Mental Illness and Employment Termination in Malaysia: Legal Gaps, Doctrinal Uncertainty and the Need for Reasonable Accommodation

The increasing prevalence of mental illness in modern workplaces has exposed significant shortcomings in employment law frameworks that were historically designed around physical incapacity, misconduct, and traditional contractual doctrines. In Malaysia, the legal treatment of employees experiencing mental illness remains fragmented, with no dedicated statutory framework governing termination arising from psychiatric incapacity. Instead, employers and courts rely primarily on general doctrines such as “just cause or excuse” under the Industrial Relations Act 1967 and frustration of contract under the Contracts Act 1950. While these doctrines may provide limited mechanisms for addressing incapacity-related dismissals, they are doctrinally ill-suited to the fluctuating, episodic, and often non-visible nature of mental illness. This article critically examines the legality of terminating employees with mental illness under Malaysian employment law through doctrinal and legal analysis. It evaluates statutory provisions, judicial authorities, and industrial jurisprudence, including Malaysian decisions on medical incapacity. The article argues that Malaysian law inadequately protects employees with mental illness due to conceptual ambiguity, doctrinal uncertainty, limited psychiatric-specific judicial guidance, the absence of statutory accommodation duties, and the failure to integrate psychiatric disability into employment protection frameworks. It further contends that the continued reliance on doctrines originally developed for physical incapacity creates doctrinal incoherence and practical injustice. This article proposes a reform-oriented framework for Malaysia that incorporates statutory recognition of mental illness, reasonable accommodation obligations, structured incapacity assessment, and enhanced procedural safeguards in employment termination disputes.

Mental Illness; Employment Termination; Malaysian Employment Law; Unfair Dismissal; Frustration of Contract; Psychiatric Disability; Workplace Mental Health

1. American Psychiatric Association. (2022). Diagnostic and statistical manual of mental disorders (5th ed., text rev.). American Psychiatric Publishing. [Google Scholar] [Crossref]

2. Archibald, J. (2004). Archibald v Fife Council [2004] UKHL 32. [Google Scholar] [Crossref]

3. Ashgar Ali Ali Mohamed, Farheen Baig Sardar Baig, & Arun Kasi. (2019). Workplace stress: The employer’s liability. [2019] 2 MLJ cxxxiv. [Google Scholar] [Crossref]

4. Brohan, E., Henderson, C., Wheat, K., Malcolm, E., Clement, S., Barley, E. A., Slade, M., & Thornicroft, G. (2012). Systematic review of beliefs, behaviours and influencing factors associated with disclosure of a mental health problem in the workplace. BMC Psychiatry, 12, 11. https://doi.org/10.1186/1471-244X-12-11 [Google Scholar] [Crossref]

5. Chan, C. M. H., Ng, S. L., In, S., Wee, L. H., & Siau, C. S. (2021). Predictors of psychological distress and mental health resource utilization among employees in Malaysia. International Journal of Environmental Research and Public Health, 18(1), 314. https://doi.org/10.3390/ijerph18010314 [Google Scholar] [Crossref]

6. Chua, S. N. (2020a). The economic cost of mental disorders in Malaysia. The Lancet Psychiatry, 7(4), e23. [Google Scholar] [Crossref]

7. Chua, S. N. (2020b). Workplace mental health: The business costs. Relate Mental Health Malaysia. [Google Scholar] [Crossref]

8. Collins, H., Ewing, K. D., & McColgan, A. (2019). Labour law (2nd ed.). Cambridge University Press. [Google Scholar] [Crossref]

9. Dreamland Corporation (M) Sdn Bhd v Choong Chin Sooi & Anor [1988] 1 MLJ 111. [Google Scholar] [Crossref]

10. Dul, J., Bruder, R., Buckle, P., Carayon, P., Falzon, P., Marras, W. S., Wilson, J. R., & Van Der Doelen, B. (2012). A strategy for human factors/ergonomics: Developing the discipline and profession. Ergonomics, 55(4), 377–395. https://doi.org/10.1080/00140139.2012.661087 [Google Scholar] [Crossref]

11. East Lindsey District Council v Daubney [1977] ICR 566. [Google Scholar] [Crossref]

12. Freedland, M., Bogg, A., Davies, A. C. L., Countouris, N., & Prassl, J. (2016). The contract of employment. Oxford University Press. [Google Scholar] [Crossref]

13. Goon Kwee Phoy v J & P Coats (M) Bhd [1981] 2 MLJ 129. [Google Scholar] [Crossref]

14. Great Eastern Life Assurance Co Ltd v Industrial Court Malaysia & Anor [1988] 2 MLJ 210. [Google Scholar] [Crossref]

15. Hanafiah, A. N., & Van Bortel, T. (2015). A qualitative exploration of the perspectives of mental health professionals on stigma and discrimination of mental illness in Malaysia. International Journal of Mental Health Systems, 9, 10. https://doi.org/10.1186/s13033-015-0002-1 [Google Scholar] [Crossref]

16. Hassan, M. F., Hassan, N. M., Kassim, E. S., & Hamzah, M. I. (2018). Issues and challenges of mental health in Malaysia. International Journal of Academic Research in Business and Social Sciences, 8(12), 1685–1696. https://doi.org/10.6007/IJARBSS/v8-i12/5288 [Google Scholar] [Crossref]

17. Ilmarinen, J. (2009). Work ability—A comprehensive concept for occupational health research and prevention. Scandinavian Journal of Work, Environment & Health, 35(1), 1–5. [Google Scholar] [Crossref]

18. International Labour Organization. (2022). Mental health at work: Policy brief. International Labour Organization. [Google Scholar] [Crossref]

19. J v DLA Piper UK LLP [2010] IRLR 936. [Google Scholar] [Crossref]

20. Kirwan, B. (1994). A guide to practical human reliability assessment. Taylor & Francis. [Google Scholar] [Crossref]

21. Mallow, M. S. (2018a). Occupational stress in Malaysia: Causes, effects and possible solutions. [2018] 2 ILJ c. [Google Scholar] [Crossref]

22. Mallow, M. S. (2018b). Work life balance policy in Malaysia: The current position and the way forward. [2018] 3 ILJ cxxxvi. [Google Scholar] [Crossref]

23. National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675. [Google Scholar] [Crossref]

24. Notcutt v Universal Equipment Co (London) Ltd [1986] ICR 414. [Google Scholar] [Crossref]

25. Reason, J. (1990). Human error. Cambridge University Press. [Google Scholar] [Crossref]

26. Ruzita Azmi, Ahmad, S. N. S., & Mustafa Kamil, B. A. (2021). Mental health issues at workplace: An overview of law and policy in Malaysia and the United Kingdom. International Journal of Law, Government and Communication, 6(22), 95–108. https://doi.org/10.35631/IJLGC.622009 [Google Scholar] [Crossref]

27. Salvendy, G. (Ed.). (2012). Handbook of human factors and ergonomics (4th ed.). John Wiley & Sons. [Google Scholar] [Crossref]

28. Sathiaval Maruthamuthu v Shell Oilfield Services (Malaysia) Sdn Bhd [1998] 1 MLJ 883. [Google Scholar] [Crossref]

29. Soer, R., Van Der Schans, C. P., Geertzen, J. H. B., Groothoff, J. W., Reneman, M. F., Brouwer, S., & Dijkstra, P. U. (2008). Normative values for a functional capacity evaluation. Archives of Physical Medicine and Rehabilitation, 89(9), 1785–1794. https://doi.org/10.1016/j.apmr.2008.02.015 [Google Scholar] [Crossref]

30. Stewart, A., Stanford, J., & Hardy, T. (2021). Creighton & Stewart’s labour law (7th ed.). Federation Press. [Google Scholar] [Crossref]

31. Taylor v Caldwell (1863) 3 B & S 826. [Google Scholar] [Crossref]

32. Vita Food Products Inc v Unus Shipping Co Ltd [1939] AC 277. [Google Scholar] [Crossref]

33. Wong Chee Hong v Cathay Organisation (M) Sdn Bhd [1988] 1 MLJ 92. [Google Scholar] [Crossref]

34. World Health Organization. (2022). World mental health report: Transforming mental health for all. World Health Organization. [Google Scholar] [Crossref]

• The Impact of Ownership Structure on Dividend Payout Policy of Listed Plantation Companies in Sri Lanka
• Urban Sustainability in North-East India: A Study through the lens of NER-SDG index
• Performance Assessment of Predictive Forecasting Techniques for Enhancing Hospital Supply Chain Efficiency in Healthcare Logistics
• The Fractured Self in Julian Barnes' Postmodern Fiction: Identity Crisis and Deflation in Metroland and the Sense of an Ending
• Impact of Flood on the Employment, Labour Productivity and Migration of Agricultural Labour in North Bihar