What is the Employment Insurance System (EIS)?

The EIS was first implemented in January 2018 by SOCSO. It is a financial scheme aimed at helping employees who lost their jobs until they find new employment. The contributions are being collected in a fund to provide financial assistance to retrenched employees. It also aims to provide extended welfare coverage and aid in job search via career counselling and job-hunting assistance.

What are considered as the Loss of Employment (LOE)?

LOE occurs if the contract of service of an Insured Person (IP) is terminated or becomes void.

It includes:

  • Normal retrenchment
  • VSS/MSS (voluntary/mutual separation schemes)
  • Closure of workplace due to natural disasters (force majeure)
  • Bankruptcy or closure of the business
  • Constructive dismissal
  • Resignation due to sexual harassment or threats made in the workplace
  • Resignation after being ordered to perform dangerous duties that are not within the job scope

What are not included under the Loss of Employment (LOE)?

The following CANNOT be accepted as LOE:

  • Dismissal due to employee misconduct
  • Voluntary resignation
  • Retirement
  • Expiry of a fixed-term contract or completion of a project


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