B. Termination

Generally. an employee may be terminated by the employer on one or more of the following grounds:-

a. Misconduct

This is when one acted in contradiction to the express of implied terms of the employment. Disobeying instruction, absenteeism without justification, violence, abusive, misappropriation of the company’s resources or information.

The questions here are: ‘whether such misconduct should warrant a prior warning before dismissal?’; ‘whether he/she had actually committed the misconduct as alleged?’.

b. Performance

An employee fails to meet the expectation of the company, company sales for example. Question here is ‘what is the yardstick for ‘expectation’?’

c. Retrenchment/Termination due to closure of business

Dismissal of ‘excess’ employees due to business prospect, restructuring of the company, economy crisis, financial difficulties or any reasons other than (a) and (b) above.

Prior to retrenchment, a company should issue a notice to Labour Office of its intention to carry out the retrenchment exercise, issue a notice to affected employees and to provide retrenchment benefit.

Usually, a company which carries out the retrenchment exercise will apply the principle of ‘Last in First out’ under the Code of Conduct for Industrial Harmony.

d. Constructive Dismissal

This is a tricky part especially when there is no formal notice issued to the affected employee or employee not being informed of the dismissal.

Situations where an employee is being demoted, relieved of the work duties, transferred/reassigned to other branch, withholding of entitlements by company (wages, bonus or commission) or refusal of access to company, with the intention to force the employee to resign (and the employee did resign), could amount to constructive dismissal.

e. Non-confirmation during probation

Although a probationer has the rights to dispute the non-confirmation, but the contractual clauses of employment would usually impose a full discretion on the company on the decision making on probationer. The grounds for non-confirmation often link to reasons (a) and (b) above.

f. Withdrawal of job offer before commencement of employment

Industrial Relations Act or Employment Act does not provide governance on such situation. However, when an employer revoke the job offer after signing the letter of offer, the prospect employee would be able to bring the action at civil court for ‘breach of contract’.

C. Unhappy after termination – what to do? – For employees governed under Industrial Relations Act

Those affected employees who are not satisfied with the grounds of termination provided by the employer as discussed above, what can you do?

(1) The employees being terminated must act fast within 60 days statutory time allowed under Industrial Relations Act sec.20, complaint to Director General of Industrial Relation by way of ‘representation’ for reinstatement. A half day outside the 60 days time period would be futile.

(2) The Industrial Relations office would then arrange for a reconciliation meeting for a possible settlement, whereby no advocates or solicitors may represent the employee at this stage.

a. Parties managed to achieve settlement – end of story; or

b. Parties failed to settle the dispute – move to (3) below.

(3) Industrial Relations Office report to Minister of Human Resources, which the Ministry may refer the matter to Industrial Court if he thinks fit. Here, the decision of Minister to refer the dispute to the Industrial Court is subject to Judicial Review at High Court of Malaya to determine whether the exercise of such discretion by the Ministry is justifiable.

a. Unhappy employee may apply to High Court of Malaya by Judicial Review, which must be made within three (3) months from the date of decision by the Minister. The High Court may quash the decision of the Minister (certiorari) and direct the Minister to refer the dispute to Industrial Court (mandamus);

b. Similarly, unhappy employer may apply the same for certiorari and an order of prohibition for referral of the dispute to Industrial Court.   

4) At the Industrial Court, other than ‘constructive dismissal’ as discussed at heading (B) above, the burden is on the company to show the Industrial Court that the dismissal/retrenchment was done with just cause or excuse. The successful employee (proven to be unfairly dismissed) may be awarded the following relief:-

a. As mentioned in above, the only relief may claim for is ‘reinstatement’. However when reinstatement is impossible (usually the case due to the hostile relationship between employer and employee), the Industrial Court may award compensation in lieu of reinstatement – one (1)  month salary for each year of service by the employee in the company.

b. Backwages – salary which an employee would have entitled had the employee not unfairly dismissed by the employer, which only allowed to a cap of twenty four (24) months salary.

5) The award or decision of the Industrial Court is also subjected to Judicial Review.

D. Labour Court – for disputes outside the jurisdiction of Industrial Court

Labour Court is presided by Director General and has jurisdiction over the disputes by employees under Employment Act 1955. In addition to that, Labour Court’s power extends to employees under Industrial Relations Act 1967, but only in relation to dispute over monthly wages or payments within the range of RM2,000.00 and RM5,000.00. However, Labour Court does not have jurisdiction to hear the dispute which is pending before Industrial Relation Court or Minister of Human Resources.

The procedure in lodging the relevant complaint at Labour Court can be summarised as follows:-

i. Complaint to Labour Court with relief seek for;

ii. Labour Court issue summons after inquiry into the merits of complaint;

iii. Hearing of the dispute between parties;

iv. Decision of the Labour Court;

v. Registration of the decision at Sessions Courts or First Class Magistrate Courts for enforcement purpose;

vi. Appeal against the decision of Labour Court is to be filed at the High Court of Malaya within fourteen (14) days from the date of decision.

E. Conclusion 

Employees must remember that clock starts ticking the moment the employer informs them of the termination, whether verbally or formal notice. Thus, it is crucial for the effected employee to lodge a ‘representation’ with the Industrial Relations Office or a complaint at Labour Office within the statutory time limit of 60 days in order to pursue the matter.