“Misconduct” is a word frequently used in the workplace. An employee arrives late, ignores an instruction or makes a costly mistake, and the incident is immediately labelled misconduct.
Legally, however, not every mistake or workplace disagreement amounts to misconduct.
Under Malaysian employment law, misconduct generally refers to improper conduct by an employee that is inconsistent with the employee’s express or implied obligations to the employer. Whether particular conduct amounts to misconduct depends on the employee’s duties, the nature of the workplace and the surrounding circumstances.
If you’re looking for a more in depth guide to Malaysian employment law, visit Employment Law Malaysia: The Complete Guide for Employees and Employers (2026) where I explain all you need to know about employment law.
How Is Misconduct Defined in Malaysia?
The Employment Act 1955 does not provide a complete definition or list of employee misconduct.
However, section 14(1) of the Act refers to misconduct that is inconsistent with the fulfilment of the express or implied conditions of an employee’s service. (Employment Act 1955)
This means misconduct may involve a breach of:
- the employment contract;
- a lawful and reasonable instruction;
- a workplace rule or company policy;
- an employee’s duty of honesty and fidelity;
- the obligation to perform work responsibly; or
- accepted standards of workplace discipline.
An act does not necessarily have to be listed in the employment contract before it can amount to misconduct. Some duties are implied by the employment relationship itself.
For example, an employer does not need a written clause expressly telling employees not to steal, falsify company records or deliberately disclose confidential information.
What Are the Main Types of Employee Misconduct?
There is no exhaustive list of employee misconduct in Malaysia. Broadly, misconduct may involve a failure to perform employment duties, a breach of workplace discipline or dishonest and improper conduct.
Whether an act amounts to misconduct will always depend on its particular facts. Common examples include the following.
1. Unauthorised absence
An employee who repeatedly fails to attend work without permission or a reasonable explanation may be guilty of misconduct.
Section 15(2) of the Employment Act 1955 also provides that an employee is deemed to have broken the contract of service where the employee is continuously absent for more than two consecutive working days without prior leave, unless the employee has a reasonable excuse and has informed or attempted to inform the employer at the earliest opportunity.
Absence should therefore be considered together with the employee’s explanation. Hospitalisation, an emergency or a genuine inability to contact the employer may affect how the absence is viewed.
2. Persistent lateness
An isolated instance of lateness will not ordinarily carry the same seriousness as repeated lateness after several warnings.
Relevant considerations may include:
- how late the employee was;
- how frequently it occurred;
- whether there was a reasonable explanation;
- whether the lateness affected operations; and
- whether the employee had previously been warned.
3. Insubordination
Insubordination generally involves a deliberate refusal to obey a lawful and reasonable instruction.
The instruction must be connected to the employee’s duties and must not require the employee to do something illegal, unsafe or fundamentally outside the employment relationship.
A rude response may amount to discourteous behaviour, but it is not always the same as refusing an instruction.
4. Breach of confidentiality
Employees may have access to commercially sensitive information, customer data, business strategies or internal documents.
Deliberately disclosing or misusing that information may amount to misconduct, particularly where the employee knew that it was confidential.
However, not every accidental disclosure carries the same seriousness. The circumstances, sensitivity of the information and employee’s intention remain relevant.
5. Conflict of interest
A conflict of interest may arise where an employee’s personal interests interfere with the employee’s duties to the employer.
Examples may include:
- secretly operating a competing business;
- diverting business opportunities;
- awarding work to a company owned by a family member without disclosure; or
- receiving personal benefits from a supplier.
Merely having an outside interest does not always amount to misconduct. The key issues are usually whether the interest conflicted with the employee’s duties and whether it was dishonestly concealed.
6. Abuse of medical leave
An employee who is genuinely unwell is entitled to take medical leave in accordance with the law and the applicable employment terms.
Misconduct may arise where an employee falsifies a medical certificate, dishonestly claims to be ill or uses medical leave for an entirely inconsistent purpose.
Employers should be careful not to assume that an employee is malingering merely because the employee was seen outside their home while on medical leave. The nature of the illness and medical advice must be considered.
7. Sexual harassment
Unwanted conduct of a sexual nature may amount to serious misconduct.
Sexual harassment is not limited to physical contact. It may include sexually explicit messages, unwanted comments, suggestive jokes, repeated advances or other conduct that creates an offensive or uncomfortable working environment.
8. Misuse of company property or systems
Misconduct may also involve improper use of:
- company vehicles;
- computers and email accounts;
- confidential databases;
- expense accounts;
- company credit cards; or
- business equipment.
The seriousness of the matter will depend on the applicable policy, the employee’s intention and the harm or risk caused.
Facing an employee misconduct issue? Get in touch.
Does a Breach of Company Policy Automatically Amount to Misconduct?
A breach of company policy may amount to misconduct, but the existence of a written policy does not automatically settle the matter.
The employer should be able to show that:
- the policy was clearly written;
- the employee knew or ought reasonably to have known about it;
- the rule was lawful and reasonable;
- the policy applied to the employee;
- the employee actually breached it; and
- the rule was consistently enforced.
An employer may face difficulty relying on a policy that was never communicated to employees or that management had routinely ignored.
Similarly, describing every policy breach as “gross misconduct” does not automatically make it so. The actual nature and seriousness of the conduct still matter.
Misconduct vs Poor Performance
Misconduct and poor performance are related but legally distinct concepts.
Misconduct usually involves wrongful conduct, such as deliberate disobedience, dishonesty or a serious failure to comply with an obligation.
Poor performance usually involves an employee’s inability to meet the required standard despite attempting to perform the work.
For example:
- An employee who tries but fails to meet a reasonable sales target may be a poor performer.
- An employee who deliberately refuses to contact customers despite repeated instructions may be committing misconduct.
Poor performance is generally addressed through performance standards, warnings and an opportunity to improve. Misconduct is ordinarily addressed through a disciplinary process.
Employers should identify the real issue instead of labelling poor performance as misconduct merely because disciplinary action appears quicker.
Misconduct vs an Honest Mistake
Employees are human. Mistakes will happen.
An honest mistake does not automatically amount to misconduct, particularly where the employee:
- acted in good faith;
- did not deliberately breach a rule;
- promptly disclosed the mistake;
- cooperated in correcting it; and
- did not cause serious or irreversible harm.
However, a mistake may cross into misconduct where it involves gross negligence, recklessness, concealment or repeated carelessness despite warnings.
Context matters. A small administrative error by a junior employee is different from a senior safety officer deliberately ignoring a critical safety procedure.
Can Conduct Outside Work Amount to Misconduct?
Conduct outside working hours may amount to misconduct if there is a sufficient connection with the employment relationship.
Examples may include:
- harassing a colleague outside the office;
- making online statements that seriously harm the employer’s legitimate interests; or
- committing an offence that makes the employee unable to perform their role.
Employers do not have unrestricted control over an employee’s private life. The conduct must have a genuine connection with the employee’s duties, workplace relationships or the employer’s legitimate business interests.
A social-media post that a manager merely dislikes is not automatically employee misconduct.
Minor and Major Misconduct
Employee handbooks often distinguish between minor and major misconduct.
Minor misconduct generally refers to less serious breaches, such as occasional lateness or an isolated failure to comply with an administrative procedure.
Major misconduct refers to conduct that seriously affects the employment relationship. Examples may include theft, fraud, violence, serious insubordination, sexual harassment or deliberate disclosure of confidential information.
These labels provide guidance, but they are not conclusive. The seriousness of misconduct depends on the facts, including:
- what the employee did;
- whether it was deliberate;
- the employee’s responsibilities;
- the harm or risk caused;
- whether the conduct was repeated; and
- the surrounding circumstances.
An employer cannot make every minor breach a dismissible offence simply by labelling it “major misconduct” in the employee handbook.
Final Thoughts
Employee misconduct in Malaysia generally refers to conduct that is inconsistent with an employee’s express or implied obligations.
It can include dishonesty, insubordination, unauthorised absence, serious negligence, harassment and breaches of reasonable workplace rules. However, not every mistake, disagreement or performance problem amounts to misconduct.
The correct classification matters because allegations of misconduct can affect an employee’s livelihood and expose an employer to an unfair dismissal claim if handled incorrectly.
For a broader explanation of workplace rights and dismissal law, read Employment Law Malaysia: The Complete Guide for Employees and Employers (2026).
This article provides general information and does not constitute legal advice. Whether conduct amounts to misconduct depends on the facts, employment terms and surrounding circumstances.
