Number of unreported retrenchments worrying, says minister

Human Resources Minister M Saravanan has warned employers that legal action will be taken against them if they do not report a layoff or salary reduction exercise.

PUTRAJAYA: Human Resources Minister M Saravanan today revealed a worrying retrenchment scenario stemming from the Covid-19 pandemic with some employers terminating their workers without informing the Labour Department.

He said Section 63 of the Employment Act 1955 stated that employers who carry out retrenchment – whether permanent, temporary or voluntarily or salary reduction – must fill up an employment notification retrenchment form (PK Form) and submit it to the Labour Department at least 30 days before the termination or salary reduction exercise.

Failure to submit the PK Form was detected following significant disparities when comparing receipt of the forms from employers with the Employment Insurance System (EIS) forms filled by employees who have been laid off.

According to him, the number of employees laid off from data received from PK Forms from January to July totalled 44,426 as opposed to 67,068 employees who filled up the EIS forms.

“The difference of 22,642 people is significant and this is something that should not be underestimated,” he said in a statement today.

Saravanan said his ministry would take legal action against employers found to have deliberately not submitted the PK Form after a layoff or salary reduction exercise.

“The government through the human resources ministry views this matter seriously and will not compromise with any employer who fails to comply with the regulations under the Employment Act,” he said.