What To Do After A Retrenchment Notice
You just received a retrenchment notice and are unsure what to check before you accept it.
A retrenchment notice just landed on your desk, and you are not sure what to check first.
A few specific steps, taken now, can protect your position while you decide how to respond to your retrenchment.
What should you check about the reason given?
Look at whether the stated reason describes a genuine redundancy in your specific role, rather than a vague reference to restructuring. If the company is still hiring for similar roles elsewhere, that detail is worth noting carefully.
A retrenchment needs to be for a genuine redundancy, not simply a convenient label for something else entirely.
What should you ask about how you were selected?
Ask directly how the selection was made, and whether Last In First Out was applied to your category of role. If your employer departed from that principle, they are expected to have sound reasons for it1.
Compare your position, in writing if you can, with colleagues in similar roles who were kept on.
Should you apply for income support right away?
Yes. The Employment Insurance System offers a job search allowance to workers who lose their job involuntarily, but applications must be made within sixty days of termination2. Treat this as an early, parallel task alongside anything else you are considering.
This support runs separately from any dismissal claim, so pursuing one does not affect your ability to pursue the other.
Should you sign anything before reviewing it properly?
Not immediately. Ask for time to read any settlement or VSS agreement, even under pressure to respond quickly, since a signed document can be difficult to unwind afterward.
Have a lawyer review any release clause specifically, since it usually asks you to give up future claims connected to your employment.
Who should you talk to first about your situation?
A lawyer, rather than colleagues facing the same notice, is the better first conversation for specific guidance on your own position. Informal comparisons with coworkers can be useful context, but they do not replace a proper review of your own facts.
What should you do this week?
Gather your notice, your contract, and any comparison information about colleagues in similar roles. Read how to prepare your case, and check your deadline with the deadline calculator before you respond to anything.
If you believe the retrenchment was not genuinely fair, you have sixty days to file a Section 20 representation challenging it.
A lawyer can review your notice and the selection reasoning to tell you whether the retrenchment looks genuinely fair.
Common questions
What is the first thing to check on a retrenchment notice?
The stated reason for the retrenchment and whether it describes a genuine redundancy in your specific role. A vague reason, or one that does not match what is actually happening at the company, is worth questioning.
Should I ask how I was selected compared with colleagues?
Yes, ask specifically how the selection was made and whether Last In First Out was applied. If it was not, ask what reason your employer gives for departing from it.
Should I apply for the Employment Insurance System right away?
Yes, applications need to be made within sixty days of termination, so treat this as a priority alongside anything else you are considering. It runs separately from any dismissal claim.
Should I sign a settlement or VSS agreement immediately?
Not before reviewing it properly. Ask for time to read the terms, even under pressure to respond quickly, since a signed agreement can be hard to unwind later.
Sources
- Last In First Out is the conventional, objective principle for choosing who is retrenched, and an employer who departs from it is expected to justify the decision with sound reasons. Richard Wee Chambers
- The Employment Insurance System gives workers who lose their job involuntarily temporary financial help, including a job search allowance for three to six months, and applications must be made within sixty days of termination. Malaysia.gov.my
Keep reading
A lawyer can review your notice and the selection reasoning to tell you whether the retrenchment looks genuinely fair.