The Malaysian government has issued a warning to employers amid concerns some companies are firing local staff in order to hire international employees.
Deputy Human Resources Minister Datuk Seri Ismail Abdul Muttalib pointed to Section 60 of the Employment Act 1955 during a recent speech.
The act states that no employer operating in the nation can arbitrarily terminate the employment of local workers to employ foreign workers.
Ismail also reminded employers that failure to comply could lead to conviction and a fine of up to RM10,000.
In an advisory issued by the Malaysian government, companies are allowed to accept foreign workers for additional manpower, and not for replacement of local employees.
Ismail also said employees are entitled to their rights when they are terminated – regardless of whether they are a Malaysian national or not.
"Employees who are suddenly laid-off are entitled to a number of basic protections. Among others, employers shall give sufficient notice period or remuneration in accordance with the work contract, but not less than stipulated under Section 12 (2) of the Employment Act,” he said.
"Employers are also obliged to pay retrenchment benefits in accordance with the work service contracts, which must not be less than the rate prescribed in the Employment (Termination and Lay-Off Benefits) Regulations 1980.”
While replacing locals with international staff is banned, Malaysia is still very much in need of overseas labour – however, migrants are only allowed to work in certain sectors. These include agriculture, construction, manufacturing, mining, plantation and within the service sector.
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