Termination Process

Termination of a contract of service can be effected either by the employer or employee. An employer cannot reject an employee’s resignation. Employees have the right to resign at any time by serving the required notice period or compensating the employer with salary in lieu of notice.


Notice Period & Payments

• The party who intends to terminate the contract must give notice to the other party in writing.

• The notice period to be given depends on what is agreed in the written contract. If there is no such period previously agreed upon, the following shall apply:


• Formula to calculate short notice payment:



Annual Leave & Payments

• The employer cannot force the employee to go on leave during the period of notice, unless the employee consents to it. Any unconsumed annual leave can be encashed by the employee.

• An employee can use his annual leave to offset the notice period for termination of contract. By bringing forward his last day of employment with the company, he is no longer considered an employee of the company and can start work immediately with his new company after that date.


Commission Payments

An employee’s entitlement to commission payment and the time of commission payment would depend on what is stated in the employment contract or existing policies/practices. If the contract is silent, it is subject to negotiation or mutual agreement between the employee and the employer.



Dismissal is the termination of the contract of service of an employee by his employer, with or without notice.

It may or may not be due to the employee’s misconduct.



An employer may, after an inquiry, terminate an employee’s services without notice if the employee is found guilty of misconduct.

Misconduct refers to a breach of duty or discipline that is inconsistent with the conditions of an employee’s contract of service. Examples of misconduct are theft or dishonesty, disorderly or immoral conduct at work, and wilful insubordination.

If the employee has committed an act of misconduct, the employer should conduct an inquiry before deciding whether to dismiss the employee or to take other forms of disciplinary action. The entire process should be properly documented for possible Ministry of Manpower audits.