LHAG Insights Special Alert 20230427: Nothing Owed, Nothing Due

• Author: Mr Amardeep Singh Toor and Ashreyna Kaur Bhatia
• Law Firm: Lee Hishammuddin Allen & Gledhill
• Published date: 09 May 2023

Nothing Owed, Nothing Due: Limited Damages For Dismissal Claims In Civil Courts

In Malaysia, employers may dismiss employees on various grounds, such as misconduct, poor performance, or redundancy. Employees may also find themselves (i) constructively dismissed when a fundamental term of their contract is breached, or (ii) victims of forced resignation. Such employees typically seek recourse at the Industrial Court - a specialised tribunal established under the Industrial Relations Act 1967 to adjudicate unjust dismissal claims. The Industrial Court is empowered to award specific performance in the form of reinstatement, or monetary compensation in lieu thereof, and backwages of up to 24 months for confirmed employees. Alternatively, employees may turn to the civil courts (i.e., the Magistrates', Sessions, or High Court) for relief.

The existence of two forums in which unjust dismissal disputes may be resolved, naturally leads to the question of whether there are material...