Just launched: “Guide to Malaysian Employment Law”

I have always believed that by writing about the law and related topics, I am not only sharing knowledge with others, but also richly expanding and deepening my own understanding of the topics I write about. This is why I have been consistently publishing my legal writings from my early days of practice, going back 18 years now.

Today, we have launched a Guide to Malaysian Employment Law. This Guide will be hosted on a standalone page on The Malaysian Lawyer, and is a one-stop introductory guide to Malaysian employment law, including categorised links to employment law articles I have published on The Malaysian Lawyer.

The topics in the Guide have been selected based on feedback from in-house counsel and HR professionals, and cover the usual high-level background legal information they would like to have on-hand, particularly as professionals from other jurisdictions considering employment issues in Malaysia.

The Guide will be constantly-evolving, and its contents will be updated from time-to-time. Please share the Guide with others who may find it useful, and leave a comment if you have any feedback, or requests or suggestions for other employment law issues that should be covered.

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Case Update: Another company’s retrenchment of employees due to COVID-19/MCO deemed unfair by Industrial Court

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.

There was a very sharp rise in retrenchment numbers in Malaysia in 2020, particularly in the aftermath of the first Movement Control Order (MCO), which started in March 2020. We are now seeing Industrial Court decisions as a result of unfair dismissal complaints lodged by employees who had their employment terminated in the first half of 2020, and I expect we will continue to see a steady succession of these decisions in the coming months.

As I have often explained, while employers are legally entitled to dismiss employees where the retrenchment is for genuine reasons, employers must be able to show that the termination was not improperly motivated. I recently highlighted one case where the Industrial Court decided that the retrenchment of an employee, which the employer said was due to the challenges caused by the COVID-19 pandemic, was an unfair dismissal: “Case Update: Industrial Court finds retrenchment due to effects of COVID-19/MCO was unfair”.

In this article, I summarise four recent awards involving retrenchments carried out at the same time by the same employer, which the employer said was due to the effects of the MCO and pandemic:

  1. Mohamad Sahrul Bin Kahulan v. Lourdes Medical Services Sdn Bhd (Award No. 1295 of 2021).
  2. Gawri A/P Muthadakan v. Lourdes Medical Services Sdn Bhd (Award No. 1296 of 2021).
  3. Lalitha A/P Subramaniam v. Lourdes Medical Services Sdn Bhd (Award No. 1297 of 2021).
  4. Rasalechumi A/P Kanagaratnam v. Lourdes Medical Services Sdn Bhd (Award No. 1298 of 2021).
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Employee poor performance: Some recent cases

The proper management of under-performing employees is always a tricky proposition. While the law recognises poor performance as one of the reasons that would constitute “just cause” for dismissing an employee, many employers make mistakes which result in dismissed employees winning unfair dismissal claims. There have also been instances where employees have been able to walk out and claim that they have been constructively dismissed due to the employer putting them on a performance improvement plan (“PIP”).

There are many variables that will determine whether a poor performance termination was carried out fairly. It’s always useful for employers and decision-makers to review how other employers have managed under-performing employees. In this article, I briefly summarise the following recent cases related to PIPs and poor performance dismissals:

  1. Azura Norden v. Small Medium Enterprise Development Bank Malaysia Berhad (Award No. 94 of 2021).
  2. Charles Selvam Andrew Francis v. Kebabangan Petroleum Operating Company Sdn Bhd (Award No. 256 of 2021).
  3. Thomas Kuruvilla v. Malaysia Digital Economy Corporation Sdn Bhd (Award No. 151 of 2021).

These summaries will provide valuable insights on the issues the Industrial Court considers when assessing performance-related terminations.

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HR Minister says employees could face fines or jail for refusing vaccinations. Is this legal?

Malaysia’s Human Resources Minister M. Saravanan caused a stir late last week when he was widely reported (see Bernama, Malay Mail, The Star) as saying that action could be taken against employees who refuse to be vaccinated. While recognising that vaccinations have not been made mandatory under Malaysian law, Saravanan said that the authorities could take action under the Occupational Safety and Health Act 1994 (“OSHA”).

The legal position regarding mandating employee vaccinations has been widely-discussed in recent weeks, and I’ve previously shared my views on this blog (“Is it legal for Malaysian employers to make vaccinations mandatory for employees?”), as well as with the media (“Can Malaysian employers make Covid-19 vaccinations mandatory for their staff? Lawyers explain.”).

So what exactly does OSHA provide, and can the authorities really rely on OSHA to take action against employees who refuse to be vaccinated?

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Case Update: Potential pitfalls where an employee is engaged by a Malaysian service provider for a foreign employer

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.

Technology has facilitated the increasingly global reach of many businesses, and now even small businesses find it easy to establish a multi-jurisdictional presence. This global footprint, plus the increasing popularity of remote-working arrangements which has been further accelerated by the COVID-19 pandemic has made it even more common for employers to hire employees in countries where they do not have a physical presence or legal entity.

Foreign companies use several options to engage individuals in Malaysia, broadly falling under the direct or indirect methods (or a combination). With the direct method, a foreign company would engage an individual directly, either as an employee or a contractor, using a contract either — (a) governed by Malaysian law; or (b) governed by the laws of the company’s home jurisdiction.

The indirect method is commonly known as “business process outsourcing” or “professional employer services” but also goes by many other names, and there are various interchangeable terminologies used. Essentially, this is a “third party employment” arrangement, whereby a foreign employer would engage a “local host employer” as a service provider, and this service provider would then engage the employees directly to perform services for the foreign employer. These local “professional employer organisations” would be responsible for arranging the payroll and statutory contributions and deductions for these “leased employees”, and would be the official “employer of record”. Using a local entity is unavoidable where the employee needs to apply for a work permit/visa.

I’ve advised employer clients on the engagement of employees using all of these options, and each of them have their respective advantages and disadvantages, and potential pitfalls for both employers and employees.

This article reviews the Industrial Court decision in Wong Wai Che vs. Quest BPO Sdn Bhd (Award No. 201 of 2021), involving an employee engaged by a foreign employer entity via a Malaysian service provider.

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Is it legal for Malaysian employers to make vaccinations mandatory for employees?

The COVID-19 pandemic has brought up seemingly endless unique legal challenges for businesses and employers for the past 18 months, and counting. Beginning with lockdown and restrictions, remote working, paycuts, retrenchments and reorganisations, businesses in Malaysia and many other jurisdictions are now focusing on reopening, and hopefully moving into a post-pandemic future.

In recent weeks, we have been reading about the issue of mandating vaccines for employees. The legality of so-called “no jab no job” policies continues to be debated in major jurisdictions such as the UK, US, and Europe, where the reopening of the economy is at a more advanced stage than Malaysia, and where many companies have been implementing mandatory vaccination policies. Multinational companies with a Malaysian presence are now looking to roll out those policies in their Malaysian offices too. However, the law can be very different across jurisdictions, and employers will need to tread with caution and consider not just the legal but practical repercussions before making vaccinations mandatory for their employees.

In this article, I set out the legal position on this issue, and the key issues employers need to consider. I’ve also previously shared some of my views on this with The Malay Mail in their piece earlier this month — “Can Malaysian employers make Covid-19 vaccinations mandatory for their staff? Lawyers explain.”

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