Hiring and termination of employment are part and parcel of the human resources affairs of a business. However, caution must be exercised in the process of termination of an employee lest a complaint be filed against the employer for unfair dismissal. This article seeks to provide a brief overview of ‘unfair dismissal’ in Malaysia.
The Right To Challenge A Dismissal
An employer is not allowed to terminate the employment of its employee at its whims and fancies. There has to be valid and justifiable reasons for the termination. Further, there is also a necessity for there to be due process and procedure in such a termination of employment. Without such reasons or due process, the aggrieved employee may challenge the dismissal.
Section 20(1) of the Industrial Relations Act 1967 reads as follows:(1) Where a workman, irrespective of whether he is a member of a trade union of workmen or otherwise, considers that he has been dismissed without just cause or excuse by his employer, he may make representations in writing to the Director General to be reinstated in his former employment; the representations may be filed at the office of the Director General nearest to the place of employment from which the workman was dismissed.
Pursuant to Section 20(1A) Industrial Relations Act 1967, such a representation must be filed no later than 60 days of the dismissal.
Reliefs Available In A Claim For Unfair Dismissal
Section 20(1) of the Industrial Relations Act 1967 clearly spells out that the primary remedy pursuant to such a representation is reinstatement. This would reinstate the aggrieved employee to his or her former employment with the same salary, benefits and position as if the employee was not dismissed.
However, there may also be instances in which reinstatement may not be a possible or a suitable relief. In such circumstances, compensation may be ordered in lieu of reinstatement. This is usually based on the employee’s last drawn salary.
That being said, the Court is not restricted to the reliefs claimed and may take into consideration any agreement and act in accordance to equity, good conscience and the substantial merits of the case in coming to its decision.
Backwages refer to the salary that the employee would have received but for the termination of employment. This is usually calculated from the date of dismissal until the date of the Court’s award.
That being said, the Second Schedule of the Industrial Relations Act 1967 provides that the backwages shall not exceed 24 months for non-probationer employees and 12 months for probationers.
Exclusive Jurisdiction Of The Industrial Court
One final point to note is regarding the jurisdiction of the Industrial Court. In 7-Eleven Malaysia Sdn Bhd v Ashvine A/P Hari Krishnan [2023] MLRAU 65, the Court of Appeal clarified that claims under Section 20 of the Industrial Relations Act 1967 ought to be ventilated via the statutory dispute mechanism under the Industrial Relations Act 1967, i.e. the Industrial Court, as opposed to a claim through the civil courts.
The Court of Appeal further endorsed the approach that such a claim under Section 20 of the Industrial Relations Act 1967, if filed at the civil courts, ought to be struck out as being an abuse of the process of the court.
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