Most Malaysians find out what the law says about leaving a job at the worst possible moment: the day a resignation letter goes in, or the morning HR calls a meeting. The rules are shorter and firmer than the office rumours suggest. They sit in three places: the Employment Act 1955, the Employment (Termination and Lay-Off Benefits) Regulations 1980, and the Employment Insurance System Act 2017, which PERKESO runs.
Since 1 January 2023 the Employment Act covers anyone with a contract of service, whatever the salary. But the First Schedule switches off a handful of rights for people earning more than RM4,000 a month (commission and overtime are not counted towards that figure), and one of them is the statutory termination benefit. Notice, final pay deadlines, annual leave and sick leave still apply above RM4,000. Domestic workers are the main group outside the notice and leave rules altogether.
This is a plain reading of the statutes, not legal advice. Your contract, a collective agreement or company policy can give you more than the minimum; they cannot lawfully give you less where the Act sets a floor.
Notice: what your contract says, or 4, 6 or 8 weeks
Section 12 says notice is the same for employer and employee and is set by the written contract. Only if the contract says nothing does the Act fill the gap:
- Less than 2 years' service: at least 4 weeks.
- 2 years to under 5 years: at least 6 weeks.
- 5 years or more: at least 8 weeks.
Notice must be in writing, and the day you hand it in counts as day one. Either side can waive it. Section 13 lets either side end the contract without notice by paying the wages the notice period would have earned, which is what "pay in lieu" means. That cuts both ways: if you leave early without your employer agreeing, it can claim that sum from you at the Labour Court.
One rule protects retrenched staff specifically. When a job ends because the business closes, moves, cuts that kind of work or changes owner, section 12(3) says the 4, 6 or 8 weeks apply even if your contract promised less.
You can also leave immediately, without paying anything, if the employer has wilfully broken the contract (not paying wages on time counts, under section 15) or if you face immediate danger of violence or disease.
When the final salary is due
- You serve out your notice, or a fixed-term contract ends: all wages due by the day the contract ends (section 20).
- Your employer ends it without notice: wages plus any pay in lieu on that same day (section 21).
- You leave without notice: the employer has until the third day after (section 21).
Ordinary monthly pay runs on a different clock, due within seven days after each wage period, so a last-day payment is earlier than most people expect.
Unused annual leave is paid out, with one exception
The Act gives 8 days of annual leave a year under 2 years' service, 12 days for 2 to 5 years and 16 days after that, pro-rated by completed months in the year you leave. Under section 60E(3A), if the contract ends before you have taken that leave, the employer must pay your ordinary rate of pay for every day. That applies whether you resigned or were let go. The only exception is an employee dismissed for misconduct after due inquiry under section 14.
For a monthly-paid employee, the ordinary rate of pay is the monthly wage divided by 26 (section 60I). Worked example: someone on RM3,900 with three years' service leaves at the end of June with nothing taken this year. Six completed months of a 12-day entitlement is 6 days, at RM150 a day, so RM900 on top of the final salary. Section 60E(2A) also lets you choose to take that leave before your last day instead.
Termination benefits: 10, 15 or 20 days a year
The 1980 Regulations entitle an employee with at least 12 months' continuous service to a payment when the contract is terminated for any reason, except:
- a voluntary resignation (unless you left because of the employer's wilful breach, or danger);
- dismissal for misconduct after due inquiry;
- retirement at the contractual retirement age.
The minimum is 10 days' wages per year of service under 2 years, 15 days for 2 to under 5 years, and 20 days for 5 years or more, with part-years pro-rated to the nearest month. It must be paid within seven days, on top of any pay in lieu of notice, and you can ask in writing for a statement of how it was calculated.
Worked example using the Labour Department's own formula (12 months' salary divided by 365, times years of service, times 10, 15 or 20): an employee on RM3,000 a month retrenched after four years and six months gets 36,000 ÷ 365 × 4.5 × 15, about RM6,658. On RM4,500 a month the statutory figure is nil, because the First Schedule excludes section 60J above RM4,000. Anything you receive at that salary comes from your contract, a collective agreement or company policy. Employers retrenching staff must also notify the Labour Department on Borang PK at least 30 days before.
EIS: for losing a job, not for leaving one
PERKESO's Employment Insurance System pays a Job Search Allowance only for involuntary job loss. Section 30 of the EIS Act excludes resignation, an expired contract, retirement, misconduct and termination by mutual consent without terms. It does accept a resignation under a voluntary separation scheme, one that amounts to constructive dismissal, and one forced by threats, harassment or an unsafe workplace.
- Claim within 60 days of losing the job; a late claim is treated as never made.
- The allowance is 80% of your assumed monthly wage in the first month, 50% in the second, 40% in months three and four, and 30% in months five and six.
- How many months you get (3 to 6 on a first claim) depends on how many monthly contributions you made in the previous 24 months.
The assumed wage is your average contributory wage over the six months before the job loss. The contribution ceiling has been RM6,000 since 1 October 2024, so in our reading that also caps the allowance. Human Resources Minister Datuk Seri R. Ramanan told The Star on 19 September 2026 that amendments the Dewan Rakyat passed in December 2025 take effect on 1 October 2026. They raise the early re-employment allowance from 25% to 50% of unpaid JSA, add a one-off RM1,000 mobility allowance for taking a job more than 100km from home, lift the daily training allowance from RM10 to RM30, and raise the maximum training fee PERKESO covers from RM4,000 to RM7,000. We could not find the gazette notice by 24 September, so check PERKESO before relying on the new amounts.
Deadlines worth writing down
- 60 days: to file an unfair dismissal representation with the Industrial Relations Department (Industrial Relations Act, section 20).
- 60 days: to claim EIS.
- 60 days: to challenge a misconduct decision at the Labour Court (Employment Act, section 69(3)).
Unpaid wages, notice pay, leave pay and termination benefits are all claimed at the Labour Court (Jabatan Tenaga Kerja) under section 69, with no cap on the amount.
