Can Employee be Forced to Resign?

Updated: Sep 8

Many employers would think that the best way to terminate the service of an employee is to force them to resign, thinking that there will be no repercussions. The employee would usually be asked to sign on a resignation letter, prepared in advance by the employer's representatives.


What amounts to Forced Resignation? Forced resignation is no resignation at all but is a dismissal. It is a well-established principle that if an employer offered the employee the alternatives of 'resign or be sacked' and without anything more, the employee resigned, then that would constitute a dismissal.


For example, if the employer suggests the employee to leave the Company, and the employee agreed to it, then this does not amount to dismissal. If the Company offers to pay the employee a good compensation if he resigns and that if he refused, he will be dismissed without any compensation, then this act would amount to dismissal.

It is the existence of the threat of being sacks, which causes the employee to be willing to resign. However, where the willingness is brought about by some other consideration, then it may be said that he resigned voluntarily. It is so because it was beneficial to him to do so that then there has therefore been no dismissal.

Burden of Prove The employment law is clear that if the fact of dismissal is in dispute, the burden is on the employee to establish that he was dismissed by his employer and it was not a voluntary act of his own, failing which there is no dismissal has taken place and the question being with just cause or excuse would not arise.


What are the remedies available to an employee who has been forced to resign?

Generally, if the Court finds that the dismissal is without just cause or excuse, the only remedy that the employee can seek is reinstatement and back wages. However, if the Court finds that the reinstatement is not suitable i,e, the position no longer exists, then the Court shall order the employee to be paid compensation in lieu of reinstatement by the employer, as may be determined by the Court. The compensation in lieu of reinstatement is normally at the rate of one month for each year of completed service. For example, if a workman has been employed for 3 years then the compensation in lieu of reinstatement is calculated as 1 month’s salary x 3. However, this compensation will be subjected to deduction as follows:- i) Mitigation; ii) Post dismissal earning; iii) Contributory conduct. It must be noted that the monetary award is only to cover all losses relating to the termination. The employee cannot claim for additional losses such as loss of future earnings or mental and emotional loss.


Written by: Dato Fion Wong & Wilfred Loke

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