Constructive Dismissal Lawyer Malaysia | Forced Resignation

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Constructive Dismissal Lawyers in Malaysia — Forced Resignation & Employer Repudiation

Constructive dismissal occurs when an employer’s conduct — not the employee’s resignation — effectively ends the employment relationship. When an employer fundamentally breaches the employment contract, and the employee resigns in response to that breach, the law treats the resignation as a dismissal by the employer. This is constructive dismissal, and the employee has the same rights as if they had been directly dismissed.

Constructive dismissal claims are among the most contested employment disputes in Malaysia — and among the most difficult to succeed in. An employee who resigns and then claims constructive dismissal faces significant evidential challenges. Equally, employers defending constructive dismissal claims must demonstrate that their conduct did not repudiate the contract of employment. NZSK’s employment law team has experience on both sides.

Why Choose Us?

What Constitutes Constructive Dismissal in Malaysia?

The test for constructive dismissal in Malaysia is whether the employer has, by its conduct, fundamentally breached a term of the employment contract — either an express term or the implied term of mutual trust and confidence — and whether the employee resigned in response to that breach within a reasonable time. Common employer conduct that gives rise to constructive dismissal claims includes:

Unilateral changes to terms and conditions — including significant salary reductions, demotion, removal of job responsibilities, and material changes to working hours or location without agreement
Harassment and bullying — systematic hostile conduct, humiliation, or victimisation by management that destroys the implied term of mutual trust and confidence
Unfounded disciplinary action — using the disciplinary process as a weapon — targeting an employee with baseless allegations of misconduct to force their departure
Exclusion from management and role — for senior employees and director-employees, being locked out of systems, denied information, or effectively sidelined from their management role
Reduction in status or authority — transferring an employee to a lesser role, removing direct reports, or materially diminishing their standing within the organisation

The Key Risks for Employees Claiming Constructive Dismissal

The single most common mistake employees make in constructive dismissal situations is resigning voluntarily without establishing the legal basis first. To succeed in a constructive dismissal claim, the employee must demonstrate:

A fundamental breach of contract by the employer — not merely an inconvenient or unfair change — a genuine repudiation of the essential terms of the employment relationship
Resignation in response to the breach — the resignation must be causally connected to the employer’s conduct — resigning for unrelated reasons, or continuing to work for a prolonged period after the breach, can destroy the claim
Acting within a reasonable time — accepting the breach by continuing to work too long after the repudiatory conduct may be treated as affirmation of the contract, waiving the right to claim constructive dismissal

We advise employees on whether the facts support a viable constructive dismissal claim — and critically, on when and how to resign to preserve the legal basis for the claim — before any resignation letter is submitted.

Employer Defence to Constructive Dismissal Claims

NZSK acts for employers defending constructive dismissal claims as well as for employees bringing them. A successful employer defence typically involves demonstrating that the business changes complained of were legitimate exercises of managerial prerogative, that any change to the employee’s role or terms was within the scope of the employment contract, and that there was no bad faith or ulterior motive.

Constructive Dismissal — Our Results

EMPLOYER WIN

2025

Bina Puri Sdn Bhd

Successfully defended Bina Puri in a High Court judicial review arising from a constructive dismissal claim. The claimant alleged that additional duties assigned to her amounted to a fundamental breach of contract. The High Court dismissed the judicial review, ruling that the additional duties were within the claimant’s job scope and that there was no bad faith by the employer.

Hasnah Hashim v. Bina Puri Sdn Bhd & Anor [2025] 3 MELR 660 — Handled by Lawyer Khoo

Claim Dismissed

Frequently Asked Questions

What is the difference between unfair dismissal and constructive dismissal in Malaysia?

In unfair dismissal, the employer terminates the employee directly — and the question is whether that termination was based on just cause and excuse. In constructive dismissal, the employee resigns — but claims that the employer's conduct made continued employment intolerable, amounting to a fundamental breach of contract. In both cases, the employee may file a representation with the DGIR within 60 days — in a constructive dismissal case, the 60 days runs from the date of resignation.

Can I be made redundant and claim constructive dismissal at the same time?

Yes, in certain circumstances. Where an employer implements a restructuring that involves a unilateral change to an employee's role, title, or responsibilities — rather than a genuine redundancy — the employee may have grounds to claim constructive dismissal rather than (or in addition to) accepting the purported redundancy. We advise on whether a restructuring constitutes genuine redundancy or an attempt to disguise a constructive dismissal as retrenchment.

If I resign because of my employer's conduct, do I lose my Employment Act termination benefits?

In a genuine constructive dismissal, the employee does not lose their statutory entitlements under the Employment Act 1955 — the resignation is treated as a dismissal by the employer. However, establishing constructive dismissal requires successfully pursuing a claim before the Industrial Court. Simply resigning without pursuing a constructive dismissal claim will not preserve the statutory entitlements. We advise on the full picture of entitlements and remedies before any resignation is made.

My employer is adding more duties without more pay. Is this constructive dismissal?

Adding duties without increasing pay is not automatically constructive dismissal — it depends on whether the duties are fundamentally different from the employee's existing role, whether the contract allows for reasonable variation of duties, and whether the addition is so extreme as to amount to a repudiation of the employment relationship. Minor adjustments to role are generally within an employer's managerial prerogative. We advise on whether specific facts cross the threshold.

Speak to a Employment Lawyer Now!

If your employer is making your working life intolerable and you are considering resignation, contact NZSK for practical and commercially focused trade mark legal advice. Contact us to arrange a consultation.