Your statutory floor
If you earn RM 4,000 or less a month (or fall within the Employment Act's First Schedule) and have served at least twelve months, the Employment (Termination and Lay-Off Benefits) Regulations 1980 set your minimum: ten days' wages per year of service under two years, fifteen days from two to five years, and twenty days at five years or more, pro-rated for incomplete years. Notice under section 12 — four, six or eight weeks by length of service — is separate and additional. Run your own numbers with our severance calculator before any conversation about signing.
Earn above the threshold and the statutory scheme may not apply — your contract and any VSS terms govern. That makes reading the offer more important, not less.
Genuine redundancy, fair selection
Employers must actually have a redundancy — a business reason making your role surplus — and must select fairly. Malaysian practice expects foreign employees to go first in the affected category, and applies LIFO (last in, first out) within it unless there are sound documented reasons to depart from it. Employers must also notify the Labour Department by Borang PK at least thirty days before the retrenchment. A "restructuring" that removes you and rehires cheaper — or re-advertises your role — is a dismissal dressed as redundancy, and the Industrial Court treats it as one.
VSS and MSS offers: read before you sign
Voluntary and mutual separation schemes typically buy out all claims — including the section 20 claim you may not realise you have. We review the offer against your statutory floor and market practice, flag the clauses that overreach (perpetual confidentiality, unpaid restraints, clawbacks), and where the numbers are thin, negotiate. If the scheme is genuinely voluntary, declining it cannot lawfully be punished.