Dealing with Employee Termination Effectively
With the current pandemic affecting the whole economy all around the world and certainly in Malaysia, many companies have no where to turn but to downsize their company. However, terminating employees is not an easy process, and can be an emotional one at times. No matter the reason of firing, if you don’t do it right, there might be certain legal repercussions and it might impact company morale negatively as well.How do you effectively terminate an employee
Generally speaking, workers should only be dismissed for a legitimate reason. Employers should not fire workers simply by notifying
them, there must be a just cause and excuse. Just cause and excuse include misconduct, poor work performance or redundancy among other things.
Severance pay
Fair and appropriate benefits should be offered as long as the company is financially capable, especially if the company terminates workers with the intention of increasing productivity and profitability.
As for the amount to be paid as compensation, it depends on whether the employee is included in the Employment Act.
EA Employees
The Employment act 1955 determines that certain minimum compensation must be given to the applicable staff: they are
- If the staff has been working for less than 2 years, 10 days pay shall be paid for every year of employment
- If the staff has been working for 2 to 5 years, 15 days pay shall be paid for every year of employment
- If the staff has been working for more than 5 years, 10 days pay shall be paid for every year of employment.
Non EA Employees
Employers are usually free to set any incentives for non-ea workers, provided that by agreeing and signing the work agreement, workers commit to those incentives
Wrongful Termination
For every member of employee that is wrongfully terminated, that is without just cause and excuse, it can amount to unfair dismissal. Employees affected by the dismissal can, however, apply their complaints to the industrial court within 60 days of the termination notice. If so, employees will face the burden of proving the termination is reasonable.
Takeaway
Firing employees is a messy business and is certainly no fun. However, it is important for every companies to do it right, for the sake of abiding by the law and being fair to its employees. If you want to learn more in detail about Failsafe Termination of Employment Contract and Dismissal, register for our Zoom training online!Your human talent is your most important asset.
Training the perfect staff presents a great deal of challenges no matter the position of the employee or the role that the employee plays in the company. Let us take that trouble away from you while you focus on the things that you do best and us the same.