What does the law say about unfair dismissal in Malaysia?
The Industrial Relations Act 1967 of Malaysia governs the relationship between employers and employees and further lays down the procedure to resolve employment disputes. It is an embodiment of the rights of employees against unfair dismissal that are not available in the common law or the Employment Act 1955. Section 20(1) of the Industrial Relations Act states that where a workman irrespective of him being a part of a trade union or otherwise believes that he has been unfairly dismissed from his job, he can make a representation at the Director-General office within a period of 60 days from the date of dismissal. No complaints shall be entertained by the Director-General if the workman fails to report within the stipulated time period. Section 20(1) also includes constructive dismissal within its ambit.
The concept of constructive dismissal is lesser-known and many people might be unaware if they have ever fallen prey to this kind of dismissal. So the question is what constitutes a constructive dismissal? When an employer makes the working conditions impossible for the employee to work in or mistreats him and thus, the employee has no other choice but to tender his resignation, it is considered as constructive dismissal. A few examples of constructive dismissal may include when an employer demotes an employee arbitrarily or puts the employee in a position where they cannot perform their regular duties or discriminates them based on their race, caste, religion or sex. Having said that it is important to be noted that the language of the code is ambiguous about constructive dismissal and owing to this ambiguity it is difficult to prove one in the court of law. In order to establish a case for constructive dismissal, an employee has to prove that the unavoidable and arbitrary actions, decisions or policies imposed by the employer inevitably resulted in a breach of the employment contract, thereby, forcing him to resign.
What can an employee do in case of unfair dismissal?
Upon receiving the complaint, the Industrial Relations Department will arrange a conciliation meeting for the employer and employee where an officer from the department acts as a mediator. The whole objective of this conciliation meeting is to resolve the matter without going to court. Contrary to its objective, this step hasn’t really been fruitful for many reasons like it is nearly impossible to get both the employer and employee on the same page and in fact, many a time reinstatement of the employee at the former position may not be viable. Before the amendments that came through in 2021, none of the parties was allowed to have representations at these meetings. However, due to the amendments, both the employer and employee have the privilege to appoint a third party, except an advocate or solicitor, to represent them at these conciliation meetings provided they need to make an application to the Director-General regarding the same.
If the parties fail to reach a settlement, the matter is then referred to the Industrial Court. Prior to the 2021 amendment, the Minister of Human Resources were responsible to decide whether the matter is fit to be referred to the Industrial Court. It is to be noted that if the Minister does not think that matter deserves a representation before the Industrial Court, it will lead to its dismissal leaving the aggrieved employee with no recourse to remedy.
Hearing before the Industrial Court.
Once the matter is referred to the Industrial Court, the court will then issue Form F – Notice of Mention of Case to the Company(“employer”) and Claimant(“employee”) to inform them that the matter has reached the Industrial Court. At this point, parties usually appoint solicitors to represent them before the court. For this purpose Form A – Application for permission to be represented by a legal practitioner and Form B – Warrant of Authority will be filed by the solicitors accordingly.
At the first mention of the Industrial Court, the learned judge hearing the matter gives directions to the parties to fill their respective cause papers. In this, the Claimant shall file his statement of the case followed by the Company filing its statement in reply and finally, the Claimant has the opportunity to reply to the Company’s statement by way of a rejoinder.
Generally in the statement of the case, the Claimant seeks four types of remedies:
(i) reinstatement to his former position in the Company;
(ii) in case the reinstatement is not viable, then compensation in lieu of reinstatement; and
(iii) back wages in respect of the Claimant’s last drawn salary and any other benefits or privileges that the Claimant would have otherwise been entitled to if the Claimant had been in continuous employment with the Company.
Backwages are granted by the court in case of wrongful retrenchment or dismissal. The second schedule of the Industrial Relations Act mandates that the court may only order backwages up to a period of 24 months and 12 months in case of probationers. However, there is still an element of discretion in the grant of backwages which the court exercises taking into consideration the facts and circumstances of both the employee and the management.
The most crucial part of the process is the hearing which is conducted by way of a trial similar to that of a civil trial. The parties will call their respective witnesses to give evidence in support of their respective cases. Except in the case of critical dismissal, the burden of proof to prove that the dismissal of the Claimant was with just cause and excuse is on the Company. After the Company has closed its case, the Claimant will proceed with calling his own witnesses, including being a witness himself. At the end of the hearing, the court directs the parties to file their written submissions. The Industrial Court will then deliver its decision and grounds for the decision in the form of an award. The Court is supposed to hand down the award within 3 months from the date of the last written submission.
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