Compliance Check: Malaysia: Navigating Unfair Dismissal Claims

Unfair dismissal remains one of the most common employment disputes in Malaysia. Under the Industrial Relations Act 1967 (IRA), employees who believe they have been dismissed 'without just cause or excuse' have a statutory right to challenge the termination of their employment. Understanding the dispute resolution framework is critical for both employers and employees.

'Just cause and excuse'

Notably, while section 12(1) of the Employment Act 1955 grants both employers and employees the statutory right to terminate an employment contract by giving notice at any time, the Malaysian courts have consistently held that termination on the basis of contractual notice alone does not amount to 'just cause or excuse'. Employees who are dismissed on this basis may seek remedies such as reinstatement or compensation by challenging the termination as being without 'just cause or excuse'.