FORM PK

1. According to Employment Retrenchment Notification 2004, all employers are required to report to the nearest Department of Labour before taking any of the following actions:

 

• Retrenchment^①
• Voluntarily Separation Scheme (VSS)
• Temporary Lay-off
• Salary Reduction

2. The employer must submit the Form PK to the nearest Department of Labour at least 30 days before the above actions had been taken.

Any employer who fails to comply with the above matter is committing an offence according to Section 63 of the Employment Act 1955 and shall be liable to a fine not exceeding RM10,000 for each offence.

The PK Form is filed in parts and in stages. Parts I to IV must be submitted within 30 days before the retrenchment of employees. Part V must be submitted within 14 days after the date of retrenchment while Part VI must be submitted within 30 days after the date of the retrenchment exercise. Parts V and VI must be submitted if the action involves a retrenchment or voluntary separation scheme. As such, employers do not need approval from the labour office before they can conduct retrenchment exercises.

1. Download the Form PK from official website.

Link:

Western Malaysia http://jtksm.mohr.gov.my/images/pdf/Borang/Pemberhentian_Pekerja/borang_pk.pdf?fbclid=IwAR2Rd-FSuoZC3_7JcuJfnkqRThfd8fsj8B3eZ6PzbFuwN6lMijpSiQoeixU

 

Sabah

http://jtksbh.mohr.gov.my/images/pdf/form/borgPemberhentian.pdf?fbclid=IwAR11MMVJwjlcCINBaj1_9oILtJP8UE3QrtBHFOXv25VwIKt8cZRh2J_TSIA

 

Sarawak

https://www.jtkswk.gov.my/images/borang/PemberhentianPekerja/jtkswk19.pdf?fbclid=IwAR2GjiZMEIPU5dFh1Y53duENAoWjhPpsWFxi12ryMWyH_UZi6hWVqYreRBY

 

Form PK Related guide

http://jtksm.mohr.gov.my/images/pdf/Borang/Pemberhentian_Pekerja/garis_panduan_pemberhentian_pekerja.pdf

 

2. Fill in the Form in Capital Letters.

i) What should you fill in?

• Part I: Company details
• Part II: Action plan to be taken

 

Kindly refer the following attachment

a) Number of workers plan to be retrenched

b) Number of workers plan to be involved in Voluntarily Separation Scheme

c) Number of workers plan to be involved in temporary lay-off and state the percentage (%) of salary paid

d) Number of workers plan to be involved in salary reduction and state the percentage (%) of reduction

• Part III: Chose the reasons and the cause for the action taken, state the date of action plan to be taken and any benefits payable to the involved workers.
• Part IV: Fill in the measures taken to avert action (reduction of working hours, reduction of normal working days, reduction or stoppage of overtime/work on rest day/work on public holiday).
• Part V: Particulars of benefits paid^②
• Part VI: Particulars of emplacement on new jobs (Any action had been taken to help the workers in finding new job? If no, kindly put NA in this part.)

 

3. Email the complete form to the following email address:

jtksm@mohr.gov.my

What is retrenchment and redundancy?

Retrenchment means the termination ofthe contract of service as the result of redundancies that may arise due to several reasons such as the closure of the company, restructuring, reduction in operation, mergers, technological changes, takeovers, economic downturn and others.

 

Say in other words, redundancy is a situation where the employee or position is no longer required. Retrenchment is the action taken to terminate the employment relationship in the event of redundancy.

 

What measures should be taken by employers to avoid retrenchment?

When a situation of redundancy arises, the employer should first take appropriate measures as proposed under the Code of Industrial Harmony in order to avoid retrenchment: –

• Freeze the recruitment of new workers except for critical areas
• Limit overtime work
• Limit work on weekly rest days and public holidays
• Reduce weekly working days or reduce the number of shifts
• Reduce daily working hours
• Provide retraining programmes for workers*
• Identify alternative jobs and transfer workers to other divisions/jobs in the same company*
• Implementing temporary lay-off, for example in the form of temporary shut down by offering fair salary and helping to secure temporary jobs elsewhere until normal operations resume. If the employer implement a temporary lay-off, it should be reported to the Manpower Department for monitoring purposes to determine whether the workers are reemployed or offered a Voluntary Separation Scheme (VSS) or are laid off permanently in future*
• Introduce pay-cut fairly at all levels and to be implemented as the last resort after other cost-cutting measures have been implemented*
• Identify vacancies in other companies to be offered to workers who will be retrenched.

* Must be implemented with the written agreement of the workers or the trade unions representing them.

 

What guidelines should employers follow when selecting employees to retrench?

The Code of Conduct for Industrial Harmony (“Code”) provides guidelines on the best practice for retrenchment exercises. While not legally binding, failure to comply may be a factor that courts take into consideration in determining whether the retrenchment exercise was carried out in a fair manner.

The Code contains suggested criteria for employers to consider when selecting employees to retrench. This includes:

• Ability
• Experience
• Skill and occupation qualifications
• Age
• Family situation
• Length of service
• Status (non-citizens, casual, temporary, permanent).

A few commons industrial practice is also to retrench employees based on the: –

• FWFO principle (Foreign worker – First Out)
• LIFO principle (Last In, First Out)

 

Can employees challenge a retrenchment?

In the absence of a valid justification for the retrenchment exercise, the termination may amount to dismissal without just cause and excuse entitling employees to remedies such as backwages, reinstatement and/or compensation in lieu of reinstatement.

 

An employee who believes they have been unfairly retrenched must lodge a complaint with the Director General of Industrial Relations within 60 days from the date of the dismissal. If parties are unable to settle their dispute during the conciliation meeting ordered by the Department of Industrial Relations, the Minister of Human Resources may refer the matter to the Industrial Court for adjudication.

Workers who are retrenched are entitled to minimum termination benefits if they are covered under the Employment Act 1955 or Collective Agreements

 

a) Wages in lieu of notice

Workers whose services are terminated without sufficient notice, may claim payment of wages in lieu of notice (indemnity). The wages in lieu of notice should be paid not later than the last day the contract of service is terminated.

 

Payment in lieu of balance of annual leave, if any.

 

b) Retrenchment Benefits

The retrenchment benefits must be paid according to the terms in the contract of service, but should not be less than the minimum rate stipulated under the Employment:

i) 10 days’ wages for every year of service if the worker has been employed for less than two years;

ii) 15 days’ wages for every year of service if the worker has been employed for two years or more but less than five years; or

iii) 20 days’ wages for every year of service if the worker has been employed for five years or more.

 

and pro-rata for an incomplete year, calculated to the nearest month.

 

The workers are entitled to receive written details of the amount of termination benefits and the method of calculation used.

 

The termination benefits should be paid not later than 7 days from the date the service of the worker is terminated.

 

An employee who is not covered by the Employment Act 1955 is only entitled to termination benefits if it is provided in his employment contract. If the contract is silent, then it is up to the employer whether to pay termination benefits, and how much to pay.

 

Employers who are carrying out a retrenchment due to serious financial difficulties may also be excused from paying retrenchment benefits.