Get to Know the Law That Prohibits Such a Decision
When the topic of jobs and the workforce becomes the town’s talk, people will generally speak of the new blood and middle management. More often, most people forget there are seniors still working in the company. Ideally, the senior people will be at the top of the organisation structure. But in reality, not all senior employees get to the top as they age. For some, they could go as high as they could depending on their skills and training. For these senior employees, some companies may see them as a weary load to the company. But beware, even senior employees are under legal protection if they are retired before the Malaysia retirement age.
Old Is Gold
Of course, not all companies view old employees as deadweight. For being in the company as long as the company exists, most employers genuinely care for senior employees. Employers are also happy to have old employees who always remind and mentor the new hires of the business’s ropes. Hence, old is gold, is how employers should view the company’s senior employees, regardless of their physical ability to work. Employers will miss their experience and knowledge if employers decide that they should retire early. Nevertheless, companies are on the constant edge of competing with the market to obtain young and suitable talent to serve the company. Companies should be aware of the Malaysia retirement age to make plans for these golden employees’ timely succession.
Legality and Longevity
The current Malaysia retirement age is at sixty years old. Before reaching an employee’s 60th birthday, no employer can request the employee to retire early. On the contrary, an employee can request an early retirement, which he or she resigns from the employment. The most common early retirement age range will begin after 55 years old. At 55, an individual will be allowed to withdraw all of its Employee Provident Fund savings. But, studies have shown that even at 55, the modern-day employee is still energetic. Thus, with the minimum Malaysia retirement age, employees will have the time to save up for retirement. However, the retirement age is a minimum. For now, there is no penalty for allowing old employees to continue working for as long as they need to.
Protected by Law
In Malaysia, the Minimum Retirement Age Act prohibits premature retirement. Most employees take for granted that the power to retire is within their hands. This may be true, but both employees and employers should be aware of the provision within the law. The act is effective since 2013, and if any employee handbook sets a lower retirement age, then it is considered void. Should an employer retires an employee earlier than the Malaysia retirement age, the company will be fined not more than RM10,000. However, the law applies only to full-time employees in the private sector. Old employees that have been retired prematurely by the company could write to the Director-General about the matter. The Director-General could order the company to reinstate the employee and pay wages from premature retirement to reinstatement. If the company has no intention to reinstate, it will have to pay salaries of the employee from early retirement until the minimum retirement age.