Pushed Into Unpaid Leave
Your employer sent you on unpaid leave and you were given no real choice.
Business is slow, you were told, and suddenly you are on leave with no pay until further notice. Nobody gave you a real choice.
Leave forced on you can be a serious breach of your contract. It sits near other constructive dismissal situations and can support a wider unfair dismissal claim.
Can your employer force you onto unpaid leave?
Not without your agreement or a clear right in your contract. Pay is a basic term of employment, and withholding it on your own authority can be a fundamental breach.1
A short unpaid break that you agreed to for personal reasons is different. So is your employer cutting costs at your expense without asking.
What if you felt you had to agree?
Agreement given under pressure, such as a warning that refusing meant termination, is not a real choice. Courts look at the real circumstances, not just the paper.
Write down exactly what was said when the leave was proposed. Include any warning about what would follow if you refused.
What evidence should you gather?
Keep the notice or message announcing the leave. Keep any company policy on leave or layoffs.
Note how some other staff were treated the same way. A leave scheme applied unevenly is harder for your employer to justify.
What is your deadline if you treat this as dismissal?
You have 60 days from when you treat yourself as dismissed to file a Section 20 representation with the Director General of Industrial Relations.2
Your employer then has to show the leave was justified and fairly handled. You do not have to prove bad intent.3
What should you do this week?
Ask in writing how long the leave will last and whether it will be reviewed.
If your pay was also cut, read about a salary cut that forced someone out. Use the deadline calculator to track your 60 days.
If you want a lawyer to review the notice, request lawyer contact first; only after an identified independent lawyer has contacted you and specifically requested the material, send it directly to that lawyer.
If you were pushed into unpaid leave and want to challenge it, an independent employment lawyer can review the notice you received and tell you whether it is a claim worth pursuing.
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
Is unpaid leave the same as retrenchment?
No. Retrenchment ends your job with notice or pay in lieu, while unpaid leave keeps you employed without income. Leave with no end date can act like retrenchment without its protections.
What if I cannot afford unpaid leave?
Explain your situation in writing and ask for alternatives such as shorter hours. The reply, or the lack of one, becomes part of the record if you later treat this as dismissal.
Does signing a leave form mean I agreed to everything?
Not necessarily, especially if you signed because you feared losing your job. How you came to sign matters as much as the form when a lawyer reviews it.
Can I claim the Employment Insurance System meanwhile?
Your job has not ended, so ask a lawyer whether the leave has become a termination in practice. That could change your position.
Sources
- Malaysian courts apply the contract test from Wong Chee Hong v Cathay Organisation, asking whether the employer breached a term so basic it strikes at the foundation of the contract. Thomas Philip
- An employee who believes they were dismissed without just cause may file a Section 20 representation within 60 days of the dismissal. Mah Weng Kwai & Associates
- In an unfair dismissal case the burden of proof rests on the employer to show just cause or excuse for what happened. Mah Weng Kwai & Associates
Keep reading
If you were pushed into unpaid leave and want to challenge it, an independent employment lawyer can review the notice you received and tell you whether it is a claim worth pursuing.
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.