Employment & Labour

In a significant decision that reaffirms the employee’s right to access justice under the Industrial Relations Act 1967, the Court of Appeal in ACE Holdings Bhd v Norahayu Rahmad & Anor [2023] 6 CLJ 159 held that an employee’s failure to explicitly seek reinstatement in a claim for unjust dismissal does not strip the Industrial Court of jurisdiction. This ruling addresses a frequently raised procedural objection by employers and provides clarity on how unjust dismissal claims should be adjudicated.
Background
Under Section 20(1) of the Industrial Relations Act 1967, an employee who believes they have been unjustly dismissed may file a representation with the Director General of Industrial Relations (DG) seeking reinstatement. If no amicable resolution is reached, the representation is referred to the Industrial Court.
At the Industrial Court, employees must file a statement of case outlining the facts and arguments supporting their claim. This typically includes the remedies sought—either reinstatement, compensation in lieu of reinstatement, or back wages. However, in this case, the employee sought only monetary relief and did not plead for reinstatement.
Industrial Court & High Court Decisions
ACE Holdings Bhd, the employer, raised a preliminary objection claiming that because the employee did not seek reinstatement in her statement of case, the Industrial Court had no jurisdiction to hear the matter. The Industrial Court agreed and dismissed the claim on that basis.
The employee then sought judicial review in the High Court, which quashed the Industrial Court’s decision. The High Court held that the absence of a reinstatement plea was not fatal to the claim, and that the Industrial Court was still obligated to hear the claim on its merits. The Court emphasized that it is within the adjudicator’s discretion to award reinstatement—or not—regardless of how the relief is pleaded.
Court of Appeal Decision
The Court of Appeal upheld the High Court’s decision, confirming that employees may proceed with unjust dismissal claims even if they are only seeking monetary compensation. The Court held that failure to request reinstatement does not divest the Industrial Court of its jurisdiction once the matter has been referred by the DG.
ACE Holdings had relied on the Federal Court’s decision in Unilever (M) Holdings Sdn Bhd v So Lai, arguing it was binding. However, the Court of Appeal distinguished the two cases. In Unilever, the issue was whether compensation could be granted in lieu of reinstatement where reinstatement was no longer possible (due to the employee’s retirement). The Court of Appeal clarified that in this case, the question was whether a claim can be heard at all in the absence of a reinstatement plea—an entirely separate issue.
The Court also reaffirmed its previous decision in Sanbos (Malaysia) Sdn Bhd v Gan Soon Huat [2021] 6 CLJ 700, stating that once a representation is referred to the Industrial Court, the court is duty-bound to hear the claim, even if reinstatement is not pursued. It rejected the employer’s concern that allowing monetary-only claims would flood the system, asserting that the Industrial Court is a specialized forum designed to resolve employment disputes, including claims that seek compensation in lieu of reinstatement.
Joint Hearing Approach Encouraged
Another important procedural point raised was that preliminary objections and the merits of a claim should be heard together. The Court of Appeal emphasized that deciding jurisdictional issues separately may delay proceedings unnecessarily, defeating the objectives of the Industrial Relations Act, which aims to resolve disputes quickly and economically. A joint hearing approach would be more efficient, saving legal costs and protecting employees from litigation fatigue or prejudice due to delays—such as employer insolvency.
Practical Implications of Amendments to the Act
Although the case referred to the ministerial referral process under the now-repealed Section 20(3), the decision remains relevant after the 2021 amendments to the Act. Since 1 January 2021, the referral of representations to the Industrial Court is mandatory once the Director General is satisfied that settlement is unlikely. Thus, the Court of Appeal’s decision reinforces the importance of substantive justice over procedural technicalities in both pre- and post-amendment contexts.
Conclusion
This ruling is a clear message that procedural omissions—such as failing to plead for reinstatement—do not invalidate an employee’s right to have their claim heard in the Industrial Court. It underscores the purpose of Section 20: to protect employees from unjust dismissal and to ensure access to remedies, whether reinstatement or compensation.
Please contact Lawyer Khoo at [email protected]

在马来西亚的劳动法实践中，“构造性解雇”（Constructive Dismissal）依然是争议频发的焦点，尤其是在涉及员工调动的案件中更为常见。近期上诉法院在 Saharunzaman Barun 诉 Perodua Sales Sdn Bhd 与其他上诉案 [2025] CLJU 3 一案中作出的判决，明确提醒雇主：员工调动必须在原有雇佣合同框架内进行，否则可能构成法律上的违约和构造性解雇。

案件背景
此案涉及三名在 Perodua Sales Sdn Bhd 服务时间介于9至22年的资深员工。公司通知他们，其所在分行将由 Nagoya Automobile Malaysia (NAM) 接管，并要求他们接受 NAM 提供的两年期固定合同，等同于终止原有的永久雇佣关系。
三名员工对此表示强烈反对。然而，雇主坚持要求他们接受安排，并于 2017年9月27日 向他们发出调动通知，命令他们在 三天内报到，地点分别是远在亚庇（Kota Kinabalu）、古晋（Kuching）和瓜拉登嘉楼（Kuala Terengganu）。三人提出希望调往较近的地点但被拒绝后，公司于2017年10月9日向他们发出“解释信”（show-cause letter），指控他们违抗命令。
最终，三名员工在 2017年10月24日 宣布视自己为被构造性解雇，并向工业关系局（Director General of Industrial Relations）提出申诉。

法律争议焦点
本案的核心法律问题在于：雇主的调动安排是否构成了对雇佣合同的根本性违反，从而使员工有权提出构造性解雇主张？

上诉法院的判决
上诉法院裁定支持员工方，认为 Perodua Sales Sdn Bhd 的行为已经构成对雇佣合同的根本性违约。法院指出，雇主未能维持员工原有的雇佣条件，而是单方面强行更改雇佣条款，强迫员工放弃“永久职”身份，转而接受一个没有保障的“定期合同”，严重侵犯员工权益。
此外，法院驳回了“其他员工也接受了调动，所以这三人也应该接受”的抗辩理由。法院认为，这种以集体行为合理化个体权益受损的做法并不成立，特别是当雇主的行为已表现出不愿继续受原雇佣合同约束的意图时，员工选择解除合同并提出构造性解雇是合理的。
法院同时强调，三天内报到至远地分行的要求极不合理，对于员工的家庭生活、居住安排等个人因素毫无顾及，这种“突如其来的远距调动”构成了对合同义务和诚信原则的严重破坏。

案件结论
上诉法院最终认定，雇主试图单方面改变雇佣条款的行为构成违约，三名员工有充分理由视此为构造性解雇，并依法终止原雇佣关系。

雇主应吸取的关键教训
员工调动必须符合同意与原有合同条款：任何涉及转岗、异地调任或合同性质更改的安排，必须基于原雇佣协议，并取得员工同意。强行由“永久工”转为“定期合同”，极可能被视为构造性解雇。
提供合理预告期和配套支持：若确需异地调动，应提前给予合理的时间及必要的协助，不能以极短时间要求员工跨州上岗，必须充分尊重员工的实际情况。
设立透明的员工申诉机制：建立和维持正式的内部沟通与申诉渠道，有助于在问题初期解决分歧，避免因程序瑕疵引发不必要的法律纠纷。

结语
员工调动是一项敏感且需谨慎处理的管理措施，稍有不当，就可能引发构造性解雇的风险。雇主应在合法合约框架内进行人事安排，确保流程合规、沟通到位，以维护企业声誉与劳资关系的长期稳定。
如需进一步了解雇佣法律事务，或面临与员工调动、解雇相关的法律问题，欢迎联系邱律师（Lawyer Khoo）：[email protected]。

In Malaysian employment law, constructive dismissal remains a highly litigated area—particularly in cases involving employee transfers. The recent Court of Appeal decision in Saharunzaman Barun v Perodua Sales Sdn Bhd & Other Appeals [2025] CLJU 3 serves as an important reminder that employers must manage transfers within the boundaries of the employment contract. This case involved three long-serving employees who challenged their transfer instructions, eventually claiming they were constructively dismissed.
Facts of the Case
The dispute arose when three employees of Perodua Sales Sdn Bhd, each with between 9 and 22 years of service, were informed that Nagoya Automobile Malaysia (NAM) would be taking over the operations of their respective branches. NAM offered each employee a two-year fixed-term contract, effectively ending their permanent employment status.
The employees objected, but Perodua Sales insisted that they accept the offer, issuing a Notice of Transfer on 27 September 2017, which required them to report to distant branches—specifically in Kota Kinabalu, Kuching, and Kuala Terengganu—within three days. After their appeals for nearby transfers were denied, show-cause notices were issued to them on 9 October 2017, accusing them of insubordination.
Ultimately, the employees treated themselves as constructively dismissed on 24 October 2017 and lodged a claim with the Director General of Industrial Relations.
Legal Issue
The central issue before the Court of Appeal was whether the transfer arrangement constituted a fundamental breach of the employment contract, thereby justifying the employees’ claim of constructive dismissal.
Court of Appeal’s Decision
The Court of Appeal ruled in favour of the employees, holding that Perodua Sales Sdn Bhd’s actions amounted to a fundamental breach of the employment contract. Instead of facilitating a legitimate transfer while preserving the employees’ existing rights, the employer attempted to unilaterally change the terms of employment. The Court found it unacceptable that the employees were forced to resign from their permanent roles and accept fixed-term contracts with no guarantee of continued employment—either with NAM or Perodua.
The Court also rejected the argument that the employees were bound to accept the transfers simply because other staff had done so. The employer’s conduct demonstrated an intention not to be bound by the original terms of the employment contract, thereby justifying the employees’ decision to walk away and claim constructive dismissal.
Moreover, the extremely short three-day notice to report to distant locations was deemed wholly unreasonable, particularly given the significant personal and logistical impact such relocations would entail.
Conclusion
The Court concluded that the employer had breached the employment contracts by attempting to change the employees’ terms unilaterally, and the employees were justified in treating themselves as constructively dismissed.
Key Takeaways for Employers
Transfers Must Comply with Employment Contracts: Employers must ensure that any internal transfers or secondments are in accordance with the original terms of employment. Changes such as a move from permanent to fixed-term status, especially without consent, can constitute constructive dismissal.
Provide Adequate Notice and Support: Transfers to distant branches must be reasonable, with sufficient notice and genuine consultation with the affected employees.
Grievance Procedures Are Crucial: Employers should implement and maintain transparent grievance mechanisms to address employee concerns early and prevent disputes from escalating into legal claims.

By respecting the contractual rights of employees and managing transfers responsibly, employers can minimize the risk of constructive dismissal claims and ensure better employee relations.
For legal advice or further information on employment disputes, please contact Lawyer Khoo at [email protected].

在马来西亚，解雇员工并非雇主的“随意决定”，而是受到《1967年工业关系法令》（Industrial Relations Act 1967）严格规管。根据该法令第20条（Section 20），若员工被雇主以无正当理由解雇，即构成不公平解雇（Unfair Dismissal），员工有权依法提出申诉，寻求复职或赔偿。尽管许多员工在遭遇突如其来的解雇后感到无助，但了解相关法律条文与程序，是保障自身合法权益的第一步。
一、不公平解雇的定义与常见形式
所谓“不公平解雇”，是指雇主在没有**正当理由（Just Cause）或未遵循正当程序（Due Inquiry）**的情况下，单方面解除与员工之间的雇佣关系。根据工业法庭的多项裁决，不公平解雇包括但不限于以下情形：
1. 无解释或通知即被解雇：员工被口头或书面通知即刻离职，但雇主并未提供解雇理由或证据。
2. 纪律处分程序不完整：即使存在某种违规行为，雇主也未给予书面警告、调查或申诉机会。
3. 绩效评估不透明：以“绩效差”为由开除员工，但缺乏量化标准或没有正式评估记录。
4. 滥用试用期或合约条款：以试用期为借口规避程序性正义，例如未提供培训或目标却解雇员工。
5. 带有歧视或报复性质的解雇：员工因投诉性骚扰、申请病假、参与工会活动或报告职场不当行为而被“秋后算账”。
在马来西亚，所有员工（包括合同工、临时工与试用期员工），只要受雇关系确立，均享有《工业关系法令》下的不被任意解雇的保护。
二、《1967年工业关系法令》第20条（Section 20, IRA 1967）详解
Section 20 是马来西亚劳工法中最常被引用的条文之一。该条款明确规定：“任何雇员若认为自己遭到不公平解雇，有权在解雇之日起60天内，向工业关系局提出申诉。”
此申诉程序的基本流程如下：
• 第1步：提交投诉
员工必须填写并提交“Section 20 表格”，列明被解雇的日期、理由以及不服的原因，连同相关证据（如解雇信、电邮记录等）。
• 第2步：协调会议（Conciliation Meeting）
工业关系局会召集雇主与雇员进行协调，尝试达成和解，避免进入诉讼程序。
• 第3步：提交工业法庭
若协调失败，案件将由人力资源部长决定是否提交工业法庭审理。若进入法庭程序，将由法官审查证据，并裁定是否构成不公平解雇。
重要提示：员工必须在60天内提出申诉，逾期将可能失去救济机会。因此，任何被解雇的员工应立即咨询律师，避免错失法律窗口。
三、真实案例解析：不公平解雇如何界定？
以下是两个具代表性的案例，有助于理解马来西亚法院如何判定解雇是否公正：
案例一：没有绩效记录却指控员工“表现差”
某技术员在公司任职两年，因业务重组被解雇。雇主声称其表现不达标，但无法出示年度评估记录、警告信或改善计划。工业法庭裁定雇主未提供“正当理由”，违反程序正义，判雇主赔偿员工12个月工资。
案例二：试用期员工投诉职场霸凌被解雇
一名试用期行政人员在向管理层举报同事霸凌后数日，被通知“不适合公司文化”而被解雇。工业关系局认定此为“报复性解雇”，转介至法庭审理后，最终雇主同意支付6个月薪资作为和解金。
此类案例显示，即使是试用期员工，也享有劳动法律保护，不得任意解雇。
四、雇主必须遵循的解雇程序
根据马来西亚劳工法律规定，合法解雇必须具备两个条件：
1. 正当理由（Just Cause）：如员工严重违纪、持续绩效不达标、组织结构重组等。
2. 正当程序（Due Process）：包括给予员工解释机会、发出警告信、进行内部调查（Domestic Inquiry）等。
若雇主跳过上述程序，即使理由“听起来合理”，也可能因程序瑕疵被判违法。
五、如果您怀疑自己被不公平解雇，应怎么做？
如果您怀疑自己遭遇了不公平解雇，请立刻采取以下步骤：
• 收集证据：包括书面解雇通知、电邮、聊天记录、绩效报告、同事证词等。
• 保持冷静并保留沟通记录：切勿情绪性辞职或冲突回应。
• 在60天内申诉：向工业关系局提出Section 20投诉。
• 咨询专业律师：尤其在涉及歧视、骚扰、假裁员等复杂情况下。
本律所建议任何收到解雇信的员工，都应在第一时间进行法律咨询，评估解雇是否合规，并探索复职、赔偿或和解选项。
六、总结：知法懂权，捍卫职场尊严
不公平解雇是马来西亚劳资关系中常见却被低估的问题。许多员工因不了解《工业关系法令》第20条的申诉机制，而放弃维权机会。反之，雇主若未遵守法律程序，则可能面临高额赔偿与声誉损失。了解与应用相关法律，不仅能保障员工的基本权益，也有助于企业建立合法、透明的人力资源管理体系。
若您或您的家人、同事正在经历疑似不公平解雇，欢迎联系本律所。我们专注于马来西亚劳工法事务，致力于为员工提供明确、实用与具策略性的法律建议。

Legal Process for Unfair Dismissal Claims In Malaysia, an employee who believes they were unfairly dismissed can file a complaint with the Industrial Relations Department. Here’s an overview of the process: Filing a Representation: The employee must file a representation for reinstatement under Section 20 of the Industrial Relations Act 1967 within 60 days of the dismissal. The request for reinstatement must be submitted to the Industrial Relations Department. Conciliation Meeting: The Industrial Relations Department will arrange a conciliation meeting between the employer and employee to resolve the matter amicably. If both parties reach an agreement, the claim is settled without further action. Referral to the Industrial Court: If conciliation fails, the case is referred to the Industrial Court, where it will be adjudicated. The court examines evidence from both parties, including documentation of the reasons for dismissal and any procedures followed .Court Decision: The Industrial Court may order reinstatement of the employee or compensation if it finds that the dismissal was unfair. Compensation is typically calculated based on the employee’s length of service and other relevant factors.Employer Responsibilities to Avoid Unfair Dismissal ClaimsTo minimize the risk of unfair dismissal claims, employers should follow best practices in termination and disciplinary actions:Establish Clear Grounds for Dismissal: Ensure there is a valid reason for dismissal, such as documented poor performance or verified misconduct.Follow Due Process: Conduct a fair investigation and hold a due inquiry if the dismissal is related to misconduct. Allow the employee to present their defense, and document all proceedings thoroughly.Adhere to Retrenchment Guidelines: In cases of retrenchment, apply fair selection criteria, provide adequate notice, and offer retrenchment benefits as required under Malaysian law.Avoid Discriminatory Practices: Ensure that termination decisions are based on objective criteria and not influenced by discriminatory factors like race, religion, or gender.Consult Legal Advice: If unsure about termination procedures, seek legal consultation to ensure compliance with Malaysian employment laws and reduce potential risks.Employee Rights in Unfair Dismissal CasesEmployees have several rights under Malaysian law when facing potential unfair dismissal:Right to Reinstatement or Compensation: The Industrial Court may order either reinstatement or compensation if it finds that the dismissal was unfair.Right to a Fair Hearing: Employees accused of misconduct are entitled to a fair inquiry, where they can defend themselves and present evidence.Right to Seek Redress: Employees can file for unfair dismissal within 60 days if they believe they were dismissed without valid cause.Right to Legal Representation: Employees may seek legal representation to strengthen their case and ensure they receive fair treatment.How Our Law Firm Can Assist with Unfair Dismissal MattersAt Ng, Zainurul, Seke & Khoo, we provide comprehensive support to both employers and employees in navigating unfair dismissal claims:For Employers: We assist in reviewing dismissal procedures, conducting fair inquiries, and ensuring legal compliance to minimize risks. Our team can help draft show-cause letters, guide you through retrenchment exercises, and represent you in the Industrial Court if a claim arises.For Employees: If you believe you have been unfairly dismissed, we can help assess your case, guide you through the claim process, and provide representation in the Industrial Court to secure fair treatment.ConclusionUnfair dismissal is a serious matter that can lead to costly legal consequences and damage to a company’s reputation. By following fair practices and legal guidelines, employers can avoid these risks and maintain a positive work environment. For employees, understanding your rights is crucial to ensuring fair treatment in the workplace.For expert guidance on unfair dismissal claims or other employment-related issues, contact Ng, Zainurul, Seke & Khoo. Our experienced team is here to protect your interests and help you navigate Malaysian employment law with confidence.

How to Conduct Retrenchment in Malaysia: A Step-by-Step Guide for Employers

Retrenchment is sometimes necessary for businesses facing financial constraints, restructuring, or downsizing, but it must be conducted fairly and in compliance with Malaysia’s labor laws. A poorly executed retrenchment process can expose employers to legal risks and claims of unfair dismissal. Here’s a guide to conducting retrenchment in Malaysia, following best practices and the latest legal requirements to ensure a fair and compliant process.

What is Retrenchment?
Retrenchment involves terminating employees due to reasons unrelated to performance or misconduct, usually for organizational or economic reasons. In Malaysia, retrenchment is governed by the Employment Act 1955, the Industrial Relations Act 1967, and guidelines from the Ministry of Human Resources (MOHR). Employers must follow a structured approach to protect both their legal standing and the welfare of their employees.

Key Steps to Conducting Retrenchment in Malaysia
Step 1: Establish the Need for Retrenchment
Document the Business Rationale: Before initiating retrenchment, ensure you have a valid business reason, such as financial challenges, technological shifts, or restructuring needs.
Evidence Collection: Keep comprehensive records, such as financial reports and strategic plans, to justify the decision if it is later questioned.
Step 2: Apply Fair Selection Criteria and LIFO Principle
Selection Criteria: Create a fair, transparent selection process. The “Last-In, First-Out” (LIFO) principle is widely recommended, which gives priority to long-serving employees.
Document Exceptions to LIFO: If exceptions are made (e.g., retaining employees with specialized skills), document the reasoning to avoid claims of discrimination.
Step 3: Consider Alternatives to Retrenchment
Explore all alternatives before proceeding with retrenchment. The Code of Conduct for Industrial Harmony recommends considering options like:

Reduced Working Hours: Temporarily adjust work hours to maintain employment.
Pay Cuts: Implement pay reductions as an interim measure.
Voluntary Separation Scheme (VSS): Offer a VSS for employees to voluntarily resign with compensation.
Step 4: Notify Relevant Authorities
Ministry of Human Resources Notification: For retrenchment exercises involving five or more employees in a month, submit the Employment Retrenchment Notification (ERF) form to MOHR at least 30 days prior to the retrenchment date. Failure to notify can result in penalties.
Step 5: Communicate with Employees
Transparent Communication: Notify employees in writing, providing adequate notice as per their contracts or, at a minimum, the Employment Act requirements.
Consultation: Where possible, engage in transparent discussions with employees and union representatives, explaining the rationale and selection criteria for retrenchment.
Step 6: Provide Fair Retrenchment Benefits
Under Malaysian law, retrenchment benefits are expected, especially for employees covered by the Employment Act 1955. The minimum retrenchment compensation is:

10 days’ wages per year for employees with less than 2 years of service.
15 days’ wages per year for employees with 2 to 5 years of service.
20 days’ wages per year for employees with more than 5 years of service.
For employees not covered by the Act, refer to their employment contracts for specific terms.

Step 7: Offer Outplacement Support (Optional)
Providing career support, such as job search assistance, career counseling, or resume-building workshops, can help affected employees transition more smoothly. While this step isn’t mandatory, it promotes goodwill and maintains the company’s reputation.

Step 8: Maintain Detailed Documentation
Keep thorough records of every decision, communication, and action taken during the retrenchment process. Comprehensive documentation is essential in defending against potential claims of unfair dismissal.

Avoiding Claims of Unfair Dismissal
To minimize the risk of unfair dismissal claims, employers must ensure that:

Retrenchment is Genuine: The retrenchment must be based on legitimate business needs, not used to unfairly dismiss specific employees.
Selection is Fair and Transparent: Follow established criteria and document any deviations from the LIFO principle.
Retrenchment Benefits Are Provided Fairly: Meet all statutory and contractual obligations regarding compensation.
How Ng, Zainurul, Seke & Khoo Can Assist with Retrenchment
At Ng, Zainurul, Seke & Khoo, we offer expert legal guidance to ensure your retrenchment process is compliant, fair, and risk-free. Retrenchment requires careful planning, and our team is here to provide support every step of the way, from developing a clear retrenchment strategy to ensuring compliance with Malaysian employment laws.

Our Retrenchment Services Include:
Retrenchment Planning and Strategy: We work with your business to create a legally compliant and strategic retrenchment plan, providing advice on fair selection criteria, employee notice requirements, and documentation.

Notification and Compliance Assistance: Our team assists with all necessary notifications to the Ministry of Human Resources and ensures compliance with relevant regulations to avoid legal pitfalls.

Drafting Clear Communications: We can draft legally sound communications, including show cause letters and retrenchment notices, to convey the reasons for retrenchment professionally and transparently.

Representation in Legal Disputes: In the event of an unfair dismissal claim, our experienced lawyers will represent your company’s interests in the Industrial Court, minimizing potential legal and financial liabilities.

Workshops and Training for HR Teams: We offer training sessions for HR professionals on best practices for managing retrenchment, maintaining compliance, and preventing disputes.

Conclusion
Conducting retrenchment in Malaysia requires not only a sound business rationale but also strict compliance with employment law to ensure a fair and transparent process. By following best practices, employers can navigate the complexities of retrenchment while protecting the rights of employees and minimizing risks.

For professional guidance through every step of the retrenchment process, contact Ng, Zainurul, Seke & Khoo. Our dedicated team of employment law experts will help you handle retrenchments with confidence, compliance, and care for all involved.

What is a Due Inquiry?
A due inquiry is a formal investigation conducted by an employer when an employee is accused of misconduct. This inquiry is essential before taking disciplinary action, such as suspension or dismissal. It ensures that the employee’s rights are protected and that any decisions made are based on objective findings.

Importance of a Due Inquiry
Failing to conduct a due inquiry can lead to claims of unfair dismissal, which may result in substantial legal and financial consequences for employers. The due inquiry serves as a safeguard for both employers and employees, ensuring fairness, transparency, and adherence to Malaysian employment law.

Key Steps to Conducting a Due Inquiry in Malaysia
Here is a step-by-step guide to conducting a due inquiry effectively and in compliance with Malaysian law.

Step 1: Identify and Document the Alleged Misconduct
Define the Misconduct: Clearly identify the misconduct in question. This could range from poor performance, habitual lateness, insubordination, or serious offenses like theft or fraud.
Gather Evidence: Collect and document all relevant evidence, including witness statements, CCTV footage, and any written records of past incidents. This documentation will form the foundation of the due inquiry.
Step 2: Issue a Show Cause Letter
Purpose of the Show Cause Letter: The show cause letter serves as a formal notification to the employee of the alleged misconduct and requests an explanation. This step is essential as it gives the employee an opportunity to address the accusations.
Contents of the Letter: The letter should outline the misconduct, reference specific incidents, and mention any applicable company policies or employment terms that were violated. The employee should be given a deadline (usually 7 days) to respond.
Step 3: Establish a Fair and Impartial Inquiry Panel
Form the Inquiry Panel: Select individuals who are not directly involved in the case and can assess the evidence objectively. Ideally, the panel should consist of senior staff or managers from different departments to avoid any bias.
Avoid Conflict of Interest: Ensure that no panel members have a personal or professional relationship with the employee that could affect the inquiry’s fairness.
Step 4: Conduct the Due Inquiry Hearing
Notify the Employee: Inform the employee in writing about the inquiry hearing, including the date, time, and location. Clearly state that they have the right to present their case, bring witnesses, and submit evidence.
Present Evidence: During the hearing, present the evidence collected, including any witness testimonies, documents, or recordings. Allow the employee to question witnesses and challenge evidence.
Employee’s Defense: Allow the employee to provide their explanation, present their witnesses, and respond to any evidence or testimonies against them.
Step 5: Evaluate the Evidence and Make a Decision
Review All Evidence Carefully: After the hearing, the inquiry panel should deliberate and review all evidence, weighing it against the standards of proof in employment disputes. In Malaysia, the standard is based on the balance of probabilities, which is lower than the criminal law standard.
Reach a Conclusion: Determine whether the evidence supports the allegation of misconduct. If the misconduct is substantiated, decide on the appropriate disciplinary action (e.g., suspension, warning, or termination).
Step 6: Communicate the Outcome
Prepare a Written Decision: Document the inquiry’s findings and conclusions, including the evidence considered, witness statements, and reasoning behind the decision.
Inform the Employee: Issue a formal decision letter to the employee, explaining the outcome of the inquiry and detailing any disciplinary actions taken. This letter should outline the effective date of any actions, such as suspension or dismissal.
Best Practices for Conducting a Due Inquiry
Ensure Confidentiality: Protect the confidentiality of both the employee and any witnesses throughout the inquiry. Keep all records secure and restrict access to relevant parties only.
Document Everything: Detailed documentation of each step in the inquiry is crucial. In the event of a legal challenge, comprehensive records can help demonstrate fairness and compliance with employment laws.
Provide Fair Opportunity for Defense: Make sure the employee fully understands their rights and has a fair chance to defend themselves. This includes providing adequate time to gather their evidence and informing them of their right to call witnesses.
Be Impartial and Objective: Throughout the inquiry, maintain objectivity and avoid any personal bias or assumptions. Ensure that the panel is composed of neutral parties.
Follow Company Policies: Adhere to any disciplinary and investigation procedures outlined in the company’s employee handbook. This ensures consistency and reinforces the inquiry’s legitimacy.
Legal Considerations and Compliance
Malaysian labor law requires employers to conduct a due inquiry before taking any disciplinary action. Section 14 of the Employment Act 1955 states that “no disciplinary action should be taken against an employee until due inquiry has been held.” Failing to conduct an inquiry or conducting it improperly could result in claims of unfair dismissal, exposing the employer to potential legal liabilities.

Consequences of Not Conducting a Proper Due Inquiry
Claims of Unfair Dismissal: If an employee is terminated without a fair and proper inquiry, they may file a claim with the Industrial Court, which could result in costly penalties for the employer.
Financial Penalties: In cases of wrongful termination, the court may order the employer to pay back wages or compensate the employee in lieu of reinstatement.
Reputational Damage: Failing to handle disciplinary issues fairly can impact the company’s reputation, leading to difficulties in attracting and retaining talent.
How Our Law Firm Can Assist with Due Inquiries
At Ng, Zainurul, Seke & Khoo, we understand that navigating disciplinary matters can be complex. Our legal team provides expert guidance to help employers conduct due inquiries that are fair, legally compliant, and transparent. Our services include:

Due Inquiry Consultation: We assist in planning and structuring due inquiries, ensuring that each step adheres to Malaysian labor law.
Show Cause Letter Drafting: Our attorneys can help draft clear and effective show cause letters that outline allegations professionally and accurately.
Representation and Support During Inquiries: We provide legal support to ensure that inquiry procedures are followed meticulously, reducing the risk of unfair dismissal claims.
Training and Workshops for HR Professionals: Our firm offers training sessions for HR and management teams on conducting due inquiries, managing evidence, and maintaining compliance with employment law.
Conclusion
Conducting a due inquiry is a critical responsibility for employers in Malaysia. A fair, transparent, and legally compliant inquiry process protects both the employer and the employee, reducing the risk of disputes and maintaining trust within the organization. By partnering with Ng, Zainurul, Seke & Khoo, employers can confidently navigate due inquiries and disciplinary actions, ensuring compliance with Malaysian labor laws and fostering a respectful workplace environment.

For expert assistance with due inquiries or any employment-related issues, contact us today.

Understanding the Performance Improvement Plan (PIP): Precision Matters in Preventing Unfair Dismissal

A Performance Improvement Plan, commonly known as a PIP, is a structured tool for employers to assist employees who are not meeting performance expectations. When implemented thoughtfully, a PIP can help employees regain their footing, improve their performance, and align with the company’s goals. However, a poorly designed or improperly executed PIP can do more harm than good, potentially leading to claims of unfair dismissal. This article explores the essentials of a well-crafted PIP, the risks of an ineffective plan, and how our law firm can provide expert guidance to ensure fair, legal, and productive use of PIPs in the workplace.

What is a Performance Improvement Plan (PIP)?
A Performance Improvement Plan is a formal document used by employers to outline specific areas where an employee’s performance does not meet the organization’s standards. The PIP includes clear objectives, measurable goals, timelines, and the support provided by the employer to help the employee meet these expectations. Key elements of a good PIP include:

Clear Objectives: The PIP should specify the areas in which performance is lacking, detailing the expected standards. These objectives must be realistic, relevant to the employee’s role, and aligned with the job description.

Measurable Goals: The plan should set measurable and achievable goals that the employee must meet within the given timeframe. This helps both the employee and the employer track progress objectively.

Support and Resources: A PIP should provide access to resources or training necessary for improvement. This shows the employer’s commitment to helping the employee succeed rather than simply documenting a case for dismissal.

Defined Timeline and Check-Ins: A PIP must include a timeline with regular check-ins to assess progress, provide feedback, and adjust support if necessary. Typically, PIPs last 30, 60, or 90 days, depending on the complexity of the performance issues.

💼 Victory for Employee Rights! 💼
Our firm, Ng, Zainurul, Seke & Khoo, recently achieved a major win in the Industrial Court of Malaysia, securing justice for our client who faced an unfair dismissal. 💪✨
💰 RM893,200 Awarded! 💰
In this landmark case, our team represented a senior employee with over 20 years of service, who was unjustly dismissed by her employer. We successfully argued that the dismissal was baseless, exposing numerous flaws in the performance assessments conducted during a company restructuring. Thanks to our meticulous preparation and commitment to fair treatment, the court ruled in our client’s favor, awarding her nearly RM900,000 in compensation!
📖 Case Background 📖
Our client, a highly experienced senior employee, had a record of strong performance, earning her multiple promotions over two decades. However, after the company underwent restructuring and appointed a new department head, her work environment changed dramatically. She was gradually sidelined, her team members were transferred or let go, and her performance reviews became unfairly critical. She was repeatedly placed on performance improvement plans (PIPs) that isolated her and affected her morale.
Despite her efforts to meet job expectations, the company continued to overlook her contributions, ultimately dismissing her on grounds of “poor performance.” In court, we detailed the series of unfair actions during the restructuring, including biased assessments, unreasonable expectations, and ongoing workplace pressures.