Termination Isn’t a Process. It’s a Legal Minefield. 

In the world of HR, few decisions are more complex or consequential than employee termination. 

We often invest in hiring the right talent, building strong cultures, and motivating performance. But when it comes to parting ways with an employee, many organisations still treat it as a checklist task. A letter to send. A form to complete. A short conversation to close the file. 

This perception is not only inaccurate. It is risky. 

Termination is Not Just Administrative. It Is Legal, Emotional, and Strategic. 

Termination is one of the most legally sensitive and emotionally charged moments in the employment lifecycle. When mishandled, it can lead to: 

• Unfair dismissal claims due to a lack of due process 

• Legal challenges from retrenchments without clear, objective criteria 

• Breach of natural justice in cases where no proper domestic inquiry is held 

• Damage to employer reputation both internally and externally 

• Loss of trust in HR and leadership 

In Malaysia, these consequences are not theoretical. Tribunal cases for unfair dismissal are frequent, and settlements can involve significant time, cost, and reputational damage. 

Common Pitfalls in Termination Decisions 

While HR professionals may be aware of the law in theory, the reality is that terminations often happen under pressure and without full consideration of risk. 

Here are examples of common mistakes: 

• A resignation that is actually a forced dismissal 

• A medical condition that is not properly assessed before termination 

• A misconduct case that proceeds without sufficient investigation or documentation 

• A performance issue that is not backed by formal warnings or improvement plans 

These are not just procedural oversights. They can be seen as breaches of employee rights if challenged in court or tribunal. 

Termination Requires Both Legal Structure and Human Sensitivity 

It is not enough to follow a process on paper. A fair and legally sound termination must also consider how it is communicated, documented, and experienced by the employee. 

Employees deserve: 

• Clear explanation of the reasons 

• Opportunity to respond or defend themselves 

• Proper documentation of warnings or misconduct 

• A respectful, private conversation with appropriate support 

• Fulfilment of all final payments and entitlements 

Managers need to be equipped with both legal understanding and emotional intelligence. They must know how to deliver difficult news without dehumanising the individual. 

Because employees may forget the details, but they will never forget how they were made to feel. 

Termination is a Test of Your Organisational Values 

How you end employment says as much about your company as how you begin it. 

• Do you uphold fairness, even when it is difficult? 

• Do you give people the opportunity to improve, explain, or respond? 

• Do you treat exiting employees with respect and dignity? 

If not, the damage goes beyond one person. It impacts culture, morale, and how your organisation is perceived by current employees and future candidates. 

What HR Should Do to Manage Termination the Right Way 

To protect your business and uphold your values, HR must take a proactive approach to termination: 

• Establish a clear and compliant termination policy aligned with Malaysian labour laws 

• Train managers on legal requirements and soft skills for exit conversations 

• Document everything including warnings, performance reviews, inquiries, and communication 

• Conduct domestic inquiries where required before proceeding with dismissals 

• Engage legal or HR experts when handling sensitive cases like medical incapacity or misconduct 

• Provide proper offboarding to ensure a smooth transition and maintain goodwill 

Termination is not a failure. But mishandling it is. 

HR’s Role Is to Safeguard People and the Organisation 

Terminating employment should never be routine. It is a pivotal decision that carries both human and legal consequences. 

At Malaysia HR Forum, we help organisations manage termination risk through structured policies, real-world HR training, and advisory support. From domestic inquiry procedures to empathetic exit conversations, we guide HR and leadership teams to handle exits with clarity, compliance, and compassion. 

Let us help you build a termination process that protects your people and your business. 

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