Compensation instead of your job back
You do not want your old job back and wonder what the law offers instead.
What is compensation in lieu of reinstatement?
It is a payment instead of getting your job back, ordered when reinstatement is not appropriate or not wanted. Malaysian unfair dismissal law is built around reinstatement as the main remedy, with money following where it is not ordered.1
Many workers do not want to return to an employer after a difficult exit, and the law allows for that. This payment is separate from back wages, though both can appear in one award.
How is the figure approached?
No single formula is fixed by statute for this payment. Length of service is commonly a reference point, alongside your salary and the wider circumstances of your case.
The court keeps real discretion, so the figure can differ between cases with similar service. Whatever figure is considered, the employer must still prove the dismissal was for just cause in the first place.2
What should you think through first?
Decide honestly whether you would want reinstatement, because that shapes what you ask for. Think about what you would do with the outcome either way, whether that is new work or time before your next role.
Keep your financial planning realistic and not tied to one assumed figure while the case runs.
What should you do next?
Gather your service history and salary records, since both affect the figure. Read about how back wages are calculated separately to see the fuller picture.
If you would take compensation instead of your job back, an employment lawyer can tell you how it applies to your length of service. They can pursue it if you have grounds.
If you would take compensation instead of your job back, an independent employment lawyer can review your service and pay and pursue that outcome if you have grounds.
For people seeking legal representation. For general information, please use our guides and tools.
First contact: general facts only, such as date, location, employment status and a short summary. Keep documents private until an identified independent lawyer contacts you and specifically requests them.
Common questions
Can I ask not to be reinstated?
Yes. Many workers do not want to return to the same employer, and the court can order compensation in lieu of reinstatement where reinstatement is not appropriate or not wanted.
Is there a fixed formula for this compensation?
No fixed formula is written into law. Length of service is often a reference point, but the court uses its own discretion instead of one calculation for every case.
Is this compensation the same as back wages?
No. They are separate figures that can both appear in the same award. Back wages cover lost salary during the case, while this compensation stands in for the job not being returned to you.
Does my length of service affect the amount?
Length of service is commonly a relevant factor, alongside your salary and the circumstances of your case. The exact weighting is a matter of judicial discretion.
Sources
- The remedy the law frames for unfair dismissal is reinstatement, with money such as back wages or compensation following where reinstatement is not ordered. Mah Weng Kwai & Associates
- The burden falls on the employer, not the employee, to prove the dismissal was for just cause or excuse. Mah Weng Kwai & Associates
Keep reading
If you would take compensation instead of your job back, an independent employment lawyer can review your service and pay and pursue that outcome if you have grounds.
For people seeking legal representation. For general information, please use our guides and tools.
First contact: general facts only, such as date, location, employment status and a short summary. Keep documents private until an identified independent lawyer contacts you and specifically requests them.