Process Flow for Retrenchment & Pay Cut

Submit Borang PK to Labour

Department (at least 30 days prior to
exercise)

Issue memo/notification on town Ensure all affected employees

hall/briefing session are informed

Ensure every employee Ensure all affected employees

sign the attendance log. attends the session. Where
This is an important Town hall/Briefing session needed, organise a separate
evidence to proof they session for those who were
have been briefed not present

Those who are keen to consider salary

reduction, please issue Expression of
Interest for Salary Reduction
Those who opt for
retrenchment, 1-1 discussion
is optional but limit it to the
details of severance package Do not initiate discussion with
Initiate the 1-1discussion with those who did not/refuse to
employees sign the Expression of Interest
for salary reduction

NO
Initiate separation process Accept

YES

Initiate Salary reduction process

Update JTK

End
Prepared by Arulkumar Singaraveloo
HR Consultant; arulkumar.singaraveloo@gmail.com
Companies shall complete ‘Borang PK’ and submit to nearest labour department and shall be submitted
along with;

1. Attachment 1 – Name list of affected employees

2. Proof of retrenchment payment (via bank payment)
3. 3 copies of employment contract – any employees
4. 3 salary statement/slip of any employees (latest 3 months)
5. Retrenchment notice/Letter
6. Summary of employees’ name, date start of employment, termination date, 12 month income
statement (for purpose of calculation of termination benefit), annual leave encashment (if
applicable), payment in lieu of notice (if applicable)
7. Agreement from employees in in writing for a pay cut and evidence of pay cut in salary
slip/payment statement

This sample policy/letter/document is merely a sample or guidance. Companies are advised to practice caution
when drafting its HR documentations and shall always be in compliance with the Employment Act and Industrial
Relations Act as well as past case laws so as to ensure the policy does not violate or infringe the prevailing
employment regulations. Companies are encouraged to adopt best practices to be an attractive employer and
promote productive and competitive operating landscape. The author shall not be held liable for any damages
or claims arising from the usage of the contents of this document.

Prepared by Arulkumar Singaraveloo

HR Consultant; arulkumar.singaraveloo@gmail.com