Employment: What is an Employee Dismissal?

Are you being dismissed by your employer? Need to seek legal advice from lawyer?

Dismissals are part and parcel of today’s workforce. However, as an employer, have you ever wonder what are some of the grounds that an employee’s employment can be dismissed? Also, as an employee, have you wondered if you can raise your grievances in the event you are unlawfully or unfairly dismissed from your employment? Below is a quick guide on some terminologies, examples of dismissals and the remedies available if one has been unlawfully or unfairly dismissed.

Direct Dismissal vs Constructive Dismissal

There are no material differences between direct dismissal and constructive dismissal[1] in the private sector.

A direct dismissal usually occurs when an employer terminates a contract of employment due to corporate restructuring, breach of professional conduct on part of the employee, or other underlying reasons that may affect the organisation’s business and/or reputation.

Meanwhile, a constructive dismissal usually occurs when the relationship between the employer and employee has reached an impasse, or when the employer has breached essential terms of the employment contract. As a result of such breach relationship breakdown, the employee is left with no choice but to leave. Examples of constructive dismissal are where:

  1. The terms of the employment have been altered/changed without prior notice to the employee;
  2. There have been occurrences of harassment at work;
  3. The employer has failed to duly pay the employee’s wages/salary; or
  4. There has been a demotion/reduction of salary without reasonable cause.

Other Causes of Employee Dismissal


In instances where the employee has passed on, the employment will automatically be terminated. The employer has the responsibility to ensure that the salary and benefit due to the employee before his demise is paid to their respective personal representative.[2]

Redundancy or Retrenchment

In situations where there is a redundancy of employee’s skill set, a corporate downsizing, or an organisational reshuffling, the employer may opt for dismissal or retrenchment in pursuance of business goals or in response to economic downfall where the employee’s skill is no longer relevant to the organisation or there is no more work available for the employee or the employer is cutting down on overhead cost due to downsizing of the workplace [3].


An employee can be terminated/ dismissed from his employment if he has been absent from work for more than two consecutive days without obtaining leave from the employer unless he has any reasonable excuse of doing so and has made an attempt to inform his employer[4].


An employer may dismiss an employee without due notice after an inquiry on the grounds of misconduct[5]. Misconduct is defined as any conduct which is inconsistent with the discharge of his duty, such as improper behaviour, intentional wrongdoing or deliberate violation of a rule/standard of behaviour[6] that is related to his work[7]. Examples of misconducts are sexual harassment, constantly late for work, absent from work, stealing the company’s property, or intentionally damaging employer’s goods etc.

Poor Performance

If the employee’s work performance is deemed to be unsatisfactory, an employer can dismiss his employee provided that it is justifiable to do so and after informing, giving warning and allowing the employee an opportunity to improve his performance[8].

Remedies for Unlawful or Unfair Dismissal

Filling a complaint with the Director General of Industrial Relation:

In the event an employee feels that their dismissal is unlawful or unfair, the employee must file a complaint with the Director General of Industrial Relation within 60 days of their dismissal[9].

Thereafter, the department will attempt to settle the matter between the employer and employee[10]. If it fails, the department will then notify the Minister in charge of human resources[11] and the Minister may refer the matter to the industrial court[12].

If the court favours the employee’s case, the court can either order that the employee be reinstated or be compensated, based on the factors laid down in the act[13]. Either party can still appeal to the high court if they are not satisfied with the outcome.

Inherent Power of Minister Responsible for Human Resources:

The minister may also compel the employer to provide benefits to the employee[14].

Filling a Civil Claim:

Alternatively, an employee can claim for damages for breach of contract in the civil court.

Are you being dismissed by your employer? Need to seek legal advice from lawyer?

[1]  Goon Kwee Phoy v J & P Coats (1981) 2 MLJ 129
[2] Kumpulan Guthrie Sdn Bhd v Sukumari Amma N Menon Award No. 33/73
[3] Section 12(3)(a) – (d), Employment Act 1955.
[4] Section 15(2), Ibid.
[5] Section 14(1)(a), Ibid.
[6] Holiday Inn Kuching v Elizabeth CS Lee Award No. 255 of 1990.
[7] Syarikat Kenderaan Kelantan Berhad v Rosidi Bin Zakaria Award No. 542 of 1995.
[8] IE Project Sdn Bhd v Tan Lee Seng Award No. 56 of 1987.
[9] Section 20 (1A), Industrial Relations Act 1967.
[10] Section 20(2), Ibid.
[11] Ibid.
[12] Section 20(3), Ibid.
[13] Section 30(4) – (7), Ibid.
[14] Section 60J, Employment Act 1955.