(May 25): Loss-making flag carrier Malaysia Airlines' (MAS) plan to terminate its entire staff and rehire only two-thirds of them is a "cynical manipulation of labour laws", a DAP lawmaker said today.

Kluang MP Liew Chin Tong in a statement today said the move, part of MAS' restructuring exercise, would cause "major economic havoc" if private companies decided to emulate it.

MAS is fully owned by Malaysia's sovereign wealth fund Khazanah Nasional Berhad, which is set to restructure the airline after years of heavy financial losses, peaked with two tragedies in 2014.

"MAS, and its owner Khazanah, are telling the whole country that the best way to sack workers is to shut down the current set-up without the necessary compensation via the conventional voluntary separation schemes (VSS)," Liew said.

"It is not uncommon for companies to terminate workers with compensation but to terminate the entire company and rehire in a new company is such a cynical manipulation of labour laws and Khazanah's role as a government-linked corporation.”

English daily The Star, quoting sources, said that the retrenchment could start in a "matter of days", in stages, and could result in almost 8,000 of its 20,000 workforce losing their jobs.

Two-thirds will be rehired under a new company called MAS Bhd.

"The employees of MAS must not be made victims and forced to shoulder the blame of more than two decades of mismanagement of MAS since Tan Sri Tajuddin Ramli's takeover of the airline in 1993," Liew said.

MAS lost two flights, MH370 and MH17, in 2014.

On March 8, MH370, a flight from Kuala Lumpur to Beijing, disappeared from the radar and no wreckage has been found since.

On July 17, MH17, a flight from Amsterdam to Kuala Lumpur, was shot down by an ground-to-air missile while flying over a conflict zone in the Ukraine. None of the passengers survived.

Khazanah took MAS private last year and laid out a restructuring plan which initially was supposed to cost 6,000 employees their jobs. – The Malaysian Insider