Forced to Resign at Work: What the Law Actually Says

June 4, 2026
Nabila Zakariah

When resignation is not truly a choice
In workplace disputes, resignation is sometimes presented as a simple and voluntary decision. However, in practice, employees may be placed in situations where resignation is strongly encouraged or indirectly pressured.

This may happen where an employee is told that their role is no longer required, that performance is unsatisfactory or that it would be “better” to resign instead of facing formal termination. In some situations, resignation letters may even be prepared in advance by the employer for immediate signing.

Although the document may appear to be a resignation, the legal issue is whether the employee truly had a free and voluntary choice to resign.

The legal position under Malaysian employment law
Under Malaysian employment law, a resignation must be voluntary and free from coercion, pressure or undue influence. There is no provision under statute that allows an employer to compel an employee to resign as a substitute for lawful termination. Instead, employment disputes of this nature are generally assessed under Section 20(1) of the Industrial Relations Act 1967.

Section 20(1) allows a workman who considers that he has been dismissed without just cause or excuse to make representations to the Director General of Industrial Relations for reinstatement. Importantly, the law recognises that dismissal may occur not only through a formal termination letter, but also through circumstances that effectively force an employee out of employment.

Constructive dismissal: when resignation is treated as dismissal
Malaysian courts recognise the doctrine of constructive dismissal, which applies where an employee resigns due to the employer’s conduct.

In essence, even though the employee submits a resignation, the law may treat it as a dismissal if the resignation was caused by a fundamental breach of the employment contract or conduct that made continued employment intolerable.

The legal assessment generally focuses on whether the employer’s actions were serious enough to amount to a breach of the employment relationship and whether the employee resigned because of that breach rather than for unrelated reasons.

Where constructive dismissal is established, the resignation is treated in law as if the employer had dismissed the employee.

Why resignation cannot be used as a termination shortcut
An employer is required to terminate employment in accordance with legal and contractual obligations. This includes acting with just cause or excuse and following due process where required.

Using resignation as a way to avoid formal termination procedures does not change the legal substance of the situation. The Industrial Court will look at the actual facts and surrounding circumstances, not merely the wording of the resignation letter.

What legal remedies are available
An employee who believes they were forced to resign may file a representation under Section 20(1) of the Industrial Relations Act 1967.

If the matter is referred to the Industrial Court, the Court will determine whether the resignation was genuinely voluntary or whether it amounts to constructive dismissal. If constructive dismissal is proven, the employee may be entitled to remedies available in cases of unfair dismissal, which may include reinstatement or compensation depending on the circumstances of the case.

Key legal principle
In employment law, substance prevails over form. A resignation label does not determine the legal outcome if the facts show that the employee was effectively left with no real choice but to leave employment.

Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. The contents herein should not be relied upon as a substitute for obtaining specific legal advice. For advice on your particular circumstances, please consult a qualified legal practitioner.