Yesterday, my company offers Mutual Separation Scheme (MSS) to me, whereby upon my acceptance, the company will pay me a total sum based on years of employment and 3-month notice period.


If I do not accept MSS latest by next Monday, my company will proceed to retrench me, and pay me a sum based on just 3-month notice period.


The issue is that the total sum is less than the amount stipulated in Employment (Termination and Lay-Off Benefits) Regulations 1980, Employment Act 1955.


I have worked in the company for 7 years.


The calculation of the total sum by my company:

Termination Benefit: 7 years ÷ 2 = 3.5 months of salary

Benefit due to termination without notice = 3 months of salary

Total MSS sum offered by my company = 3.5 + 3 = 6.5 months of salary


However, the following is the calculation based on Employment (Termination and Lay-Off Benefits) Regulations 1980.
- 20 days salary for each year of service if the employee has served 5 years or more.


20 days x 7 = 140 days

140 days / 30 days = 4.6 months

Calculation of total MSS sum = 4.6 months + 3 months (notice period) = 7.6 months of salary
- more than 6.5 months of salary offered by my company.



There is a clause in the MSS letter, indicating that after I signed the letter and accepted 6.5 months of salary, I cannot request the company to give me additional money (1.2 month of salary in this case), in order to comply with Employment Act.


Anyhow, I will highlight this issue to HR, and hope that HR will revise the total MSS sum, as per Employment Act.


However, what should I solve the issue, if HR refuses to revise the total MSS sum, as per Employment Act?

1) Decline the MSS, and lodge a complaint in Labour Office.
- I am afraid that this takes a long time, and the MSS offer will expire and become worthless. Then, my company will proceed to retrench me, and pay me a sum based on just 3-month notice period.

Or,

2) Sign the MSS, and accept 6.5 months of salary, as the total MSS sum offered by the company.


Thank you.

This post has been edited by kart: Oct 8 2024, 06:16 AM

Speaking from experience [gotten MSS this 3 years ago], take and leave but don't burn professional bridges.
I made similar choices and the manager even hooked me up with a new job that paid 50% more.
From there, made connections to another place and current pay is 2.5x more than previous salary.

Btw, remember to go to SOCSO office to claim for the 6 months unemployment benefit / allowance while you are looking for a new job.

usually for every year you work is 1month celery if got let go..

so 7years around 7 months pay should be getting.


i were you ... just take and go..

For this Employment Act, you can go to nearest Jabatan Tenaga Kerja for free consultation. Usually, Jab Tenaga Kerja has been notified for this MSS exercise from your company HR team. It's matter of compensation package of each company.
There must be a min requirement compensation according to Employment Act. You may direct get consultation from JTK for more accurate info.

Personally, I'll take and go. The 1 month different is not worth the time to fight & burn the bridge. Make thing easy for ppl & thing will be made easy in return for us. You will never know how the HR will reach you out for future job recommendations.

Just sharing this incident which happened to my elder sibling. She quitted her job due to some internal office politic getting worse. The boss got very angry & sad on her decision. Nevertheless she didn't burn the bridge. She didn't sabotage the company & still defended the company's image professionally during her last few months of employment.

Now the ex-boss introducing her some small scale freelance jobs. Their master-disciple relationship continues even they cannot work in the same firm.

What I did last time was, I took the deal, and brought the issue up to industrial relations.
As long as u lodge a case within 60 days (I think) it’s ok.
U can say u were left with no choice.
Bring all your documents (mss, offer letter etc) to industrial relations and they will review to see if there is a case. Please go to industrial relations which is within the same district as your company address.
Also, note that in order to get your payout, the company will request a tax clearance letter from you which u will need to go lhdn to get. This will take a bit of time.
U need to consider the timeline where u get your payout and also lodge a case with industrial relations because there might be a chance once your company find out u lodge a case they block payment.

Thank you for the replies from you all. Yes, I will take MSS, as suggested.


If I am not mistaken, the most recent Employment Act has been amended to provide coverage for all employees, irrespective of the salary amount.


My salary is about RM 4500.


So, Employment (Termination and Lay-Off Benefits) Regulations 1980 should be applicable to me, right?


Thank you.

Usually, standard compensation on MSS package for MNC as below:

Years of service + 1 month notice + bonus

Let said 5 years with the company

5 month + 1 months + let said 1 month bonus

so total in 7 months you will be getting