Case Update: Can an employee bring an unfair dismissal claim after accepting a severance payment?

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

Malaysian employment law is relatively pro-employee when it comes to termination of employment. Based on the fundamental principle of security of tenure, any termination by an employer must be with just cause. In practice, just cause can sometimes be difficult to establish.

To avoid having to establish just cause — and to terminate an employment relationship without being exposed to the risk of an unfair dismissal claim — many employers opt to negotiate a mutual separation with the employee.

Typically, some form of monetary compensation (and sometimes other terms as well) is negotiated between the parties, and documented in a mutual separation agreement. The agreement will usually contain a clause to the effect that the employee confirms that the separation package and terms are in full settlement of any claims the employee may have, and that the employee will not bring an unfair dismissal claim.

So what happens where a mutual separation agreement is signed, and the employer makes the agreed compensation payment, but the employee then proceeds to file an unfair dismissal claim?

The relevant legal principles were recently considered by the Industrial Court in Raul Fabrizio Casserini v. George Fischer (M) Sdn Bhd [2017] 3 ILR.

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Case Update: Employer’s poor handling of workplace assault and harassment complaints amounts to constructive dismissal

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

Most employers are now aware of the importance of having clear policies and processes when it comes to handling complaints and disciplinary issues. It’s the norm for businesses hiring a reasonable number of employees to have in place various codes of conduct, guidelines, and policies.

Despite this, an employer that receives an employee complaint and acts on it could still be at risk of being deemed to have breached the terms and conditions of employment, or severed the employment relationship, due to shortcomings in how the complaint was handled.

The Industrial Court recently considered these issues in Justin Maurice Read v. Petroliam Nasional Berhad (Petronas) (Award No. 965 of 2017). In this case, the claimant (the Employee) had complained of being assaulted and harassed in the workplace. The Employee then claimed that the manner in which these complaints were handled by the company (the Employer) entitled him to claim to have been constructively dismissed.

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Case Update: Court of Appeal considers whether an employer can dismiss an employee for insubordination

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

Insubordination is where an employee wilfully disobeys or ignores an employer’s legitimate instructions. Malaysia’s Industrial Court has established via many previous decisions that insubordination is capable of being a serious misconduct which is sufficient to destroy the employment relationship and justify a dismissal.

However, as is the case for employee misconduct in general, not all instances of insubordination will amount to just cause for an employer to dismiss an employee. The Court of Appeal considered this issue in Ngiam Geok Mooi v. Pacific World Destination East Sdn Bhd [2016] 6 CLJ 395.

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Case Update: When an employee transfer can amount to a constructive dismissal

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

It is a well-established principle in employment and industrial relations law in Malaysia that the right to transfer an employee is a prerogative of the management which the Industrial Court would rarely interfere with. However, there are factors which may affect an employer’s ability to transfer an employee without consent, including the following:

  • Whether the transfer is between different roles or departments within the same location, or from one branch or location to another, or between different companies within the same Group.
  • Whether the transfer is brought about by bona fide or genuine business reasons.
  • In some cases, the practical effect of the transfer may also be relevant (eg the impact of a change in work location or job functions).

In short, employee transfers are not always straightforward. Transferring an employee without consent may result in a breach of contract or constructive dismissal.

The Industrial Court considered these issues in Ng Bee Yoong v. Capital Development Sdn Bhd (Award No. 186 of 2016).

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Case Update: High Court rules entitlement to back wages limited to unexpired duration of fixed-term contract

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

The issue of calculating back wages due to an unfairly dismissed employee has become fairly settled, at least when it comes to the upper limit of the award. The Second Schedule of the Industrial Relations Act states:

1. In the event that backwages are to be given, such backwages shall not exceed 24 months’ backwages from the date of dismissal based on the last-drawn salary of the person who has been dismissed without just cause or excuse.

However, the recent High Court case of Malayan Banking Bhd v. Mahkamah Perusahaan Malaysia & Anor [2017] 2 CLJ 70 considered a unique scenario, where the employee was dismissed while under a probationary period as part of a fixed-term contract. The Second Schedule of the Industrial Relations Act provides the following in respect of probationers:

2. In the case of a probationer who has been dismissed without just cause or excuse, any backwages given shall not exceed 12 months’ backwages from the date of dismissal based on his last-drawn salary.

The applicant (the Employer) applied to the High Court for an order to quash the decision of the first respondent (the Industrial Court). One of the issues that the High Court had to consider in this case (which is the issue we will focus on in this case update) was whether the second respondent (the Employee) should only have been entitled to back wages for the unexpired portion of her fixed-term contract (which was 5 months and 17 days), and not the 12-month maximum provided in the Industrial Relations Act for probationers.

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Case Update: Factors considered when determining whether a resignation is forced or voluntary

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

It is common for employers to opt to negotiate a mutual separation or voluntary resignation when handling a potential dismissal. This could arise where there is a misconduct, unsatisfactory performance, or possible redundancy. Many employers take the view that is better for both parties to sit down and agree on the separation instead of the employer unilaterally exercising its rights under the law and risking a dissatisfied employee bringing an unfair dismissal claim.

However, what happens where an employee resigns following discussions with the employer, and later claims that this resignation was forced, or obtained under duress or pressure from the employer, and therefore that he was in fact unfairly dismissed?

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Case Update: Can an employee be dismissed for misconduct off-the-job and outside office hours?

Case Updates (FB)

In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

The general position in Malaysian employment law is that the conduct of employees outside of the office and in their personal time is not relevant to the employment relationship. However, out-of-office misconduct may in some circumstances be serious enough to justify an employer taking disciplinary action against the employee, including dismissal.

The Industrial Court recently considered this issue in Sebastian Matthias Boehme v. Siemens Malaysia Sdn Bhd (Award No. 667 of 2017). Siemens, the Employer, terminated the Employee’s services following complaints received regarding the Employee’s behaviour at a hotel bar outside of office hours.

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