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Breach of Contract of Service and Termination of Employment is 2 Different Things

Updated: Oct 11, 2022

There is no such thing as statutory termination.

G Company


Nationam Union of Plantation Workers

  • Industrial Court, Kuala Lumpur

  • Award No. 55 Of 1982 [Case No. 250/81]

  • 24 February 1982

Employment Act 1955

Section 15 of the Employment Act 1955 reads:

  1. An employer shall be deemed to have broken his contract of service with the employee if he fails to pay wages per Part III.

  2. An employee shall be deemed to have broken his contract of service with the employer if he has been continuously absent from work for more than two consecutive days:-

    1. without prior leave from his employer or without reasonable excuse; or

    2. without informing or attempting to inform his employer of the excuse before or at the earliest opportunity during such absence."

The word “consecutive” has been defined in the Oxford Advanced Learner’s Dictionary of Current English (Fifth Edition) as “coming one after the other without interruption or following continuously”.

The Facts

The Claimant was first employed on the 410-acre rubber estate as a rubber tapper in 1954.

In November 1977, the Claimant informed the Estate Manager verbally that he proposed to take 35 days' leave to go to India to visit his sick mother-in-law.

He was only entitled to 14 days' leave at the time. the Estate Manager told him to put his request in writing.

On 1.12.1978, the Claimant did not report for work. The following day, he left for India by air and returned on 4.1.1979.

He reported for work on 5.1.1979, but as it was raining heavily that day, there was no work on the estate.

On the same day, however, the Estate Manager addressed a letter to the Claimant terminating his service with the Company with effect from that day because he had been absent from work without leave for 35 days.

The Claimant contends that
  • he had been dismissed without just cause or excuse on January 5, 1979;

The Company contends that
  • the Claimant never applied for leave in writing.

  • the Estate Manager did not grant the leave verbally either.

  • in any event, the Estate Manager had no authority to grant leave exceeding 14 days.

The Union contends that
  • The written application for leave was made on 22.11.1978 and handed in on 23.11.1978.

  • Further, the Estate Manager granted verbal approval of the leave before the Claimant left for India.

The Law

It is obvious that an absent workman misconducted himself if he was absent from work without reasonable excuse or, if he had such reasonable excuse, fails to inform or attempt to inform his employer of such excuse before or at the earliest possible opportunity during his absence.

The Evaluation Of Evidence And Findings

The Claimant knew he had to apply for leave in writing.

He did not do so, but even if he did, he did not wait for the approval.

He was only entitled to 14 days of leave at the time, and the Estate Manager did not have the authority to grant more than 14 days. Approval had to come from the Company's head office in Melaka.

In its Statement of Case, the Union said that the Claimant waited until 1.12.1978, and as his leave application had not been rejected, he proceeded to India.

Three days after his departure, the Company made enquiries regarding his absence.

On 30.12.1978, the Estate Manager reported his absence to the Director of Labour and the Company's decision to terminate his service.

On 5.1.1979, the Estate Manager, by letter addressed to the Claimant, terminated his services from that day.

The Conclusion

The Court made no specific reference to Section 15 (2) of the EA 1955 as there is no such thing as statutory termination.

Breach of contract of service and termination of employment are two different things.

A breach of contract of service may or may not lead to termination of employment.

Section 15 of the Act is only a deeming provision.

It cannot be the intention of the legislature that employees automatically lose their jobs whenever an employer fails to pay their wages under s 15(1). Nor do we foresee employees terminating their contracts of service every time an employer delays paying their salaries for more than seven days after the due date.

In such instances, the employer commits an offence and may be dealt with under Section 91 of the Act.

However, unlike the employer, there is no penalty clause in the Act against the employee if he breaches his service contract.

The consequence of any such breach depends on the conditions of employment and the provisions of the Act.

Absence without prior leave for more than two consecutive days is deemed a breach of the contract of service by Section 15 (2) of the Act.

If the circumstances of the breach are such that it justifies termination of service, then the employer may terminate the contract of service under Section 13 (2) of the Act, which provides:-

"Either party to a contract of service may terminate such contract of service without notice in the event of any wilful breach by the other party of a condition of the contract of service." 

It follows that the act of termination is a separate process though consequential, following a breach of the contract of service.

The question NOW is, did the Company properly terminate the Claimant's services?

There was, therefore, sufficient evidence to show that by absenting himself from work without prior leave of his employer for 35 days, the Claimant committed a wilful breach of a condition of his contract of service.

The facts clearly show that his services were terminated under Section 13 (2) of the Act.


The claimant's claim is dismissed.

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