Redundancy and Restructuring in a Transitioning Global Economy: Ensuring Economic Justice for Employees Retrenchment

Within the wider context of layoffs, redundancy is now recognised as an increasing issue, just as Malaysia’s economy continues to grow rapidly. Redundancy, a term used in business, takes place when the number of employees is greater than operations require in the workforce due to cost-cutting reorganisations, or there is discontinuation of certain job positions in that company. This issue has arisen mainly due to market competitiveness within businesses, technological advancement in the industries, as well as post-pandemic restructuring, which leads companies to eliminate roles that are no longer required, i.e. redundancy. Although these measures may be essential to a business’s survival, especially as automation grows in popularity, they contribute to forced unemployment and thus reveal the issues of worker protection provided by Malaysia’s legal system, namely the Employment Act 1955. This article evaluates the effectiveness of legislative safeguards in addressing redundancy through a qualitative legal evaluation from significant court rulings, policy papers, and statutory provisions. The study identifies gaps in the current frameworks and finalises by suggesting specific legislative measures that would strengthen economic justice for displaced workers, improve the transparency of the redundancy procedure, and strengthen their rights to compensation.

Economic : Employees Retrenchment

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