NOTICES UNDER THE LAW OF EMPLOYMENT: HOW IMPORTANT ARE THEY?

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Submitted by: Cassandra Liew

Abstract

The laws of employment are essential to protect both rights of employers and employees. However, there are many employers who are not aware of the procedures listed in the law, which are needed to be adhered to dismiss employees fairly on the grounds of their misconduct. Therefore, this article aims to illustrate on the importance of the documents and the consequences of its absence from an employer’s perspective. It also focuses on how to dismiss an employee fairly, especially when it involves the conduct of absence without notice. It is hoped that this work delivers helpful information and instills awareness among readers on their rights under the laws of employment.

Situation in Malaysia

According to statistics by the Ministry of Human Resources, in 2017, out of the 384 cases, there are 336 cases regarding unfair dismissal that were brought before the Industrial Court. At the 13th MECA Industrial Relations Convention 2017, Datuk Umi Kalthum Abdul Majid, a learned Court of Appeal Judge had showed her concerns about the awareness among the employers on the right procedures that should be taken by them before dismissing an employee.1 It is saddening to hear that these procedures are not widely known despite the fact that the laws on the dismissal have been with us since the 20th century, for example, the Industrial Relation Act 1967 (hereinafter known as IRA 1967) and the Employment Act 1955 (hereinafter known as EA 1955). This may create a ground on procedural error for employees who claim that they are dismissed unfairly.

Regulations on the Misconduct of Employee

The regulation of handling the issue of employee’s act of misconduct can be seen in S. 12, 13, 14 and 15 of EA 1955 and S.20 of  IRA 1967.2 It is to be said that there are differences between termination and dismissal. However, according to Dr A.Dutt v Assunta Hospital3, it held that either termination or dismissal must be made with just cause and excuse, there is no material difference between both of them. Such will then justify the employer’s action, where just cause and excuse is the key to determine whether such dismissal is unfair.

In S.12(1) of EA 1955, it states that at any time, either party to the contract of service may give his notice of termination to the other party in order to inform the latter about his intention to terminate such contract. S.14 of EA 1955 provides that such contract can be terminated for special reasons. In S.14(1)(a) of EA 1955, it states that after due inquiry, an employer may dismiss without notice to the employee on the grounds of misconduct inconsistent with the fulfilment of his service’s express or implied conditions.

However, in S.13 of EA 1955, termination of contract without notice is allowed. According to S. 13(1) of EA 1955, termination can be made by either party without notice or before the expiry of notice given in line with S.12, with the condition that the other party shall receive an indemnity of sum equal to the amount of wages which would have accrued to the employee.

On the other hand, in S.13(2) of EA 1955, if there is any willful breach of a condition of the contract of service by either party, the other party may terminate the contract without notice. However, a contract can also be deemed breached. In S.15(2) of EA 1955, it is stated that unless the absence is justified with reasonable excuse and has informed his employer such excuse during his absence, if an employee has been continuously absent from work for more than two days, he shall be deemed to have broken his contract.

From the above provisions, it is shown that termination can be made by the employer with or without notice or due to an act of breach of the employee, with the condition that it is made with just cause and excuse. In S.20(1) of IRA 1967, a workman may make representations in writing to the Director General to be reinstated in his former employment, if he opined that his dismissal was without just cause or excuse. If one observes carefully, termination cannot simply be made because the party has to prove a few elements. For example, the intention to terminate the contract had been informed or the presence of domestic inquiry (inferred from the phrase “due inquiry”) or reasonable excuse.

It is to take note that both domestic inquiry and the act of informing the intention shows that notices, in terms of indicating the intention to terminate the contract has to be proven. In the author’s opinion, perhaps these actions function as heads up, which  is to imply or expressly show the other party, his or her intention to terminate the contract. For example, during inquiry, the employer will question and give counselling on the employee’s misconduct. If such situation (act of misconduct) continues, it gives the right to the employer to terminate him as all steps have been taken. It will also further prove that his dismissal was just.

Dismiss with Just Cause or Excuse (Absenteeism)

Through the analysis of employment cases, it can be observed that the act of absent without notice is one of the common factor which leads to the termination or dismissal of an employee. It then leads to the contention made by the employee on its procedure to dismiss him, which is an issue itself in most cases.

According to the National Human Resource Centre, there are three types of absenteeism. Absence from work for one day and absence more than two consecutive days falls under the category of “Employee Minor or Major Misconduct”. Absence for an indefinite period of time falls under the category of major misconduct.4 There are procedures to be followed for these two categories. Generally, under “Employee Minor or Major Misconduct”, the important procedures and documents that needed to be adhered to are counselling, investigation on the misconduct, show cause letter, notice to attend Domestic Inquiry, the panel and conduct of Domestic Inquiry.5 On the other hand, in handling problems of absence for a long period of time, the employer has a duty to send a letter by way of A.R. Registered Post to the last known address of the employee stated in the company’s records. Explanation about his conducts and its consequences has to be addressed in the letter.6

In cases of whether the dismissal was with just cause and excuse, In Wong Chee Hong v Cathay Organisation (M) Sdn Bhd7, the Supreme Court stated that the issue of whether there is a dismissal had to be addressed first before moving on to the issue of whether it was done with just cause or excuse. According to Syahrizal Salam @ Mansor v Desaru Damai Beach Resort Sdn Bhd8, the onus lies on the employer to prove on the balance of probability that the termination was with just cause or excuse. In this case, it was held that the dismissal was with just cause as the manager was absent from work more than a week without the approval of the company. Furthermore, his position as a manager is of great importance and his bad working attitude allows the company to exercise its managerial prerogative of dismissal against him.

Reading together both S.13 and S.15 of EA 1955, according to Lian Yit Engineering Works Sdn Bhd v Lok Ah Fon9, a worker who had absented himself continuously from work for more than two days without reasonable excuse commits a willful breach of his contract of service. Such breach may allow the company to terminate his contract without notice. This principle is then further discussed in Azizul Ariffin v Yamakoh Precision (M) Sdn Bhd10, where an employee’s absence for two consecutive working days and not more, does not constitute a willful breach under S. 13(2) of EA 1955 because it has to be more than two consecutive days.

In Saravanan Tanimalai v A W Faber-Castell (M) Sdn Bhd11, the claimant, who has a past record of absenteeism, had been numerously warned by the respondent verbally and also through warning letters about his high absenteeism. Counselling sessions were also given to the claimant to change his work ethics. The court took these actions into consideration and held  that the act of dismissing the claimant was with just cause and fair. From here, it can be observed that these documents play an important role in justifying the reason to dismiss the employee as sufficient warnings were given to them to change their working attitude.

The author’s opinion can be further supported by the case of Pulai Mewah Sdn Bhd v Leong Fook Heng12, which discussed the issue of whether sufficient warnings were given.  Throughout the claimant’s working period, he was being absent excessively and was also absent from work for more than one month without valid reason.  Even though there is no show cause letter and only one written warning letter was given to the claimant, the court had considered the numerous verbal warnings given by the company to him throughout the years. It was held that the dismissal was with just cause and excuse. It was also emphasized that an employee must be given a warning to inform him of his misconduct before he is dismissed.

One of the misconception by many employers is that the laws of employment are pro-employee13, which it is not true if the procedures are done correctly. Hence, the procedures stated in the laws of employment had to be taken seriously and to be adhered carefully. Notices, which do not only come in written form, but also orally, should be served to the employees as warning before dismissing them. They weigh as heavy as the consequences.

Footnotes

[1] T. Balasubramaniam. (2017,13 September). 336 unfair dismissal cases in first three months, says ministry. The Malay Mail Online. Retrieved from https://www.malaymail.com/s/1464203/336-unfair-dismissal-cases-in-first-three-months-says-ministry

[2] Employee misconduct and disciplinary action. (2015, 11 May). The Star Online. Retrieved from https://www.thestar.com.my/metro/smebiz/focus/2015/05/11/employee-misconduct-and-disciplinary-action/

[3] [1981] 2 MLJ 129

[4] Employee Absenteeism/Lateness. (n.d.). National Human Resource Centre. Retrieved from http://www.nhrc.com.my/employee-absenteeism/-lateness-sbs

[5] Employee Minor/Major Misconduct. (n.d.). National Human Resource Centre. Retrieved from http://www.nhrc.com.my/employee-minor/-major-misconduct-sbs. To know further about the overview and the flow of the procedure, please refer to the link.

[6] Above n 5. For more information about the flow of procedure, please refer to the link.

[7] [1988] 1 CLJ 45

[8] [2018] 1 ILR 381

[9] [1974] 1 LNS 75

[10] [2008] 2 LNS 0552 (Award No. 552 of 2008)

[11] [2015] 3 ILR 384

[12] [2002] 2 ILR 279

[13] Geyzel, M. (2016). What Malaysian employers need to know about employment law. Retrieved from https://themalaysianlawyer.com/2016/01/05/malaysia-employment-law/

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