Unfair Dismissal: From Termination To Industrial Court Award

• Published date: 20 July 2020
• Subject Matter: Employment and HR, Contract of Employment, Unfair/ Wrongful Dismissal, Employment Litigation/ Tribunals
• Law Firm: MahWengKwai & Associates
• Author: John Chan and Raymond Mah

Malaysian employment law requires employers to have "just cause and excuse" before terminating their employees. The Courts have put employees security of tenure in employment on the same footing as that of 'property right'. In Hong Leong Equipment Sdn. Bhd. v Liew Fook Chuan and Anor [1996] 1 MLJ 481 , Gopal Sri Ram JCA (as he then was) observed that:

"The legislature has willed that the relationship of employer and workman as resting on a mere consensual basis that is capable of termination by the employer at will with the meagre consequence of paying the hapless workman a paltry sum as damages should be altered in favour of the workman. It has accordingly provided for security of tenure and equated the right to be engaged in gainful employment to a proprietary right which may not be forfeited save, and except, for just cause or excuse"

However, it is still very common for employers to be ignorant and oblivious about this. Similarly, the majority of employees are not aware that they have been afforded such a "right" or "security" so to speak.

Termination

Below is an example of how an employee's termination letter would normally read:

"Please be informed that the Company has decided to terminate your employment on the ground that you have committed a serious misconduct of making false claims amounting to RM10,000.

Pursuant to your employment contract, the Company hereby gives you two (2) months notice and your last day of work will be on 31st January 2018."

The above example can be considered a prudent termination letter. This is because employers who are oblivious to the law may not provide any reasons whatsoever for terminating the employee on the presumption that compliance with the notice period stipulated in the employment contract alone is sufficient. This presumption is flawed and will be to the employers' detriment.

Whether or not the employer provides a reason in the termination letter, an employee nevertheless has the right to seek relief under the Industrial Relations Act 1967.

Section 20 of the Industrial Relations Act 1967

Under Section 20 of the Industrial Relations Act 1967, an employee who feels that he has been unfairly dismissed without just cause or excuse by his employer, may lodge a representation to the Director General of Industrial Relations within 60 days from the date of his termination. By lodging this representation, the employee is seeking for reinstatement to his former employment with the employer.

This recourse includes the...