Unlawful Dismissal and What You Should Know
Though the concept of unfair dismissal or unlawful termination is not new in Malaysia, there have been numerous misconceptions about it. Though there has been increased awareness about the rights of employees in Malaysia, many still remain unclear. Below are several salient points on the matter.
From the time of dismissal, an employee has 60 days to file a complaint of unfair dismissal under Section 20 of the Industrial Relations Act 1967. As for those dismissed with notice, they are free to file the complaint any time during the notice period, but not later than 60 days from the expiry of his notice. If for any reason, the complaint is not filed within the limitation period, the complaint will be barred. If this happens, the complainant may look at other avenues in the civil courts. However, the damages and remedies awarded may differ.
Cases are not heard immediately at the Industrial Court
Anyone who wants to lodge a complaint on unfair dismissal must firstly do so at the Industrial Relations Department (IRD). Following this, the IRD will get both parties, the employer and employee to attend a reconciliation meeting with the hope of amicably settling the dispute. However, if there is no positive outcome, the IRD can then refer the matter to the Industrial Court. At times, it could take more than a year for a claim to be referred to the Industrial Court. This all depends on the number of backlog cases. Also, there is no guarantee the claim will be referred and those who are unhappy with the IRD’s decision can apply for judicial review at the High Court.
IRD meeting not a court hearing
The IRD officer does not have any power to decide on the merits of the complaint during the conciliation meeting. It must be remembered that the IRD meeting is not a court hearing and the IRD will not make any ruling or decision as to whether the dismissal is unfair. The purpose of the IRD meeting is to get parties to reach an amicable settlement. Section 54 of the Industrial Relations Act 1967 provides that no evidence shall be given of any conciliation meeting other than a written statement agreed to and signed by the parties. Parties should feel comfortable to discuss matters freely during the conciliation meeting.
Industrial Court fixes remedies
If it is found that an employee was unfairly dismissed, the Industrial Court will award either reinstatement and back dated wages or back dated wages and compensation in lieu of reinstatement. Back dated wages are meant to cover the period between the termination date and the award of the Industrial Court. However, they are capped at 24 months (confirmed employees) and 12 months (probationers). Compensation in lieu of reinstatement is usually awarded at the rate of 1 month for every year of service, but this is not a fixed formula and is still subject to the discretion of the Court. Any other monetary sum is also subject to discretionary deduction by the Court.The court will take into account various mitigation factors such as conduct of the employee and post-dismissal earnings. The monetary award given is meant to cover all losses relating to the termination, and employees cannot claim for additional damages for things like loss of future earnings, loss of reputation, or mental and emotional stress.
All Industrial Court awards are public record
The public can access all Industrial Court awards through their website (mp.gov.my). Both employers and employees should be mindful that issues relating to the termination and all evidence adduced thereto may be easily accessible by third parties. They must remember that any unfavourable decision reached could be damaging to both the employee and the employer. This could be in terms of future job prospects or reputation in the market. With this in mind, both sides must weigh this against other relevant factors when determining whether an out of court settlement will be more beneficial. An out of court settlement is better as it is more confidential and if requested, the terms of the settlement will not be recorded in a Court award.