FORCED RESIGNATION: AN UNLAWFUL PRACTICE

It would seem to be a common misconception by an employer that a prepared letter of resignation signed by an employee would safeguard the interest of a company. Employers would believe that once an employee is called in on the pretext of having a performance meeting and with the insinuation or the verbal threat of taking disciplinary action with eventual dismissal, an employee being fearful would submit a letter of resignation duly prepared by the Company with the kind considerate word of thanks to the company would be unchallengeable.

Employers seem to believe that once a letter of resignation is prepared through a calculated or continuous effort of placing pressure on an employee to provide employees with only a single recourse of resigning should be aware that forced resignation is classified as a form of constructive dismissal.

In Stanley Ng Peng Han v AAF Re Ltd [1979] 1 MLJ 57 the court held;

“A resignation under compulsion is no resignation in law”

The position of law with claims of constructive dismissal and in particular forced resignation requires the Court to look into the circumstances that lead to the allegation of forced resignation. It is surprisingly common to hear of companies adopting the practice of “resign or be fired” which is a blatant breach of fair employment practices and unknowingly justifies a claim for constructive dismissal;   

In Lipo Corp Bhd v Mahkamah Perusahaan Malaysia & Anor [2013] 9 MLJ 888, the court held

Obviously, in this case, the threat was undisputedly ‘resign or face a domestic enquiry and be embarrassed’ and this threat was directly preceded by the ‘forced resignation’. The evidence also pointed to a ‘rushed’ scenario where the employee was left with no option but to resign.

It is an unethical and certainly an unlawful practise for employers to pressure the employee to resign and sign prepared letters of resignation as an easy and convenient method to “get rid” of employees and avoid undertaking the necessary fair practices. Such practices unnecessarily expose companies to legal liabilities and eventual unfavourable outcomes and making court-ordered payment to employees after legal proceedings.