Retrenchment

Employment

Retrenchment is the termination of employees because their jobs are no longer needed, often due to restructuring, redundancy, or the business closing down. It should be based on genuine business reasons and follow fair procedures, commonly the 'last in, first out' principle unless justified otherwise. Eligible employees under the Employment (Termination and Lay-Off Benefits) Regulations may receive termination benefits calculated from their length of service. Employers are also expected to notify the Labour Department. A retrenchment done unfairly can be challenged as unfair dismissal. Benefit rates and procedures are set by law and subject to the latest rules.

Related Q&A

• Got retrenched, what severance and rights am I entitled to?

Related terms

EPF / KWSPSOCSO / PERKESOEIS (Employment Insurance System)BonusNotice PeriodEA FormMinimum WageOvertime (OT)