Retrenchment in Malaysia – Interpreting the Rules

 The Malaysian Employers’ Federation (MEF) has attempted to paint the minimum wage as being more beneficial to foreign than local employees, suggesting a lack of coherence in employers’ use of their managerial prerogatives, and blaming retrenchments on the minimum wage. The objective of this article is to analyze critically the laws, procedures, and the principles of retrenchment in Malaysia. The research question is whether employers are terminating workers in Malaysia, actually after having made poor or unsustainable business decisions, but apparently under the specious guise of a claimed unfettered prerogative of retrenchment. Argument tries to show that employers exercising mere prerogative claims necessarily leads to capricious termination decisions, and that redundancies must instead be grounded entirely in law. The configuration of the rules suggests the state recognised the likelihood of underlying employer unreasonableness, mala fides and capricious departures from the LIFO requirement. Companies may, in actuality, retrench workers purely to solve errors in their management structure.