Employment
(How to conduct a due inquiry?)

Conducting a Due Inquiry in Malaysia: A Professional Guide to Fair and Compliant Procedures

In Malaysia, conducting a fair and legally compliant due inquiry is essential when handling cases of employee misconduct. A properly executed inquiry fulfills the principles of fairness and transparency, providing a structured process to evaluate misconduct allegations objectively. This article provides a professional guide on conducting a due inquiry in Malaysia, covering critical steps, best practices, and essential considerations for compliance with Malaysian employment law.

What is a Due Inquiry?

A due inquiry is a formal investigation carried out by an employer when an employee is accused of misconduct. This inquiry provides an impartial process to determine whether the alleged misconduct is substantiated before any disciplinary action, such as suspension or termination, is considered.

Importance of a Due Inquiry

Failing to conduct a fair due inquiry can result in claims of unfair dismissal, potentially leading to costly legal consequences for employers. A thorough due inquiry is crucial to protect the rights of both employers and employees, ensuring a fair decision-making process based on objective findings.

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 employment best practices in Malaysia.

Step 1: Identify and Document the Alleged Misconduct

• Define the Misconduct: Clearly identify the specific misconduct in question, whether it involves poor performance, habitual lateness, insubordination, or other serious offenses.
• Gather Evidence: Collect and document relevant evidence, including witness statements, CCTV footage, and any written records of previous incidents. This documentation will support the due inquiry process.

Step 2: Issue a Show Cause Letter

• Purpose of the Show Cause Letter: The show cause letter serves as a formal notice to the employee of the alleged misconduct and requests an explanation.
• Contents of the Letter: Outline the alleged misconduct, refer to specific incidents, and mention any relevant company policies or contractual terms violated. Provide the employee with a deadline to respond, typically within 3-7 days.

Step 3: Establish a Fair and Impartial Inquiry Panel

• Form the Inquiry Panel: Choose individuals not directly involved in the incident to form the inquiry panel, ensuring objectivity. Ideally, the panel should include senior staff or managers from different departments to avoid any bias.
• Avoid Conflict of Interest: Ensure no panel members have any personal or professional relationship with the employee that might influence the inquiry’s impartiality.

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. Make it clear that the employee has the right to present their case, bring witnesses, and submit evidence.
• Present Evidence: During the hearing, present the evidence collected, including any witness testimonies and documents. Allow the employee to cross-examine witnesses and challenge the evidence.
• Employee’s Defense: Permit the employee to provide an explanation, present witnesses, and respond to any evidence against them.

Step 5: Evaluate the Evidence and Make a Decision

• Review All Evidence Carefully: After the hearing, the inquiry panel should review all evidence based on the balance of probabilities standard in employment disputes, rather than a criminal standard of proof.
• Reach a Conclusion: Determine whether the evidence substantiates the misconduct allegation. If it does, decide on the appropriate disciplinary action, such as suspension, a warning, or termination.

Step 6: Communicate the Outcome

• Prepare a Written Decision: Document the inquiry’s findings, conclusions, evidence considered, and reasoning for the decision.
• Inform the Employee: Issue a formal decision letter to the employee, explaining the outcome of the inquiry and detailing any disciplinary actions, with the effective date of any actions, such as suspension or dismissal.

Best Practices for Conducting a Due Inquiry

1. Ensure Confidentiality: Protect the confidentiality of both the employee and any witnesses throughout the inquiry. Secure all records and restrict access to relevant parties only.
2. Document Every Step: Detailed documentation of each inquiry step is essential. Comprehensive records can help demonstrate the inquiry’s fairness and compliance with employment laws in the event of a legal challenge.
3. Provide Fair Opportunity for Defense: Make sure the employee understands their rights and has ample opportunity to defend themselves, including adequate time to prepare evidence and present witnesses.
4. Be Impartial and Objective: Ensure that the inquiry panel maintains objectivity and avoids personal bias. Select neutral parties to oversee the process.
5. Follow Company Policies: Adhere to any disciplinary or investigation procedures outlined in the company’s employee handbook. Consistency in following company policies reinforces the inquiry’s legitimacy.

Legal Considerations and Compliance

While the Employment Act does not explicitly mandate a due inquiry for every employee, it is generally considered best practice, especially for cases involving serious misconduct. A due inquiry ensures that any disciplinary action taken is grounded in fairness and due process, reducing the risk of legal disputes.

Consequences of Not Conducting a Proper Due Inquiry

1. Claims of Unfair Dismissal: If an employee is terminated without a fair and proper inquiry, they may file a claim with the Industrial Court, leading to potential financial liabilities.
2. 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.
3. Reputational Damage: Poor handling of disciplinary matters can impact the company’s reputation, making it more difficult to attract and retain talent.

How Our Law Firm Can Assist with Due Inquiries

At Ng, Zainurul, Seke & Khoo, we understand the complexities involved in handling disciplinary matters in compliance with Malaysian employment law. Our team provides expert guidance to help employers conduct due inquiries that are fair, transparent, and legally sound. Our services include:

1. Due Inquiry Consultation: We assist in planning and structuring due inquiries, ensuring that each step adheres to best practices in employment law.
2. Show Cause Letter Drafting: Our attorneys help draft clear and effective show cause letters to outline allegations professionally and accurately.
3. Representation and Support During Inquiries: We provide legal support to ensure that inquiry procedures are meticulously followed, reducing the risk of unfair dismissal claims.
4. Training and Workshops for HR Professionals: We offer training for HR and management teams on conducting due inquiries, managing evidence, and complying with employment law requirements.

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 fostering 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 upholding fair workplace practices.

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