Understanding the difference between resignation and termination is essential for all employers and employees in Malaysia. Both processes carry distinct legal implications and should be handled in compliance with Employment Law – Dismissal, Termination & Policies to avoid misunderstandings or potential disputes.
1. Overview of Employment Law – Dismissal, Termination & Policies
Employment relationships in Malaysia are governed by well-established Employment Law – Dismissal, Termination & Policies. These policies outline procedures for ending employment, whether initiated by the employer (termination) or employee (resignation). Companies and individuals must follow these frameworks to ensure a legally sound separation process.
2. What is Resignation Under Employment Law – Dismissal, Termination & Policies?
Resignation is when an employee voluntarily decides to end their employment contract. Under Employment Law – Dismissal, Termination & Policies, employees are typically required to serve a notice period as specified in their contract. In the absence of notice, payment in lieu of notice may be necessary.
3. What is Termination Under Employment Law – Dismissal, Termination & Policies?
Termination occurs when the employer ends the employment relationship. Under Employment Law – Dismissal, Termination & Policies, termination can happen due to redundancy, misconduct, or performance issues. Regardless of reason, the termination process must follow prescribed procedures to remain compliant.
4. Key Differences Between Resignation and Termination
| Factor | Resignation | Termination |
| Initiated by | Employee | Employer |
| Notice Period | Required unless waived or paid in lieu | Required unless it’s a summary dismissal |
| Cause | Voluntary decision by the employee | May be due to performance, misconduct, or redundancy |
| Final Pay & Entitlements | Payable according to contract and labor laws | Subject to legal obligations in Employment Law – Dismissal, Termination & Policies |
5. Notice Periods in Employment Law – Dismissal, Termination & Policies
Both resignation and termination generally require a written notice, the duration of which is defined in the employment contract. If no notice is given, the party initiating the separation may need to provide compensation in lieu. Employers and employees should refer to their contracts and Employment Law – Dismissal, Termination & Policies to avoid errors.
6. Documentation & Procedures for Termination or Resignation
Whether it’s a resignation or termination, accurate documentation is vital. Letters of resignation or termination must clearly state the terms and conditions of the employment ending. In accordance with Employment Law – Dismissal, Termination & Policies, all procedures must be clearly recorded and retained for compliance.
7. Final Payments and Entitlements
Employees are entitled to receive outstanding wages, leave encashment, and other benefits upon resignation or termination. Employers must compute these accurately and disburse payments within the timeline set under Employment Law – Dismissal, Termination & Policies.
8. Probationary Employees: Resignation and Termination Rules
Probationary employees are subject to different termination and resignation protocols. Although the notice period may be shorter, Employment Law – Dismissal, Termination & Policies still applies to ensure due process and procedural fairness.
9. Exit Interviews and Handover Process
Conducting an exit interview and ensuring proper handover can reduce operational disruption. This step, though not mandatory under Employment Law – Dismissal, Termination & Policies, is a best practice for maintaining a professional offboarding experience.
10. Common Mistakes to Avoid When Handling Resignations and Terminations
Failing to give proper notice, not documenting communication, or overlooking final pay are common errors. Employers and employees should refer to Employment Law – Dismissal, Termination & Policies to ensure they fulfill all obligations.
11. Importance of a Written Employment Contract
A clear employment contract defines the resignation and termination process. Under Employment Law – Dismissal, Termination & Policies, this contract becomes a key reference in any dispute, making it essential to have detailed clauses regarding both scenarios.
12. Role of Company HR and Legal Advisors
Human Resources and legal advisors play a crucial role in executing resignations and terminations. Their guidance helps ensure that actions taken are aligned with Employment Law – Dismissal, Termination & Policies and best practices in employment compliance.
13. Resignation Letters and Exit Formalities
A resignation letter should be submitted formally in writing, indicating the notice period. Exit procedures such as clearance of dues and return of company assets should be done according to Employment Law – Dismissal, Termination & Policies.
14. Misunderstandings That May Lead to Disputes
Mislabeling a resignation as a termination or vice versa can lead to legal complications. Clarity and compliance with Employment Law – Dismissal, Termination & Policies prevent such issues.
15. Employee Rights After Termination or Resignation
Employees retain rights related to final pay, claims, and references. Employers must fulfill these obligations under Employment Law – Dismissal, Termination & Policies to avoid potential claims or disputes.
Conclusion
Both resignation and termination come with responsibilities that must be observed by employers and employees. Proper documentation, timely notice, and adherence to Employment Law – Dismissal, Termination & Policies are essential for a smooth transition. For companies in Malaysia, following these guidelines not only protects legal interests but also promotes ethical and professional practices.
FAQs
What is the difference between resignation and dismissal?
Can I resign without notice in Malaysia?
Is notice period mandatory when terminating or resigning?
What rights do employees have upon resignation?
What should employers include in a termination letter?
Do I need to conduct an exit interview for resigned employees?
What happens if an employee resigns but refuses to serve notice?
How is final pay calculated after resignation?
Disclaimer: This article is intended to provide general information only and does not constitute legal advice. It should not be used as a substitute for professional legal consultation. We recommend seeking legal advice before making any decisions based on the information in this article. TSL Malaysia fully disclaims any responsibility for any loss or damage that may result from its reliance on this article.
