MaxineKhoo

In Malaysia, the most common and practical business structure is the Private Limited Company (Sdn Bhd), which is regulated by the Companies Act 2016. Many entrepreneurs prefer this model because it offers limited liability protection, a separate legal identity, perpetual succession, and enhanced credibility with clients, banks, and investors. Compared to a sole proprietorship or partnership, a Sdn Bhd provides stronger safeguards for business owners while remaining flexible for growth and expansion.
To incorporate a company in Malaysia, several basic requirements must first be satisfied. At least one director must be appointed, and that individual must ordinarily reside in Malaysia. In addition, there must be at least one shareholder, who may be an individual or even a corporate entity. Every company must also appoint a licensed company secretary approved by the Companies Commission of Malaysia (SSM). The law allows for a minimum paid-up capital of RM1, but in practice, many companies declare a higher capital to improve their credibility in dealing with banks, suppliers, or government tenders. Finally, a local Malaysian registered address must be provided for statutory and official correspondence.
The incorporation process begins with reserving a company name through the MyCoID portal. The proposed name must be distinct and not misleading, offensive, or too similar to existing businesses. Once the name is approved, incorporation documents are prepared, including details of directors, shareholders, and the company secretary, together with statutory declarations and, if required, a constitution. These documents are then lodged online with SSM along with the incorporation fee of RM1,000. When the application is approved, SSM issues a Notice of Registration, which serves as proof that the company is legally established.
However, registering a company is only the first step. After incorporation, the company must meet ongoing compliance obligations. An auditor must be appointed within 30 days, unless the company qualifies for audit exemption. An annual return must be filed every year within 30 days of the anniversary of incorporation, and financial statements must be prepared and lodged accordingly. The company secretary is responsible for maintaining statutory registers and ensuring corporate records are kept up to date. Failure to comply with these requirements can result in penalties, fines, or even the striking-off of the company from the register.
New business owners often underestimate these compliance obligations. Common mistakes include choosing a company name that too closely resembles existing businesses, appointing directors who do not meet residency requirements, or neglecting annual filing duties. While the process may appear straightforward, such oversights can cause serious delays or even expose the company to legal risks.
Engaging a corporate lawyer provides peace of mind and long-term protection. Legal advice ensures that shareholding structures are properly planned, shareholders’ agreements are drafted to prevent disputes, and statutory duties are fulfilled. Lawyers also provide guidance on employment laws, tax compliance, licensing, and governance matters. These safeguards are essential for entrepreneurs who want their business to grow without being hampered by costly legal issues later on.
In summary, incorporating a Private Limited Company (Sdn Bhd) in Malaysia is a clear and structured process under the Companies Act 2016. Yet success lies not only in registration, but also in ensuring compliance and sound corporate governance from the start. By seeking professional assistance, business owners can be confident that their company is built on a strong legal foundation and ready for sustainable growth.
Written by Lawyer Khoo, Ng, Zainurul, Seke & Khoo

Why Domestic Inquiries Matter
When an employee is accused of misconduct—whether it is absenteeism, insubordination, harassment, or theft—many employers react quickly and decisively. Some issue warning letters; others move straight to termination. But under Malaysian employment law, dismissing an employee without giving them the chance to defend themselves can backfire badly.
That is where the domestic inquiry (DI) comes in. A DI is essentially an internal hearing where the employer gives the employee an opportunity to explain and defend themselves before any disciplinary action is taken. It is not a court trial, but it is a formal process that demonstrates fairness. Handled properly, it protects the employer from unfair dismissal claims. Handled poorly, it can undermine the employer’s case completely.

The Legal Foundation
The Industrial Relations Act and case law in Malaysia emphasise the principle of natural justice. This means that before imposing a penalty as serious as dismissal, an employer must give the employee two fundamental rights:
The right to know the charges against them.
The right to be heard before a decision is made.
A domestic inquiry is the mechanism through which these rights are honoured.

Steps to Conducting a Proper Domestic Inquiry
First, the process begins with a show cause letter. This letter sets out the alleged misconduct clearly, with dates, times, and details, and gives the employee a chance to reply. If the reply is unsatisfactory, the employer may proceed to a DI.
Next, the employer must form an impartial panel to hear the case. Ideally, the panel should consist of individuals not directly involved in the incident, to avoid bias.
The employee must then be given adequate notice of the hearing, usually a few days, so they can prepare their defence. They should also be allowed to bring witnesses or documents to support their case.
During the hearing, both sides should be heard. The employer presents the allegations and evidence; the employee has the right to cross-examine witnesses and to make their own representations.
After the hearing, the panel deliberates and issues findings in writing. If the employee is found guilty of misconduct, the employer may decide on the appropriate punishment—ranging from a warning to dismissal.

The Do’s of a Domestic Inquiry
Do keep it impartial: Bias in the panel undermines credibility.
Do document everything: Minutes of proceedings, witness statements, and evidence must be recorded.
Do allow the employee to be heard fully: Cutting them off or refusing witnesses can make the inquiry invalid.
Do follow your own company policies: If the employee handbook specifies procedures, follow them strictly.

The Don’ts of a Domestic Inquiry
Don’t predetermine guilt: The inquiry must be genuine, not a formality before a dismissal already decided.
Don’t rush the process: Allow reasonable time for preparation and response.
Don’t use vague charges: Allegations must be specific and detailed.
Don’t ignore the findings: If the panel finds the employee not guilty, dismissing them anyway risks a strong unfair dismissal claim.

Risks of Skipping or Mishandling a DI
Some employers argue that a domestic inquiry is unnecessary, especially in small companies. But skipping it entirely—or conducting a “paper inquiry” that is not genuine—creates significant risk. The Industrial Court may conclude that the employer denied the employee natural justice. In such cases, even if misconduct was real, dismissal may still be ruled unfair, leading to heavy compensation awards.
Mishandling the process is equally dangerous. An inquiry riddled with bias, missing records, or vague charges will not stand up in court. Instead of protecting the employer, it becomes evidence against them.

Benefits of a Proper Domestic Inquiry
A well-run DI strengthens the employer’s position in several ways. It shows the company acted fairly and reasonably. It creates a documented record of misconduct and the employee’s response. It demonstrates compliance with both the law and the principle of natural justice.
For employees, a DI is equally important. It gives them a chance to tell their side of the story, to present evidence, and to avoid being dismissed unfairly. Even if the outcome is dismissal, the employee knows they were given a fair chance.

Final Thoughts
Domestic inquiries may seem like an administrative burden, but they are in fact a vital safeguard for both employers and employees. For employers, they prevent costly unfair dismissal claims. For employees, they ensure dignity and fairness in the workplace.
The lesson is clear: never treat a DI as a mere formality. Approach it with seriousness, impartiality, and proper documentation. In the long run, the time and effort spent on a proper inquiry will save far more than the cost of defending an unfair dismissal claim.
At its heart, the domestic inquiry is about balance. It is about giving both sides a voice before life-changing decisions are made. And in that sense, it reflects the very spirit of employment law in Malaysia—fairness, justice, and respect for the rights of all.

✍️ Written by Lawyer Khoo, Partner at Ng, Zainurul, Seke & Khoo

Why Employment Contracts Matter
For many small and medium-sized enterprises (SMEs) in Malaysia, employment contracts are often treated as an afterthought. Owners are focused on growing the business, generating sales, and managing daily operations. Legal paperwork sometimes feels secondary. But when disputes arise—whether over termination, salary, or working hours—an unclear or poorly drafted contract can become a company’s biggest liability.
As an employment lawyer, I have seen SMEs face unnecessary claims simply because their contracts lacked clarity or failed to comply with the law. To avoid those costly lessons, here are the top five mistakes SMEs commonly make in employment contracts.

Mistake 1: Using a Generic Template Without Customisation
Many SMEs download a contract from the internet or recycle one from another business, assuming it will “cover everything.” Unfortunately, employment law in Malaysia is specific, and each business has unique needs. A one-size-fits-all template often leaves out key clauses on probation, confidentiality, intellectual property, or termination.
Worse, some templates include terms that directly contradict the Employment Act or Industrial Relations Act. This creates unenforceable provisions that give employees an advantage in disputes. Every SME should tailor contracts to reflect their industry, work arrangements, and legal obligations.

Mistake 2: Failing to Define Job Scope Clearly
Disputes often begin when employees say, “That’s not my job.” A vague job description in the contract leaves room for argument about what duties are expected. Employers may assume flexibility, while employees may assume limits.
A well-drafted contract should set out the role, responsibilities, and reporting lines clearly. While some flexibility is allowed, clarity prevents misunderstandings. This is especially important in SMEs, where employees often wear multiple hats.

Mistake 3: Ignoring Probation and Confirmation Clauses
Probation is a critical period, yet many SMEs fail to spell out its terms properly. Some contracts do not specify the probation period at all; others forget to explain what happens at the end of it.
Without clear clauses, employers risk disputes when an employee assumes they are confirmed automatically. The contract should clearly state the probation duration, the criteria for assessment, and whether confirmation is automatic or subject to employer discretion.

Mistake 4: Overlooking Termination Procedures
One of the most common mistakes SMEs make is treating termination casually. Some contracts say little more than “the employer may terminate at any time.” This is legally dangerous.
Malaysian law requires termination to be based on “just cause and excuse.” Employers must follow proper notice periods, disciplinary procedures, and due process. If a contract fails to outline these requirements, an SME could face an unfair dismissal claim.
A good contract should include notice periods, grounds for summary dismissal (such as serious misconduct), and references to due process such as show cause letters or domestic inquiries. These provisions protect both employer and employee by setting expectations upfront.

Mistake 5: Forgetting About Compliance with the Employment Act
Perhaps the most serious mistake is ignoring statutory law. The Employment Act sets minimum standards on matters such as wages, working hours, rest days, maternity leave, and overtime. Any contract that falls below these minimum standards is invalid.
SMEs sometimes draft contracts that impose longer working hours without overtime, or deny employees their statutory leave. Not only are such provisions unenforceable, they also expose the business to penalties and claims. Compliance is not optional; it is the foundation of every valid employment contract.

The Hidden Costs of Poor Contracts
When these mistakes occur, the costs can be significant. SMEs may face claims at the Industrial Court, orders to pay back wages or compensation, or investigations by the labour authorities. Beyond financial loss, poor contracts can damage employee trust, morale, and the company’s reputation.
The truth is, an employment contract is more than just a formality. It is a roadmap for the working relationship. Done properly, it protects both sides and reduces the risk of disputes.

Best Practices for SMEs
To avoid these pitfalls, SMEs should:
Invest in professionally drafted contracts tailored to their business.
Review contracts regularly to ensure compliance with updated laws.
Be clear about roles, probation, and termination procedures.
Train managers on the importance of following contractual and statutory obligations.
These steps require some effort upfront but save far more in the long run.

Final Thoughts
In the fast-moving world of SMEs, employment contracts may seem like paperwork that slows down growth. But ignoring them is like building a house without a solid foundation—the cracks will eventually show. By avoiding the common mistakes outlined above, SMEs can strengthen their business, protect themselves legally, and build healthier relationships with their employees.
At the end of the day, a well-drafted contract is not just a shield in disputes. It is a sign of professionalism, fairness, and respect—qualities that every successful SME should embody.

✍️ Written by Lawyer Khoo, Partner at Ng, Zainurul, Seke & Khoo

Why Show Cause Letters Matter
In Malaysian employment law, one of the most common mistakes employers make is mishandling misconduct at the workplace. When an employee breaches company rules or displays questionable behaviour, employers often act in haste—either by ignoring the matter or rushing straight to dismissal. Both approaches are risky.
The proper legal step is usually to issue a show cause letter. This letter asks the employee to explain or justify their actions before any disciplinary action is taken. It may look like a simple piece of paper, but in the eyes of the law, a show cause letter is a crucial safeguard for both employer and employee. Done correctly, it demonstrates fairness and due process. Done poorly, it can expose the employer to claims of unfair dismissal.

The Purpose of a Show Cause Letter
A show cause letter is not a punishment in itself. Its purpose is to give the employee an opportunity to be heard. In legal terms, this reflects the principle of natural justice—that no one should be condemned without being given a fair chance to explain.
The letter should clearly state the alleged misconduct, ask for the employee’s explanation, and allow a reasonable timeframe for response. Only after considering the explanation should the employer decide whether further action, such as a domestic inquiry or dismissal, is appropriate.

The Do’s of Issuing a Show Cause Letter
First, be clear and specific. The allegation must be described in sufficient detail—dates, times, places, and actions. A vague statement like “poor behaviour” or “lack of commitment” is not enough.
Second, stick to the facts. The letter should state what happened, not what the employer feels about it. Emotional or judgmental language weakens the letter’s credibility.
Third, allow a fair opportunity to respond. A common standard is 48 to 72 hours, depending on the complexity of the allegations. Employees must have enough time to prepare a proper explanation.
Fourth, follow up properly. Once the response is received, it must be considered genuinely. If the explanation is reasonable, the matter may end there. If not, the employer may proceed to a domestic inquiry or other disciplinary steps.
Finally, keep proper records. Documentation is key in case the matter is later challenged at the Industrial Court.

The Don’ts of Issuing a Show Cause Letter
Do not rush the process. Issuing a show cause letter on the same day as dismissal defeats the entire purpose.
Do not be vague. Without clear allegations, the employee cannot reasonably defend themselves. Courts often criticise letters that lack specific details.
Do not threaten or predetermine guilt. The tone should invite an explanation, not declare the employee guilty in advance. Phrases like “you are guilty of” or “we have decided to dismiss you” should be avoided.
Do not ignore the response. If the employee provides an explanation, the employer must evaluate it seriously. Ignoring it altogether makes the process appear like a sham.
And importantly, do not use the show cause letter as a weapon. It is not meant to intimidate employees or create fear. Its purpose is fairness, not punishment.

Risks of Getting It Wrong
When show cause letters are mishandled, the risks are serious. If the Industrial Court finds that an employee was dismissed without proper due process, the employer can be ordered to pay months or even years of back wages, plus compensation. The cost of an unfair dismissal claim can far outweigh the inconvenience of drafting a proper letter and conducting a fair inquiry.

Why Employees Should Pay Attention
From an employee’s perspective, a show cause letter should not be taken lightly. It is an opportunity to explain and defend yourself. Ignoring it or giving a careless response can make matters worse. A well-drafted explanation, supported by evidence or witnesses, can prevent escalation and even save your job.

Striking the Right Balance
Ultimately, a show cause letter is about balance. It protects the employer by showing that rules are enforced properly, and it protects the employee by ensuring fairness and the right to be heard. It may feel like paperwork, but in reality, it is a cornerstone of workplace justice.
As an employment lawyer, I have seen too many disputes where employers skipped this step or mishandled it, only to face costly claims later. I have also seen employees who ignored their chance to respond, only to regret it after dismissal.
The lesson is simple: handle show cause letters with care. For employers, draft them clearly and fairly. For employees, respond seriously and honestly. When both sides respect the process, the workplace becomes not only more compliant with the law but also more just.

✍️ Written by Lawyer Khoo, Partner at Ng, Zainurul, Seke & Khoo

The First Few Months
For many employees, joining a new company is both exciting and nerve-racking. The first few months—often called the probation period—are a time to prove yourself, adapt to the workplace culture, and show that you are the right fit for the role. For employers, probation is a safety net: a chance to evaluate whether the new hire has the skills, attitude, and reliability that the job demands.
But in Malaysia, the probation period is not just a formality. It carries specific legal rights and obligations. Both employers and employees often misunderstand what probation really means, and that confusion can lead to disputes when things do not go as planned.

What is a Probation Period?
A probation period is a trial stage of employment, usually lasting three to six months, though contracts may specify longer or shorter periods. During this time, the employee is expected to demonstrate competence and commitment. The employer, in turn, monitors performance closely to decide whether to confirm the employee as a permanent staff member.
Despite being on probation, an employee is still considered a regular employee under Malaysian law. The key difference is that confirmation is not automatic—the employer must make a decision at the end of the probation period.

Rights of Employees on Probation
A common misconception is that probationers have no rights. This is not true. Probationary employees are entitled to the same basic protections as confirmed employees. For example, they are covered by the Employment Act (if within the salary threshold) and enjoy rights to wages, leave, and other statutory benefits.
Most importantly, probationers cannot be dismissed arbitrarily. If an employer wishes to terminate a probationary employee for poor performance, the same principles of “just cause and excuse” apply. This means that the employer must show evidence of unsatisfactory performance, provide feedback, and give the employee a fair opportunity to improve.

Employer’s Right to Assess
Employers are not powerless during probation. The whole purpose of probation is to evaluate suitability. Employers may set performance standards, monitor progress, and even extend the probation period if they feel more time is needed for assessment. However, any extension should be reasonable and communicated clearly in writing.
If the employee consistently fails to meet expectations despite guidance and feedback, termination may be justified. But again, the process must be fair and well-documented to avoid legal challenges.

Risks for Employers
The biggest risk for employers is assuming that probation gives them complete freedom to dismiss without consequences. Termination without proper justification can lead to claims of unfair dismissal. Courts in Malaysia have repeatedly emphasised that probationers are entitled to natural justice.
Another risk is failing to document evaluations. If performance issues are not recorded—through appraisals, warning letters, or counselling sessions—the employer may struggle to defend a termination decision later.
Employers also face reputational risks. Treating probationers unfairly can damage morale among existing staff and harm the company’s reputation in the job market.

Risks for Employees
For employees, the main risk is uncertainty. Until confirmation, job security is weaker. Employers may decide not to confirm employment if performance is lacking. In some cases, employees are kept in extended probation, which can be demoralising.
Another risk is misunderstanding rights. Some probationers accept termination quietly, not realising they may have grounds to challenge the decision. Others assume confirmation is automatic, only to be disappointed when the employer chooses otherwise.

Best Practices for Employers
Set clear performance expectations from day one.
Conduct regular reviews and provide constructive feedback.
Document performance issues and keep records of discussions.
Communicate decisions—confirmation, extension, or termination—in writing.
Treat probationers with the same respect and fairness as confirmed employees.

Best Practices for Employees
Understand the terms of your probation contract, including duration and evaluation criteria.
Take feedback seriously and show willingness to improve.
Keep records of your achievements and any communications about performance.
If faced with unfair treatment, seek advice before making decisions.

Final Thoughts
The probation period is meant to benefit both sides: employers gain time to evaluate, and employees get the opportunity to demonstrate their worth. But in Malaysia, the law makes it clear that probation is not a free pass for arbitrary dismissal. Rights and obligations apply from the first day of work, regardless of whether an employee is confirmed.
For employers, the message is simple: fairness and documentation are your strongest protections. For employees, awareness of your rights is essential to avoid being taken advantage of.
Ultimately, probation is not about mistrust—it is about building trust. When handled properly, it sets the stage for a stronger and more confident employment relationship for both employer and employee.

✍️ Written by Lawyer Khoo, Partner at Ng, Zainurul, Seke & Khoo

The Confusion
In the workplace, not all departures are the same. Sometimes employees resign willingly to pursue new opportunities. Other times, they feel they have no choice but to leave because of the employer’s actions. The law treats these two situations very differently. Many employees are uncertain about whether their case amounts to a simple resignation or what is legally known as “constructive dismissal.”
Understanding the difference is crucial, because it can mean the difference between walking away empty-handed and successfully claiming compensation for unfair dismissal.

What is Resignation?
Resignation is straightforward: it is a voluntary act. An employee decides to leave the company, usually by giving notice as required in their contract. The reasons may vary—better job offers, career change, personal circumstances, or dissatisfaction with the role—but in the eyes of the law, resignation means the employee made the decision freely.
When you resign, you typically give up the right to challenge the termination. You are essentially ending the contract yourself. Unless there is evidence of coercion or legal exceptions, resignation closes the chapter.

What is Constructive Dismissal?
Constructive dismissal happens when an employee resigns, but not because they truly want to. Instead, they resign because the employer has made the working conditions so unbearable or has fundamentally breached the employment contract that the employee has no real option but to leave.
The law in Malaysia views constructive dismissal as a form of unfair dismissal, even though the resignation letter comes from the employee. In other words, if you were forced to resign because of your employer’s conduct, the law treats it as if you were dismissed by the employer.

Examples of Employer Conduct Leading to Constructive Dismissal
Constructive dismissal is not about ordinary dissatisfaction or minor disagreements. It requires serious conduct by the employer, such as:
A sudden and unilateral pay cut.
Demotion without valid reason.
Drastic change of job scope without consent.
Persistent harassment or victimisation.
Creating a hostile or unsafe work environment.
The key point is that the employer’s actions must amount to a fundamental breach of trust and confidence in the employment relationship.

The Legal Test
When assessing constructive dismissal, Malaysian courts often ask: Did the employer’s actions breach an essential term of the contract or the implied duty of mutual trust and confidence? And was the employee left with no real alternative but to resign?
If the answer is yes, the resignation may be treated as constructive dismissal. The employee can then bring a claim for unfair dismissal under the Industrial Relations Act.

The Fine Line
The challenge lies in the fine line between resignation and constructive dismissal. An employee who resigns simply because they are unhappy, stressed, or not getting along with a manager may not have a case. The law requires evidence of serious employer misconduct.
Timing is also important. If you continue working for months after the alleged breach, it may appear that you accepted the employer’s conduct. To succeed in a claim, the resignation must usually follow soon after the intolerable act.

Practical Advice for Employees
If you feel you are being pushed out, do not rush to resign. First, document what is happening—keep records of emails, instructions, or changes to your role. Second, seek legal advice before handing in your resignation letter. Once you resign, the burden is on you to prove constructive dismissal. Without clear evidence, it will be difficult to succeed.
If you are certain that your employer’s actions amount to a breach, you may resign and file a claim. But remember, constructive dismissal cases are complex and fact-specific. Professional advice can help assess whether your case has merit.

Practical Advice for Employers
For employers, the lesson is to handle workplace changes carefully and fairly. Do not unilaterally alter contracts, salaries, or job scopes. If changes are necessary, communicate transparently and seek the employee’s agreement.
Employers should also be alert to patterns of harassment or discrimination within the organisation. Turning a blind eye can lead to claims that could have been avoided with proper HR practices.

Closing Thoughts
Resignation and constructive dismissal may look the same on the surface—both involve an employee handing in a resignation letter. But legally, they are worlds apart. One is a voluntary act; the other is a forced departure that can amount to unfair dismissal.
For employees, knowing the difference can protect your rights. For employers, understanding the boundaries can prevent costly disputes. In the end, the law aims to ensure fairness in the workplace, because employment is not just about contracts and pay—it is about trust, dignity, and mutual respect.

✍️ Written by Lawyer Khoo, Partner at Ng, Zainurul, Seke & Khoo

Imagine this: you have been working in a company for several years, and suddenly you are told that your performance is not up to standard. Without much discussion, you are handed a termination letter. For the employer, this may seem like a reasonable step—why keep an employee who is “underperforming”? But for the employee, the experience feels unfair and devastating. The question then arises: what does Malaysian employment law actually say about termination for poor performance?
In Malaysia, the law requires that every termination must be supported by “just cause and excuse.” Poor performance can, in principle, amount to a valid reason. However, the courts have consistently held that it is not enough for an employer to simply label an employee as “not good enough.” The employer must be able to prove the allegation and show that a fair process has been followed before arriving at the decision to terminate.
A fair process usually begins with clear communication. Employees must know what is expected of them, whether through job descriptions, performance targets, or key performance indicators. Vague or inconsistent instructions will not hold up if a dispute reaches the Industrial Court. Employers must also provide proper feedback and warnings when performance falls short. A single incident of poor output is seldom enough to justify termination; the law expects employers to give employees time and guidance to improve.
This is where performance reviews or improvement plans come into play. A responsible employer will document counseling sessions, set timelines for improvement, and give employees a genuine chance to correct their weaknesses. Only after such opportunities have been exhausted would termination be considered fair. Importantly, the employee should also be given a chance to respond or explain their side of the story. This is part of the principle of natural justice, which lies at the heart of employment law.
Unfortunately, many employers stumble at this stage. Some act too quickly, terminating without prior warnings or without documenting the performance issues. Others rely on subjective judgments—such as saying an employee is “lazy” or “not committed”—without concrete evidence. These missteps often lead to costly unfair dismissal claims, where the employer may be ordered to pay significant compensation.
From the perspective of employees, it is equally important to know your rights. If you are terminated for poor performance, you should ask yourself whether your employer gave you clear expectations, whether you received proper warnings, and whether you were given a fair chance to improve. If the answer to these questions is “no,” you may have grounds to challenge the dismissal and seek redress.
Termination for poor performance remains one of the most common issues in Malaysian employment disputes. The lesson is clear: employers must ensure that termination decisions are backed by evidence and fairness, while employees must understand that they cannot be dismissed arbitrarily. At its core, employment law is about striking a balance between performance expectations and the dignity of workers.
As an employment lawyer, I have seen how disputes over performance can leave lasting scars on both sides. For employers, it is a reminder to act carefully and fairly. For employees, it is a reassurance that the law provides protection when dismissal is unjust. Ultimately, good communication and fair processes are the best safeguards for both parties, ensuring that the workplace remains not only productive but also just.

✍️ Written by Lawyer Khoo, Partner at Ng, Zainurul, Seke & Khoo

Our firm recently achieved a decisive victory in a high-stakes commercial dispute involving allegations of conspiracy, breach of fiduciary duty, fraud, forgery, unlawful competition, and unjust enrichment. The case centred on a situation many businesses face: when key employees resign and later join or establish a competing company, where does fair competition end and unlawful conduct begin?
The plaintiff company claimed that our clients, who had previously served in managerial, operational, and technical roles, conspired to divert business opportunities and customers to new ventures while still employed. It further alleged forgery of documents, unlawful termination of a major service contract, and misuse of confidential information.
From the outset, our strategy was to present a clear, evidence-based defence. We demonstrated that our clients’ employment had in fact been terminated well before the disputed events, with contemporaneous termination notices, WhatsApp messages, and even admissions by the plaintiff’s own director supporting this. While the plaintiff pointed to continued EPF and SOCSO contributions as proof of ongoing employment, the Court accepted our argument that statutory contributions alone are not conclusive without proper salary slips or records.
On the issue of conspiracy, the Court agreed with our submissions that suspicion and timing alone are insufficient. Allegations of conspiracy require clear and convincing evidence of an actual agreement to cause harm, which was lacking in this case. The forgery claim also failed when evidence showed that our clients had authorised access to the company’s digital stamp and signature, with the director himself conceding that such use had been permitted.
A key part of the plaintiff’s case involved the termination of a major corporate customer contract, which it alleged was done unlawfully to benefit a new company. We successfully proved that the termination had been authorised by the plaintiff’s own director, corroborated by WhatsApp communications. The Court accepted this position, dismissing the allegation of unlawful interference.
Ultimately, the Court dismissed all claims against our clients, holding that fiduciary duties end upon termination of employment and that their later actions were legitimate business competition. The plaintiff’s wide-ranging claims of conspiracy, fraud, unlawful interference, unjust enrichment and dishonest assistance were all rejected, and costs were awarded in our clients’ favour.
This judgment highlights important lessons for businesses: fiduciary duties exist only during employment unless expressly extended by contract; employers must keep clear records of terminations and salary payments; and serious allegations like conspiracy and fraud must be backed by strong, contemporaneous evidence.
For our firm, the case reflects our commitment to rigorous preparation, strategic defence, and protecting our clients’ interests in complex commercial disputes.
If your company is facing allegations of breach of fiduciary duty, conspiracy, or unlawful competition or if your business is affected by mass resignations and client diversion our experienced team is ready to assist.
Contact us today for a confidential consultation and let us help you safeguard your business and reputation.

Our firm recently acted for a company in the manufacturing sector in a claim against a former senior employee who resigned abruptly to join a direct competitor. The case involved allegations of breach of employment contract, breach of confidentiality, misuse of company information, and unlawful interference with trade.
The employee had worked with the company for several years before resigning suddenly and paying salary in lieu of notice. On the very day of her resignation, she joined a competitor led by a former industry player. Following her departure, the company discovered that large volumes of business emails, quotations, order forms, vendor registrations, and customer lists had been deleted from her work computer. The company also found that the work phone’s SIM card had been returned in a damaged state, preventing access to customer data. Despite repeated requests, she failed to conduct a proper handover and only later admitted to retaining customer contacts.
We presented evidence that the employee had not only failed to return company property but also used confidential customer information to approach clients for her new employer, thereby interfering with the company’s business. Forensic IT analysis confirmed large-scale deletion of crucial records just days before her resignation.
The High Court found in our client’s favour, holding that the employee had indeed breached her employment contract and confidentiality obligations, and had unlawfully interfered with the company’s trade. The Court reaffirmed that an employee’s duty of confidentiality continues even after resignation, especially when sensitive client information is involved.
While the company’s claim for millions in lost profits was not fully allowed, the Court awarded a mandatory injunction compelling the return of all company property, special damages for IT forensic costs, and exemplary damages as a deterrent to similar misconduct. In total, our client was awarded RM100,000 in damages and RM50,000 in costs, with interest.
This case underscores a vital lesson: confidential business information belongs to the company, not the employee, and courts will protect employers against the misuse of such information by departing staff. Employers should also ensure robust handover procedures, digital security measures, and properly communicated employee handbooks to minimise risks.
At our firm, we have extensive experience representing businesses in employee misconduct claims, breach of fiduciary duty, trade secret protection, and unlawful competition disputes. If your business is facing challenges from employees who resign and join competitors, we can help you safeguard your interests and pursue remedies through the courts.
📞 Contact us today for a confidential consultation to protect your business from employee misconduct and unfair competition.
Written By Lawyer Khoo

在一项具有重要意义的裁决中，马来西亚上诉法院在 ACE Holdings Bhd 诉 Norahayu Rahmad & Anor [2023] 6 CLJ 159 案中确认，即使员工在不公平解雇申诉中未明确请求复职，工业法庭仍然有权审理该案。该裁决澄清了雇主常提出的程序性抗辩，并强调了员工依法获得救济的权利。
背景
根据《1967 年工业关系法》第 20(1) 条，若员工认为自己遭到不公正解雇，可向工业关系总监（Director General，简称 DG）提出申诉，要求复职。如果雇主与员工无法和解，总监会将该申诉移交至工业法庭（Industrial Court）。
员工随后需提交案件陈述，说明事实和理由，说明解雇为何不公，并通常载明所寻求的救济方式，例如复职、代替复职的赔偿金以及追溯工资。
在本案中，员工仅请求金钱赔偿，并未在案件陈述中请求复职。
工业法庭与高等法院裁决
ACE Holdings Bhd 提出程序性异议，主张因员工未请求复职，工业法庭对该案件没有审理权限。工业法庭支持了该异议，并以无权审理为由驳回员工的申诉。
员工随后向高等法院申请司法审核。高等法院允许该申请，并撤销工业法庭的裁决。法院认为，未请求复职并不致命，因为是否复职属工业法庭自由裁量权范围内。同时，既然申诉已被依法移交至工业法庭，该法庭有责任就案件实体内容作出裁决，而不是仅根据程序异议将案件驳回。
上诉法院裁决
上诉法院支持高等法院的裁决，并进一步确认，即使员工仅寻求金钱赔偿，依然有权继续在工业法庭进行诉讼。法院指出，未请求复职不应导致工业法庭丧失审理权。
ACE Holdings 引用联邦法院在 Unilever (M) Holdings Sdn Bhd v So Lai 一案中的判例作为抗辩。然而，上诉法院认为，Unilever 案与当前案件事实不同。Unilever 案的关键在于员工已达退休年龄，无法复职，因此法院裁定无法给予复职替代赔偿。而本案关注的问题则是，若员工未请求复职，工业法庭是否仍有权审理该案。
此外，上诉法院重申其在 Sanbos (Malaysia) Sdn Bhd v Gan Soon Huat [2021] 6 CLJ 700 一案中的判决，指出一旦人力资源部长（或修法后由总监）将申诉移交至工业法庭，工业法庭便有义务审理案件，即使员工未请求复职。
上诉法院亦驳回雇主的担忧，即若允许仅请求金钱赔偿的案件进入工业法庭，可能造成申诉泛滥。法院强调，工业法庭本就是设立来专门处理员工不公解雇纠纷的机构，因此不能以程序技术为由限制其功能。
合并审理程序性异议与实体问题
法院进一步指出，程序性异议与案件实体应一并审理并作出统一裁决，避免因分阶段处理导致诉讼拖延。这种“合并审理”方式既节省时间和费用，又可防止雇主破产或员工因诉讼疲劳而被迫放弃诉讼所造成的不可挽回的损害。
法律修订的实际影响
虽然本案引用的是已废除的第 20(3) 条（即人力资源部长有酌情权移交案件），但该裁决依然适用于2021年1月1日起修订生效的新法。新法明确规定：若总监认为无法和解申诉，必须将案件移交至工业法庭。
因此，法院的裁决同样适用于经总监移交的案件。若因员工未请求复职就否定法院审理权，将会违背修法意图，并削弱员工依法获得救济的权利。
结语
本案明确指出，即使员工未请求复职，只要求赔偿，工业法庭依然有权审理申诉。这是对员工基本劳动权益的有力保障，也体现了司法机关对《工业关系法》立法宗旨的尊重：为不公正解雇的员工提供快速、公正、实质性的救济渠道。