Thirty days’ notice to the Director General, and LIFO considered

By Equipo Saplic Published on 12/08/2026 Updated on 12/08/2026

Both are checkable if you were selected.

In this guide
  1. The 30-day notification
  2. The LIFO principle
  3. Proper benefits must be paid
  4. Notice or payment in lieu
  5. If you think it was unfair
  6. The other 60-day clock
  7. What to check
  8. What to gather
  9. Where to go
  10. Penalties for the employer

Retrenchment in Malaysia carries procedural obligations, and each is a potential ground if not followed.

The 30-day notification

For mass retrenchment, the employer must notify the Director General of Labour at least 30 days in advance.

The LIFO principle

The Last-In, First-Out principle should be considered when selecting employees for retrenchment.

It is a principle to be considered rather than an absolute rule, but a selection that ignored it entirely — particularly one that retained newer staff over longer-serving ones without justification — is questionable.

Proper benefits must be paid

Covered employees receive termination benefits at 10, 15 or 20 days' wages per year depending on length of service.

Notice or payment in lieu

Four, six or eight weeks by service length. If notice is not given, the terminating party pays compensation equal to the wages that would have been earned during the notice period.

If you think it was unfair

Unfair dismissal claims fall under the Industrial Relations Act 1967, which governs employer-employee relations, collective bargaining and unfair dismissal.

Complaints must be filed within 60 days of termination.

The other 60-day clock

Separately, EIS claims must be made within 60 days of the loss of employment. The two deadlines run in parallel, and they are different processes.

Filing an unfair dismissal complaint does not claim your EIS, and vice versa.

What to check

  1. Whether the Director General of Labour was notified 30 days ahead
  2. Whether LIFO was considered in the selection
  3. Whether you are a covered employee for termination benefits
  4. That the correct day rate was applied for your service band
  5. That notice or payment in lieu is included separately

What to gather

Your written contract, payslips, evidence of your start date, the termination letter, and your EPF and SOCSO records.

Where to go

The Department of Labour, and the Industrial Relations framework for unfair dismissal.

Penalties for the employer

Non-compliance with the Employment Act can attract fines of up to RM50,000 per offence.

Frequently asked questions

What must an employer do before mass retrenchment?
Notify the Director General of Labour at least 30 days in advance, consider the Last-In First-Out principle in selection, and pay proper termination benefits.
Is LIFO an absolute rule?
It is a principle to be considered rather than absolute, but a selection ignoring it entirely — retaining newer staff over longer-serving ones without justification — is questionable.
How long do I have to claim unfair dismissal?
Sixty days from termination, under the Industrial Relations Act 1967.
Are the unfair dismissal and EIS deadlines the same?
Both are 60 days but they are different processes running in parallel. Filing one does not claim the other.
What should I check about my selection?
Whether the Director General was notified 30 days ahead, whether LIFO was considered, whether you are a covered employee, and that the correct day rate was applied.

Sources

Put this into practice

Create your free profile and apply to the active openings in Malaysia.

Continue with Google I would rather sign up with my email

It is free and we never ask for a card.