Eternity Job

Retrenched in Malaysia? What to do in the first 60 days

Eternity Job Career Team21 October 2026 · 4 min read

Being retrenched is a shock, but it is not a judgement on you. Retrenchment means your role is no longer needed, because of a restructuring, a closure, cost cutting or a downturn. That is different from being dismissed for misconduct, and the difference matters for the benefits you can claim.

The first few weeks decide a lot. Here is what to do, in order.

1. Get everything in writing

Ask HR for these before your last day, or as soon as you can after:

  • Your retrenchment letter, stating the reason and your last working day

  • Details of your notice period, or pay in lieu of notice

  • Your final payslip

  • Your unused annual leave balance

  • How your retrenchment benefit was calculated

  • Your EPF, SOCSO and EIS contribution records

  • Your EA form for the year

  • A letter confirming your employment and role

2. Check your notice

Compare the notice you were given with what your contract says. If you have been asked to leave immediately, ask whether you will be paid in lieu of notice, how much, and when. Our notice period guide explains the minimums.

3. Check what you are owed

Depending on your contract and salary, you may be owed:

  • Your final salary

  • Pay for unused annual leave

  • Pay in lieu of notice

  • Termination or retrenchment benefits

If you are covered by the Employment (Termination and Lay-Off Benefits) Regulations 1980, the minimum termination benefit for each full year of service is:

  • Less than 2 years: 10 days' wages

  • 2 to less than 5 years: 15 days' wages

  • 5 years or more: 20 days' wages

A worked example. On a monthly salary of RM3,000, one day's wage is RM3,000 ÷ 26 = about RM115.38. With one year of service at 10 days, that is roughly RM1,153.80. Your contract or a company policy may give you more.

Before you sign anything

Some employers hand over a settlement or release form. Read it slowly, because signing may waive your right to claim anything later. Ask:

  • What exactly the payment covers

  • How each amount was worked out

  • Whether leave, EPF, SOCSO and tax have been handled correctly

You are allowed to take it home and think about it. If the reason or the amount looks wrong, the Labour Department (JTK) or PERKESO can advise you.

4. Claim EIS within 60 days

The Employment Insurance System (EIS), run by PERKESO, supports people who lose their jobs. You must apply within 60 days of losing your job, and a late claim can be refused.

Retrenchment, redundancy and company closure usually qualify, as long as you have enough contributions. Resigning, retiring, being dismissed for misconduct and a fixed-term contract ending usually do not.

You will typically need:

  • A copy of your IC

  • Your retrenchment or termination letter

  • Your bank account details

  • Recent payslips

The Job Search Allowance is paid as a share of your assumed monthly wage:

  • Month 1: 80%

  • Month 2: 50%

  • Months 3–4: 40%

  • Months 5–6: 30%

On an assumed wage of RM3,000, that works out to about RM2,400, RM1,500, RM1,200 and RM900. EIS can also cover a Reduced Income Allowance, an Early Re-employment Allowance if you find work quickly, and training. Check the current rules with PERKESO, since amounts depend on your contribution history.

5. Take stock of your finances

Work out how many months your savings will last, check whether your medical cover ends with the job, and talk to your bank early if loan repayments will be tight. Avoid big decisions in the first week, especially withdrawing EPF savings.

6. Get back on the market

  • Update your resume with results, not duties. Our guide to formatting a resume for Malaysian employers will help.

  • Keep the explanation short and factual. "The company restructured and my role was made redundant" is enough. Interviewers hear it often.

  • Register with MYFutureJobs and set up job alerts on Eternity Job so new roles come to you.

  • Use the gap. A short course on a skill employers in your field keep asking for is time well spent.

Watch for scams

People who have just lost a job are a favourite target. Be wary of offers with very high pay and few details, requests for an upfront fee, or anyone asking for your bank details before an interview. Read how to spot a fake job offer.

This is general information, not legal advice. Confirm your entitlements with PERKESO or the Labour Department (JTK).

More on workplace