Presentation on Employment Law in Malaysia - for Masters class @ UniRazak

Universiti Tun Abdul Razak

“Employment Laws in Malaysia”
Presented by
Adnan Seman (KLCP109039)
Kevin Koo Seng Kiat (KLCP109034)

For
QGM 6013 Human Resource Management
Course Leader: Prof Dr Saeed bin Siddiq

Presentation on Employment Laws at

Outline of Presentation

Part 1: Hiring

Part 2: Firing

Part 3: Other Stuff


Part 1: Hiring
1.Contract
2.Workers
3.Employers


1.0. Contract

What forms the basic relationship
between employee and employer?


1.1 Contract for Service
● No Employer-Employee Relationship
● Self-employed, freelancer, independent contractor
● Example: Blackwater (mercenaries for US Army)


1.2 Contract of Service
● Defined in s. 2 Employment Act 1955
● Any agreement, oral or in writing, express of
implied, whereby
– One person agrees to employ another person as
employee
– The second person agrees to serve his employer as
employee
– Includes an apprenticeship contract


1.3 Apprenticeship Contract
● A written contract by a person with an employer
who
– Undertakes to employ the person and
– Train or have him trained systematically for a trade
– For a period of not less than 2 years
– During which the apprentice works in the employer's
service.


1.4. Contract “For” vs “Of” Service:

● Control Test: Control of employer over employee.
● Independence Test: Employee's independence in
his/her job.
● Integration Test: How integral is the job to the
business operation
● Economic Reality Test: Degree employee relies on
the job for survival


1.5. Employer
● Any person who enters into a contract to employ
another person as employee
● Includes the agent, manager or factor of the
employee.


1.6. Employee
● First Schedule, Employment Act 1955:
– Person employed by employer, with wages less than
RM1,550 per month.
– Person who, irrespective of wages, enters contract of
service for:
● Manual labour, including artisan / apprentice
● Operating / Maintaining vehicle for passengers /
goods / reward / commercial purposes
● Supervises & oversees other employees engaged in
manual labour.
● Engaged in a vessel in any capacity (conditions)

1.7. Wages
● Basic wages and all other payments in cash
– Payable to employee for work done for his contract
of service
– Does not include:
● Accomodation, food, fuel, light, water, medical
attendance, approved amenity / service
● Contribution paid to pension fund, provident fund,
superannuation, retrenchment, termination, lay-off,
retirement, thrift scheme, and other funds
established for employee welfare.
● Travelling allowance


1.7. Wages (continued)
● Sum payable to employee to defray special expenses
by nature of his employment
● Gratuity payable on discharge or retirement
● Annual bonus (or part thereof)


1.8. Elements of the Contract
● Ready Mixed Concrete (South East) Ltd v Minister
of Pensions & National Insurance [1968] 2 QB 497:
– Company hire-purchase scheme allowed employees
to purchase lorries.
– The terms of the scheme required the employee to
carry concrete for the company.
– The contract referred to the employee as an
“independent contractor”.
– Employee had to paint his lorry in company colours
and wear company uniform.

1.8 – Elements of Contract of Service
● The lorry driver was a “small businessman”, not an
employee.
● A “contract of service” exists, if:
– The servant agrees, for wage or other remuneration,
to provide work and skill in performing his service
for the master
– The servant agrees, expressly or impliedly, in
performing the service, he is subject to the master's
control to a degree sufficient to make him master
– Other terms of the contract are consistent with a
contract ofPresentation on Employment Laws at
service.

1.10. Terms
● Implied Terms
– Business efficacy test – based on necessity, terms
which “must have been intended at all events by
both parties who are business men”
– Officious bystander test – If a term is “something so
obvious that it goes without saying”
● Employer's Duties
– Duty to Provide Work - “a skilled man takes pride in
his work. He does not do it merely to earn money.
He does it so as to make his contribution to the
well-being of all.”

1.10 Terms (Cont'd)
– Duty to exercise care – i.e. providing a safe place for
employee to work.
● Traditionally understood as physical health
● Modern jurists include mental health
● Employee's Duties
– Good faith – duty to protect confidential information
and trade secrets of employer
● Implied Duty of Mutual Trust and Confidence
– Employer must not destroy or damage employer-
employee relationship through actions

1.10. Terms (Cont'd)
● Express terms that can be included in a contract:
– Job title
– Wages and details of other monetary payments such
as allowances and bonus
– Normal working hours
– Holiday and leave entitlements
– Probationary period
– Notice period for termination
– Retirement Age

1.11 Restraint of Trade
● Section 28 of Contracts Act 1950 prohibits restraint
of trade clauses except if:
– The person who is selling the goodwill of a business
agrees not to enter a similar business;
– The partners in a business that will be dissolved
agree not to enter a similar business; and
– The partners in a business agree not to enter any
other business than the one they are in.


2.0. Worker

Some things about the employee


2.1 Probationer
● Probationary employees enjoy the same rights as
permanent or confirmed employees and cannot be
dismissed without just cause or excuse.
– Khaliah bte Abbas v Pesaka Capital Corp Sdn Bhd
[1997] 1 MLJ 376
– Probationers should not be dismissed during the
probationary period, except for misconduct or
redundancy.
– Probationers performance should be monitored and
appraised. If performance is not satisfactory,
warning should be given.

2.2 Employee
● Some categories:
● Manual labourers
● Domestic servants
● Part Time Employees
● Supervisors
● Casual Workers
● Outworkers
● Directors
● Probationers
● Foreign employees


2.3. Workman
● ...means any person, including an apprentice,
employed by an employer under a contract of
employment to work for hire or reward ...
– ... for the purposes of any proceedings in relation to a
trade dispute includes any such person who has
been dismissed, discharged or retrenched
– Section 2, Industrial Relations Act 1967
● May or may not include a Director of a company.
– Kuan Shin @ Kuan Nyong Hin v Chin Foh Trading
Sdn Bhd (Award 364 of 2012)

2.3. Workman
● “... it is incorrect to state … that a company director
can never be a workman. An examination of the
functions of the claimant is always necessary to
decide the question.”
– Hoh Kiang Ngan v Mahkamah Perusahaan Malaysia
& Anor [1995] 3 MLJ 369


2.4 Deductions from Wages
● Deductions from employees' wages:
– Allowed up to 50% unless it includes repayment of
housing loan (then it may be 75% of wages)
● Employer may lawfully deduct:
– To recover overpaid wages in preceding 3 months;
– To pay to Employees Provident Fund, Employees
Social Security Organization and Inland Revenue
Board; and
– To recover advances where no interest in charged.


2.5. Hours of Work
● The maximum hours that can be required of an
employee are 8 hours a day.
– This can be increased to 12 hours with overtime.
● If employee is not required to work 6 days a week,
maximum hours (without overtime) can be increased
to 9 hours a day.


2.5. Hours of Work
● If employee works on rest day:
– If he works <50% of his normal hours, he is paid one
day's wages
– If he works >50% of his normal hours, he is paid two
days' wages


2.6. Wages
● If an employer fails to pay an employee wages, the
employer breaks the contract of service.
● Section 15(1), Employment Act 1955.
● Employee cannot recover wages from employer for
time spent in prison or attending court.
● Section 23 Employment Act 1955.
● Wages must be paid in legal tender (money).
●
Wages must be paid by the 7th of the month.
● Section 19, Employment Act 1955

2.7. Bonus
● Contractual
– Counts as deferred salary, because employee is
promised the salary in the contract.
● Non-contractual
– Is a discretion of the employer and based on profit
● “Once annual bonus is made contractual by the
parties, the court will not make it discretionary, if it
is paid to employees at company's discretion the
court will not make it contractual”
● Award No. 42 of 1988, Industrial Court of Malaysia

2.8. Minimum Wage
● The Malaysian government is going to implement a
minimum wage policy which will be announced on
st
1 May 2012.
● Workers need to be paid at least the minimum wage.
● Malaysia passed the Minimum Wage Act in 2011.


2.9. Rest Days, Public Holidays
● Every employee is entitled to one whole rest day per
week.
– Section 59(1) Employment Act 1955
● Employees are entitled to paid holidays:
– On 10 gazetted public holidays, including:
● National Day (31st August)
● Birthday of Yang Di-Pertuan Agong
● Birthday of Ruler or Yang Di-Pertuan Negeri
● Workers Day


2.9. Rest Days & Public Holidays
– On any other day declared as a public holiday under
s. 8 Holidays Act 1951
● Section 60D(1) Employment Act 1955
● Employee is not entitled to holiday pay if:
– He is absent on the working day immediately before,
or immediately after, the public holiday(s)
– Or the day(s) substituted for the public holiday(s)
– Without the prior consent of the Employer.
● Section 60D(2) Employment Act 1955


2.10 Hospitalization & Sick Leave
● After examination by a doctor appointed by the
Employer, a worker is entitled to paid sick leave:
– If no hospitalization is required:
● Between 14 to 22 days in each calendar year,
depending on the duration he has been employed.
– If hospitalization is required:
● 60 days in each calendar year.
● Paid sick leave also allowed after examination by a
dental surgeon.
– Section 60F(1) and (2), Employment Act

2.10. Hospitalization & Sick Leave
● Employee is absent from work without permission
if:
– He is absent on sick leave which is not from a
registered medical practitioner / medical officer /
dental surgeon under s. 60F(1)
– He complies with s. 60F(1) but fails to inform
employer of sick leave within 48 hours.
– Section 60F(2) Employment Act 1955.


2.11. Annual Leave
● Employee is entitled to paid annual leave:
– 8 days for every 12 months of continuous service (if
employed for less than 2 years)
employed between 2 to 5 years)
employed for more than 5 years)
– In addition to rest days and paid holidays!
– Sections 60E(1) and (1A), Employment Act 1955


2.12. Maternity Leave
● Female employees are entitled to maternity leave of
60 or more days for each confinement period.
● Section 37(1) Employment Act 1955
● Female employees are entitled to maternity
allowance if:
– She was employed at any time in the 4 months before
confinement;
– She was employed for 90 days in the 9 months
before confinement

2.12. Maternity Leave
● Female employee must inform employer:
– If she is leaving the employer and knows she will be
confined within 4 months → Before leaving
– If she is not leaving → Within 60 days before
expected confinement together with date maternity
leave starts
● Section 40(1) & (2) Employment Act 1955
● Employer cannot terminate her for being absent up
to 90 days after Maternity Leave period

2.13. Foreign Employees
● Employer who employs foreign employees must
inform Director-General within 14 days.
– Section 60K(1) Employment Act 1955
● D-G can look into complaint of discrimination:
– A local employee complaining that he is
discriminated against in relation to a foreign
employee;
– A foreign employee complaining that he is
discriminated against in relation to a local
employee

2.13. Foreign Employees
– D-G may issue directive to employer to resolve it.
● Section 60L(1) Employment Act 1955
● Employer cannot terminate local employee merely
to employ foreign employee.
– Section 60M, Employment Act 1955
● Employer who wishes to reduce redundancy must
terminate foreign employees first before terminating
local employees.
– Section 60N, Employment Act 1955


2.14. Absence Without Leave
● Employee is deemed to break contract of service if
he is continuously absent for more than two
consecutive working days without prior leave.
– Section 15(2), Employment Act 1955


2.15. Termination Benefits
● In a normal termination of contract:
– Wages less lawful deductions, which are earned but
not yet paid, shall be paid to the employee
– Not later than the day on the termination of the
contract.
● If contract is terminated without notice:
– As above, but includes additionally the indemnity
payable to the employee.

2.16. Retirement
● Where a contract of employment did not state the
retirement age, employer's later introduction of a
retirement age clause is illegal.
– Sports Toto Malaysia S/B v Chong Keat Chin (1995)
ILR 742
● Where employee was told he could work “as long as
he wanted”, a retirement policy introduced after
entering employment contract was illegal.
– Dr Satwant Singh Gill v Hospital Assunta [1998] 4
CLJ 47

2.17. Non-Renewal of Contract
● Fixed duration contract
– Employment contracts may be drawn for a fixed
period with a determined beginning and end.
– After expiry, the contract terminates by itself without
any expectation of reinstatement.
– In some cases, there is an expectation of renewal due
to continuing renewal of contracts.
– Courts have held that continuous renewal can create
expectation and non-renewal means dismissal.


● Example cases – Claims dismissed.
– Teacher employed on year-to-year basis, contract not
renewed after 5th year. Claim dismissed.
● Zahir b Abdullah v Lang Education Sdn Bhd (Award
210 of 2010.)
– Employer policy- to employ until age 60, after that
employment on a year-to-year basis. Employee
aged 60 in 2000, employed year-to-year basis until
2005. Claim dismissed.
● Thavaratnam a/l Thambipillay v OM Education Sdn
Bhd (Award 334 of 2010)

● Example cases – Amounting to Dismissal
– 35 teachers employed on fixed term contracts did not
have contracts renewed. Dismissal found.
Reinstatement ordered.
● Han Chiang High School / Penang Han Chiang Associated Chinese Schools
Association and National Union of Teachers in Independent Schools in West
Malaysia [1988] 2 ILR 612.

– Employee on 3 year contracts, served employer for 9
years. Non-renewal amounted to dismissal,
backwages ordered.
● Innoprise Corporation Sdn Bhd v Sukumaran
Vanugopal [1993] ILR 373

3.0. Employer

Some things about the employer


3.1. Management & Union
● “Trade Union” is defined as “any trade union
registered under any law relating to the registration
of trade unions”.
● A trade union must be recognised by the employer
to represent the workers.
– If an employer is approached but refuses to recognise
the trade union, the union must report in writing to
the Director General of Industrial Relations
● Section 9(4) Industrial Relations Act

3.1. Management & Union
● The Director-General may refer the matter to the
Minister, who may decide that the Employer should
recognise the trade union.
– Section 9(5), Industrial Relations Act 1967
● Trade unions exist for employees and employers.
● Collective agreements are in writing and usually
valid for three years or more.
– Section 14(1) and (2)(b), Industrial Relations Act


3.2. Right to Hire, Fire and Transfer
– “No trade union of workmen may include in its
proposal for a collective agreement....:
a)The promotion by an employer of any workman
b)The transfer by an employer of any workman
c)The employment by an employer of any person
d)The termination by an employer of the services of a
workman
e)The dismissal and reinstatement of a workman by an
employer
f) The assignment or allocation by an employer of duties
or specific tasks to a workman
➢ Section 13(3) Industrial Relations Act 1967

3.3. Right to Terminate & Dismiss
● If there is employee misconduct, employer may,
after due inquiry,
– Dismiss the employee without notice;
– Downgrade employee;
– Impose lesser punishment, and if wages are
suspended, the maximum period is two weeks.


3.4. Termination & Notice
● Contracts of service must be in writing and have a
provision for termination of contract.
● Contract of service for specific period of time or for
work will terminate when the time is up or when the
work is done.
● Either employer or employee can terminate contract
by giving notice.
● Section 12(1), Employment Act 1955

3.4. Termination & Notice
● Depending on the duration employee has been
employed, the notice is between 4-8 weeks.
● Notice of termination must be written
● Contract can be terminated without notice (or short
notice) but indemnity sum must be paid to other
party for wages accrued during notice period.

Part 2: Firing
1.Performance Appraisal
2.Employee Misconduct
3.Dismissal
4.Unfair Dismissal
5.Constructive Dismissal


1.0. Performance Appraisal


1.1. Dismissal for Poor Performance
● An employee must be given warning and a chance
to improve before he is dismissed for poor
performance.
● Every employer should have a clear procedure so
that managers and supervisors can handle employees
with poor performance.
– Identifying and diagnosing performance problems
– Counselling employees
– Drafting warning letters


1.1. Dismissal for Poor Performance
● “An employer should be very slow to dismiss upon
the ground that the employee is found to be
unsatisfactory in his performance or incapable of
performing the work which he is employed to do
without first telling the employee of the respects in
which he is failing to do his job adequately, warning
him of the possibility or likelihood of dismissal on
this ground and giving him an opportunity of
improving his performance.”
– Award No. 39 of 1987, Industrial Court of Malaysia


1.2. Burden & Standard of Proof
– “Where representations are made and referred to the
Industrial Court for enquiry, it is the duty of that
court to determine whether the termination or
dismissal is with or without just cause or excuse. If
the employer chooses to give a reason … the duty
of the Industrial Court will be to enquire whether
that excuse or reason has or has not been made out.
If it finds as a fact that it has not been proved, then
the inevitable conclusion must be that the
termination or dismissal was without just cause or
excuse.”
● Goon Kwee Phoy v J&P Coats (M) Bhd [1981] 1 LNS
30 Presentation on Employment Laws at

1.2. Burden & Standard of Proof
● The burden of proof is on the respondent (i.e. the
Employer), the standard of proof being one of a
balance of probabilities.
– Telekom Malaysia Kawasan Utara v Krishnan Kutty
a/l Sanguni Nair & Anor [2002] 3 CLJ 314


1.3. Domestic Inquiry
● An employer can only justify disciplinary action:
– On grounds in the show cause or charge sheet; and
– The conclusions of the domestic inquiry.
● A show cause letter is usually given:
– After warning letters (poor performance) or
– After serious misconduct.
● The show cause letter will set the agenda for the
Domestic Inquiry.


1.3. Domestic Inquiry
● An investigation conducted by the employer to
establish facts of a misconduct.
– Section 14(1) of the Employment Act 1955
● If misconduct is found, employer may:
– Dismiss an employee without notice on grounds of
misconduct; or
– Down-grade the employee; or
– Impose other lesser punishment as deemed just and fit,
including suspending wages up to two weeks.


2.0. Employee Misconduct
The dictionary meaning of the word ‘misconduct’ are improper
behaviour, intentional wrong doing or deliberate violation of a rule
or standard of behaviour. Insofar as the relationship of industrial
employment is concerned, a workman has certain express or implied
obligations towards his employer. Any conduct on the part of an
employee inconsistent with the faithful discharge of his duties, or
any breach of the express or implied duties of an employee towards
his employer would constitute an act of misconduct.
Liew Ken & Ors and Malayan Thung Pau Bhd
Industrial Court Award 37 of 1974


2.1. Sexual Harassment
S.Sivalingam v Northern Telekom Industry Alleged molestation of the cleaning woman in Dismissal of the supervisor not upheld for
Sdn. Bhd. Penang[1980] 1 ILR 96 the toilet by her supervisor want of corroborative evidence.
Lam Soon (M) Bhd v Cik Chong Siew Yuan Victimised for rejecting the amorous advances Dismisal of the supervisor not upheld for
[1986] 1 ILR 1425 of her supervisor want of corroborative evidence.
Plaat Rubber Sdn. Bhd v Goh Chok Guan Case of a Male worker peeping into the female Dismisal upheld on the ground that it was
[Award no.30 of 1995] [1995] 1 ILR 79. toilet from the opening in the ceiling an imoral act.
Insco Sdn. Bhd v Swan Hui Mooi [Award no Victimised by her boss for not continuing her Dismisal of the female account executive
195 of 1995] [1995] 1 ILR 685 personal involvement with him after she found a was held unjust.
new boy friend.
Pamol Plantation Sdn Bhd, Johor v Lim Outrageous behavior of the supervisor towards a Dismisal of the supervisor upheld on the
Cheng Guan [Award no 183 of 1998]; married woman subordinate. basis of coroborative evidence.
[1998] 1 ILR 410.
The Project Leburaya Utara Selatan Bhd v Harrasement of the female subordinate by the Dismisal of the supervisor upheld on the
Azahar Ahmad [Award no 183 of 1998]; toll plaza supervisor. basis of coroborative evidence
[1998] 2 ILR 51.
Aru Hotel Sdn. Bhd v Eble Stanislaus [1998] Restaurnt manager harassing cocktail attendee. Side stepped sexual harassement
1 LNS 403. allegation but upheld the dismissal of the
manager on some other ground.
Shangri-La-Hotel v Leow Yoke Sim [Award Female masseuse in the hotel health club Her dismisal was upheld on the basis of
o 475 of 1995]; [1995] 2 ILR 847. soliciting clients for sexual favours for a price. written complaints of foreign clients.
Melewar Corporation Bhd v Abu Osman Complaint by five female employees of The managers demotion and transfer were
[Award no 378 of 1994]; [1994] 2 ILR 807 physical molestation by the Group Human upheld in an ex-parte decision.
Resoure Managemer


2.2. Conflict of Interest
– Diverting business away from employer and causing
loss to employer
● Bukit Ritan Realty Sdn Bhd v Doris Melanie
Perayasamy [2003] 1 ILR 1
– Enticing / Inducing other employees / potential
employees to work elsewhere
● Safeguards Corporation Bhd v Mohamad Ali Hj
Abdullah [2003] 1 ILR 14
– Lecturer recruiting students for rival college
● Inti College Sarawak v Hardeep Singh Sidhu [2000] 3
ILR 112


2.3. Insubordination
– “Go-slow” attitude resulting in work not completed
on time
● Koperasi Telekom Malaysia Bhd v Sengam @
Nadeson s/o Marie [1984] 2 ILR 599
– Threatening or intimidating a superior
● Torita Rubber Works Sdn Bhd v V Maniarsm a/l
Veerasamy [1995] 2 ILR 293
– Any act of employee that exhibits lack of respect for
employer or superior e.g. bad / foul language
● Walters v Top Crists Foods Ltd [1972] IRLR 108


2.4. Theft & Dishonesty
● Passing trade secrets to a competitor
● Embezzlement of funds
● Skimming i.e. stealing unrecorded sales
● False disbursements / expenses claims
● Unauthorised use of company equipment
● False purchases / sales
● Theft of 42 cheques
● RHB Bank Bhd v Ramnain Tani [2006] 2 ILR 1356

2.4. Theft & Dishonesty (cont'd)
● False quotations
– Maybank Johor v Mohd Najib Salim [1997] 3 ILR
435
● Theft of co-employee's property
– Fraser & Neave (M) S/B v Mad Isa Hamid [1995] 1
CLJ 1234
● Making any false representation
– Penang Adventist Hospital v Valaithum a/l Suppiah
Penang [1993] 1 ILR 184


2.5. Misrepresentation
● Representing that she had “SPM” when she had
“PMR” only
– Kids Island Education Management (M) S/B v Rita
Davaderi Stevenson [2006] 4 ILR 2314
● Employee withheld information that she was
dismissed from previous job
– Hunter v Sorensen Group (Unreported, NZ Award
325 of 2003)


3.1. Dismissal
● Dismissal should be with “just cause and excuse”
– “When the Industrial Court is dealing with a
reference under s. 20, the first thing that the court
will have to do is ask itself a question whether
there was a dismissal, and if so, whether it was
with or without just cause and excuse.”
● Wong Chee Hong v Cathay Organisation (M) Sdn Bhd
[1988] 1 MLJ 94


3.1. Dismissal
● Claimant worked as Export Sales Executive. He
signed a voucher for receipt of USD9,313.80 while
at Kenya, but did not bring back the money. The
domestic inquiry found that claimant was negligent
not in signing the voucher, but in failing to bring
back the money.
– Goodway Rubber Industries S/B Mugunthan
Damodaran , Industrial Court Award 631 of 2007


3.2. Show Cause Letter
● If there is a prima facie case against the employee,
the employer may issue a “show cause letter” to
demand an explanation from employee.
● The employee may respond.
● If employer is not satisfied with the explanation,
employer may proceed for domestic inquiry.
– KJJ Cleetus v Unipamol (Malaya) S/B Kluang,
Industrial Court Award No. 66 of 1975


3.3. Letter for Domestic Inquiry
● The letter should have the following details:
– Specific charge of the offence: date, time, place,
where it took place.
– Rules and Regulations which have been violated.
– Date, time, place for the inquiry.
– Right to bring witness(es) if any.
– Suspension of no more than one (1) week.


3.4. Domestic Inquiry Panel
● A panel should be set up for the domestic inquiry,
comprising:
– Chairman (not involved in investigating the offence)
– 2 independent panel members (employees from other
departments)
– Prosecutor (personnel from HR department).


3.5. Small Companies
● A panel is required for the Domestic Inquiry. A
problem arises if the company is too small.
● The company could:
– Seek assistance from business associates who are
familiar with domestic inquiry to assist.
– Engage a business consulting firm to advise and
assist in conducting the domestic inquiry.
– Engage a respected individual in society to head the
panel of the domestic inquiry.


3.6. Domestic Inquiry – Hearing
1.Prosecutor – outlines case against Employee by
producing evidence and witnesses
➢ Employee may cross examine witnesses.
2.Employee – enters defence, produces witnesses.
➢ The witnesses may be cross examined by prosecutor.
3.Chairman – Guides proceedings & records evidence
➢ Tape recording may be used.
➢ Lawyers may not appear at this stage (only at court!)


3.7. Domestic Inquiry – Post-Hearing
● Panel – to discuss hearing & study evidence from
both parties.
● Chairman – submits panel finding &
recommendations to Management.
● Management – may make decision to:
a)Dismiss employee without notice
b)Downgrade employee.
c)Impose lesser punishment as deemed fit, including
suspension of wages up to two weeks.

4.0. Unfair Dismissal
● The workman / employee who is not satisfied with
the domestic inquiry may refer the matter to the
Industrial Court.
– “The findings of a domestic inquiry are not binding
on the Industrial Court which rehears the matter
afresh. However, it may take into account the fact
that a domestic inquiry has been held when
determining whether a particular workman was
justly dismissed.”
● Gopal Sri Ram, JCA in Hong Leong Equipment S/B v
Liew Fook Chuan & Other Appeals [1997] 1 CLJ
665

4.1. Natural Justice
● Rule of Fair Hearing (audi alteram partem):
– Means, “No man should be condemned unheard”
● Employee has right to know the charge.
● Employee has right to reply to the charge.
● Rule Against Bias (Nemo judex in causa sua):
– Means, “No man should be a judge in his own cause”
● Rule against bias should prevail against staff
constraints
● In a small company, outside help should be sought to
comprise the domestic inquiry panel.


4.2. No Domestic Inquiry = Fatal?
● Failure of employer to hold domestic inquiry is
curable through de novo hearing held by Industrial
Court.
– Wong Yuen Hock v Syarikat Hong Leong Assurance
S/B and anor appeal [1995] 2 MLJ 753.


4.3. Guidelines for Industrial Court
● The Industrial Court should consider whether there
was a dismissal. If yes, the court should consider
whether the dismissal was with just cause or excuse.
– Supreme Court, in Wong Chee Hong v Cathay
Organisation (M) S/B [1988] 1 CLJ 92, 45, 298
– Federal Court, in Milan Auto S/B v Wong Seh Yen
[1995] 4 CLJ 449


4.4. Powers of Industrial Court
● The Industrial Court may:
– Order for Reinstatement (Unfair Dismissal)
– Order for maximum 24 months back wages
– Order for recognition of collective agreements
● Industrial Court's Awards are “final and conclusive”
● However, an unsatisfied party may file a writ or
certiorari at High Court to annul or quash the Award
– Can appeal from High Court to Court of Appeal and
Federal Court!

5.0. Constructive Dismissal
● When employer's conduct is outrageous and makes
continued employment impossible:
– Workman need not tolerate it, and can treat himself
as dismissed!
– Employee should leave immediately – delay may
harm his/her case.
● Employer makes life unbearable for workman
– Employer's conduct is unreasonable and repudiates
the contract.


5.1. Forced Resignation
● When a receptionist in Subang was asked to work in
Sabah.
– Dicklin Sdn Bhd v Bathma Subramaniam Award 216
of 1991 ILR
● General Manager's duties changed, became
subordinate to Assistant General Manager.
– Konnas Jet Cargo Systems Sdn Bhd v. Cheah Cheong
Tian [1995] 2 ILR 800


5.2. Demotion
● Assistant manager in shipping department
transferred to service parts department.
– Funai Electric (Malaysia) Sdn Bhd Johore v Salliah
Ahmad [1997] 2 ILR 1002
– 12 days delay allowed because she had to find out if
it was an actual demotion.
● Hotel maintenance executive assigned new job “car
park executive”. Court found the job was car park
attendant and found demotion.
– Hotel Malaya S/B v Say Lip Nyen [1994] 1 ILR 464

5.3. Other Examples
● Worker not paid her monthly salary.
– ATI Technologies (M) S/B v Jamilah Abu Bakar
[2002] 1 ILR 385
● Company relocated from PJ to Bangi, promised free
transportation. Service discontinued after 2 months.
– Plastic Tecnic S/B v Sarawasthy d/o Manickam &
Ors Industrial Ct Award 173/1991
● Employer assaulted employee
– Multrapac S/B v Low Kok Piew Industrial Ct Award
13/1991

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Presentation on Employment Law in Malaysia - for Masters class @ UniRazak

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