Employment Act · 2026 Revised Edition · Part · Contracts of Service
26. Misconduct of employee
In plain English
Not legal advice
After a proper inquiry, an employer may dismiss an employee for misconduct without notice. It may instead down-grade them, or suspend them unpaid for up to one week. An employee who feels unfairly dismissed may ask the minister in writing, within one month, for reinstatement. If satisfied it was unjust, the minister may order reinstatement with back pay, or compensation.
Summary · Drafted with AI, checked against the official text on 30 Sep 2026.
Official textFrom Attorney General's Chambers, unchanged
An employer may after due inquiry dismiss without notice an employee employed by him on the grounds of misconduct inconsistent with the fulfilment of the express or implied conditions of his service except that instead of dismissing an employee an employer may —
employer
“employer” means any person who employs another person under a contract of service and includes — (a) the Government, in respect of such categories, classes or descriptions of public officers or employees of the Government as are declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act; (b) any statutory body; (c) the duly authorised agent or manager of the employer; (d) the person who owns or is carrying on or for the time being responsible for the management of the profession, business, trade or work in which the employee is engaged;
instantly down-grade the employee; or
instantly suspend him from work without payment of salary for a period not exceeding one week.
Notwithstanding subsection (1), where an employee considers that he has been dismissed without just cause or excuse by his employer, he may, within one month of the dismissal, make representations in writing to the Minister to be reinstated in his former employment.
employee
“employee” means a person who has entered into or who works under a contract of service with an employer, and includes a workman and any public officer or employee of the Government included in a category, class or description of such officers or employees declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act or any Part thereof; but does not include any seaman, domestic worker or any person employed in a managerial, executive or confidential position or any person belonging to any other class of person whom the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, may by notification published in the Gazette, declare not to be employees for the purposes of this Act;
The Minister may, before making a decision on any such representations, by writing under his hand request the Commissioner to inquire into the dismissal and report whether in his opinion the dismissal is without just cause or excuse.
If, after considering the report made by the Commissioner under subsection (3), the Minister is satisfied that the employee has been dismissed without just cause or excuse, he may, notwithstanding any rule of law or agreement to the contrary —
Commissioner
“Commissioner” means the Commissioner of Labour appointed under section 3(1);
direct the employer to reinstate the employee in his former employment and to pay the employee an amount that is equivalent to the salaries that the employee would have earned had he not been dismissed by the employer; or
direct the employer to pay such amount of salaries as compensation as may be determined by the Minister, and the employer shall comply with the direction of the Minister.
The decision of the Minister on any representation made under this section is final and shall not be challenged in any court.
Any direction of the Minister under subsection (4) shall operate as a bar to any action for damages by the employee in any court in respect of the wrongful dismissal.
Employment
An employer who fails to comply with the direction of the
Minister under subsection (4) is guilty of an offence and liable on conviction to a fine not exceeding $5,000, imprisonment for a term not exceeding one year or both.
Where any amount to be paid by an employer under subsection (4) is not paid in accordance with the direction of the Minister and the employer has been convicted of an offence under subsection (7), the amount or so much thereof as remains unpaid shall be recoverable by the court as if it were a fine and the amount so recoverable shall be paid to the employee entitled to payment under the direction of the Minister.
For the purpose of an inquiry under subsection (1), the employer may suspend the employee from work for a period not exceeding one week but shall pay him not less than one-half of his salary for such period.
week
“week” means a continuous period of 7 days commencing at midnight on Sunday.
If the inquiry does not disclose any misconduct on the part of the employee, the employer shall forthwith restore to the employee the full amount of the salary so withheld.
salary
“salary” means all remuneration including allowances payable to an employee in respect of work done under his contract of service, but does not include — (a) the value of any accommodation or the supply of any food, fuel, electricity, water or medical attendance, or of any amenity or service excluded by order of the Minister published in the Gazette; (b) any contribution paid by the employer on his own account to any pension fund or provident fund; (c) any travelling allowance or the value of any travelling concession; (d) any sum paid to the employee to reimburse him for special expenses incurred by him in the course of his employment; (e) any gratuity payable on discharge or retirement; and (f) any retrenchment benefit payable on retrenchment;
Terms defined in this Act
Commissioner
Defined · s 2“Commissioner” means the Commissioner of Labour appointed under section 3(1);
employee
Defined · s 2“employee” means a person who has entered into or who works under a contract of service with an employer, and includes a workman and any public officer or employee of the Government included in a category, class or description of such officers or employees declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act or any Part thereof; but does not include any seaman, domestic worker or any person employed in a managerial, executive or confidential position or any person belonging to any other class of person whom the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, may by notification published in the Gazette, declare not to be employees for the purposes of this Act;
employer
Defined · s 2“employer” means any person who employs another person under a contract of service and includes — (a) the Government, in respect of such categories, classes or descriptions of public officers or employees of the Government as are declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act; (b) any statutory body; (c) the duly authorised agent or manager of the employer; (d) the person who owns or is carrying on or for the time being responsible for the management of the profession, business, trade or work in which the employee is engaged;
salary
Defined · s 2“salary” means all remuneration including allowances payable to an employee in respect of work done under his contract of service, but does not include — (a) the value of any accommodation or the supply of any food, fuel, electricity, water or medical attendance, or of any amenity or service excluded by order of the Minister published in the Gazette; (b) any contribution paid by the employer on his own account to any pension fund or provident fund; (c) any travelling allowance or the value of any travelling concession; (d) any sum paid to the employee to reimburse him for special expenses incurred by him in the course of his employment; (e) any gratuity payable on discharge or retirement; and (f) any retrenchment benefit payable on retrenchment;
week
Defined · s 68“week” means a continuous period of 7 days commencing at midnight on Sunday.
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