What does unfair dismissal mean?
Unfair dismissal refers to a termination of employment that is considered unfair, unreasonable, procedurally flawed, or not supported by a valid reason under local employment law. The exact legal test differs by country, but the general issue is whether the employee was dismissed in a way that was lawful and fair.
A dismissal may be challenged if the employer cannot show a clear reason, has weak documentation, skips required steps, applies rules inconsistently, or terminates the employee for reasons that may be discriminatory, retaliatory, or unrelated to work.
Unfair dismissal is different from ordinary resignation or fixed-term contract expiry. It usually concerns an employer-led termination, such as dismissal for performance, misconduct, redundancy, retrenchment, probation failure, or other business reasons.
Why unfair dismissal matters
Termination is one of the highest-risk stages of employment. A company may have a genuine reason to end employment, but still create risk if the process is poorly handled. Documentation, communication, notice, final pay, severance, and local employment rules all matter.
When managing employees in Southeast Asia, dismissal rules should be checked country by country. In Indonesia, Government Regulation No. 35 of 2021 covers termination procedures and termination-related payments, including severance pay, service appreciation pay, and compensation of rights. The Philippines, Malaysia, Vietnam, and Thailand have their own rules around dismissal, due process, redundancy, final pay, and employee protection.
A home-country termination template should not be used automatically for employees based in Indonesia, the Philippines, Malaysia, Vietnam, or Thailand. The local employment contract, employee classification, reason for dismissal, prior documentation, and statutory requirements should be reviewed before taking action.
Common unfair dismissal risk areas
Note: This table is a general guide. Unfair dismissal rules depend on the employee’s country, contract type, termination reason, length of service, and current local regulations.
Unfair dismissal and EOR arrangements
If an employee is hired through an Employer of Record, the client company should coordinate with the EOR before making any termination decision. The EOR is usually the local legal employer, so termination letters, notice, final pay, statutory benefits, and local process should be reviewed before communicating the decision to the employee.
Weshine’s Employer of Record service can support companies hiring employees in Southeast Asia without setting up a local entity, including coordination around local employment administration and offboarding. For payroll-related exit items, Weshine’s payroll service can also support final salary, payslips, statutory deductions, and employee records.
Common mistakes companies should avoid
A common mistake is dismissing an employee based only on frustration with performance, without documenting expectations, feedback, warnings, or improvement opportunities.
Another mistake is treating probation as a period where no process is needed. Probation rules still vary by country, and employees may still have rights during probation.
Companies should also avoid communicating dismissal before checking final pay, notice, unused leave, severance, and required documentation. Once the decision is communicated, it becomes harder to correct process gaps.
A final mistake is using the same termination wording across all Southeast Asian countries. Local review is important because unfair dismissal risk depends on country-specific rules and facts.
Note: Unfair dismissal is a legal and employment compliance issue. Companies should verify current local requirements before terminating employment.
