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Employment Law in MalaysiaBy Dymphna Lanjuran
www.twitter.com/EmploymentLaw_
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Introduction Termination of Employment Pre-Termination (Misconduct)
Post-Termination Challenging the Decision New statutes Minimum Wages Order
2012, Minimum Retirement Age Bill 2012
AgendaFCL
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Introduction
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STATUTES
Employment Act 1956 Monthly salary RM1,500 and below Manual Labour
Domestic servants
Industrial Relations Act 1976
Remedy - Reinstatement Industrial Court
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STATUTES
Employees Provident Fund Act Applies to all employees of Malaysian
employers
Employees' Social Security Act, 1969 SOCSO
Workmen's Compensation Act 1952
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Termination of Employment
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Grounds
Misconduct Poor Performance Redundancy & Retrenchment Mutual Termination/Cessation
Constructive Dismissal Fundamental breach that goes to the root of
the contract Must be immediate no cooling off period Burden of proof on employees
Termination of EmploymentFCL
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Termination of Employment:Misconduct
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Ground - Misconduct
Case: Hyatt Regency Saujana v Kananathan SGRamu [2004] 3 ILR 391
Termination of Employment
Claimant, Security Officer - the position isone of trust and confidence where thesafety and security of the entire hotel was
entrusted in the hands of the Claimant.
Illegal gambling during work.
Dismissal justifiable.
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Ground - Misconduct
Case:Southern Bank Berhad vAzmi Ali [2003] 1ILR 614
Termination of Employment
The court is of the view that honesty andintegrity are amongst the key characteristicsthat any employee should possess, no matter
what form of employment the employee isengaged in.
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Ground Misconduct
Case: Ng Hock Cheng v Pengarah Am Penjara &Ors [1998] 1 CLJ 405 (Federal Court)
An employer is the best person to judge theseriousness of the conduct of its employees.
Termination of EmploymentF
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Termination of Employment:Poor Performance
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Ground Poor Performance
Probationer
Case: Azmi & Company Sdn Bhd v FirdausMusa [2000] 2 ILR 510
His character, suitability and capacity as anemployee is to be tested during the
probationary period and his employment onprobation comes to an end if during or at theend of the probation period he is found to be
unsuitable .
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Ground Poor Performance
Probationer
Case: Dorsett Regency Hotel (M) Sdn Bhd vAndrew Ambrose [2003] 2 ILR 740
The real test would be whether he possesses theright skill, competence, temperament,
aptitude, attitude and suitability which wouldentitle him to transcend from being anemployee on probation to that of a confirmed
permanent employee.
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Ground Poor Performance
Probationer
Keep the probationer informed or alerted ofhis shortcomings to enable the probationer to
strive to meet the standards expected of himby the Company before his probationaryperiod ends.
Warnings, guidance, trainings, sufficient trimeto improve; despite that still fail to improve...
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Ground Poor Performance
Probationer
Case: Robert John Reeves v Menteri SumberManusia & Anor[2000] 1 CLJ 180 (High Court)
The power to either continue or discontinuethe services of an employee or probationer
rests with the employer.
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Ground Poor Performance
Confirmed employee
Rigid test 1st: The employer must show in what respects
the employee had failed to perform the workwhich formed the basis for his belief that theemployee was a poor performer.
2nd: The belief under 1st above emerges froma fair process; i.e. by putting an employee onnotice of his deficits & affording him a fair
opportunity to improve.
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Termination of Employment:Redundancy & Retrenchment
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Ground Redundancy & Retrenchment
Case: William Jacks & Co (M) Sdn Bhd v SBalasingam [1997] 3 CLJ 235 (Court of Appeal)
Termination of Employment
Retrenchment is defined as the discharge ofsurplus labour or staff.
It is well settled that the employer is entitled toorganize his business in the manner heconsider best.
Must be bona fide.
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Ground Redundancy & Retrenchment
Case: Musnita Mustafa v Weatherford SolutionsSdn Bhd [2012] 3 ILR 350
Termination of Employment
Did redundancy situation arise leading toretrenchment?
Was the consequent retrenchment made incompliance with reasonable selectionprocess or the principle of Last In, First Out(LIFO).
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Ground Redundancy & Retrenchment
Case: Musnita Mustafa v Weatherford SolutionsSdn Bhd [2012] 3 ILR 350
Termination of Employment
Restructuring exercise the Flow ControlDepartment and the Technical Departmentof the company were to be merged.
3 secretaries in the same division, with theClaimant being the most junior surplus.
Termination justified with just cause.
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Termination of Employment:Mutual Termination/Cessation
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Ground Mutual Termination/Cessation
Case: Timber Master Trading (M) Sdn Bhd vJaneWang Sing Fang [1994] 2 ILR 1293
Termination of Employment
The duty of the Court is to determinewhether there had been a terminationwhich had been mutually and freely agreed
upon between the parties.
Must be genuinely consensual.
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Termination of Employment vsConstructive Dismissal
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Employer terminates employment of anemployee
There exist a Letter of Termination Ind Ct: Burden on employer to show just cause
or excuse
Termination of Employment
Constructive Dismissal EmployerDOES NOT terminate employment of
an employee Employee WALKS OUT of out employment NO Letter of Termination
Ind Ct: Burden on employee to show dismissal
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Pre-Termination
(Ground: Misconduct)
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Pre-Termination
Ground: Misconduct
Initial investigations - to identifypossible allegations & possiblemisconduct, gather documentary
evidence and oral evidence(statutory declaration)
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Pre-Termination
Ground: Misconduct
Show Cause Letter
To suspend or not to suspend?
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Pre-Termination
Ground: Misconduct
Notice of Domestic Inquiry
Domestic Inquiry
3 Panels Independent Charge(s) to be read
Procedures to be explained Prosecuting Officer Recording Secretary
Witnesses & Documents
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Pre-Termination
Ground: Misconduct
Decision of the Panel
Decision of the Management
Demote, Suspend, Warning,Withholding of Increment/Bonus,Termination of Employment
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Post Termination
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Remedy Sought:
Reinstatement
ORWages ($$$)
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Wages = less than RM5,000
No pending inquiry orproceedings under theIndustrial Relations Act(IRA)
No proceedings before theIndustrial Court
Matter has not been
decided by the Ministerunder s.20
Conciliation Industrial Relations Officers
Report
Ministers decision (subject to
JR) Industrial Court
Representation / Complaint - 60 days rule
Labour CourtIndustrial Court
Remedy sought:
Wages or any other
Payment in Cash
Remedy sought:
Reinstatement
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Post Termination
Statement of complaint andremedy from Complainant
Summon to the Company:
Notice of the complaint Name of the
Complainant
Date, time & place toattend and to bringwitnesses.
Warrant/Authority to Act
Witness Statements
Form A & B
Statement of Case
Statement in Reply
Bundle of documents
Witness Statements
Labour CourtIndustrial Court
PROCEDURES - Documents
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Post Termination
a) Trial procedures
Burden of proofs Procedures Submissions
b) Order (subject to appeal)
c) Enforcement/Non-Compliance
a) Trial procedures
Burden of proof Procedures Submissions
b) Award (subject to JR)
c) Non compliance
Labour CourtIndustrial Court
PROCEDURES
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Challenging the Decision
(Judicial Review/Appeal)
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Challenging the DecisionREVIEW/APPEAL
Industrial Court/
Ministers Reference
Labour Court
Order 53 RHC review on
procedures not on merits
S. 77 EA procedure in a civilappeal from Sessions Court
Leave (ex parte) - Form 111A,Order 53 Statement, Affidavit inSupport
After leave Form 111B [Noticeof Hearing] & Order Exchange of Affidavits Written Submissions Hearing
Notice of Appeal
Memorandum of Appeal
Record of Appeal
Written Submissions
Hearing
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New Statutes
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Minimum Wages Order 2012(Perintah Gaji Minimum 2012)
Minimum Retirement Age Bill 2012
New Statutes
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Minimum Wages Order 2012(Perintah Gaji Minimum 2012)
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New Statute
Minimum Wages Order 2012
Gazetted on Monday, 16 July 2012 Dates of coming into operation:
1.1.2013: > 5 employees
Professional activity classified underMASCO (Malaysia StandardClassification of Occupations)
1.7.2013: 5 employees or less other than MASCO
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Ne Stat te
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New Statute
Minimum Wages Order 2012
Deferral of implementation to another date Not less than 90 days beforecommencement date, make anapplication to the Wages Council
Discretion of the Council.
Does not apply to Domestic Servant.
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New Statute
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New Statute
Minimum Wages Order 2012
Minimum Wages Rates:
3.85800Sabah,Sarawak andFT Labuan
4.33900PeninsularMalaysia
Hourly
(RM)
Monthly
(RM)
Regionalareas
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New Statute
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New Statute
Minimum Wages Order 2012
ProbationersMinimum wages may be reduced NOTMORE than 30% Reduction may be based on
agreement between employer andemployee (BUT cannot exceed 30%reduction)
Reduction = ONLY for the 1st 6 months
Further reading: http://dymphnablog.wordpress.com/2012/07/17/brief-outlook-on-the-
minimum-wages-order-2012/
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Minimum Retirement Age Bill 2012
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New Statute
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New Statute
Minimum Retirement Age Bill2012
Gazetted on 16 August 2012 Minimum retirement age = 60 years old Employer SHALL NOT prematurely retire an
employee before 60 years old [*fine:
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