FACULTY OF BUSINESS MANAGEMENT

DIPLOMA IN BANKING STUDIES

MBA1194A (GROUP 8)

HUMAN RESOURCE MANAGEMENT (MGT340)

PAST YEAR QUESTIONS (TERMINATION OF SERVICES)

PREPARED FOR:

PROF. MADYA DR. ROZMAN BIN MD YUSOF

PREPARED BY:

NOR IZZATI BALQIS BINTI SARIMIN 2018253714

NURUL EZATUL NAZIRA BINTI AYOB 2018644398
SITI DAHLIA A/P RAMLAN 2018229088

SUBMISSION DATE:

24 JUNE 2020
 1.0 OCTOBER 2016 - QUESTION 5 (b)

Retrenchment is termination of employees’ services as a result of redundancy. There are

consequences of retrenchment to the workers as well as to the employers. Discuss two (2)
consequences of retrenchment to the workers and two (2) consequences to the employers.

Answer:

The consequences of retrenchment to the workers are they will face financial
problems because they had lost their regular income. They will face difficulties such as
making loan repayment and they might have to use up whatever savings that they have but if
the saving was run out, they will suffer from it. Furthermore, the employees will face
problems of providing necessities for themselves and their family. For example, if one of
their family is sick, they do not have money for treatment in the hospital.

Next, the retrenched workers will face psychological stress due to the financial
problems they faced plus the embarrassment and negative reactions from their family
members and the local community because of his unemployment. Next, their emotions in
response to this situation such as shock, anger, distress and guilt will make their health
become worst. The effects from it, they will have problems to sleep, appetite loss, frustration,
mood swings or over-reactions to small things and muscle tension or pain.

The consequences of retrenchment to employer are lowered morale among the

remaining employees especially when the retrenchment process has not been handle in
appropriate manner. Employees become insecure and fear of the risk of losing their own jobs
because of retrenchment in the future. The workload will also increase because the remaining
employees will have to take over duties left by their ex colleagues. This will cause fatigue
and depression among them, hence resulting in lower productivity for the company.

Next, the employer will bear high short-term expenditure. This is because employer
has to set aside big amount of funds to compensate employees who are to be retrenched. For
example, employer retrenched employees who are surplus to the company to cut cost as result
of COVID-19 pandemic. Compensation must be paid to them accordingly.

1
 2.0 DECEMBER 2018 – QUESTION 6 (b)

Termination of employee is an employee’s departure from job. Discuss four (4) types of
termination in organization.

Answer:

First type of termination in organization is resignation. Resignation is when an

employee terminates his employment with the employer’s consent. This is when an employee
chooses to end his contract of employment with the organization on his own freewill. Some
of the reasons that causing them to leave the organization are to join another organization, to
become self -employed, to start own business or because of personal reasons like full-time
studies. Before that, the employee needs to give a written notice of his intention to resign as
required by his contract of employment.

Next is retirement. Retirement is defined as an employee leaving his job as he has

reached the age limit set by the employer. Each company is free to set its own policy. The
minimum retirement age of the employee is 60 years old and majority of the employers
follow the practice in the public sector. If there is no provision in the workers contract or
employment in retirement age, then the employer cannot force the worker to retire at any age.

Third is retrenchment. Retrenchment is the termination of the employee’s service as a

result of redundancy. Redundancy occurs when an employee’s skills has no longer be
usefully employed or that his job no longer exists. In short it means that the company no
longer has work for the employee to do. The consequences of the redundancy for the
employee are financial problems, psychological stress and health. Furthermore, the effects for
the employer are they will lowered morale among remaining workers, lowered productivity
and loss of public confidence on the firm.

Lastly, fixed term contracts. Fixed term contracts are contracts that expired at the end
of the time period. An employee on fixed term contracts may file a claim under the Industrial
Relations Act if his contract is not renewed. At the end of the fixed term contract, both parties
need not give any notice. The contract automatically expires when the contract period end.
The contract is normally offered to expatriate staff, foreign workers, retired workers and
workers filling in a short term vacancy.

2
 3.0 REFERENCES

Amirul Izzat Hasri, Donovan Cheah. (2020). Retrenchment of Workers Due to Covid-19.
Retrieved from: https://dnh.com.my/retrenchment-of-workers-due-to-covid-19/

Better health channel. (2018). Retrenchment or Financial Loss. Retrieved from:

https://www.betterhealth.vic.gov.au/health/healthyliving/retrenchment-or-financial-loss

Maimunah Aminuddin. (2018). Human Resource Management : Principles and Practices.

Selangor Darul Ehsan, Malaysia : Oxford Fajar Sdn. Bhd.