When faced with the prospect of termination by an employer, some employees opt to tender their resignation in order to “save face”. The concept of “saving face” is prevalent among most Asian cultures; it is used to refer to acts done to avoid humiliation or embarrassment, or to maintain one’s reputation.

Getting terminated is an emotional, gut-wrenching experience, but it could even be more harrowing when faced with the embarrassment of what your colleagues or peers in the same industry might say; after all, termination is often associated (whether rightfully or not) with unsatisfactory performance.

As such, the act of resigning before one can be terminated is a form of career “seppuku”; it is an attempt to have a dignified exit from the company and avoid the spread of gossip.

What happens when such a resignation is “suggested” by the employer?  It is not uncommon to hear of this scenario:

  • An employee is alleged to have been poorly performing, or have committed some form of serious misconduct.
  • The employer confronts the employee.
  • During the discussion, the employer suggests that it may be better for the employee to resign rather than having a black mark in their employment record as having been terminated for poor performance or misconduct.
  • The employee agrees to resign to avoid disciplinary proceedings, or to avoid being put on a performance improvement plan.

In the scenario above, the employee may still end up filing a complaint for unfair dismissal on the basis that they had “no choice” but to resign.  In other words, this is based on the underlying doctrine of “forced resignation”, whereby an employee alleges they were placed under the compulsion to resign, and in the event of the employee’s refusal to resign, the employee would have been terminated anyways.

In City-Link Express (M) Sdn Bhd v Greenson Dauk [2002] 3 ILR 1219, the Court expressed its general reluctance to find that scenarios such as the one above, can amount to a dismissal or forced resignation:

“Where an employee who had been told of the several respects in which he has failed to perform, or to meet the standards of conduct expected of his employer, decides that it would be wise to make the best out of a bad situation and that it would be in his interest to resign, it would be a matter of some difficulty for the Court to find that the Claimant left the employer because he had been forced to tender his resignation. To do so would be to ignore the reality of workforce dynamics and interaction between the employer and employee.”

Therefore, in order to succeed in this type of claim, there must be clear evidence of compulsion, and that the threat caused the employee to resign.  Employees in such cases will bear the burden to prove to the Court that they were forced or coerced to resign. Putting it another way – the employer has no burden to prove that the resignation was voluntary.  If employee fails to meet their burden of proof, the question of unfair dismissal does not exist since there is no “dismissal” to begin with.

As such, the emphasis on documentary evidence is paramount in these types of cases. The lack of evidence in such cases prevents most employees from successfully bringing a claim of forced resignation against their employers.

An employee’s conduct during and after receiving the alleged “threat” of termination will usually be taken into account.  For example, in some cases, the Courts have found that an employee who actively negotiates the terms of his resignation cannot be seen to be someone who was pressured to resign.  This is because the willingness to resign has been brought about by some other consideration (ie: the negotiated terms of settlement) and the employee would have resigned voluntarily because he felt it was beneficial for him to do so.

Further, an employee who fails to contemporaneously protest his resignation is unlikely to be able to convince the Court that his resignation was not voluntary. After all, a person who was forced to resign is unlikely to keep quiet about the injustice that he has suffered, and to only raise his protest at a very late stage could be seen as self-serving.

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This article was written by Donovan Cheah (Partner) and Amirul Izzat Hasri (Associate) from the employment law practice group of Donovan & Ho.  

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