MINIMIZING PSYCHOLOGICAL IMPACT ON WORKERS IN GENUINE REDUNDANCY: FORMULATING GUIDELINES FOR EMPLOYER

Year 2018, Volume: 4 Issue: 12, 239 - 244, 28.12.2018

Ashgar Ali Ali Mohamed Mohammad Naqib Ishan Jan Muhamad Hassan Ahmad Arun Kasi

https://doi.org/10.18768/ijaedu.478263

Abstract

The competing
interests of a worker and an employer require that a worker’s security of
tenure must be balanced against the just expectation of the employer for
latitude, under genuine redundancy in the organisation, to retrench the surplus
labour or workers. Such redundancy may arise due, among others, to a reduction
of business activities, perceived advantages of greater mechanisation and
technological change, deployment of capital resources in different ways,
reorganisation of business operations with a view to enhancing profitability,
and reducing losses either generally or in selected areas. For a retrenchment
to be justified, there must be convincing grounds to establish redundancy.
Whether a genuine redundancy is established and a retrenchment is justified in
any particular case would depend on the factual matrix and circumstances of
each case. It is not doubted that a retrenchment of workers would have
psychological impact on the affected workers, more so if the worker has been in
service for a long time in the organisation. He will likely face difficulty in
relocating and/or securing other employment due to various factors. Hence, it
is appropriate that certain viable and practicable guidelines are developed for
the employer to adhere to in order to minimize the impact of retrenchment
exercise on the workers.

It is an established
rule that an employer should ensure that retrenchment, if necessary, is carried
out in a fair manner. It includes manner of selecting the worker or workers
declared to be redundant, giving a fair opportunity to them to make representations
on the possibility of re-deployment, etc. The courts would not normally
interfere with a bona fide exercise of rights of an employer in a
retrenchment exercise, which rights are inherent in it. However, any form of
victimisation of the employee, whether by arbitrary, perverse, baseless action
or otherwise by the employer which is considered to be unnecessarily harsh or
was not just or fair, or other mala fide action on the part of the
employer, may warrant the courts’ interference. In light of the above, this
paper will discuss retrenchment and its psychological impact on workers with
particular focus on formulating some guidelines for employers with a view of
minimising the impact.

Keywords

Redundancy, Psychological Impact, Guidelines for Employer

References

• Ashgar Ali and Farheen Baig (2012). Retrenchment: The Law and Practice in Malaysia. Sweet & Maxwell Asia, 48. Maimunah, Aminuddin (2006). Malaysian Employment Law Practices. LexisNexis, Kelana Jaya, 302. Maimunah, Aminuddin (2011). Malaysian Industrial Relations Employment Law. McGraw-Hill, p. 252.