Can an Employer Reject Resignation? Here Is The Answer

Handling resignations is part of every employer’s journey. The first reaction is often emotional, shock, disappointment, or even frustration. But beyond the emotions lies a legal question many Malaysian employers ask: Can an employer reject resignation?

Find the answer to this question in this article. We help you to unpack what resignation means under Malaysian labour laws, whether employers have the right to reject it, and how to handle the process professionally and lawfully.

What is a Resignation?

Resignation is when an employee formally notifies their employer that they intend to end their employment. In most workplaces, this is done through a written resignation letter that includes a notice period, as outlined in the employment contract or the Employment Act 1955.

The notice period gives both parties time to prepare for the transition. Employees can finish tasks and hand over responsibilities, while employers can arrange for replacements or redistribute workloads. Once the resignation letter is submitted and acknowledged, it sets the clock running on the employee’s final day.

Can an Employer Legally Reject a Resignation?

The simple answer is no. Under Malaysian labour law, employees have the right to resign as long as they comply with the notice period stated in their contract or pay salary in lieu of notice. Employment is a mutual agreement, and just as employers can terminate contracts with notice, employees can also choose to leave.

Once a resignation letter is submitted properly, employers cannot force the employee to continue working beyond the notice period. Attempting to block or reject a resignation can expose employers to legal risk and reputational damage.

When Can an Employer Delay or Dispute a Resignation?

While you cannot outright reject a resignation, there are limited situations where you may delay or dispute the process. Usually tied to contractual or procedural issues:

Improper Notice

If an employee resigns without serving the agreed notice or without paying in lieu, you may dispute the timing and recover compensation based on the contract.

Ongoing Disciplinary Investigations

If the employee is under investigation for misconduct or legal issues, you may delay final clearance to complete the process. This does not mean rejecting the resignation, but ensuring the case is documented properly.

Incomplete Handovers

In critical roles, you can negotiate for the employee to extend their handover period, but it must be mutual and cannot be enforced indefinitely.

Informal or Verbal Resignations

Verbal resignations or informal messages are not considered valid. In these cases, you can request a proper written letter before processing.

Notice Period Requirements in Malaysia

Notice periods in Malaysia are primarily governed by employment contracts. The Employment Act 1955 provides minimum notice periods for employees covered under the Act:

Less than 2 years of service: 4 weeks’ notice
2–5 years of service: 6 weeks’ notice
More than 5 years of service: 8 weeks’ notice

Many companies set their own notice periods, commonly one to three months, especially for managerial roles. Both employer and employee can agree to shorten the notice by paying salary in lieu.

Notice periods for probation employees are often shorter (e.g., one week or one month), but this must be clearly stated in the employment contract.

What Employers Should Do After Receiving a Resignation

When a resignation lands on your desk, the next steps are crucial for a smooth exit:

Acknowledge in writing by replying with an official letter confirming receipt and stating the final working day based on the notice period.
Review contract terms and entitlements, such as unused leave, bonuses, or deductions for notice in lieu.
Plan for a clear handover process, including documentation, training for successors, and transfer of responsibilities.
Calculate final salary, including leave encashment and statutory deductions for EPF, SOCSO, and tax. Provide the EA form for tax purposes at year-end.
Do an exit interviews to learn why the employee is leaving. Insights from exit interviews can help improve retention.

Can an Employer Reject a Resignation Out of Emotion?

No. Feeling upset or inconvenienced is not a valid reason to reject someone’s resignation. Reacting emotionally can harm the company’s reputation and make other employees feel uneasy. Handling the situation calmly and professionally avoids legal trouble and leaves a good impression, which can help if you want to rehire the person or get referrals from them in the future.

What Happens If the Employee Leaves Without Notice?

If an employee leaves without completing their notice period, employers have two main options:

Deduct payment in lieu of notice from their final salary, as stated in the contract.
Pursue legal action for breach of contract in serious cases where financial loss can be proven.

Always document the situation carefully. Keep copies of the resignation letter, communication records, and payroll deductions to protect the company if disputes arise later.

Tips for Employers to Handle Resignations Better

Clarity and professionalism are key when dealing with resignations. Keep contracts clear about notice periods and resignation procedures.

Avoid reacting emotionally. Instead, focus on operational planning and knowledge transfer.

Conduct exit interviews to identify recurring issues and use the feedback to improve retention strategies.

Handled well, even an employee’s departure can leave a positive mark on your employer brand.

FAQ

Can I force an employee to continue working after they resign?

No. Once an employee resigns with proper notice or pays in lieu, they have the legal right to leave.

What if an employee leaves without notice?

You may deduct the salary equivalent to the notice period or seek damages if the breach causes losses, depending on contract terms.

Can I reject a resignation if the employee is critical to business operations?

No. You can request an extension for handover, but the employee is not obliged to agree.

Is a resignation valid without a formal letter?

Resignations should be in writing. Verbal or informal notices are not recommended and may be disputed.

What is the difference between resignation and termination in Malaysia?

Resignation is initiated by the employee; termination is initiated by the employer. Both require notice or payment in lieu unless dismissal is for cause.

Need to Hire New Employees in Malaysia?

Post your job ads on Maukerja, Ricebowl, Epicareer with AJobThing to find the best talent today!