Wrongful dismissal arises when an employee has been terminated by his employer without just cause or excuse. In Malaysia, employees are afforded legal avenues to challenge such dismissals and seek appropriate remedies.
Challenging a Wrongful Dismissal
Under Section 20 of the Industrial Relations Act 1967, a private sector employee who considers that they have been dismissed without “just cause or excuse” may formally challenge the termination. This is done by submitting a written representation to the Director-General of Industrial Relations, seeking reinstatement to their former position.
Importantly, this claim must be filed within 60 days from the date of dismissal. Employees typically lodge their complaints at the nearest office of the Department of Industrial Relations, which is available in most states.
The Conciliation Process
Once a claim is filed, the matter proceeds to a conciliation meeting facilitated by an officer from the Department of Industrial Relations. The purpose of this meeting is not to determine who is right or wrong, but to encourage both parties to reach a mutually acceptable resolution.
Representation at this stage is limited. Employees and employers may be assisted by trade union officers, representatives from organisations such as the Malaysian Trades Union Congress (MTUC) or the Malaysian Employers Federation (MEF), or other approved consultants.
During conciliation, parties may negotiate possible outcomes, including:
- Reinstatement of the employee;
- Withdrawal of the claim; or
- Compensation in lieu of reinstatement.
If no settlement is reached, the conciliator will prepare a report for the Director-General, who may then refer the dispute to the Industrial Court for adjudication.
Role of the Industrial Court
Where conciliation fails, the Industrial Court will examine the facts and determine whether the dismissal was indeed without just cause or excuse. If the court finds in favour of the employee, it may order reinstatement or award compensation.
Claims in the High Court
The position differs for public sector employees, who are not covered by the Industrial Relations Act 1967. Instead, they may bring a claim for wrongful dismissal in the High Court.
Private sector employees do not usually initiate claims at the High Cout as the High Court does not have the jurisdiction to order reinstatement. Instead, any remedy is usually restricted to damages, often calculated as payment in lieu of notice, typically equivalent to one to three months’ salary, depending on the employment contract.
Conclusion
In summary, Malaysian law provides structured mechanisms for employees to challenge unfair terminations. For private sector employees, the Industrial Relations framework offers a more comprehensive remedy, particularly the possibility of reinstatement while High Court claims are generally limited to financial compensation. Understanding these distinctions is crucial when deciding how best to respond to a dismissal.
