What is constructive dismissal in Malaysia, and how do I claim it?

Sometimes an employer does not say "you are fired" but makes it impossible to stay: salary is cut without agreement, you are demoted, or you are transferred to a role that is not yours. Malaysian law may treat this as constructive dismissal, and you may claim as if you were dismissed.

What is the legal test?

In Wong Chee Hong v Cathay Organisation (M) Sdn Bhd [1988] 1 MLJ 92, the Supreme Court held that the test is the contract test: whether the employer's conduct is a significant breach going to the root of the contract, or shows that the employer no longer intends to be bound by an essential term. If so, the employee may treat the contract as ended and leave. Unreasonable or unfair conduct alone may not be enough.

What are common examples?

• Unilateral salary cuts or withholding wages.
• Demotion or removal of core duties without agreement.
• Transfer to a different location or role where the contract does not allow it, or in bad faith.
• Serious harassment or humiliation that destroys the working relationship.

Every case depends on the contract, the facts and the evidence.

What should I do before leaving?

1. Do not resign in the heat of the moment. Take advice first.
2. Raise the issue in writing: tell the employer what term has been breached and ask them to put it right within a reasonable time.
3. Keep evidence: contract, payslips, emails, messages, and notes of meetings.
4. Act promptly. If you stay on for too long without protest, you may be treated as having accepted the change.
5. If you leave, say why in writing: state that you are treating yourself as constructively dismissed because of the employer's breach.

Have a question about your own situation? Ask on WhatsApp

How do I file the claim?

Under section 20 of the Industrial Relations Act 1967, an employee who considers they have been dismissed without just cause or excuse may file a representation with the Director General of Industrial Relations. It must be filed within 60 days of the dismissal. In constructive dismissal cases, that is generally counted from the date you left. If the matter is not settled at conciliation, it may be referred to the Industrial Court.

What must I prove?

In constructive dismissal, the employee must first prove that they were dismissed, that is, that the employer committed a fundamental breach and that they left because of it. Only then does the question of whether the dismissal was with just cause arise.

What remedies are possible?

The Industrial Court may order reinstatement or compensation in lieu, and back wages, subject to the rules in the Act. No outcome is guaranteed; it depends on the evidence. See unfair dismissal.

What should I prepare?

• Your employment contract and any variations.
• Payslips before and after the change.
• Your written complaint and the employer's response.
• Your resignation or notice letter stating the reason.
• A timeline.

Common mistakes: resigning without giving reasons, waiting months before acting, accepting the new terms by conduct, and missing the 60-day deadline.

When to speak to a lawyer

Before you resign. Timing and wording matter. You can contact us; every case depends on its facts.

Frequently asked questions

Can I claim constructive dismissal if I resigned months ago?

The 60-day limit is strict. If it has passed, get advice urgently about any remaining options.

Is a heavy workload constructive dismissal?

Usually not on its own, unless it amounts to a fundamental breach of contract.

Can I claim unpaid salary as well?

Yes, outstanding wages may be claimed separately. See unpaid salary.

Will my employer know I filed?

Yes. The employer is notified and invited to conciliation.

Do I need to work my notice period?

Not necessarily in constructive dismissal, but get advice on how this affects your claim and any counterclaim.

Sources & fact check

Legal points in this article were checked against the primary sources below. The law can change; this is general information, not legal advice.

1. Industrial Relations Act 1967 (Act 177), including section 20, AGC Laws of Malaysia
2. Wong Chee Hong v Cathay Organisation (M) Sdn Bhd [1988] 1 MLJ 92 (Supreme Court) (reported judgment)
3. Employment Act 1955 (Act 265), including sections 19 and 69, AGC Laws of Malaysia

Fact-checked on 17 Oct 2026