Case Background & Strategy

What’s the Difference?

People often use unfair dismissal and wrongful termination interchangeably, but in Malaysia they describe two different legal routes with different remedies. Understanding the distinction helps you choose the right path after losing your job.

What is unfair dismissal?

Unfair dismissal is a statutory claim under Section 20 of the Industrial Relations Act 1967. It asks whether the employer had just cause or excuse to dismiss you. The claim is heard by the Industrial Court, the employer carries the burden of proof, and the main remedies are reinstatement or compensation in lieu plus back wages.

What is wrongful termination?

Wrongful termination (or wrongful dismissal) is a contractual claim brought in the civil courts. It focuses narrowly on whether the employer breached the contract, usually by failing to give the correct notice or follow the contractual procedure. The typical remedy is limited to damages for the notice period, not reinstatement.

Key differences at a glance

• Forum: Unfair dismissal goes to the Industrial Court; wrongful termination goes to the civil courts.
• Test: Unfair dismissal asks if there was just cause; wrongful termination asks if the contract was breached.
• Remedies: Unfair dismissal can give reinstatement and up to 24 months back wages; wrongful termination usually gives only damages for the notice period.
• Deadline: Unfair dismissal has a strict 60-day deadline; contractual claims follow the general limitation period.

Which route is better?

For most employees, the unfair dismissal route under the IRA is far more generous, which is why it is the usual choice. The contractual route may be relevant for very high earners outside the workman definition, or where a specific contractual breach gives a clear claim. In practice, the two are mutually exclusive strategies, so getting advice early is important.

Frequently Asked Questions

Can I pursue both at the same time?

Generally you choose one route. Pursuing the Industrial Court claim is the more common and usually more advantageous option for employees.

Does just cause matter in a wrongful termination claim?

Less so. A contractual claim focuses on proper notice and procedure, whereas the IRA claim examines whether the reason itself was justified.