Can an Employer Terminate an Employee Without Warning?

Written by: Izz Murtada

Many people in Malaysia ask this question. An employee may hear, “Your service ends today,” with no letter and no chance to explain. An employer may wonder if there is a quicker way to deal with a worker who keeps causing problems. The answer is not a simple yes or no. It depends on why the employer wants to end the job. In this article, we look at what the Employment Act 1955 (Act 265) says, in easy words.

Not Every Problem Is the Same

The first step is to know what kind of problem you are dealing with. In the workplace, there are two big groups.

The first is poor performance. This means the employee is not reaching the targets, makes many mistakes, or is slow to learn. The employee may be trying, but the results are not good enough.

The second is serious misconduct. This means the employee did something wrong, like stealing, lying, hurting someone, or breaking an important rule on purpose.

These two are treated differently under the law. If you mix them up, the employer can end up making a costly mistake. The employee can also end up being treated unfairly.

Why Warnings Matter

A warning is a fair way to tell someone, “This is not acceptable. Please fix it.” For poor performance, a warning gives the employee a chance to improve. It also gives the employer a clear record of what was said and when.

Here is something many people do not know. Act 265 does not say, word for word, that every employee must get a warning letter first. But the Act does expect the employer to follow a fair process. For misconduct, Section 14 says the employer can act “after due inquiry”. This means the employer must look into the matter properly before deciding. It cannot just guess, or act on anger.

In real life, warnings help both sides. The employee knows what to change. The employer can show that the decision was fair if it is questioned later.

Ending the Job for Poor Performance

If the problem is poor performance and not misconduct, the normal way to end the job is by giving notice. Section 12 of Act 265 explains this. The notice must be in writing. The length of notice is the same for the employer and the employee. It follows what is written in the contract of service. If the contract says nothing, the Act sets the least amount of notice:

• Four weeks, if the employee has worked for less than two years
• Six weeks, if the employee has worked for two years or more but less than five years
• Eight weeks, if the employee has worked for five years or more

The employer can also end the job right away without giving notice. Section 13(1) allows this if the employer pays the employee the wages that would have been earned during the notice period. This is often called “pay in lieu of notice”. So an employer can end a job quickly, but it must pay for it.

Before doing this, many employers choose to give a warning or a chance to improve first. This is not always forced by the Act, but it is a good habit that keeps things fair.

When Can an Employer Dismiss Without Notice?

There are some serious situations where dismissal without notice may be allowed.

The first is misconduct. Section 14(1) says an employer may, because of misconduct that goes against the conditions of the job, dismiss the employee without notice. But this can only be done “after due inquiry”. The employer may also choose a lighter action, such as downgrading the employee, or another fair punishment. If the punishment is suspension without pay, it cannot be more than two weeks.

The second is a wilful breach of the contract. Section 13(2) says either side can end the contract without notice if the other side wilfully breaks a condition of the contract.

The third is long absence. Section 15(2) says an employee is seen as having broken the contract if he or she is away from work for more than two days in a row without leave. The only exception is when there is a good reason and the employee told, or tried to tell, the employer as early as possible.

Notice the word “inquiry” again. Even for serious misconduct, the employer should hear the employee’s side first. During the inquiry, the employer may suspend the employee for up to two weeks, but must pay at least half of the wages. If the inquiry finds no misconduct, the employer must pay back the full wages that were held.

What Employers Should Be Careful About

Here are some simple points to remember.

First, the employer must still pay what is owed. When the job ends without notice because of Section 14(1)(a) or Section 13, the wages earned up to the day before the end date must be paid by the day the job ends. If the employer ends the job by pay in lieu of notice, that extra amount must be paid on the same day.

Second, some employees have special protection. Under Section 41A, it is an offence to end the job of a pregnant employee, or one who is ill because of her pregnancy, unless the reason is a wilful breach of contract, misconduct, or the business closing down. If this happens, the employer must prove that the reason was not her pregnancy.

Third, an employee who feels the dismissal was unfair is not left without help. Section 69 allows the Director General of Labour to look into a decision made by an employer under Section 14(1), and to confirm it or set it aside. If the dismissal is set aside, the employer may need to pay the employee what is due, such as pay in lieu of notice.

A Simple Way to Think About It

So, can an employer terminate an employee without warning? Sometimes, yes. But it is not as easy as it sounds. For serious misconduct, the employer may dismiss without notice, but only after a proper inquiry. For poor performance, the employer should give proper notice or pay in lieu of notice. A warning is not always written as a rule in the Act, but it is one of the best ways to show that the process was fair and honest.

For employees, the lesson is to read your contract and keep your own records. For employers, the lesson is to act with care and to write everything down.

How Kita Strategies Can Help

Ending someone’s job is never easy, and a small mistake can turn into a big problem. At Kita Strategies, we are an HR company that helps businesses in Malaysia handle matters like warning letters, inquiries, and employment contracts in a clear and fair way. If you would like some guidance on managing your people, we are always happy to have a friendly chat.