Resignation is one of the common ways by which an employment relationship comes to an end. In Malaysia, resignation of employees is governed by the Employment Act 1955 (“EA 1955”) and the common law of contract. Under Section 12 (1) of the EA 1955, either party to a contract of service may give notice of termination in writing.
According to Section 12(2) of EA 1955, the minimum statutory notice periods are as follows: –
• 4 weeks if employed for < 2 years; •6 weeks if employed for ≈ 2 years but < 5 years; •8 weeks if employed for > 5 years
Section 20 of the Industrial Relations Act 1967 (“IRA 1967”) gives dismissed employees a right to challenge their dismissal, if they considered that they have been dismissed without just cause by the employer. However, this right generally does not extend to voluntary resignations, unless the resignation was made under coercion.
Retraction of resignation after acceptance: Employer’s discretion
Resignation, once properly tendered in accordance with these provisions and/or the employment contract, is recognised as a lawful termination. Once a resignation is served to the employer, the contract of employment is considered terminated at the end of the notice period (or immediately if so specified).
In such circumstances, the resignation takes immediate effect and cannot be unilaterally withdrawn by the employees. As in Chong Kok Kean v Citibank Berhad [2022] 1 LNS 973, the High Court referred to Percetakan Keselamatan Nasional Sdn Bhd v. Jammaliah md Yusoff [2001] 2 ILR 536, held that there is no legal obligation on the part of a company to communicate its acceptance of resignation and that a resignation once tendered cannot be withdrawn except with the consent of the employer.
Essentially, when an employee resigns but later changes his mind, the employer is not under any obligation to allow the retraction. The refusal to accept the retraction and/or withdrawal of resignation does not lead to dismissal of employment.
Exception
An important exception arises where the resignation is alleged to be involuntary, whereby the conduct of the employers had left the employee with no choice but to resign. As such, the employment is terminated due to a breach on the part of the employer. In such cases, the claim of forced resignation (a form of constructive dismissal) under Section 20(1) of the IRA 1967 will arise.
Examples of significant breaches including but not limited to the following scenarios: –
• Emotional distress or pressure from superiors; • Hostile work environment; • Unjustified cut in salary, commissions or benefits; • Unreasonable changes to job scope and/or responsibilities; • Unjustified demotion or downgrade of job position; • A breach of material term by the employer in the employment contract; • Reassignment or transfer to a position outside the scope of the employee’s employment
Key Takeaways for Employers and Employees
For Employees
• Do not tender resignation unless you are certain — once served, it is deemed effective. •If resignation was made under duress and/or threats, consider seeking redress under Section 20 of IRA 1967. •Must be aware that a claim for constructive dismissal requires all four (4) key elements to be clearly established:
◦ The employer committed a fundamental breach of the employment contract;
◦ The employee clearly protested against the breach;
◦ The resignation was directly caused by that breach; and
◦ The resignation occurred without unreasonable delay after the breach.
For Employers
• It is good practice to always acknowledge and document acceptance of resignation clearly. • Be consistent in ensuring mutual understanding on the notice period, and the final employment date to avoid miscommunication.
Conclusion
While it remains employees’ statutory right to resign at any time in accordance with the EA 1955 or contractual terms, the right to retract resignation is limited. Once the resignation letter is served to the employer, it becomes binding unless both parties agree otherwise. As always, clarity in communication and documentation remains key to avoiding disputes.
Employees Resignations: Is It Too Late To Change Your Mind?
Introduction
Resignation is one of the common ways by which an employment relationship comes to an end. In Malaysia, resignation of employees is governed by the Employment Act 1955 (“EA 1955”) and the common law of contract. Under Section 12 (1) of the EA 1955, either party to a contract of service may give notice of termination in writing.
According to Section 12(2) of EA 1955, the minimum statutory notice periods are as follows: –
• 4 weeks if employed for < 2 years;
•6 weeks if employed for ≈ 2 years but < 5 years;
•8 weeks if employed for > 5 years
Section 20 of the Industrial Relations Act 1967 (“IRA 1967”) gives dismissed employees a right to challenge their dismissal, if they considered that they have been dismissed without just cause by the employer. However, this right generally does not extend to voluntary resignations, unless the resignation was made under coercion.
Retraction of resignation after acceptance: Employer’s discretion
Resignation, once properly tendered in accordance with these provisions and/or the employment contract, is recognised as a lawful termination. Once a resignation is served to the employer, the contract of employment is considered terminated at the end of the notice period (or immediately if so specified).
In such circumstances, the resignation takes immediate effect and cannot be unilaterally withdrawn by the employees. As in Chong Kok Kean v Citibank Berhad [2022] 1 LNS 973, the High Court referred to Percetakan Keselamatan Nasional Sdn Bhd v. Jammaliah md Yusoff [2001] 2 ILR 536, held that there is no legal obligation on the part of a company to communicate its acceptance of resignation and that a resignation once tendered cannot be withdrawn except with the consent of the employer.
Essentially, when an employee resigns but later changes his mind, the employer is not under any obligation to allow the retraction. The refusal to accept the retraction and/or withdrawal of resignation does not lead to dismissal of employment.
Exception
An important exception arises where the resignation is alleged to be involuntary, whereby the conduct of the employers had left the employee with no choice but to resign. As such, the employment is terminated due to a breach on the part of the employer. In such cases, the claim of forced resignation (a form of constructive dismissal) under Section 20(1) of the IRA 1967 will arise.
Examples of significant breaches including but not limited to the following scenarios: –
• Emotional distress or pressure from superiors;
• Hostile work environment;
• Unjustified cut in salary, commissions or benefits;
• Unreasonable changes to job scope and/or responsibilities;
• Unjustified demotion or downgrade of job position;
• A breach of material term by the employer in the employment contract;
• Reassignment or transfer to a position outside the scope of the employee’s employment
Key Takeaways for Employers and Employees
For Employees
• Do not tender resignation unless you are certain — once served, it is deemed effective.
•If resignation was made under duress and/or threats, consider seeking redress under Section 20 of IRA 1967.
•Must be aware that a claim for constructive dismissal requires all four (4) key elements to be clearly established:
For Employers
• It is good practice to always acknowledge and document acceptance of resignation clearly.
• Be consistent in ensuring mutual understanding on the notice period, and the final employment date to avoid miscommunication.
Conclusion
While it remains employees’ statutory right to resign at any time in accordance with the EA 1955 or contractual terms, the right to retract resignation is limited. Once the resignation letter is served to the employer, it becomes binding unless both parties agree otherwise. As always, clarity in communication and documentation remains key to avoiding disputes.
About the authors
Chau Yen Shen
Principal Associate
Employment
Halim Hong & Quek
[email protected]
◦
Esther Lee Zhi Qian
Associate
Employment
Halim Hong & Quek
[email protected]
More of our articles that you should read: