I work for a startup in Malaysia. My contract has a notice period of 3 months. Our boss told us yesterday (Feb 28th) that the company's funding has run dry and salary will be delayed until the middle of March when it was due today.

Malaysian employment law states that companies have to pay salaries no more than 7 days after the end of the month.

If my employer doesn't pay me on time, am I still bound by my notice period? What should I be aware of should I choose to quit immediately due to not being paid?

closed as off-topic by Thomas Owens, Mister Positive, Chris E, Snow, JasonJ Mar 1 '17 at 15:40

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  • Comments are not for extended discussion; this conversation has been moved to chat. – Lilienthal Mar 1 '17 at 12:16
  • To clarify further: are you strictly looking for a legal answer or are you also interested in the ethical/professional angle? Note that high-level legal questions like this are indeed on-topic but anything that involves looking at the precise date when your specific employer broke your specific contract is off-topic as you'd need a lawyer. – Lilienthal Mar 1 '17 at 12:18
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    I've reopened your question given the edits and since you already had a few reopen votes. This may still be borderline since Malaysian law might not define an employment contract and the conditions for a breach clearly enough to give a general answer, but since people with HR experience in Malaysia should really be able to answer this I believe it's on-topic here. – Lilienthal Mar 1 '17 at 13:24
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    A meta question has been open for discussion on this question: meta.workplace.stackexchange.com/questions/4367/… – Chris E Mar 1 '17 at 15:31
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    There it is no longer asking for legal advice just general advice that our experts can help with. – IDrinkandIKnowThings Mar 6 '17 at 16:55

It doesn't matter either way

Your company is bankrupt.

Maybe not *officially*, yet, but if they aren't making payroll then the money has truly run out.

Assume that your company will cease to exist by the end of the month and you won't ever see that final paycheck.

Bankrupt companies don't enforce notice periods. Or anything much, really.

Start looking for another job immediately.

If you find one, hand in your resignation and walk out the same day.

  • This can be dangerous. In some jurisdictions, a trustee will be appointed, who'll dispense final payments. Since there's probably some but not enough money, priorities will have to be made.Not paying this employee who breached a contract could be a possible outcome. – MSalters Mar 1 '17 at 21:43
  • @MSalters Sure. But the money you'll earn from definitely getting paid for working for another company is almost certainly greater than the money you might get paid for working for a bankrupt company, unless you're taking a massive step down in salary. – Philip Kendall Mar 1 '17 at 22:07
  • @PhilipKendall: Don't be so sure. I know my government (or actually social security) covers my salary in case of bankruptcy, and this is likely better than the salary I could get elsewhere on short notice. Depends a bit on the exact circumstances, also. If there's a huge supply of goods to be sold, the trustee will fire salespeople last; if there's a huge volume of sales that still have to be fulfilled the salespeople may go first. – MSalters Mar 1 '17 at 22:13
  • Given that this is a startup. I strongly suspect there will be few, if any, assets left to distribute. – Kaz Mar 1 '17 at 22:17
  • Or they are having an issue with their payroll company and will make good with their employees as stated. You do not have enough information to conclude that the company is going bankrupt. It should definitely be a concern, but if the assumption is wrong then the consequences to the OP could be severe. – IDrinkandIKnowThings Mar 6 '17 at 16:56

There is likely no technical breach of contract as the 7 day limit is defined by law, not contract. Unless said stipulation was repeated in your contract you are basically out of luck unless you are willing to start legal proceedings against your employer (which you at this point could do either under the contract act 1950 or the employment act 1955).

That said, a better resource for this and similar questions is probably http://www.mylabourlaw.net as it specialises in discussing cases such as this.

  • Does not the law override the contract here? – Neuromancer May 13 '18 at 23:13
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    @Neuromancer Not in Malaysia. – Weckar E. May 14 '18 at 10:29

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