Can Employers in Malaysia Reject an Employee’s Resignation Letter?

Everything at the company seems to be going smoothly. You have an efficient team in place, and everyone works harmoniously. And suddenly, your high-performing employee comes into your office and hands you a letter of resignation. You don’t want them to leave. But can you, as an employer, refuse a resignation letter, or are you most obligated to accept it?

Below, we dive into the common Q&As of the resigning process and whether an employer can reject a resignation letter.

Do employees need to give a letter of resignation?

The short answer - is yes. Employees must give their employer reasonable notice when they resign and may be liable for damages for wrongful resignation if they do not provide notice.

A typical amount is generally accepted as 2 weeks. Still, most companies nowadays include sections on resignations and terminations in their respective employment contracts where they state terms such as the amount of notice period employees need to give and what to expect throughout the process. In addition, employers must also pay the regular wages of the employee who has resigned during the notice period.

So, is it legal for employers to reject an employee’s resignation?

Technically, based on the Employment Act 1955, employers cannot refuse or reject an employee’s resignation letter. This is because of Section 12 of the Act, whereby both employers and employees can terminate a contract of service by giving notice of their intention without any requirement for an ‘acceptance’ of the termination by either party. 

In addition, the confirmed notice period will be decided by your pre-determined employment contract - failing which, default periods are provided for in the Act. Nevertheless, do take note that the Employment Act does not apply to every employee in Malaysia. The Act is only applicable to West Malaysia, which includes the following categories: 

• Employees who have entered into a contract of service with monthly wages of RM 2,000 or less

• Employees who are engaged in manual labour regardless of monthly wage

• Domestic servants

• And other categories of employees within the First Schedule of the EA 1955

What about other employees in Malaysia? 

Employees not covered by the Employment Act 1955 in Malaysia can look into the terms outlined in their respective employment contracts. A typical employment contract should indicate what an employee needs to do to ‘terminate’ the contract and how long of a notice period the employee is needed to be of service. 

Note that this notice period applies to both the employer and the employee. Meaning employers will also need to honour the notice period if they intend to end the contract. However, termination without a notice period is usually permitted in some unique cases (e.g. misconduct or breach of contract). 

In addition, most employment contracts - as well as the Employment Act 1955 - provide for payment in place of notice. In simple terms, employees can technically buy themselves out of their notice period for a certain sum equivalent to their wages. 

Can an employee withdraw their letter of resignation?

An employee cannot withdraw their resignation once their employer has accepted it. 

How do employers stay protected against lawful claims?

Many unforeseen misunderstandings can arise when an employee resigns. For instance, the employer and employee may not agree on what the “reasonable notice” represents or may dispute the resignation's actual intent. All of which could manoeuvre to more serious conflicts or even lawsuits.

Therefore, employers should take preventive actions to reduce the risk of any potential conflicts arising from employees’ resignations. One definite way to do this is by clearly stating the terms of resignations and terminations in every employment contract. This will help clarify both parties' expectations during the resignation process.

Companies should also make sure that the wordings of the terms or conditions outlined are explicit and transparent, particularly regarding the specific amount of notice period required and the compensation to be given. 

Including these terms and conditions in the employees’ handbook is also good. Employers should try to use the same wording and structure to steer clear of potential loopholes and ambiguities for both parties.

The bottom line: Employers cannot reject an employee’s resignation letter. When an employee hands in their notice of resignation, the employer must acknowledge the notice.

While employers may try to negotiate a longer notice period so that the employee can work longer, failure to acknowledge the notice may lead to bigger conflicts and wrongful dismissal. Even though it is unfortunate to see employees, especially top performers, resign, employers should consider this an opportunity for other skilled applicants to join the company and contribute to the team’s success.