Myths about being retrenched

Some beliefs about retrenchment in Malaysia are repeated so often that they sound like settled fact. Some are close to true and some are not, and the difference changes what you should do next.

Myth: a retrenchment label automatically makes it fair

False, the retrenchment still has to be for a genuine redundancy in your role. If similar roles are still being hired elsewhere in the company, question that directly.

A vague reason with no evidence that the company needs fewer staff invites a closer look.

Myth: an employer can select anyone it prefers

Also false. Last In First Out is the conventional, objective principle, and an employer who departs from it is expected to justify the decision with sound reasons.¹

Simple preference is not a sound reason on its own. Ask how you were selected, and compare the answer with what happened to colleagues in similar roles.

Myth: Employment Insurance System support blocks a dismissal claim

False. The Employment Insurance System is a government scheme, separate from a Section 20 claim, and applying for one does not affect the other.²

Many people pursue both at once, since they meet different needs in the same hard period.

Myth: signing a VSS payout closes every door

Only partly true. A signed agreement can limit your options, so read it carefully before you sign, because it is much harder to challenge afterwards.

Myth: accepting a package gives you more time to decide

False. The same 60-day window runs from your last working day, whether or not you accepted a VSS package or a retrenchment payout.

Accepting a package does not stop the clock.

What should you do this week?

Write down which of these you had assumed were true, and check each against your own situation. Read about common mistakes to avoid, and confirm your window with the deadline calculator.

If you want a lawyer to act, an independent employment lawyer can review your facts before you file a Section 20 representation, so you act on facts and not assumptions.