Common Myths About Being Retrenched

A few beliefs about retrenchment in Malaysia get repeated often enough that they start to sound like settled fact.

Some of them are close to true, others are not, and the difference matters for what you decide to do next.

Myth, a retrenchment label automatically makes it fair

This is false. The retrenchment still needs to be for a genuine redundancy in your role, not simply a convenient label for something else. If similar roles are still being hired elsewhere in the company, that detail is worth questioning directly.

A vague or generic reason, without evidence of an actual reduction in need, invites more scrutiny.

Myth, an employer can select anyone they prefer

This is also false. Last In First Out is the conventional, objective principle for selection, and an employer who departs from it is expected to justify the decision with sound reasons¹. Simple preference is not, on its own, a sound reason.

Ask directly how you were selected, and compare your answer against what happened to colleagues in similar roles.

Myth, Employment Insurance System support blocks a dismissal claim

This is false as well. The Employment Insurance System is a government scheme entirely separate from a Section 20 claim, and applying for one does not affect your ability to pursue the other².

Many people pursue both at the same time, since they address different needs during the same difficult period.

Myth, signing a VSS payout closes every door permanently

This is only partly true. A signed agreement can genuinely limit your options going forward, which is exactly why reviewing it carefully before signing matters so much. Once signed, it becomes much harder to challenge later.

Myth, there is more time to decide if you accepted a package

This is false too. The same sixty day window applies from your last working day, whether or not you accepted a VSS package or a retrenchment payout along the way.

People sometimes assume accepting a package buys more time to think things over, when in fact the clock keeps running regardless.

What should you do this week?

Write down which of these myths you had assumed were true, and check them against your actual situation carefully. Read about common mistakes to avoid, and confirm your window with the deadline calculator.

Ask a lawyer to review your specific facts before you file a Section 20 representation, so you are acting on accurate information rather than assumptions.