Termination of employment contract

Under What Circumstances Can A Contract Of Service Be Terminated By Either The Employer Or Employee ?

Where a contract of service is considered broken, an employer can dismiss an employee. A contract of service is considered to have been broken when an employee has been absent from work for more than 2 consecutive working days without prior leave from the employer or without informing or attempting to inform the employer at the earliest opportunity during such absence with reasonable excuse.

An employer may terminate the contract of service where the employee is found guilty of misconduct, misdemeanor or negligence.

An employee has the right to terminate the contract of service, where an employer fails to pay wages within seven days after the wages period.

A contract of service can also be terminated without notice :

• by paying to the other party or indemnity in lieu of notice
• if there is a willful breach by the other party of a term or condition of the contract of service

Where the contract of service has expired or work being completed, the contract may also be terminated. Written notice being given by either party may also terminates a contract of service.

Notice Period Required To Terminate A Contract Of Service

An employee may resign by giving notice of resignation or termination to the employer to terminate the contract of service. An employer may also dismiss an employee by giving notice of termination to such employee. In both situation, the length of notice shall be the same pursuant to the contract of service.

Where the period of notice of termination is not specified in the contract of service, the notice period shall be as follows :

• less than 2 years of service – minimum 4 weeks
• 2 years or more but less than 5 years of service – minimum 6 weeks
• 5 years of service or more – minimum 8 weeks

Other Than Termination, What Actions Can An Employer Takes Against An Employee On The Grounds Of Misconduct On The Part Of The Employee ?

Where an employee is found guilty of misconduct by an employer, the employer may take the following actions :

• downgrade the employee
• impose any other lesser punishment as the employer considers just and fit

What can be done if my employment contract Have Been Terminated Without Cause Or Excuse By My Employer ?

Where you have been terminated without cause or excuse by your employer, you can enforce your civil right and remedies for any breach or non-performance of the contract of service by any suit in court or you can file in a written representation within 60 days of the dismissal to the Director General of Industrial Relations Department to be reinstated pursuant to section 20 of the Industrial Relations Act, 1967.

The Industrial Relations Act 1967 provides for the regulation of relations between employers and employee and their trade unions and the prevention and settlement of disputes between employer and employee which is connected with the employment or non-employment or the terms of employment or the conditions of work of such employee.

Where you are a female employee and your employer is found guilty of terminating you during your maternity leave, your employer shall be liable, on conviction to a fine not exceeding RM2,000.

What Are The Circumstances Under Which An Employee Is Not Entitled To Termination Or Lay-Off Benefits ?

There are certain circumstances under which an employee is not entitled to termination or layoff benefits :

• Employed for less than 12 months on date of termination
• The employee voluntarily terminates the contract of service
• Where the employee commits misconduct inconsistent with the fulfillment of the expression or implied condition of service after due inquiry.
• Where the employee attains the age of retirement as stipulated in the contract of service
• The contract of service is renewed
• The employee re-engaged on terms and conditions not less favorable than his previous contract
• 7 days before the date of termination, the employer has offered to renew the contract on no less favorable terms
• The employee leaves the services without paying the employer the indemnity due contract of service after receiving due notice of termination of the contract or without employer’s prior consent

An employer shall pay termination or layoff benefits to an employee not later than 7 days after the termination.
Layoff Benefits

Under the Employment (Termination and Layoff Benefits) Regulations 1980, an employee will be entitled to layoff benefits not less than the following :

• 1 to 2 years service – 10 days wages for each year service
• more than 2 years but less 5 years service – 15 days wages for each year service
• 5 years service or more – 20 days wages for each year service

For an incomplete year, the calculation will be on a pro-rata basis to the nearest month.

Similar Posts:

• Notice of termination of contract
• FAQ on Probationary Period
• Probationary Period
• Reasons for termination of employment
• How to professionally resign from your job
• Introduction to EA 1955
• Leave

Filed Under: Employment Act 1955 • Malaysia Labour Law

Tags: employment law, employment terms, firing