Key Takeaways
- Warning letters formally document employee misconduct or poor performance before stronger action.
- Under the Employment Act 1955, employers must conduct a due inquiry before dismissing for misconduct; suspension during inquiry is permitted for up to two weeks on at least half pay.
- Progressive discipline commonly follows verbal, first written, and final written warnings, the exact steps depend on the seriousness of the issue.
- Each letter should clearly state the issue, relevant facts, expected corrective steps, and potential consequences.
- Clear documentation protects employers during disputes and promotes fair HR practice.
A warning letter formally notifies an employee of misconduct or poor performance, giving them a chance to improve before disciplinary action. It protects both the employer and employee by documenting the issue clearly and fairly in line with Malaysia’s Employment Act 1955.
Ever had to confront an employee about consistent lateness or missed deadlines and weren’t sure how to make it official? In Malaysia, many HR managers and business owners struggle to strike the right balance between firmness and fairness when drafting warning letters.
Today, the best accounting firm in Malaysia will break down how to write an effective warning letter, explain each type used in Malaysian workplaces, and include ready-to-copy templates.
What Is a Warning Letter to an Employee?
A warning letter is a formal notice given to an employee who breaches workplace rules or underperforms, documenting the issue and outlining expected improvements.
In Malaysia, issuing warning letters correctly is crucial for compliance and fairness under the Employment Act 1955.
It shows that an employer has provided a reasonable chance for the employee to correct behaviour before stronger actions such as suspension or termination are taken.
When Should You Issue a Warning Letter?
Employers usually issue a warning letter when informal reminders or counselling fail to resolve the issue.
Reasons include:
- Consistent lateness or absenteeism
- Poor work performance after coaching
- Misconduct such as insubordination, misuse of company property, or harassment
- Violation of company policy or code of conduct
It is best practice to record earlier verbal discussions so each stage of the process is traceable.
“Absenteeism and misconduct are among the top reasons for disciplinary action reported by private employer in Malaysia”
Types of Warning Letters
Below is a quick comparison of the three common types used in Malaysian workplaces.
Type | Purpose | Tone | When to Use | Follow-Up |
Verbal Warning (Documented) | Informal reminder recorded internally | Advisory | First minor offence | Monitor behaviour for 30 days |
First Written Warning | Formal notification of issue and expectations | Firm but corrective | Repeated offences | Improvement plan with clear KPIs |
Final Written Warning | Last chance before disciplinary action | Serious and formal | After prior warnings or major misconduct | May proceed to termination if unresolved |
What to Include in Every Warning Letter
Every warning letter should contain these seven key components to remain valid under Malaysia’s Employment Act 1955 and good HR practice.
Component | Why It Matters | Example |
Employee Details | Ensures accuracy and prevents misidentification | Name, IC No., Position, Department |
Date & Incident Details | Establishes a clear timeline of events | “On 15 March 2025, you failed to submit…” |
Description of Misconduct or Performance Issue | Forms the factual basis for action | “Repeated failure to meet monthly KPI…” |
Previous Discussions or Warnings | Shows the company acted fairly and gave chances | “Counselling held on 28 Feb 2025” |
Corrective Actions Required | Clarifies what the employee must do | “Attend weekly coaching sessions and meet KPI by May 2025” |
Consequences of Non-Compliance | States next disciplinary step clearly | “Further misconduct may result in final warning or termination” |
Signatures or Acknowledgment | Confirms the employee received and understood the letter | Employer and Employee signatures with date |
Our Recommendation: Keep copies of all signed warnings in the employee’s personal file. They serve as vital evidence if a dispute arises at the Industrial Court.
How to Write a Warning Letter (Step by Step)
A well-structured warning letter maintains professionalism and supports compliance.
1. State the Purpose Clearly
Begin with a direct line stating that the letter serves as a warning regarding a specific behaviour or performance issue.
2. Describe the Incident or Concern
Include factual details such as dates, times, and nature of misconduct. Avoid emotional or subjective language.
3. Reference Previous Warnings or Discussions
Mention any prior counselling, meetings, or written warnings if relevant.
4. Outline Expected Improvements
Specify the corrective actions, measurable standards, and timeline for improvement.
5. Mention Consequences
State that continued misconduct or lack of improvement may lead to further disciplinary action, including termination.
6. Provide Signature Fields
Include spaces for both employer and employee acknowledgment to confirm receipt and understanding.
Sample Templates
1. Verbal Warning (Documented Confirmation)
A verbal warning is the first step in addressing minor misconduct or performance issues. It’s informal but should still be documented for record purposes.
Company Name: [Insert Company Name]
Address: [Insert Company Address]
Tel / Email: [Insert Contact Information]
Reference No.: HR/[Year]/[Number]
Date: [Insert Date]
Employee Name: [Insert Name]
Position: [Insert Position]
Department: [Insert Department]
Incident Summary: [Describe the issue briefly, e.g., repeated lateness on multiple occasions.]
Policy Reference: [e.g., Clause 7.2 of Attendance Policy – Punctuality]
This memo confirms a verbal warning given to you on [insert date] regarding [specific issue]. You were reminded of company policies and advised to improve immediately.
Expected Improvement / Action Plan:
- Maintain punctuality for 30 days.
- Communicate any expected delays in advance.
Review Date: [Insert Follow-up Date]
Remarks (HR use only): ___________________________
Issued By:
Name: ____________________
Designation: ____________________
Date: ____________________
Acknowledged By Employee:
Name: ____________________
Signature: ____________________
Date: ____________________
2. First Written Warning Letter
A first written warning is issued when an employee’s behaviour or performance fails to improve after a verbal warning. It records the concern formally and sets clear expectations for correction.
Under Malaysia’s Employment Act 1955, this step demonstrates that reasonable opportunity for improvement was given before stronger action.
Company Name: [Insert Company Name]
Address: [Insert Company Address]
Tel / Email: [Insert Contact Information]
Reference No.: HR/[Year]/[Number]
Date: [Insert Date]
Employee Name: [Insert Name]
Position: [Insert Position]
Department: [Insert Department]
Incident Summary: [Describe the issue, such as failure to meet monthly performance targets.]
Policy Reference: [e.g., Clause 5.1 – Performance Standards Policy]
This letter serves as a first written warning following earlier counselling sessions on [insert dates]. Despite those discussions, your performance has not met expectations.
Expected Improvement / Action Plan:
- Achieve the minimum target of [insert KPI] by [insert month/year].
- Attend weekly coaching sessions with your supervisor.
Consequences of Non-Compliance: Failure to improve may result in a final warning or further disciplinary action in accordance with company policy.
Review Date: [Insert Follow-up Date]
Remarks (HR use only): ___________________________
Issued By:
Name: ____________________
Designation: ____________________
Date: ____________________
Acknowledged By Employee:
Name: ____________________
Signature: ____________________
Date: ____________________
3. Final Written Warning Letter
A final written warning is issued for repeated or serious misconduct after prior warnings. It signals that continued non-compliance may lead to termination.
This stage must reference earlier warnings and specify an improvement window to comply with Section 14 of the Employment Act 1955.
Company Name: [Insert Company Name]
Address: [Insert Company Address]
Tel / Email: [Insert Contact Information]
Reference No.: HR/[Year]/[Number]
Date: [Insert Date]
Employee Name: [Insert Name]
Position: [Insert Position]
Department: [Insert Department]
Incident Summary: [Describe the serious or repeated offence, e.g., continued absenteeism after previous warnings.]
Policy Reference: [e.g., Clause 7.2 – Attendance and Conduct Policy]
This serves as your final written warning following previous warnings dated [insert dates]. Despite opportunities to improve, your conduct remains below company standards.
Expected Improvement / Action Plan:
- Immediate compliance with attendance and performance requirements.
- Maintain regular communication with your manager regarding duties.
Consequences of Non-Compliance: Any further breach of company policy or failure to improve will lead to disciplinary action, including possible termination of employment after a Domestic Inquiry under Section 14 of the Employment Act 1955.
Review Date: [Insert Follow-up Date]
Remarks (HR use only): ___________________________
Issued By:
Name: ____________________
Designation: ____________________
Date: ____________________
Acknowledged By Employee:
Name: ____________________
Signature: ____________________
Date: ____________________
What About Show Cause Letters?
A show cause letter is not a warning but a preliminary step before serious disciplinary action.
It asks the employee to explain, within a specified time, why they should not face penalties for alleged misconduct.
Employers often issue it before suspension or dismissal, especially for serious infractions such as theft or harassment.
What Happens After a Final Warning
Once a final warning has been issued, the next step depends on the employee’s response and behaviour.
- If improvement is shown:
The warning remains on record for 6–12 months, after which it can lapse. Continued compliance should be recognised during performance reviews. - If no improvement is shown:
The employer should convene a Domestic Inquiry (DI) before termination. This is a formal hearing that allows the employee to present their side and any witnesses.
Domestic Inquiry process checklist
- Issue a written notice of inquiry outlining allegations.
- Form a neutral panel that is not the direct supervisor.
- Allow the employee to be heard and to call witnesses where relevant.
- Record proceedings and the employee’s statements.
- Deliver written findings with a decision.
If dismissal follows, issue a termination letter stating reasons and effective date. This process is the usual way to satisfy the due inquiry requirement under Section 14.
“Employers who skip the Domestic Inquiry risk losing in Industrial Court proceedings, where compensation or reinstatement can be ordered.”
Avoid These Warning Letter Mistakes
- Sending a warning without conducting a proper inquiry or verifying facts.
- Using emotional, threatening, or vague language.
- Skipping documentation of verbal discussions or earlier counselling.
- Not giving the employee reasonable time to respond or improve.
- Failing to align disciplinary action with company policy and the Employment Act.
Under the Employment Act 1955 and Industrial Relations Act 1967, employers must follow due process before taking disciplinary action.
In cases of dispute, the Industrial Court often reviews whether warning letters were fair and properly communicated.
Conclusion: Professionalism First, Compliance Always
Writing a clear, factual, and structured warning letter protects both employer and employee. It demonstrates that your organisation values fairness, accountability, and compliance under Malaysia’s Employment Act 1955.
By following the three-stage process and keeping thorough documentation, you create a transparent record that supports internal consistency and defends your company in case of disputes.
At Accounting.my, we understand that managing employee discipline goes hand in hand with accurate recordkeeping.
Our payroll and accounting software help businesses automatically track absenteeism, lateness, and attendance patterns, ensuring every warning or performance action is backed by reliable data.
If you need guidance in structuring compliant HR documentation or integrating payroll tracking with accounting workflows, our team can help you streamline both financial and workforce management, all within one system.
Disclaimer: This article is informational and not legal advice; legal obligations can vary by contract, collective agreements, and specific facts, rely on the latest EA 1955 text and official MOHR guidance.
Source:
- Employment Act 1955, Act 265, official text. Supports Section 14 due inquiry and suspension during inquiry.
- Code of Conduct for Industrial Harmony 1975, Ministry of Human Resources English version.
- Industrial Relations Act 1967, Act 177, official text. Context for unfair dismissal remedies and the court’s role.
- Employment Act 1955, Section 15(2) explained by Malaysian employment law practitioners.
- Electronic Commerce Act 2006, Act 658, official text. Legal recognition of electronic messages and e-signatures, relevant to emailing warnings.
- “The Myth of 3 Warning Letters,” Malaysian employment law firm article. Confirms no legal requirement for a fixed number of warnings before dismissal.
- Overview of domestic inquiry in Malaysia, regional legal briefing. Practical steps and compliance considerations.
- Industrial Court of Malaysia resources page. Access to Industrial Relations Act and related rules used by the court when assessing dismissals.
- Practitioner note on absenteeism and dismissal, citing Section 15(2). Illustrative case handling.
Frequently Asked Questions About Warning Letter to Employee
It formally notifies an employee of misconduct or underperformance and gives them a chance to improve before disciplinary action.
There is no fixed number in law. The steps depend on the seriousness of the misconduct and the evidence gathered.
Yes. Record the refusal and have a witness sign for acknowledgment of issuance.
This is a policy decision. Many organisations use 6 to 12 months.
No. A show cause letter seeks an explanation before deciding on action; a warning letter records misconduct or poor performance and sets expectations.
Yes, if you can prove delivery and acknowledgment. Malaysian law recognises electronic messages and signatures, which supports electronic HR documentation.
