Case Update: Is a clause in an employee handbook effective if an employee claims not to have read it?

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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.

Identifying the terms and conditions that apply to an employment relationship is often not as straightforward as reading through an employment contract.

It is the norm, particularly in large employer organisations which span multiple jurisdictions, for these terms and conditions to be set out in several documents. As a minimum, many employers would have an offer letter, the main employment contract, and an employee handbook. These are then supplemented by further individual policies, such as those in relation to personal data, BYOD, IT, benefits, discipline, workplace conduct, grievance procedures — the list is close to endless. The difficulty in determining which terms apply is further complicated when these documents (or parts of some of these documents) are amended or updated over the years.

Problems arise when an employer seeks to apply or enforce some of the terms set out in one of those documents, and the employee claims to not be aware of it — or contends that the document does not apply. The Industrial Court recently considered one such case in Ho Seng Fatt v. Strateq System Sdn Bhd (Award No. 279 of 2018).

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Case Update: Factors considered by the Industrial Court in determining the identity of the employer in a multi-jurisdictional employment relationship

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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.

In this era of the multinational corporation, it is common for employees to be carrying out most (or even all) of their work in one jurisdiction, while technically being employed by an employer entity in another jurisdiction. This could either be because the employer does not have a local entity, or because the employee was initially employed by an entity in one jurisdiction but was subsequently assigned to a post in another jurisdiction, or for a host of other commercial reasons.

We therefore see increasingly complicated employment relationships — the core employment contract being supplemented by assignments, secondments, or some other similar arrangements both formal or otherwise — which in time can lead to confusion over who the actual employer entity is, and more importantly, which jurisdiction the employer is in. Some of these arrangements can get even more convoluted with the introduction of other structures such as third party employment or payroll service providers or local host entities.

Identifying the correct employer entity becomes important when an employee seeks recourse at the Industrial Court. It is not as straightforward as determining which entity pays the employee’s salary, or owns the office the employee spends most of his time in. Once it is determined that the employer entity is in another jurisdiction, can the Industrial Court hear the matter?

The relevant factors were recently considered by the Industrial Court in two cases — Lars Kruse Thomsen v. Hot-Can Sdn Bhd (Award No. 1629 of 2017), and John Brian Chesson v. Baker Hughes (Malaysia) Sdn Bhd (Award No. 119 of 2018).

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Case Update: What can an employer do upon discovering that an employee lied in a job application?

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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 hiring process can often be tricky for employers. In the Malaysian job market, it is common for employers to receive hundreds of applications for certain vacancies. Employers then have to comb through these applications, shortlist candidates to be interviewed, and make a hiring decision based on fairly limited information.

To reduce the time spent on this process, many employers do not conduct thorough background checks on job applicants. The experience and employment history stated in the applications are often assumed to be accurate, with some allowance given for an expected reasonable degree of exaggeration.

What is the recourse for an employer who, soon after hiring an individual, realises that the employee had lied in his job application? Does this false information constitute just cause for an employment termination, or will the dismissal enable the employee to bring a successful unfair dismissal claim?

The Industrial Court considered these issues in two recent awards — Khoo Kim Loang v. Shock Media Studio Sdn Bhd (Award No. 51 of 2018) on 4 January 2018, and Khoo Kim Loang v. Kim Siah Electric Co Sdn Bhd (Award No. 137 of 2018) on 12 January 2018 — interestingly both involving the same Employee.

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Case Update: Federal Court decides whether punishable misconduct in employment law is distinguishable from criminal conduct

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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.

Misconduct is one of the reasons which would qualify as “just cause” for an employer to dismiss an employee.

However, it’s not straightforward to pin down an exact definition of what constitutes “misconduct”. Even in instances where actions can be broadly categorised as misconduct, there is often confusion as to whether —

  • a misconduct is serious enough to justify dismissal instead of a lighter sanction; and
  • the standards to be applied to misconduct in the context of employment law are the same as those in respect of criminal wrongdoing.

This potential for confusion was illustrated in a recent case dealing with an employee dismissal for misconduct which went from the Industrial Court (“IC”) through to the High Court (“HC”), Court of Appeal (“COA”), and was ultimately decided by the Federal Court (“FC”). The issues were fully considered in the recent grounds of judgment of the FC dated 8 January 2018 in Akira Sales & Services (M) Sdn Bhd v Nadiah Zee binti Abdullah and Another Appeal (Federal Court Civil Appeal Nos. 01-15-05/2016 and 01-16-05/2016).

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Case Update: Relevant issues when an employer uses financial difficulties as a reason for retrenchment

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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.

As explained in an earlier article (What you need to know about the law on retrenchment of employees), the basic legal position in Malaysia in relation to retrenchments is clear and settled: It is the prerogative of the management to decide on the reorganisation of it business, and the courts will not intervene unless it is shown that the employer’s decision was not in good faith.

One of the accepted reasons for a retrenchment is where the business is experiencing financial difficulties, or where a reorganisation of the workforce is deemed necessary to increase efficiency or cut costs.

What are the factors to be considered when assessing whether cost-effectiveness or financial reasons are sufficient to constitute a genuine reason for retrenching employees?

The Industrial Court considered this in Mohd Azhan Ariffin v. Ranhill Berhad (Award No. 920 of 2017). The claimant (Employee) was retrenched, and paid retrenchment benefits, on the basis that the respondent (Employer) could no longer sustain him in the business due to financial constraints.

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