There will be more retrenchment this year and the end of the year 2008 will see a few more thousands of employees laid off from their company.
Workers subject to retrenchment are those whose companies are closing part or the whole of their business operation, or those signing up for the Voluntary Separation Scheme (VSS) offered by their employers.
Companies employing foreign workers and intend to exercise retrenchment must lay off their foreign workers first. Currently, there are more than 2 million foreigners working in Malaysia.
At the same time, salary and compensation will remain flat as employers are embracing the downfall of global economy. Many of the companies are now showing signs of slowing things down. However, flat salary rate may be compensated by increase in certain allowances such as mileage, fixed allowance, meals and so on.
The latest major retrenchment involved about 1,000 workers, after Nikko Electronics Berhad closed its factory in Prai, Penang last month.
According to Malaysia Employers Federation (MEF), in 2007, more than 12,000 employees in Malaysia were retrenched, and while it represents a drop of about 10% from the previous year, the figure is still worrying. Majority of those retrenched were those working in the manufacturing industry, and were involved in lower skilled jobs.
Retrenchment figures for the 2008 ending are expected to show some significant increase.