Notice periods in Malaysia: what the Employment Act requires

Notice is one of the most misunderstood parts of Malaysian employment law. Employers assume the contract can say anything; employees assume one month is universal. Both are wrong. The Employment Act 1955 (Act 265) lays down a clear statutory floor in section 12, and the contract can build above it but never below it. This guide sets out exactly what notice period applies, how payment in lieu works under section 13(1), and the narrow situations where no notice is required — each tied to its section number and an authoritative source. Carriera is a compliance-focused recruitment partner in the Klang Valley, so this is the same framework we apply when we advise clients on offers, resignations and exits.

What is the minimum notice period for resignation or termination in Malaysia?

Where the contract of service does not state a notice period, section 12(2) of the Employment Act 1955 fixes it by length of service. An employee with less than two years' service must give or receive four weeks' notice; two to under five years, six weeks'; and five years or more, eight weeks'. These are the statutory defaults — a fall-back when the contract is silent, and a minimum that a contract cannot undercut. The tiers are confirmed on the official Employment Act 1955 text published by the Department of Labour (JTKSM) under the Ministry of Human Resources.

Read these figures as weeks, not months. A six-week notice is roughly a month and a half — not two months — which trips up many payroll calculations. The tiers reward tenure: the longer someone has served, the more runway the relationship gives on either side before it ends.

Is the notice period the same for the employer and the employee?

Yes. Under section 12(1) of the Employment Act 1955, the length of notice must be the same for the employer and the employee, and is determined by the contract or, failing that, by the section 12(2) tiers. This is the symmetry rule: an employer cannot give itself a short exit while binding staff to a long one. If a contract says three months, both sides serve three months; if the contract is silent and the employee has served three years, both sides serve six weeks.

Can my contract require a longer notice period than the Act?

Yes — upwards only. The section 12(2) periods are a floor, not a ceiling. A contract of service may specify a longer notice period, and that longer contractual period is then the one that applies. Three- or six-month notice clauses are common for senior, technical and confidential roles, and they are fully enforceable. What a contract cannot do is set a notice period shorter than the statutory minimum for an employee covered by the Act; any such term defaults back up to the section 12(2) figure. Malaysian legal commentary on Act 265 confirms this hierarchy — the contract governs where it gives more, the statute governs where it gives less (Worksy, Termination Notice Period in Malaysia).

Two practical points follow. First, always read the contract before assuming the four/six/eight-week tiers apply — a well-drafted offer letter usually states an express period. Second, when you write that clause, make sure it is at least the statutory minimum for the expected tenure; getting this right at the offer stage is precisely what our training on drafting the contract of service covers.

What is payment in lieu of notice, and how is it calculated?

Either party can end the contract immediately without serving out the notice — by paying for it instead. Under section 13(1) of the Employment Act 1955, the party who terminates without notice (or without sufficient notice) must pay the other an indemnity equal to the amount of wages that would have accrued during the notice period (or the unserved part of it). This works in both directions: an employer can release an employee on the spot by paying out the notice, and an employee can leave early by paying the employer in lieu. The provision is set out in section 13(1) of Act 265 and explained in Malaysian legal guidance on termination (D&P Law Group, Termination of Employment under the Employment Act 1955).

So payment in lieu is not a penalty or a bonus — it is simply the unserved notice converted into money. The figure tracks the same tier and the same wage; the only judgement call is how much of the notice was actually worked. For plain-language definitions of notice period, payment in lieu and contract of service, see our glossary.

When can employment end without notice or payment in lieu?

Notice is the default, but the Act recognises situations where the relationship can end immediately, with no notice and no indemnity. There are two distinct routes, and they are often confused. The first is wilful breach of a condition of the contract; the second is misconduct dismissal after a due inquiry. Both sit in different sections, and an employer who relies on the wrong one — especially skipping the inquiry — risks a costly unfair-dismissal claim at the Industrial Court.

• Wilful breach of contract — section 13(2). Either party may terminate the contract without notice in the event of a wilful breach by the other party of a condition of the contract of service. This is reciprocal: an employee can walk if the employer commits a wilful breach, and vice versa.
• Misconduct after due inquiry — section 14(1). An employer may, after a due inquiry, dismiss an employee without notice for misconduct inconsistent with the fulfilment of the contract. The Act also allows lesser punishments — downgrading, or other punishment it deems just and fit. The due inquiry is mandatory: the employee must be told the allegation and given a fair chance to be heard before any decision.
• Absconding / continuous absence. The Act treats a prolonged unexplained absence (broadly, more than two consecutive working days without leave or reasonable excuse, where the employee has not informed or attempted to inform the employer) as a deemed breach — but the employer must still establish the facts rather than assume them.

The two grounds confirmed above — section 13(2) wilful breach and section 14(1) misconduct after due inquiry — are set out in the Act and in published commentary on Act 265 (D&P Law Group). Outside these exceptions, the ordinary section 12(2) notice — or payment in lieu under section 13(1) — applies. "Serious misconduct" asserted without a proper inquiry is the single most common way employers turn a lawful dismissal into an unlawful one.

Why does the notice clause matter when you hire?

Notice is decided at the offer stage, not at the exit. A contract that omits a notice period silently inherits the section 12(2) tiers; a contract that sets a period below the minimum is unenforceable to that extent; and a contract that conflates "misconduct" with automatic no-notice dismissal invites an Industrial Court dispute. These are drafting decisions — which is why Carriera screens for Employment Act literacy when we place HR, finance and management roles through our recruitment service, and why we treat the contract of service as a compliance document, not a formality.

Keeping HR and line managers current on this is also fundable. Carriera Academy is an HRD Corp Approved Training Provider, so SBL-Khas-claimable programmes on the Employment Act, contracts, notice and payroll are available — including Basic Skills for Writing the Contract of Service. Browse the live schedule on our training page, or speak to us directly about a session for your team.

This guide is general information, not legal advice. For the binding text, refer to the Employment Act 1955 (Act 265) and the Department of Labour (JTKSM) under the Ministry of Human Resources. Updated 18 June 2026.