The Guidance Behind A Responsible Retrenchment
You were retrenched and want to know what a responsible process was supposed to look like.
Retrenchment is one of the few dismissal situations where the process itself, not just the reason, is closely scrutinised, and this guidance explains why.
What does this Code actually set out?
The Code of Conduct for Industrial Harmony sets out guidance for how employers should approach workplace relations, including responsible steps before and during a retrenchment.
It covers the kind of process an employer is expected to follow, rather than fixing any specific payment figure.
Is this Code actually a binding law?
No. It is described as persuasive guidance rather than a binding statute, so it is not enforced in the direct way a specific section of an Act is.
That does not make it irrelevant. It still reflects what is widely accepted as reasonable behaviour by an employer during a retrenchment exercise.
What does LIFO actually mean, and when can it change?
LIFO, letting the most recently hired staff in the affected category go first, is the conventional, objective way to select who is retrenched.1
An employer may depart from it, but needs sound, specific reasons for doing so, and any retrenchment must be for a genuine redundancy in the first place.1
Why does the process matter as much as the reason?
An employer who skipped basic, well established steps, such as notice of the exercise or consultation with affected staff, may find that gap used against them later.
A retrenchment can be challenged not only on whether the redundancy was genuine, but on whether the selection and process around it were fair.
What should you do if your retrenchment looks irregular?
Read about retrenchment and redundancy for how selection and process are normally expected to work, and note anything that deviated from it.
Whatever the process looked like, your 60-day window to challenge it still applies, so check it on the deadline calculator.
Tell us how your retrenchment was selected and carried out, and we can compare it against what responsible practice generally looks like.
Common questions
Is this Code an actual binding law?
No. It is treated as persuasive guidance rather than a binding statute, so it is not enforced word for word the way a specific section of an Act is.
What is LIFO, and does my employer have to follow it?
LIFO means letting the most recently hired staff in the affected category go first. An employer can depart from it, but needs sound reasons for doing so.
Does ignoring this guidance make my retrenchment automatically unfair?
Not automatically, but a process that clearly ignores widely accepted fair practice can support an argument that the process, not just the reason, was unfair.
What does genuine redundancy actually mean here?
It means the position itself is genuinely no longer needed, rather than retrenchment being used as a convenient way to remove a particular individual.
Sources
- LIFO, letting the most recently hired staff in the affected category go first, is the conventional, objective selection principle for retrenchment; an employer may depart from it but must justify the departure with sound reasons, and any retrenchment must be for a genuine redundancy. Richard Wee Chambers, 5 Points On The Law Of Retrenchment In Malaysia
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Tell us how your retrenchment was selected and carried out, and we can compare it against what responsible practice generally looks like.