My fixed-term contract was not renewed. Is that a dismissal?

For six years you have signed a new one-year contract every January. You do the same job as permanent staff, and your manager has always said renewal is "a formality". This year HR tells you the contract will not be renewed. Is that just the end of a contract, or a dismissal?

The general rule

Under section 11(1) of the Employment Act 1955, a contract of service for a specified period terminates when that period expires, unless it is terminated earlier in accordance with the Act. A contract for an unspecified period continues until terminated in accordance with the Act (s.11(2)).

So when a genuine fixed-term contract simply runs out, there is usually no dismissal.

Substance over form

The Industrial Court acts on equity, good conscience and the substantial merits of the case without regard to technicalities and legal form (Industrial Relations Act 1967, s.30(5)). It looks at what the relationship really was. Factors that may point to permanent employment include:

• repeated renewals over many years without a break;
• the work being core and ongoing, not a project with a natural end;
• the same duties as permanent employees;
• assurances of renewal or of permanent status;
• the fixed-term label being used to avoid employment protections.

If the Court finds the employment was in substance permanent, or that you had a legitimate expectation of renewal, the non-renewal may be treated as a dismissal that must be justified.

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Filing a claim

A workman who considers he has been dismissed without just cause or excuse may file written representations with the Director General of Industrial Relations (IRA 1967, s.20(1)) within 60 days of the dismissal (s.20(1A)). For non-renewal, the safest approach is to count from the last day of the contract.

If conciliation fails, the matter may be referred to the Industrial Court (s.20(3)). Remedies include reinstatement or compensation in lieu, and backwages capped at 24 months under the Second Schedule.

Evidence that helps

• Every contract and renewal letter.
• Job descriptions and comparisons with permanent staff.
• Emails or messages promising renewal or confirmation.
• Appraisals showing good performance.
• Evidence the role continues, such as a replacement or job advert.

What should I do first?

1. Collect all your contracts in date order.
2. Write down any promises made about renewal.
3. Ask in writing why the contract is not being renewed.
4. Note the 60-day deadline from the end of the contract.
5. File representations if you believe it was a dismissal.

Example

A lecturer has been on eight consecutive one-year contracts teaching the same core subjects. She receives good appraisals and written assurance of renewal. The college does not renew and hires someone else for the same role. The Industrial Court finds the employment was in substance permanent and the non-renewal was a dismissal without just cause.

Common mistakes

• Assuming nothing can be done because the contract "expired".
• Waiting for a renewal that never comes and missing the deadline.
• Not keeping old contracts and renewal letters.
• Accepting a new short contract on worse terms without advice.

When to speak to a lawyer

Speak to a lawyer as soon as you are told your contract will not be renewed, particularly after several renewals. See our employment page; you can also contact us.

Frequently asked questions

My contract was ended early, before the fixed term expired. Is that different?

Yes. Early termination is a termination during the contract. It must be in accordance with the contract and the law, and may be challenged.

Does the reason for non-renewal matter?

Where the employment is genuinely fixed-term, the employer usually need not give a reason. Where it is in substance permanent, the employer must show just cause or excuse.

I am a foreign worker on a fixed-term contract. Does this apply?

Contracts tied to a work pass raise separate issues. Take advice on your specific circumstances.

Sources & fact check

Legal points in this article were checked against the primary sources below. The law can change; this is general information, not legal advice.

1. Employment Act 1955 (Act 265), including sections 19 and 69, AGC Laws of Malaysia
2. Industrial Relations Act 1967 (Act 177), including section 20, AGC Laws of Malaysia
3. Industrial Court of Malaysia (Mahkamah Perusahaan), official portal

Fact-checked on 18 Oct 2026