RegisterLog In

Early Release & Payment in Lieu of Notice

SJL
Member
Mon, 02 Mar 2020 01:24:49 PM  (Last updated: Mon, 02 Mar 2020 07:50:55 PM)

Hi, my company have an employee based overseas on secondment who tender resignation on 1 February. Based on the notice period, the employee should serve 3 months notice and the employee intend to serve the actual 3 months.

However, management decided to early release this employee (only give 1 week notice and LWD is 5 March 2020) and give payment in lieu of notice. Currently, this employee gets basic salary + overseas allowance + phone allowance + accomodation allowance.

What I have propose is the employee will get full pay (basic + all allwances) until he exhaust all his annual leave. Then notice in lieu start from then until the end of 3 months. Eg below:-

LWD by management 5/3/2020. Balance AL 5 days. << Basic salary + overseas allowance pay full until 12 March.

Payment in lieu notice from 13 March to 30 April << Only Basic salary

>> Employee claim that his notice in lieu must include his overseas allowances (as if he is still base there), if not he will claim this early release as under duress. Appreciate some advice? What are the alternative company have?

KL Siew
Administrator
Mon, 02 Mar 2020 05:54:09 PM

I think the employee is right. Under section 13(1) of the Employment Act quoted below, note the words in bold. That means whatever he would have earned during the period had he been working during the period.

"13. (1) Either party to a contract of service may terminate such contract of service without notice or, if notice has already been given in accordance with section 12, without waiting for the expiry of that notice, by paying to the other party an indemnity of a sum equal to the amount of wages which would have accrued to the employee during the term of such notice or during the unexpired term of such notice. "

SJL
Member
Mon, 02 Mar 2020 07:11:54 PM
Originally posted by KL Siew on Mon, 02 Mar 2020 05:54:09 PM

I think the employee is right. Under section 13(1) of the Employment Act quoted below, note the words in bold. That means whatever he would have earned during the period had he been working during the period.

"13. (1) Either party to a contract of service may terminate such contract of service without notice or, if notice has already been given in accordance with section 12, without waiting for the expiry of that notice, by paying to the other party an indemnity of a sum equal to the amount of wages which would have accrued to the employee during the term of such notice or during the unexpired term of such notice. "

Employee earning >RM5k not covered under employment act right? 

For company is it better to issue him a cessation of secondment first then only compute his payment in lieu so employee cannot argue on grounds of overseas allowance?

KL Siew
Administrator
Mon, 02 Mar 2020 07:50:55 PM

Yes, you can argue like that. It is then up to the court to decide what written law to apply should the employee concerned bring the case to the civil court.

  This topic is closed