Malaysia does not recognize the concept of "termination simpliciter" (i.e. termination by contractual notice and for no reason). Accordingly, the termination of employees must be based on just cause or excuse, failing which, the Industrial Court may award the employee back wages, and reinstatement, or compensation in lieu of reinstatement.
Recent Industrial Court Awards:
- A former senior manager was awarded approximately RM1,137,192
for unfair dismissal.
- In reaching this decision, the Industrial Court found that the employee was employed under a permanent contract of employment disguised as multiple fixed term contracts of employment. As such, in that instance, where the employer had informed the employee that it would not be renewing the employment contract, the termination of the employee's contract of employment was found to be without proper reason and without proper notice, an amounted to "termination simpliciter".
- A former secretary was found to have been constructively
dismissed due to among other things, a complaint of sexual
harassment by the CEO of a GLC. The secretary was awarded RM158,760
(consisting of back wages and compensation in lieu of
reinstatement).
- The CEO was found to have uttered certain remarks, though it was claimed to be done as a joke. In this instance, the HR Handbook specifically provided that jokes could also constitute sexual harassment;
- Additionally, the Industrial Court also found that the investigation committee set up by the GLC to consider the complaint was not independent.
- A former project manager specialist of a Telecommunications
entity was awarded a sum of RM703,664 for unfair dismissal.
- In reaching the decision, the Industrial Court had found that the company had dismissed the employee without providing him with a warning or a show cause letter as to his performance.
- The Industrial Court had reportedly awarded two former aircraft
engineers a combined sum of around RM675,786 in back pay and
compensation instead of reinstatement.
- In reaching the decision, the Company was found to have adopted and applied unjust and inequitable selection criteria for the employees' retrenchment by targeting them based on their higher salary.
As unfair dismissal claims by disgruntled employees may lead to costly consequences (especially in the form of back wages, which is limited to 24 months from the date of dismissal to the date of award), for prudence, employers are advised to obtain legal advice in ensuring that employee terminations (and processes related to such terminations), are done with just cause or excuse.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
