Notice Period: Can Employees Skip It?

A "notice period" is typically included in an employment contract. The employer or the employee may end the employment contract by giving the notice period. The notice period may vary according to the position and status of the employee.

Notice of termination

The standard period when the employer or the employee must provide termination or resignation notice depends on the length of the employment.

Section 12 of the Employment Act 1955 states the following:

The length of notice should be the same for both parties. The length of notice should be stated in writing in the contract of service. If there is no such provision, then it should be as follows:

Employed for less than two years (4 weeks' notice)
Employed for 2 – 5 years (6 weeks' notice)
Employed for more than five years (8 weeks' notice

What is the purpose of the notice period for employers?

The notice period helps the company minimise any losses resulting from an employee's resignation. For example, the company may want to ensure that the departing employee completes any remaining work or assists with transition and handover.

A senior staff member of the company may have a long notice period, such as three months. However, sometimes there are situations that could force the employee to leave before they can finish the notice period.

Thankfully, there are a few solutions that will allow the employee to bypass the notice period legally:

How an employee may bypass the notice period legally

1. Offsetting the notice period through outstanding leave

Through outstanding leave, an employee may shorten the length of their notice period, though it will not leave them to skip it. Please remember that offsetting the notice period with outstanding leave is not an SOP, as the employee and their employer must agree to it first.

There are two ways to use outstanding leave to offset the notice period:

The employer and the employee agree to use their remaining leave days to offset their notice period.
The employer and the employee agree that they will not offset their notice period with their leave. However, the employer will pay them extra based on their outstanding leave. For instance, if the employee has nine more days of leave, the employer will pay them an extra nine days' wages, though they must serve the entirety of the notice period.

2. Negotiating for the employer to waive the notice period

Under Section 63 of the Contracts Act 1950, employees can negotiate with their employer to alter their employment contracts.

"If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed."

The above explains that if the employee and the employer agree to change their contract, the old contract will not take effect anymore.

The employee will still need to reach an agreement with the employer to alter their contract or waive the notice period. This agreement is allowed under Employment Act's Section 12.

Providing a notice period before quitting is common practice to allow employers time to prepare paperwork, transfer over the employee's portfolio, and search for a successor for their post.

It depends on the employer's decision to say "yes" to allowing the employee to leave earlier.

3. Applying for unpaid leave to offset the notice period

This method is similar to the first one, as the employee still requires their employer's approval to waive the notice period. The difference is that the employee will not be paid throughout the unpaid leave.

4. Paying the penalty for quitting without any notice period

The employee may resort to their final option: to pay the penalty.

The employment contract has a clause that states how early notice an employee must provide before resigning. The clause covers the notice period and the alternative method of terminating employment. An example of the clause would be:

"Either party may terminate the employment by serving X months' notice or X months' pay instead of notice."

This clause states that either the employee or their employer can end the employment by servicing the notice period or paying the other party X months of wage.

5. The new employer offers to buy out the employee's notice period.

The new employer will offer to pay the penalty for the employee to be released early. It usually means that the new employer wants the employee to be on board as soon as possible.

What should an employer do if the employee ignores the notice period?

The employee is contractually obligated to serve the notice period as long as it is specified in the employee contract. What can the employer do if the employee declines to serve their notice period?

The employer can first seek payment in place of the notice period from the employee. For instance, if their monthly income is RM10,000, the payment in lieu for a two-month notice period is RM20,000.

The employer may take the matter to court if the employee fails to comply. There are two choices:

Labour Court
Civil Court

It should be noted, however, that the Labour Court can only be applicable if the employee's monthly wage does not exceed RM5,000. Employees earning more than RM5,000 per month must file a civil lawsuit for breach of contract. The employer should consult a legal professional for more guidance at this stage.

It is also worthwhile to analyse the causes behind an employee's abrupt departure without fulfilling their notice periods. Are they in a difficult situation? Is there anything their employer can help them with at work or home?

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