Employment Laws in Malaysia

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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 Universiti Tun Abdul Razak

Outline of Presentation

Part 1: Hiring Part 2: Firing Part 3: Other Stuff

Presentation on Employment Laws at Universiti Tun Abdul Razak

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

Presentation on Employment Laws at Universiti Tun Abdul Razak

1.0. Contract

What forms the basic relationship between employee and employer?

Presentation on Employment Laws at Universiti Tun Abdul Razak

1.1 Contract for Service
● ● ●

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

Presentation on Employment Laws at Universiti Tun Abdul Razak

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





Presentation on Employment Laws at Universiti Tun Abdul Razak

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.

Presentation on Employment Laws at Universiti Tun Abdul Razak

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
Presentation on Employment Laws at Universiti Tun Abdul Razak





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.



Presentation on Employment Laws at Universiti Tun Abdul Razak

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)
Presentation on Employment Laws at Universiti Tun Abdul Razak

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
Presentation on Employment Laws at Universiti Tun Abdul Razak

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)

Presentation on Employment Laws at Universiti Tun Abdul Razak

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.
Presentation on Employment Laws at Universiti Tun Abdul Razak







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.
Universiti Tun Abdul Razak





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” 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.”
Presentation on Employment Laws at Universiti Tun Abdul Razak





Employer's Duties


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 Employer must not destroy or damage employeremployee relationship through actions
Presentation on Employment Laws at Universiti Tun Abdul Razak



Implied Duty of Mutual Trust and Confidence


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
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– – – – –

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.





Presentation on Employment Laws at Universiti Tun Abdul Razak

2.0. Worker

Some things about the employee

Presentation on Employment Laws at Universiti Tun Abdul Razak

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.
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2.2 Employee


Some categories:
● ● ● ● ● ● ● ● ●

Manual labourers Domestic servants Part Time Employees Supervisors Casual Workers Outworkers Directors Probationers Foreign employees
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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 Kuan Shin @ Kuan Nyong Hin v Chin Foh Trading Sdn Bhd (Award 364 of 2012)
Presentation on Employment Laws at Universiti Tun Abdul Razak




May or may not include a Director of a company.


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

Presentation on Employment Laws at Universiti Tun Abdul Razak

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) 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.
Presentation on Employment Laws at Universiti Tun Abdul Razak



Employer may lawfully deduct:
– –



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.

Presentation on Employment Laws at Universiti Tun Abdul Razak

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



Presentation on Employment Laws at Universiti Tun Abdul Razak

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. Section 25(1), 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
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2.7. Bonus


Contractual


Counts as deferred salary, because employee is promised the salary in the contract. Is a discretion of the employer and based on profit



Non-contractual




“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
Presentation on Employment Laws at Universiti Tun Abdul Razak

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.

● ●

Presentation on Employment Laws at Universiti Tun Abdul Razak

2.9. Rest Days, Public Holidays


Every employee is entitled to one whole rest day per week.


Section 59(1) Employment Act 1955 On 10 gazetted public holidays, including:
● ● ● ●



Employees are entitled to paid holidays:


National Day (31st August) Birthday of Yang Di-Pertuan Agong Birthday of Ruler or Yang Di-Pertuan Negeri Workers Day
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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
Presentation on Employment Laws at Universiti Tun Abdul Razak

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. 60 days in each calendar year.



If hospitalization is required:




Paid sick leave also allowed after examination by a dental surgeon.


Section 60F(1) and (2), Employment Act
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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.





Presentation on Employment Laws at Universiti Tun Abdul Razak

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) 12 days for every 12 months of continuous service (if employed between 2 to 5 years) 16 days for every 12 months of continuous service (if employed for more than 5 years) In addition to rest days and paid holidays! Sections 60E(1) and (1A), Employment Act 1955
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– –

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




Section 37(2) Employment Act 1955
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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


Section 42(1) Employment Act 1955
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2.13. Foreign Employees


Employer who employs foreign employees must inform Director-General within 14 days.


Section 60K(1) Employment Act 1955 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
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D-G can look into complaint of discrimination:




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
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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

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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.




Section 20, Employment Act 1955



If contract is terminated without notice:


As above, but includes additionally the indemnity payable to the employee.


Section 21(1), Employment Act 1955.
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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
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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.
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2.17. Non-Renewal of Contract


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)
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2.17. Non-Renewal of Contract


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
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3.0. Employer

Some things about the employer

Presentation on Employment Laws at Universiti Tun Abdul Razak

3.1. Management & Union


“Trade Union” is defined as “any trade union registered under any law relating to the registration of trade unions”.


Section 2, Industrial Relations Act 1967



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
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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

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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
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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.


Section 14(1) Employment Act 1955

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3.4. Termination & Notice


Contracts of service must be in writing and have a provision for termination of contract.


Section 10, Employment Act 1955



Contract of service for specific period of time or for work will terminate when the time is up or when the work is done.


Section 11, Employment Act 1955



Either employer or employee can terminate contract by giving notice.


Section 12(1), Employment Act 1955
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3.4. Termination & Notice


Depending on the duration employee has been employed, the notice is between 4-8 weeks.


Section 12(2), Employment Act 1955 Section 12(4), Employment Act 1955



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.


Section 13(1), Employment Act 1955
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Part 2: Firing
1.Performance Appraisal 2.Employee Misconduct 3.Dismissal 4.Unfair Dismissal 5.Constructive Dismissal

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1.0. Performance Appraisal

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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
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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
Presentation on Employment Laws at Universiti Tun Abdul Razak

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
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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

Presentation on Employment Laws at Universiti Tun Abdul Razak

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.
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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.

– –

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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

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2.1. Sexual Harassment
S.Sivalingam v Northern Telekom Industry Sdn. Bhd. Penang[1980] 1 ILR 96 Lam Soon (M) Bhd v Cik Chong Siew Yuan [1986] 1 ILR 1425 Plaat Rubber Sdn. Bhd v Goh Chok Guan [Award no.30 of 1995] [1995] 1 ILR 79. Insco Sdn. Bhd v Swan Hui Mooi [Award no 195 of 1995] [1995] 1 ILR 685 Pamol Plantation Sdn Bhd, Johor v Lim Cheng Guan [Award no 183 of 1998]; [1998] 1 ILR 410. The Project Leburaya Utara Selatan Bhd v Azahar Ahmad [Award no 183 of 1998]; [1998] 2 ILR 51. Alleged molestation of the cleaning woman in the toilet by her supervisor Victimised for rejecting the amorous advances of her supervisor Case of a Male worker peeping into the female toilet from the opening in the ceiling Dismissal of the supervisor not upheld for want of corroborative evidence. Dismisal of the supervisor not upheld for want of corroborative evidence. Dismisal upheld on the ground that it was an imoral act.

Victimised by her boss for not continuing her Dismisal of the female account executive personal involvement with him after she found a was held unjust. new boy friend. Outrageous behavior of the supervisor towards a Dismisal of the supervisor upheld on the married woman subordinate. basis of coroborative evidence. Harrasement of the female subordinate by the toll plaza supervisor. Dismisal of the supervisor upheld on the basis of coroborative evidence Side stepped sexual harassement allegation but upheld the dismissal of the manager on some other ground.

Aru Hotel Sdn. Bhd v Eble Stanislaus [1998] Restaurnt manager harassing cocktail attendee. 1 LNS 403.

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 [Award no 378 of 1994]; [1994] 2 ILR 807 Complaint by five female employees of physical molestation by the Group Human Resoure Managemer
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The managers demotion and transfer were upheld in an ex-parte decision.

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 Inti College Sarawak v Hardeep Singh Sidhu [2000] 3 ILR 112
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Lecturer recruiting students for rival college


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 Torita Rubber Works Sdn Bhd v V Maniarsm a/l Veerasamy [1995] 2 ILR 293



Threatening or intimidating a superior




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

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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
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2.4. Theft & Dishonesty (cont'd)


False quotations


Maybank Johor v Mohd Najib Salim [1997] 3 ILR 435 Fraser & Neave (M) S/B v Mad Isa Hamid [1995] 1 CLJ 1234 Penang Adventist Hospital v Valaithum a/l Suppiah Penang [1993] 1 ILR 184
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Theft of co-employee's property




Making any false representation


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)

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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

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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

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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

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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.

– – – –

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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).



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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.
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3.6. Domestic Inquiry – Hearing
1.Prosecutor – outlines case against Employee by producing evidence and witnesses


Employee may cross examine witnesses. The witnesses may be cross examined by prosecutor. Tape recording may be used. Lawyers may not appear at this stage (only at court!)
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2.Employee – enters defence, produces witnesses.


3.Chairman – Guides proceedings & records evidence
➢ ➢

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.
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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
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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.
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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.

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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



Presentation on Employment Laws at Universiti Tun Abdul Razak

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 Section 33, Industrial Relations Act 1967



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!
Presentation on Employment Laws at Universiti Tun Abdul Razak

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's conduct is unreasonable and repudiates the contract.
Presentation on Employment Laws at Universiti Tun Abdul Razak





Employer makes life unbearable for workman


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

Presentation on Employment Laws at Universiti Tun Abdul Razak

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
Presentation on Employment Laws at Universiti Tun Abdul Razak

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 Multrapac S/B v Low Kok Piew Industrial Ct Award 13/1991
Presentation on Employment Laws at Universiti Tun Abdul Razak



Employer assaulted employee


Q & A Session

Any Questions or Views....? Please Share.....

Presentation on Employment Laws at Universiti Tun Abdul Razak

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