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How to Deal with Termination of Employment (with Templates!)

by Danial
Jan 22, 2019 at 6:07 PM

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Termination is the most dreaded part of a Human Resource Manager’s job. It takes a lot skill to manage the process of letting go of an employee. Every step has to be thought out thoroughly so that the situation is treated professionally yet sensitive.  

To make the process easier, Human Resource Managers should go for a more graceful approach. FInding out the best way to communicate will also help HR Managers to be more confident and compassionate when faced with the task. 


The Correct Termination Procedure

First, you must make sure you are well-versed about the Employment Act 1955. You have to be thorough with job descriptions and contracts especially when you are explaining about these to incoming employees.

Second, if you have to let go of an underperforming employee, identify the severity of the misconduct (if any) and produce the necessary show cause letter, you can read more about show cause letter here.  Employees should be given the chance to redeem themselves through a stated and agreeable probationary period.

In Malaysia, termination is not encouraged unless it’s a serious offence and affects the organisation's:

  1. morale

  2. bottom line

  3. other documented performances.  

If it is a minor offence or misconduct, employers must commit to due diligence and conduct thorough investigation. It is also recommended to send the employee for a counseling before delivering show cause letter. The HR Manager can choose to take proper disciplinary action if all allegations of misconduct are investigated and found to be true.

According to  Section 15 (1) Employment Act : (termination is valid) when contract is deemed to be broken by employer and employee. This statement covers performance. After conducting due diligence of :

  1. proper job description
  2. sufficient job training
  3. putting competency measurement in place,

then an employer can declare measurable proof of incompetency and/or poor performance when evidence is glaring.

Lawful termination is possible only when the employer finds the employee ‘guilty' and the employee fully admits to the misconduct.  Keep in mind that termination without a valid reason will result in a heavy penalty whereby the organisation may have to compensate the employee or be dragged to court.


What about employees on probation?

An employee on probation enjoys the same rights as confirmed employees. The process of termination is the same for both probationer and confirmed employee.

According to the Employment Act 1955, there are a few items that highlight the need for employers to be well-versed and clear about the usage and purpose of contracts concerning termination.  

Since termination is a means to an end for the employee, lack of knowledge puts the HR manager at risk of uncertainty, legal actions and mostly strings of excuses from the employees that the manager cannot fault.

In order to avoid tension and negative outcomes to termination conversations:

  1. Contracts must be in written format that include provision for termination.

  2. The contract must provide provision as to termination of contracts with specified employment period clearly stated.

  3. Either party, employer or employee can serve a notice of termination of contract.  The grace period of the notice must be equal for both parties and provision must be made in writing.

  4. Termination and suspension of contract for special reason should identify grounds of misconduct.  Employers can suspend the employee not exceeding 2 weeks or pay him half his wage for such period.

  5. Contract is deemed broken by employer and employee if:

    1. Employer fails to pay wages as contracted.

    2.  Employee fails to show up for work for more than two consecutive working days without prior leave from the employer.

Finally, keep documentations intact. For example, have the employee handbook; consult the HR administration department and legal concerning termination before meeting the employee; always set an appointment that includes a colleague from the human resource in a private setting.  

Set the tone; no flip flop decisions and retracting the decision unless there's a new information that could change the decision. Don't surprise the termination and keep your explanation short but specific. Most importantly, follow the company policy and don't apologise.


Letter of termination of probationer sample

Written Warning sample


Source: National Human Resource Center


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