I have just been informed about this situation, and I not sure if any HR experts / lawyers can attest to this.
Upon tendering resignation and started notice period, there are options to either provide written notice in advanced, or make payment in lieu of basic salary, or to contra with annual leave balance. This has always been a common knowledge among working people.
Now here comes the case, I have just discovered that in this peculiar company, there is an unwritten policy which stated that you can't fully contra your notice period with your annual leaves, this is due to the differences in the way they calculate the compensation rate and the deduction / penalty rate.
For example:
1) I have 10 days of leave balances, which I choose to cash out.
HR's calculation:
Your annual pay / 365 x 10 days (compensation by company)
2) I have no leave balance, and I choose to pay in lieu to reduce the notice period by 10 days, HR will make me pay:
Monthly salary / 22 days x 10 days (deduction from employee's end)
OR
3) I have 10 days of leave balances, I opted to contra it to reduce the notice period.
HR will:
Your annual pay / 365 x 10 days = A
Monthly salary / 22 days x 10 days = B
C = Final month salary + A - B
Of which C would be the amount for my final payslip at the company, before deducting EPF and income tax.
Ok, for TLDR, you think you can settle for early release of 1 day by contra your 1 day AL, but in this peculiar company, you can't, due to the difference of the calculations above, which means, your 1 day doesn't equate "their" 1 day, after contra with your AL, you still need to pay the penalty.
This is the first in my life time to encounter such company, please share if you have similar experiences, and is this even legal under Malaysian law?
I did not ever come across any such clause written explicitly in the employment letter.
This post has been edited by galecsys: Oct 13 2015, 02:53 PM
Issue with notice period, "1 day does not equal to 1 day"