Can an employer terminate an employee simply by invoking the notice clause, without giving any reason? The Industrial Court has consistently held that such an approach—commonly called termination simpliciter—does not apply in Malaysian employment law. Employers must demonstrate that a dismissal was carried out with just cause or excuse. If they fail to do so, they risk being ordered to pay significant compensation.

This is illustrated in the case of Ang Chin Gaik v WV Services Malaysia Sdn Bhd (Award No. 309 of 2025, 3 March 2025), where the claimant was awarded RM1,380,722.20 after being dismissed without any stated reason, coupled with the employer’s failure to appear in court to justify the dismissal.

Brief Facts

On 18 June 2022, the company terminated the employee’s employment without providing any reasons. The employee subsequently filed a claim for unfair dismissal.

Initially, the company engaged solicitors who filed the Statement in Reply, Bundle of Documents, and Witness Statement, and hearing dates were scheduled.

However, the company’s solicitors later ceased acting for them. No representative from the company attended the following mention date, and the company was also absent on the hearing day.

Pursuant to Section 29 of the Industrial Relations Act 1967, the Court proceeded with the case in the absence of the employer.

Court’s Evaluation and Findings

The Court concluded that the dismissal lacked just cause or excuse.

The termination letter did not specify any reasons for the dismissal. The Court reiterated that termination simpliciter is not recognised in Malaysia, as Section 20 of the Industrial Relations Act 1967 places the burden on the employer to prove that the dismissal was justified.

Although the company had filed documents and was aware of the hearing dates, its absence at the hearing led the Court to disregard those documents. As a result, the employee’s evidence went unchallenged and was accepted as admitted.

Since reinstatement was deemed inappropriate, the Court awarded the employee 20 months’ back wages, totaling RM1,380,722.20.

Key Takeaways

This decision reaffirms that dismissals in Malaysia must be supported by just cause or excuse. While employment contracts often include notice clauses allowing termination with notice or payment in lieu, relying solely on such provisions without valid justification may expose employers to claims of unfair dismissal.

Employers should also take such proceedings seriously due to the potential financial consequences. Proper legal representation and attendance at hearings are essential, particularly as the burden of proof lies with the employer. Failure to appear may result in the Court proceeding without them and accepting the employee’s case as uncontested.

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