It is not uncommon for an employee to resign in the heat of the moment. A resignation email or letter is sent, only for regret to set in hours later—or perhaps the very next day. The employee promptly informs the employer that he or she wishes to withdraw the resignation. By then, however, the employer has neither responded to nor acknowledged the resignation.

Whether the employee can retract the resignation at that stage is not as straightforward as many would assume. Under Malaysian employment law, the answer turns on a crucial issue: whether the resignation has been accepted by the employer.

1. An Employee Has the Right to Resign

Section 12 of the Employment Act 1955 recognises an employee’s right to terminate his or her employment by giving the required notice, or by making payment in lieu of notice where permitted.

In general, an employer cannot compel an employee to remain in employment or refuse to recognise a resignation that has been validly tendered.

However, this raises an important question: When does a resignation actually become effective?

2. Is a Resignation Effective the Moment It Is Submitted?

Many employees assume that once a resignation letter or email has been sent, the employment relationship automatically comes to an end.

The legal position is more nuanced.

In Universe Digital Library Sdn Bhd v Mahkamah Perusahaan Malaysia & Anor [2016] MLJU 1786, the High Court affirmed and adopted the trite law that a resignation is only complete once it has been accepted by the employer. In reaching that conclusion, the Court cited the Industrial Court’s decision in MST Industrial System Sdn Bhd v Foo Chee Lek (1993) 1 ILR 202, which held:

“…The employer-employee relationship under the common law on resignation or termination is settled. Just as an employer has the right to terminate the service of an employee, similarly an employee has a right to put an end to his contract of employment by intimating to his employer of his intention to quit by way of resignation. An employee who makes known his intention to resign the job to his employer who accepts his resignation, the contract of employment comes to an end, ending the employer employee relationship. However, the resignation is not complete until it is accepted by the employer and before such acceptance an employee can change his mind and withdraw his resignation. Once his resignation is accepted the contract comes to an end…                                                                                                                        (Our emphasis)

The principle is straightforward. While an employee is free to resign, the resignation is not regarded as complete until the employer communicates its acceptance.

This naturally leads to the next question: What If an Employer Chooses to Withhold Acceptance of a Resignation?

3. Can an Employee Leave if the Resignation Has Not Been “Completed”?

Yes. As stated above, an employee has the right to terminate his or her employment under Section 12 of the Employment Act 1955. The law does not, as a general rule, require an employer’s acceptance for a resignation to take effect.

Accordingly, once the employee has served the requisite notice period (or paid salary in lieu of notice, where applicable), the employee is entitled to leave the employment relationship. This position applies notwithstanding the absence of any formal acknowledgement or acceptance of the resignation by the employer.

4. Why Does Acceptance Matter?

The timing of an employer’s acceptance can have significant legal consequences.

Where an employee withdraws a resignation before the employer has communicated its acceptance, the withdrawal may be legally effective. In such circumstances, the employer may no longer be entitled to rely on the original resignation.

This was the position adopted in MST Industrial System Sdn Bhd (supra). In that case, the Industrial Court held that an employee may withdraw a resignation at any time before the employer communicates its acceptance. However, in this case, because the employer had accepted the resignation on the same day it was submitted, the employee was no longer entitled to unilaterally withdraw it.

The converse scenario is equally important. What if the employee withdraws the resignation before it has been accepted, but the employer nevertheless insists on treating the resignation as effective?

The Industrial Court considered this issue in Lunar Venture Sdn Bhd v Encik Mohd Noor Khan bin Mohammad Khan [2005] ILJU 29. The Court held that an employer could not accept a resignation that had already been validly withdrawn. If the employer nevertheless proceeded to end the employment, such conduct amounted to a dismissal, potentially giving rise to a claim for constructive dismissal.

In other words, once a resignation has been validly withdrawn before acceptance, the employer cannot simply ignore the withdrawal and continue to rely on the original resignation.

Conclusion

For employees, resignation should never be an impulsive decision. If you have second thoughts, acting quickly may make all the difference. A resignation that has not yet been accepted may, depending on the circumstances, still be withdrawn.

For employers, resignation letters should be dealt with promptly and communicated clearly. Delays or uncertainty over whether a resignation has been accepted can create unnecessary disputes and may expose the employer to legal claims.

Ultimately, whether a resignation can be withdrawn depends on the specific facts of each case, including when the resignation was submitted, whether it was accepted, and whether that acceptance was communicated. Both employers and employees should seek legal advice before taking further steps where there is any uncertainty.

Disclaimer: This article is for general information purposes only and does not constitute legal advice. Specific advice should be sought based on the facts and structure of each transaction.