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Employment Law in Malaysia By Dymphna Lanjuran
[email protected] www.dymphna.me www.twitter.com/EmploymentLaw_
Agenda
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Introduction Termination of Employment Pre-Termination (Misconduct) Post-Termination Challenging the Decision New statutes – Minimum Wages Order 2012, Minimum Retirement Age Bill 2012
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Introduction
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Employment Law in Malaysia
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STATUTES
Employment Act 1956 • Monthly salary RM1,500 and below • Manual Labour • Domestic servants Industrial Relations Act 1976 • Remedy - Reinstatement • Industrial Court 4
Employment Law in Malaysia
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STATUTES
Employees Provident Fund Act • Applies to all employees of Malaysian employers Employees' Social Security Act, 1969 – SOCSO Workmen's Compensation Act 1952
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Termination of Employment
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Termination of Employment
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Grounds • Misconduct • Poor Performance • Redundancy & Retrenchment • Mutual Termination/Cessation Constructive Dismissal • Fundamental breach that goes to the root of the contract • Must be immediate – no cooling off period • Burden of proof – on employees 7
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Termination of Employment: Misconduct
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Termination of Employment
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Ground - Misconduct
Case: Hyatt Regency Saujana v Kananathan SG Ramu [2004] 3 ILR 391 • Claimant, Security Officer - the position is one of trust and confidence where the safety and security of the entire hotel was entrusted in the hands of the Claimant. • Illegal gambling during work. • Dismissal justifiable. 9
Termination of Employment
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Ground - Misconduct
Case: Southern Bank Berhad v Azmi Ali [2003] 1 ILR 614 “The court is of the view that honesty and integrity are amongst the key characteristics that any employee should possess, no matter what form of employment the employee is engaged in.” 10
Termination of Employment
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Ground – Misconduct
Case: Ng Hock Cheng v Pengarah Am Penjara & Ors [1998] 1 CLJ 405 (Federal Court) “An employer is the best person to judge the seriousness of the conduct of its employees.”
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Termination of Employment: Poor Performance
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Termination of Employment
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Ground – Poor Performance Probationer Case: Azmi & Company Sdn Bhd v Firdaus Musa [2000] 2 ILR 510 His character, suitability and capacity as an employee is to be tested during the probationary period and his employment on probation comes to an end if during or at the end of the probation period he is found to be unsuitable . 13
Termination of Employment
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Ground – Poor Performance Probationer Case: Dorsett Regency Hotel (M) Sdn Bhd v Andrew Ambrose [2003] 2 ILR 740 The real test would be whether he possesses the right skill, competence, temperament, aptitude, attitude and suitability which would entitle him to transcend from being an employee on probation to that of a confirmed permanent employee. 14
Termination of Employment
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Ground – Poor Performance Probationer • Keep the probationer informed or alerted of his shortcomings to enable the probationer to strive to meet the standards expected of him by the Company before his probationary period ends. • Warnings, guidance, trainings, sufficient trime to improve; despite that still fail to improve... 15
Termination of Employment
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Ground – Poor Performance Probationer Case: Robert John Reeves v Menteri Sumber Manusia & Anor [2000] 1 CLJ 180 (High Court) The power to either continue or discontinue the services of an employee or probationer rests with the employer.
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Termination of Employment
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Ground – Poor Performance Confirmed employee • Rigid test • 1st: The employer must show in what respects the employee had failed to perform the work which formed the basis for his belief that the employee was a poor performer. • 2nd: The belief under 1st above emerges from a fair process; i.e. by putting an employee on notice of his deficits & affording him a fair opportunity to improve. 17
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Termination of Employment: Redundancy & Retrenchment
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Termination of Employment
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Ground – Redundancy & Retrenchment Case: William Jacks & Co (M) Sdn Bhd v S Balasingam [1997] 3 CLJ 235 (Court of Appeal) • Retrenchment is defined as the discharge of surplus labour or staff. • It is well settled that the employer is entitled to organize his business in the manner he consider best. • Must be bona fide.
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Termination of Employment
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Ground – Redundancy & Retrenchment Case: Musnita Mustafa v Weatherford Solutions Sdn Bhd [2012] 3 ILR 350 • Did redundancy situation arise leading to retrenchment? • Was the consequent retrenchment made in compliance with reasonable selection process or the principle of “Last In, First Out” (LIFO). 20
Termination of Employment
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Ground – Redundancy & Retrenchment Case: Musnita Mustafa v Weatherford Solutions Sdn Bhd [2012] 3 ILR 350 • Restructuring exercise – the Flow Control Department and the Technical Department of the company were to be merged. • 3 secretaries in the same division, with the Claimant being the most junior – surplus. • Termination justified – with just cause.
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Termination of Employment: Mutual Termination/Cessation
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Termination of Employment
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Ground – Mutual Termination/Cessation Case: Timber Master Trading (M) Sdn Bhd v Jane Wang Sing Fang [1994] 2 ILR 1293 • The duty of the Court is to determine whether there had been a termination which had been mutually and freely agreed upon between the parties. • Must be genuinely consensual. 23
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Termination of Employment vs Constructive Dismissal
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Termination of Employment
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• Employer terminates employment of an employee • There exist a Letter of Termination • Ind Ct: Burden on employer to show just cause or excuse
Constructive Dismissal • Employer DOES NOT terminate employment of an employee • Employee WALKS OUT of out employment • NO Letter of Termination • Ind Ct: Burden on employee to show dismissal 25
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Pre-Termination (Ground: Misconduct)
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Pre-Termination Ground: Misconduct
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• Initial investigations - to identify possible allegations & possible misconduct, gather documentary evidence and oral evidence (statutory declaration)
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Pre-Termination Ground: Misconduct
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• Show Cause Letter
• To suspend or not to suspend?
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Pre-Termination Ground: Misconduct
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• Notice of Domestic Inquiry • Domestic Inquiry
3 Panels – Independent Charge(s) to be read Procedures to be explained Prosecuting Officer Recording Secretary Witnesses & Documents
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Pre-Termination Ground: Misconduct
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• Decision of the Panel • Decision of the Management – Demote, Suspend, Warning, Withholding of Increment/Bonus, Termination of Employment
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Post Termination
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Remedy Sought: Reinstatement OR Wages ($$$)
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Post Termination
Industrial Court
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Remedy sought: Reinstatement
Remedy sought: Wages or any other Payment in Cash Labour Court
Representation / Complaint - 60 days rule • Wages = less than RM5,000
• Conciliation • Industrial Relations Officer’s Report • Minister’s decision (subject to JR) • Industrial Court
• No pending inquiry or proceedings under the Industrial Relations Act (“IRA”) • No proceedings before the Industrial Court • Matter has not been decided by the Minister under s.20
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Post Termination PROCEDURES - Documents Industrial Court • Form A & B • Statement of Case • Statement in Reply • Bundle of documents • Witness Statements
Labour Court
• Statement of complaint and remedy from Complainant • Summon to the Company: Notice of the complaint Name of the Complainant Date, time & place to attend and to bring witnesses.
• Warrant/Authority to Act • Witness Statements
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Post Termination PROCEDURES Industrial Court a) Trial procedures • Burden of proof • Procedures • Submissions b) Award (subject to JR) c) Non compliance
Labour Court
a) Trial procedures • Burden of proofs • Procedures • Submissions
b) Order (subject to appeal) c) Enforcement/NonCompliance
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Challenging the Decision (Judicial Review/Appeal)
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Challenging the Decision REVIEW/APPEAL Industrial Court/ Minister’s Reference Order 53 RHC – review on procedures not on merits
• Leave (ex parte) - Form 111A, Order 53 Statement, Affidavit in Support • After leave – Form 111B [Notice of Hearing] & Order • Exchange of Affidavits • Written Submissions • Hearing
Labour Court
S. 77 EA – procedure in a civil appeal from Sessions Court • Notice of Appeal • Memorandum of Appeal • Record of Appeal • Written Submissions • Hearing
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New Statutes
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New Statutes
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Minimum Wages Order 2012 (Perintah Gaji Minimum 2012) Minimum Retirement Age Bill 2012
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Minimum Wages Order 2012 (Perintah Gaji Minimum 2012)
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New Statute Minimum Wages Order 2012
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• Gazetted on Monday, 16 July 2012 • Dates of coming into operation: 1.1.2013: • > 5 employees • Professional activity classified under MASCO (Malaysia Standard Classification of Occupations) 1.7.2013: • 5 employees or less other than MASCO 41
New Statute Minimum Wages Order 2012
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• Deferral of implementation to another date – Not less than 90 days before commencement date, make an application to the Wages Council – Discretion of the Council. • Does not apply to Domestic Servant.
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New Statute Minimum Wages Order 2012
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• Minimum Wages Rates: Regional areas Peninsular Malaysia Sabah, Sarawak and FT Labuan
Monthly (RM) 900
Hourly (RM) 4.33
800
3.85
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New Statute Minimum Wages Order 2012
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• Probationers Minimum wages may be reduced NOT MORE than 30% Reduction may be based on agreement between employer and employee (BUT cannot exceed 30% reduction) Reduction = ONLY for the 1st 6 months Further reading: http://dymphnablog.wordpress.com/2012/07/17/brief-outlook-on-theminimum-wages-order-2012/ 44
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Minimum Retirement Age Bill 2012
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New Statute Minimum Retirement Age Bill 2012 • Gazetted on 16 August 2012 • Minimum retirement age = 60 years old • Employer SHALL NOT prematurely retire an employee before 60 years old [*fine: < RM10k] • Premature employment does not include: Optional retirement Termination on other grounds 46
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New Statute Minimum Retirement Age Bill 2012 • Does not apply to: • Person employed by the Federal Government, statutory body or local authorities • Probationers • Apprentice • Non-citizen • Domestic servants • Part time employees • Fixed term of not more than 24 months 47
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New Statute Minimum Retirement Age Bill 2012 • No date of coming to force yet. • The essence of this Bill is to make retirement age of private sector’s employees in line with employees for public sector. • More about the essence of this Bill can be downloaded here: http://www.mohr.gov.my/pdf/MRA.pdf • Blog by MOHR on this Bill: http://www.mohr.gov.my/index.php?option=com_content&view=article&id= 2472&Itemid=634&lang=en Further reading: http://dymphnablog.wordpress.com/2012/07/10/minimum-retirement-agebill-2012-gives-power-of-reinstatement-to-the-labour-officers/ 48
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Thank you Dymphna Lanjuran
[email protected] www.dymphna.me www.twitter.com/EmploymentLaw_
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