Employment & industrial relations chambers — Kuala Lumpur +60 3-2202 4188 WhatsApp
FLS Faiza Loke & SivamAdvocates & Solicitors

Employee desk

Constructive dismissal

Constructive dismissal is the hardest claim on our employee desk — and the one where early advice changes outcomes most. If you are being squeezed out, speak to us before you resign, not after.

The contract test, not the fairness test

Malaysian courts apply the contract test: you must show the employer committed a breach going to the root of the contract of employment — not merely that it acted unfairly or unreasonably. The classic qualifying breaches are unilateral demotion, significant reduction of salary or responsibilities, transfer in bad faith to force resignation, and conduct destroying the relationship of mutual trust and confidence.

Two further requirements defeat more claims than the breach itself: you must resign in response to the breach, and you must do so promptly. Stay silent and keep working for months, and the law treats you as having affirmed the new terms.

The protest letter is the case

Before any resignation, the file needs a written protest: identifying the breach, rejecting it, and reserving your position. We draft these carefully — measured enough to keep settlement open, firm enough to anchor the claim. In many matters the protest letter alone brings the employer back to the table, because it tells them the next document is a section 20 representation.

Constructive dismissal files are built weeks before the resignation letter is sent.
Constructive dismissal files are built weeks before the resignation letter is sent.

Timing your exit

Once you resign claiming constructive dismissal, the sixty-day window under section 20 runs from the date your resignation takes effect. We plan the sequence with you: evidence gathered while you still have system access, protest lodged, medical and financial realities weighed, then — only if the breach is clear and the record supports it — the resignation letter that states exactly why you are treating yourself as dismissed.

Questions we hear at assessments

My salary was cut 30% "temporarily". Is that a breach?

A unilateral pay cut is one of the clearest fundamental breaches there is. Whether to act on it — protest, negotiate, or resign and claim — depends on the paper trail and your appetite for the fight. Do not sign any variation letter before advice.

I was transferred to another state with three days' notice.

Transfer is generally management prerogative if the contract allows it — unless exercised in bad faith, on terms that punish, or to engineer a resignation. The pattern around the transfer usually decides it.

Can I claim while still employed?

No — constructive dismissal requires you to treat the contract as ended. That is exactly why the decision to resign needs legal advice first: you are spending your job to buy a claim.

Get it assessed properly.

Bring the documents; leave with the deadline, the merits and the next step in writing.

Mon–Fri 9am–6pm · Sat morning by appointment · +60 3-2202 4188

Call WhatsApp Book assessment