Your Employee is Refusing to Serve Their Notice Period — What Now?

Disclaimer: This article should not be considered to be legal advice, and altHR is not liable for any actions taken based on this article.‍‍

When an employee chooses to leave your company, there are a number of things you need to take into consideration. Chief among your immediate concerns would be thinking about the impact of your soon-to-be former employee’s departure on the company’s business objectives — as well as the time you have to look for a replacement. 

Fortunately, many employment contracts come with stipulated notice periods for this very purpose. This is the period of time between an employee’s tendered resignation and their actual last working day at the organisation, where outgoing individuals can be offboarded and complete the necessary handover tasks and formalities. 

However, a commonly-asked question in HR circles in Malaysia: what do you do when an employee refuses to serve their notice period? If you’re encountering a similar situation, you’ve come to the right place.

The Employment Act 1955

Employees that are covered by the Employment Act 1955 automatically have notice periods of: 

• 4 weeks if the employee has been so employed for less than 2 years‍
• 6 weeks if employed for at least 2 years but less than 5 years‍
• 8 weeks if employed for at least 5 years

Do note that the Act only covers the following categories of employees in West Malaysia: 

• Employees who have entered into a contract of service with monthly wages of RM2,000 or less
• Employees who — regardless of monthly wage — are engaged in manual labour
• Domestic servants
• And other categories of employees within the First Schedule of the EA 1955

For other employees, your notice period will be specified within your contract. You should also be aware that you can choose to make a payment in lieu of your notice period, if you need to leave immediately — as long as it is mentioned in your contract. 

Find out more about that here.

What to do if your employee ignores their notice period

As long as the notice period is stipulated in the employee agreement, the employee is contractually bound to serve the notice period. However, what should you do if your employee simply refuses to serve their notice? 

As mentioned above, the first thing you should do is to seek payment in lieu of notice from the employee. For example, if their monthly salary amounts to RM10,000, then payment in lieu for a notice period of 2 months is equivalent to RM20,000. 

If your former employee refuses to comply, then your next step is to take the matter to court. There are two options, as explained by Donovan & Ho: 

• Labour Court
• Civil Court 

However, do note that the Labour Court will only be appropriate if the employee’s monthly salary does not exceed RM5,000. For individuals with monthly salaries of above RM5,000, your next step is to take legal action in civil court for breach of contract. At this point, you’re best advised to engage a legal firm for further advice. 

As a side note, it’s also worth considering the reasons behind an employee’s sudden departure without serving their notice periods. Are they in a distressing situation? Is there something at work/home that can be mitigated or helped by their employers? Remember to treat your employees as human beings first and foremost — something that we always keep in mind when building altHR.