Dismissal of Malaysian employees

Updated on Tuesday 24th January 2023

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The termination of the employment contract in Malaysia falls under the Employment Law and managers need to consider the rules and regulations in this matter. It is advisable to ask for guidance and legal assistance, if you are a foreign or local employer found in a situation where you need to fire one or more employees from our lawyers in Malaysia.


Details about dismissals in Malaysia

Firing an employee in Malaysia needs to have a solid basis and to respect the terms and conditions stipulated in the working contract, where you also find the contractual rights of an individual in a company. There are two types of dismissals in Malaysia, as followed:

•    direct notice of dismissal;
•    constructive dismissal.

In the case of a direct dismissal, an employer has the right to finish the work collaboration in a straight manner, with the help of a letter of termination presented to the person in question. If you find yourself in this situation and you consider there has been an abuse, or the company did not exercise the dismissal in good faith, you have the right to solicit help in the court of law.

In the case of constructive dismissal in Malaysia, visible harassment and dishonor might put an individual in the position to leave the company. Besides that, if the terms of the Malaysian contract change frequently, this might be a strong reason why individuals choose to close the collaboration. Constructive dismissal in Malaysia means the employee can refuse or not the new contractual terms, but the principle of fairness will be considered. Additional information on these matters can be obtained from our Malaysian lawyers.

The situations when an employee can be dismissed

From the beginning, we mention that according to the rules and regulations in Malaysia, an employer needs to pay the compensation as stipulated in the work contract of an individual. Poor work performance and inappropriate behavior of an employee in a company are the main reasons why a working relationship may end up with a dismissal. In such cases, the employee will be announced in writing the company’s decision.

Interested in residency in Malaysia? You have the option to work with our lawyers to get a clear idea of ​​what formalities and procedures are involved. You can also make investments to earn this status, and family members can be included in your application. It is important to specify that foreign citizens have the obligation to register with the local authorities before applying for a residence permit.

Please feel free to contact our law firm in Malaysia for extra details in dismissal matters in a company.