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Urgent ... Urgent ... Urgent => Retirement and Termination Issues.

wen3116
Member
Fri, 29 Jul 2016 09:11:01 PM  (Last updated: Tue, 02 Aug 2016 03:50:26 PM)

Hi Siew,

Please advise for employees aged 61 & above with a daily wage of RM 34 + full attendance allowance of RM150 per month and their monthly paid < RM1,500.00, what retrenchment benefits they can get ?  These employees had been with the company since it was established.  When the Retirement New Age 2012 took effect in 2013, they were aged 58 and above.  Their employment contracts do not have clause about retirement age.  Company has not asked them to stop work when they attained 55 years old and they continue to work till recently when the company ceased business operation end June.  

We have checked with Labour Department in KL and officer on duty advised they can receive retrenchment benefits as stated in the Employment Act.  Whereas the employer has approached the Labour Department in the state where the company is based and was advised otherwise, ie, they are not entitled to retrenchment benefits in per EA.  We have also consulted the officer on duty on another date at the same Labour Department and the answer is entitled.  

The company intends to make an offer of 3 months as lay off benefits to them, can accept or reject to file a case with Labour Department ?

Really appreciate your guide.

KL Siew
Administrator
Sat, 30 Jul 2016 12:16:54 PM

You can refer to the Employment(Termination and Layoff Benefits)Regulations

4. (1) Subject to paragraphs (2), (3) and (4), an employee shall be entitled to termination benefits payment where his contract of service is terminated for any reason whatsoever otherwise than -

(a) by the employer, upon the employee attaining the age of retirement if the contract of service contains a stipulation in that behalf;

Now you may have to check your contract of service whether there is a retirement clause. If there is none as you said, it looks like that the employees are entitled.

But the problem is, in the new Minimum Retirement Age Act, the employee is over 60, will this new law complicate the issue? Will he still be entitled to termination benefits? I am not so sure.

If the parties cannot get the matter satisfactorily resolved, the employees may have to lodge an official claim for the benefits at the Labour Department. Let them decide one way or another.

wen3116
Member
Tue, 02 Aug 2016 03:50:26 PM
Originally posted by KL Siew on Sat, 30 Jul 2016 12:16:54 PM

You can refer to the Employment(Termination and Layoff Benefits)Regulations

4. (1) Subject to paragraphs (2), (3) and (4), an employee shall be entitled to termination benefits payment where his contract of service is terminated for any reason whatsoever otherwise than -

(a) by the employer, upon the employee attaining the age of retirement if the contract of service contains a stipulation in that behalf;

Now you may have to check your contract of service whether there is a retirement clause. If there is none as you said, it looks like that the employees are entitled.

But the problem is, in the new Minimum Retirement Age Act, the employee is over 60, will this new law complicate the issue? Will he still be entitled to termination benefits? I am not so sure.

If the parties cannot get the matter satisfactorily resolved, the employees may have to lodge an official claim for the benefits at the Labour Department. Let them decide one way or another.

Dear Siew,

Thanks for the advise, will inform the workers to act urgently. 

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