In order to know more about the Malaysian labour laws, I suggest you get acquainted with the Employment Act and the Employment (Termination and Layoff) Benefits Regulations. Both can be found on this website.
1. Please read the First Schedule of the Employment Act at http://www.pesaraonline.net/1stschedule.htm This the place where "employee" is defined.
2. The Employment Act gives protection in the form of minimum benefits such as working hours, rest days, leave, sick leave, maternity benefits and so on. It does not provide protection for those matter mentioned by you. It is up to the employers to maintain discipline. Disciplinary actions should be taken by the employers for 'bad employees'.
3. The working relationship between employer and employees seems to be not so good in the company. Need to improve. You pay termination benefits in normal termination and you do not have to pay when the employee is dismissed due to misconduct. Please read Regulation 4(1)(b)below:
"....4. (1) Subject to paragraphs (2), (3) and (4), an employee shall be entitled to termination benefits payment where his contract of service is terminated for any reason whatsoever otherwise than -
(a) by the employer, upon the employee attaining the age of retirement if the contract of service contains a stipulation in that behalf; or
(b) by the employer, on the grounds of misconduct inconsistent with the fulfilment of the express or implied condition of his service, after due inquiry, or
(c) voluntarily by the employee, other than under section 13 (2) or the reasons specified in section 14 (3) of the Act....."
4. What I meant was the new company should not provide terms and conditions of service less favourable than those in the old company. Again, you must read the Termination and Layoff Regulations in order to get a better picture.
5. His salary and other terms and conditions should not be worse than before.
6. VSS stands for Voluntary Severance Scheme. When a company is not doing well and wishes to downsize, the company may work out a scheme for the employees to choose. The scheme usually involves payment of monetary incentive. If the employee is happy with the offer, he may choose to accept the offer and leave the company and everyone is happy. Those who do not want to accept (may be the offer is not attractive), they will choose to stick on.
Finally, if you have the time, I think it is a good ideal to attend some labour law courses as these labour problems seem to be bugging you.