As the company goes through a financial decline, the management decided to make an offer for compensation to employees who are willing to be laid off. Do you still have legal recourse against the company on grounds of unjust dismissal if you take on the offer?
Well, the answer is NO!
It is trite that if an employee has been dismissed without a just cause and excuse, the employee may bring an action against the company as provided by Section 20 of the Malaysian Industrial Relations Act 1967.
However, if an employee has signed a voluntary or mutual separation scheme, the employee is not considered to have been dismissed. Hence, no action for dismissal without just cause and excuse can be brought up against the company.
What is a Voluntary Separation Scheme?
A voluntary separation scheme (‘VSS’) is a scheme/ offer where an employer invites and offers the employee to resign voluntarily without the implications of a retrenchment while still receiving fair compensation from it.
For VSS, a company will usually make an open announcement that they are not dismissing anyone but will welcome employees’ application to be considered for the VSS.
What is a Mutual Separation Scheme?
Mutual Separation Scheme (“MSS”), as the name suggests, arises when both parties, the employee and the employer come to an agreement to the terminate the employment relationship.
Even though VSS and MSS might be a bit different, essentially, the employee must agree to the scheme voluntarily.
[Note]: “Voluntarily”- There must be no harassment, compulsion, undue advantage, oppression, unfair labour practice, misrepresentation, duress, coercion or any other matter, which the court may consider to be vitiating factors in the process of reaching the said agreement.
When Can VSS Or MSS Be Considered As A Dismissal?
For a VSS or MSS to be valid, they must be signed voluntarily. A dismissal can only be construed if the employee is not released of his/her employment voluntarily.
Therefore, if the employee can prove that he has signed the VSS or MSS without his free consent, the termination of his employment can be considered as a dismissal.
Conclusion
In a nutshell, employees who have signed on to a VSS or MSS are generally deemed to have made the decision to relief themselves of their employment with the company voluntarily. However, an element of coercion may enable an employee to take legal action on grounds of unjust dismissal against the employer.
