Can an Employer Terminate an Employee Without Notice in Malaysia?

An employee commits a serious workplace offence and the employer wants them to leave immediately.

Can the employer dismiss the employee without notice or payment in lieu of notice?

Under Malaysian employment law, the answer is yes but only where sufficiently serious misconduct or a wilful breach of the employment contract has been proved.

Not every mistake justifies immediate dismissal. The employer should investigate the allegation, allow the employee to respond and ensure that dismissal is proportionate.

What Is Dismissal Without Notice?

Dismissal without notice is commonly known as summary dismissal.

It means that:

• employment ends immediately;
• the employee does not serve a notice period; and
• the employer does not pay salary in lieu of notice.

This differs from immediate termination with payment in lieu of notice, where the employee receives the salary they would have earned during the notice period.

When Can an Employer Dismiss Without Notice?

Section 13(2) of the Employment Act 1955 allows employment to be terminated without notice where the other party has committed a wilful breach of a condition of the employment contract.

Section 14(1) also allows an employer, after due inquiry, to dismiss an employee without notice for misconduct inconsistent with the express or implied conditions of employment.

Alternatively, the employer may impose a lesser punishment, such as downgrading or suspension without wages.

What Misconduct May Justify Immediate Dismissal?

Examples may include:

• theft or fraud;
• serious dishonesty;
• falsifying company records;
• physical violence;
• sexual harassment;
• serious insubordination;
• accepting bribes;
• disclosing confidential information;
• working for a competitor without permission;
• deliberate safety violations;
• gross negligence causing serious harm; or
• prolonged absence without leave or explanation.

Whether dismissal is justified depends on the facts. An employee handbook describing conduct as “gross misconduct” does not automatically make immediate dismissal lawful.

Must the Misconduct Be Serious?

Yes.

The employer should consider:

• whether the conduct was deliberate;
• the damage caused;
• the employee’s role and responsibilities;
• whether trust and confidence were destroyed;
• the employee’s disciplinary record;
• how similar cases were handled; and
• whether a warning or lesser punishment would be sufficient.

A minor first offence will not ordinarily justify summary dismissal. Repeated minor misconduct may eventually justify dismissal where the employee has received clear warnings but continues to breach workplace rules.

Must the Employer Have Proof?

Yes. Suspicion is not enough.

Relevant evidence may include:

• documents and financial records;
• emails or messages;
• CCTV footage;
• access logs;
• attendance records;
• witness statements;
• audit reports; and
• the employee’s explanation.

In Goon Kwee Phoy v J & P Coats (M) Bhd [1981] 1 MLJ 129, the Federal Court confirmed that where an employer gives a reason for dismissal, the Industrial Court must determine whether that reason has been proved.

The employer should not dismiss first and search for evidence later.

Must a Show Cause Letter Be Issued?

The employer should ordinarily issue a show cause letter setting out:

• the allegation;
• the relevant date and incident;
• the rule or duty allegedly breached; and
• the deadline for the employee’s response.

The allegation should be specific enough for the employee to provide a meaningful explanation.

The employer should then consider the response honestly before deciding whether further investigation or disciplinary action is required.

Is a Domestic Inquiry Required?

Section 14(1) refers to dismissal after due inquiry.

A due inquiry involves fairly investigating the allegation and allowing the employee to respond. A formal domestic inquiry may be appropriate where facts are disputed, witnesses must be questioned or the allegation is particularly serious.

In Dreamland Corporation (M) Sdn Bhd v Choong Chin Sooi [1988] 1 MLJ 111, the Federal Court held that the absence or defectiveness of a domestic inquiry is not necessarily fatal if the employer can ultimately prove just cause or excuse before the Industrial Court.

Nevertheless, skipping a fair investigation remains risky. The employer may overlook an innocent explanation or fail to preserve important evidence.

Read more: Can My Employer Dismiss Me Without a Domestic Inquiry In Malaysia?

Can Unexplained Absence Justify Dismissal?

Potentially.

Under section 15(2) of the Employment Act, an employee is deemed to have broken the employment contract if they are absent for more than two consecutive working days:

• without prior leave;
• without a reasonable excuse; and
• without informing or attempting to inform the employer at the earliest opportunity.

The employer should still try to contact the employee and request an explanation before treating the employment as abandoned.

The employee may have been hospitalised or genuinely unable to communicate. Absence alone is not conclusive if there is a reasonable explanation.

Can an Employer Terminate Immediately by Paying Notice?

Section 13(1) allows employment to end immediately through payment in lieu of notice.

However, paying notice does not automatically make the dismissal fair.

If the employee challenges the dismissal under section 20 of the Industrial Relations Act 1967, the employer must still establish just cause or excuse.

In Maritime Intelligence Sdn Bhd v Tan Ah Gek [2021] 4 MLJ 719, the Federal Court confirmed that the Industrial Court should examine the genuine reason operating in the employer’s mind at the time of dismissal.

An employer should not rely solely on a contractual termination clause while concealing the real reason for dismissal.

Can a Probationer Be Dismissed Without Notice?

A probationary employee may be summarily dismissed for serious misconduct where just cause or excuse is proved.

However, probation does not give an employer an unrestricted right to dismiss.

In Khaliah Abbas v Pesaka Capital Corporation Sdn Bhd [1997] 3 CLJ 827, the Court of Appeal confirmed that probationers are protected against dismissal without just cause or excuse.

If the real issue is poor performance, the employer should ordinarily communicate the shortcomings and provide a reasonable opportunity to improve instead of immediately dismissing the probationer.

What Should the Dismissal Letter Include?

A summary dismissal letter should state:

• the misconduct proved;
• the material facts;
• the process followed;
• why the employee’s explanation was rejected;
• why dismissal was considered appropriate;
• the effective date; and
• any outstanding payments.

The reason stated should be the genuine reason for dismissal. Introducing new allegations after the employee files a claim may weaken the employer’s case.

What Payments Remain Due?

Even after a lawful summary dismissal, the employee remains entitled to wages and other payments already earned, subject to lawful deductions.

These may include:

• salary up to the final day;
• approved expense reimbursements; and
• contractual or statutory payments already accrued.

Payment in lieu of notice is not ordinarily payable where summary dismissal for serious misconduct is justified.

Can the Employee Challenge the Dismissal?

Yes.

An employee who considers that they were dismissed without just cause or excuse may file a representation under section 20 of the Industrial Relations Act 1967.

The representation must generally be filed within 60 days of dismissal.

The Industrial Court may consider:

• whether the misconduct occurred;
• whether the employer had reliable evidence;
• whether the employee could respond;
• whether the investigation was fair;
• whether the offence was sufficiently serious; and
• whether dismissal was proportionate.

Practical Checklist for Employers

Before dismissing without notice, ask:

• What specific misconduct occurred?
• What evidence proves it?
• Has the employee been allowed to respond?
• Has the explanation been fairly considered?
• Is a domestic inquiry required?
• Is dismissal proportionate?
• Would a warning or lesser punishment be sufficient?
• Does the dismissal letter state the true reason?
• Are all outstanding wages ready for payment?

If these questions cannot be answered clearly, immediate dismissal may be premature.

Final Thoughts

An employer may terminate an employee without notice where serious misconduct or a wilful contractual breach has been established.

However, summary dismissal should not be the automatic response to every workplace mistake.

The employer should investigate fairly, allow the employee to respond and consider whether dismissal is proportionate. Simply paying notice or relying on a termination clause also does not remove the requirement for just cause or excuse.

If you need help investigating misconduct, responding to disciplinary allegations or assessing whether an immediate dismissal is lawful under Malaysian law, feel free to get in touch. You can also explore Employment Law Malaysia: The Complete Guide for Employees and Employers (2026) for practical articles covering workplace rights, disciplinary procedures, termination and unfair dismissal claims.

This article provides general information and does not constitute legal advice. Each dismissal depends on its facts, evidence, employment terms and disciplinary process.