Can Malaysian Employers Reject an Employee’s Resignation Letter?

Blog
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September 14, 2021
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By
Nicholas K

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

All good things must come to an end, as the saying goes. As an employee, you’re thinking of leaving your current company for pastures anew, and you have a shiny new offer on the table from your future employers. Everything is going according to plan, until you attempt to tender your resignation with your present company.

Then, you encounter a roadblock: your current boss tells you that they’re rejecting your resignation. It isn’t unheard off, and employers are often — naturally — reluctant to lose employees who are integral to the business, or employees that they simply cannot afford to do without.

But is this even legal? Can employers in Malaysia reject an employee’s resignation? 

What does the Employment Act 1955 say?

According to the Employment Act 1955, employers technically cannot reject your resignation. This is because of Section 12 of the Act, which provides that both employers and employees can terminate a contract of service by giving notice of their intention — without any requirement for an “acceptance” of the termination by either party. 

The actual notice period will be determined by your pre-agreed employment contract — failing which, default periods provided for in the Act. Do note, however, that the Employment Act does not cover all employees in Malaysia. The Act only applies to West Malaysia, covering the following categories: 

  • 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.

What about other employees in Malaysia? 

Employees who are not covered by the Employment Act 1955 in Malaysia can rely on the terms of their respective employment contracts. Your employment contract should state what you need to do to “terminate” your contract — specifically, how long of a notice period you’ll be required to serve. 

Keep in mind that this notice period applies to both parties: employers and employees. This means that your employers will also need to honour the notice period if they intend to terminate the agreement, although termination without a notice period is usually permissible in certain cases (such as misconduct, breach of contract). 

Additionally, most employment contracts — as well as the Employment Act 1955 — provide for a payment in lieu of notice. This means that you’ll be able to effectively buy yourself out of your notice period for a sum equivalent to your wages. 

For example, an employee who earns a monthly salary of RM3,000 with a stipulated 2-month notice period, can make a payment of RM6,000 instead of serving the notice period. 

That’s the long answer. 

The short answer: no, employers cannot reject an employee's resignation in Malaysia. 

What if your boss “loses” your resignation letter?

In some cases, your boss might claim that they never received your resignation letter, or that they refuse to accept it. This issue was settled in the case of Chong Kok Kean v Citibank Berhad, where the court ruled that employers don’t need to actually respond to a resignation letter for it to be considered valid. 

This means that your notice period should begin on the day of your resignation — whether your boss has supposedly seen the letter, or not. Be sure to tender your resignation in writing, and if you’re emailing your letter of resignation, a good tip is to CC your personal email so that you have a copy for your personal records. Additionally, you can also cover your bases by following up with your HR department, or your employers, to ensure that your resignation has been received/sent.

Again, it’s the same answer: no, employers cannot reject your resignation letter. 

Digitalise employment agreements and ALL your HR processes with altHR

Situations like these can be better managed with Digi’s super app, altHR. As employers, keeping track of documents like employment contracts can take up a large chunk of your day as employers, or HR professionals — particularly for large teams. Part of this can be attributed to manual processes, including large quantities of paper-based documentation such as employee handbooks, contracts, and company policies. 

At the end of the day, the key to surviving — and thriving — in the new normal is digitalisation. With altHR, HR processes such as employment agreements can be streamlined and adapted to the Documents module — this functionality allows HR to publish and share documents with limited visibility to other employees within an organisation. 

You’ll also be able to revise documents on the go, and for sensitive documents, enable password protection to maintain the utmost confidentiality. This also helps employees to keep track of their important documents, with easy and secure access to their employment contracts, all within altHR. 

And of course, all of that works seamlessly with the other modules in the new normal, such as leaves, expense and payroll management.

HR professionals are often faced with manual, repetitive, and often tedious tasks on a daily basis — tasks that have become even more difficult to handle in light of the ongoing COVID-19 situation. 

But help is available, if you know where to look. Let us streamline your HR processes by managing and automating day-to-day tasks, so you won’t have to worry about things like paperwork, privacy concerns, time-tracking, or onboarding challenges.

Sign up for altHR, the all-in-one digital solution that covers everything from payroll and onboarding, to staff management and providing employees with information kits. You’ve done it the old way long enough.

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