- In Malaysia, the Employer is required to provide the employees with reasons for dismissal and/or termination. Each and every termination of employment must be with just cause and excuse.
- Section 20(3) of the Industrial Relations Act 1967 provides that any employee who feels that he has been dismissed without just cause and excuse and/or unfair dismissal can write in to the Director General of Industrial Relations in order to request for reinstatement in his former employment.
- Award by the Labour Court and Industrial Court is appealable to the High Court.
What To Do Next When You Feel You Have Been Unfairly Terminated And/Or Retrenched By Your Employer ?
Q1. Can Employers terminate the employment of their employees during business downtime caused by COVID-19?
Business downtime per se is not a straightforward ground for termination of employment, more so when the business downtime caused by COVID-19 remains to be assessed (uncertain as to how long it will last) and the financial impact would vary depending on industry. Employers are advised to comply with the necessary redundancy and retrenchment laws in so far as termination of employment due to extended business downtime caused by COVID-19 is concerned.
It is to be noted that under Malaysian employment and industrial relations laws, any dismissal of an employee must be with just cause or excuse. In the event where the employee considers that he/she has been dismissed without just cause or excuse by his/her employer, he/she may make representations in writing to the Director General of Industrial Relations to be reinstated in his/her former employment.
Q2. In what grounds Employer are allowed to dismiss an employee?
In Malaysia, employees can only be dismissed with just cause and excuse. There is no definition of the term “just cause and excuse” in the legislation. Generally, the potentially justifiable reasons to dismiss an employee are:-
- gross misconduct
- poor or unsatisfactory work performance
Q3. How can employees challenge any action?
If there is no valid justification for the retrenchment exercise (for example), the termination may amount to dismissal without just cause and excuse which entitling the employees to remedies such as backwages, reinstatement and/or compensation in lieu of reinstatement.
An employee who believes they have been unfairly retrenched must lodge a complaint with the Director General of Industrial Relations within 60 days from the date of the dismissal. If parties are unable to settle their dispute during the conciliation meeting ordered by the Department of Industrial Relations, the Minister of Human Resources may refer the matter to the Industrial Court for adjudication.
Q4. Who can make a complaint to the Labour Court?
Employees who fall within the definition of an employee under the first schedule of the Employment Act 1955. For employees not included under the definition of the first schedule may file a complaint under the provisions of Section 69b1.
For Employers, they may file a claim for notice of indemnity either under section 69 or Section 69c, where applicable.
Q5. How to file a complaint in Labour Court?
- Complaints can be made by personally attending the nearest Labour Office or sending an official letter to the nearest Labour Office or email to firstname.lastname@example.org.
- After making a complaint, the Complainant is required to make to make a statement of claim on oath and bring a long documentary evidence, if any (e.g. contract of service).
- After that, the Complainant will be advised to wait for further notice from the Labour Office (while they do their investigation).
- The Labour Officer may contact the Employer concerning the Complainant’s claim. If the Employer accepts the Complainant’s claims and pays up, the matter is settled and the Complainant will withdraw the claim against the Employer. If the Employer disputes the claim, the Labour Officer will fix a date to hear the case in the Labour Court.
- Both parties are required to attend the hearing. The Complainant would be informed by letter (may be registered letter) and a summons would be issued to the defendant i.e. the Employer.
- The Complainant may choose to represent himself, or be represented by trade union, by a lawyer or an official from the Malaysian Trades Union Congress (MTUC) (if the Complainant seek their help). The defendant may represent himself, or by his lawyer.
- At the end of the hearing, the Presiding Officer makes an order either orally or in writing.
Q6. If any of the party is not satisfied with the decision or order made by the Labour Court, can it be appealed upon?
Yes. Any party not satisfied with the decision of the Presiding Officer can appeal to the High Court within fourteen (14) days from the date of the decision or order is made.
If the defendant does not appeal to the High Court and does not want to obey the order of the Labour Court, the Labour Office will assist to enforce its order in the Sessions Court in order to recover the money.
Q7. How the appeal process is made?
The process of the appeal is made by filing four (4) copies of the notice of appeal with a filing fee of RM 100.00 in the form of Revenue Stamp together with deposit of RM 250 in the form of money order or bank draft. All such matters shall be submitted to the Labour Office where the order or decision is made within fourteen (14) days from the date the decision or order is made.
Q8. What is the consequence if the Employer fails to comply with the Labour Court’s order?
An Employer who fails to comply with the order or decision of the Labour Court is guilty of an offense under Section 69(4) (or Section 69e of a case filed under Section 69b or 69c). Penalties are punishable by a fine of not more than RM10,000.00 and a daily fine of RM 100.00 per day will be charged for continuing offenses.
Q9. Who can make a complaint to the Industrial Court?
Generally, all employees can make a complaint as the Industrial Relations Act 1967 applies to all employees in Malaysia and governs the relation between employers and employees, including trade union and the prevention and settlement of disputes.
Q10. What is the procedure for bringing the matter to Industrial Court?
A workman2 who has been dismissed must make a representation in writing to the Director General of Industrial Relations3 to be reinstated to his former employment within 60 days of his dismissal4.
The Director General of Industrial Relations will try to resolve the matter through conciliation between the parties. If conciliation fails, the Director General of Industrial Relations will refer the matter to the Minister5, who may, if he thinks fit, refer the matter to the Industrial Court for a decision6.
Q11. What types of cases are heard by the Industrial Court?
The types of cases which are heard by the Industrial Court are as follows:-
- Dismissal of workmen which have been referred to the Industrial Court by the Honourable Minister of Human Resources.
- Trade disputes between Employers/trade union of employers and trade union of workmen which have been referred to the Industrial Court by the Honourable Minister of Human Resources.
- Applications by any party bound by an Award or collective agreement for the interpretation/amendment/variation thereof.
- Applications by any party bound by an Award to refer to the High Court questions of law.
- Complaints of non-compliance of an Award or collective agreement.
- Cases of victimisation in connection with trade union activities.
Q12. Can there be an appeal against the decision of the Industrial Court?
Any party who is dissatisfied with an award of the Industrial Court may appeal to the High Court within fourteen (14) days from the date of receipt of the award7.
The procedure for the appeal will follow the Rules of Court 2012 (rules applicable to civil courts) and will be treated as if it is an appeal from a Sessions Court to High Court. The Court of Appeal becomes the highest forum to challenge an Industrial Court award.
Q13. What is the difference between a Labour Court and an Industrial Court?
|LABOUR COURT||INDUSTRIAL COURT|
|Jurisdiction||Deals with disputes in relation to wages, over time pay, sick leave, annual leave and so on.||Mainly deals with issues of unfair dismissal, trade union complaints and trade disputes.|
|Who hears and decides the cases||Labour Officer of the Labour Department||
For dismissal cases – President or Chairman sitting alone.
For trade disputes – a panel comprising of the President/Chairman, an Employers’ representative and an employee’s representative.
|What if I am not happy with the decision||Decisions made by Labour Court is appealable to the High Court.||Decisions made by the Industrial Court is appealable to the High Court.|
(i)For wages not exceeding RM5,000
The Director General of Labour shall have the power to inquire into the disputes with regards to wages as well as any other payments in cash due to the Employee.
Director General of Labour will then decides on the dispute.
(ii) For wages exceeding RM5,000
The Industrial Relations Department will step in to settle the dispute.
However, if the matter still not resolved, the Department will report to the Director General of Industrial Relations.
i- Lodge a complaint to the Director General of Industrial Relations.
ii- Conciliation process conducted by the DG of Industrial Relations.
iii- Report of the conciliation process will be given to the Ministry of Human Resources.
iv- Minister of Human Resources has discretion to take whatever actions necessary to conciliate.
v-In the event the conciliation process fails, the Minister of Human Resources will then decide whether or not to refer the dispute to the Industrial Court.
vi- The Industrial Court will only have the power to hear if the matter is referred to the Industrial Court.
 Employees whose wages per month exceed RM2,000.00 but does not exceed RM5,000.00.
 Section 2 of the Industrial Relations Act 1967 (“IRA 1967”) define workman as any person including an apprentice, employed by an employer under a contract of employment to work for hire or reward and for the purposes of any proceedings in relation to a trade dispute includes any such person who has been dismissed, discharged or retrenched in connection with or as a consequence of that dispute or whose dismissal, discharge or retrenchment has led to that dispute
 Section 8(1) of IRA 1967
 Section 20(1A) of IRA 1967
 Section 8(2) of IRA 1967
 Section 8(2A) of IRA 1967
 Section 33C of IRA 1967 (effective 1st January 2021)
THIS FAQ IS PREPARED AND PUBLISHED BY GENERAL LITIGATION, CORPORATE INSOLVENCY AND APPELLATE DEPARTMENT OF THE DISPUTES RESOLUTION OF MESSRS GAN & ZUL, ADVOCATES & SOLICITORS.
Ben Lee Kam Foo (Partner)
Head of Dispute Resolution
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Cross Border Taxation Planning
General Dispute Resolution
Contractual, Land and Commercial Disputes
Nur Amalin Shahida Sabidi (Associate)
Generate Disputes Resolution
Commercial Retail Tenancy Disputes
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