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Termination of Employee Due To Business Closure

Wed, 15 Apr 2009 05:48:49 PM  (Last updated: Wed, 15 Apr 2009 05:59:01 PM)

One of my friend had closed down his business 4 months ago. Before that, he had given 1.5 months notice and gave 3 months compensation for all workers before their termination. On receipt of this compensation, the workers had signed on the receipt record.

However, (after 4 months of closing down) recently, one of the workers came to my friend to get more compensation. This worker basic salary is RM 1900 and he had been servicing for > 10 years. He told that he had checked with labour dept. and he should get compensation of RM 20,000++ (with calculation of 20 days x years of service).

(1) Is his request valid with his basic salary is > RM 1500?

(2) How is his chance of success if he bring this issue to Industrial Relation Dept. (IR)?

(3) Based on employment law, what is the correct compensation amount to him?

Kindly advise. Urgent...

Thank you.

KL Siew
Wed, 15 Apr 2009 05:56:31 PM

1. Don't accept his demand first. Let him complain to the IR and your friend can settle the matter at the IR Department.

2. I can't speculate his chances of success.

3. Read the Employment (Termination and Layoff Benefits) Regulations at

Wed, 15 Apr 2009 05:59:01 PM

Thank you for your advise.

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