Read this case of ex-GM from MOX that sued MOX and got RM 1.3m from his ex-employer.
http://thestar.com.my/news/story.asp?file=...1991&sec=nation

For salary below 1.5K per month, they are protected by Labour Law. For salary above 1.5K, you are covered under Employment Act. You can go to Industrial Court just like the case reported in Star. In the news, the GM's monthly salary was RM27,125 not inclusive of a RM4,500 car allowance.

Legally, you have the right to pay the 3 months in lieu and just leave. But, you have to verify the information first. It is true that there are industry practice that competitors do not take each other staffs. Competitors also share information. One example is Petroleum industry. I am not sure about your industry. Better check first.

The other thing you have to be cautious:

a) Are you playing a critical roles that will cost problem if you don't stay for 3 months? In some cases that I know, critical persons left abruptly and caused the entire project to delay and the company suffered financial penalty from the customer. If this is the case, you have to be more careful for long term problems.

b) The best deal is to have win-win situation. Pay 50% and stay back for a while until the company find a replacement.

That's true. Nevertheless, world is small if want to remain in the same industry. So, when apply next job, you will probably see the ex-colleagues there.

Furthermore, the older you are, the more senior positions you are targetting. A lot of big companies and MNC are using recruitment firms nowadays. As a result, reference checks (the headhunter mostly will not take the reference stated in the cv) can't be avoided.

Company has reasons to keep a person. Under this economy situation, if i can let go staff without cost, I will do so to cut down the headcount and cost. If I cannot cut, there must be reasons.

So, think twice.