What’s the difference between “termination” and “dismissal”?

Companies have commonly asked about the difference between a “termination” and a “dismissal”. Of course, certain circumstances would fit either word better. For example, an employee on a term contract would be “terminated” when the contract expires, as he was clearly not dismissed. On the other hand, an employee who was sacked could be described as being “terminated” or “dismissed” and it would fit the scenario.

Of course, when companies ask me as a lawyer, then my short answer is there is absolutely no difference in law. An employee who is “terminated” or “dismissed” would have the same rights in law against the company, and the Courts would equally look into the circumstances of the termination or dismissal regardless of the terminology used.

In fact, the way employment law has evolved in Malaysia, the Industrial Court has even enquired into the circumstances even when an employee resigns. I would have thought that a resignation letter is clearly a good safeguard for the employer, since an employee can always choose to walk out without signing the letter if he feels compelled.

Has the Industrial Court become too vigorous in its protection of employees? I would think so, and partially it is because the Industrial Court is not in reality a Court of law, but a tribunal set up for a specific purpose. Hence, it was not born out of the Courts of Judicature Act or even of the Subordinate Courts Act. It also does not have inherent jurisdiction to do justice like the Courts of law, although in considering cases before it, the Industrial Court would look at principles of equity as opposed to strict legal provisions.

What can employers do bearing in mind the Industrial Court’s vigorous approach? Well, at the very least, I would think employers should know their rights. Secondly, employers ought to take enough caution to deal with employees who are leaving (whether by way of resignation, termination or dismissal) appropriately.

But that would be another topic for another day.

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