Employment law issue of what you should do if your employer orders you to do something you think is illegal?

What do you do if your employer orders you to do something you think is illegal?

Have you ever been in a dilemma where your boss instructs you to do something which, in your opinion, may fall within the grey area of legality?

What do you do when you think you know better than your boss?

Should you comply or challenge the instructions given?

If you disobey, can your boss dismiss you on grounds of insubordination?

The apex Court of Malaysia has shed some light in the above questions through the case of Ngeow Von Yean v. Sungei Wang Plaza Sdn Bhd/Landmarks Holding Bhd [2006] 5 MLJ 113. The facts of the case are as follows:-

  • The employee was dismissed on grounds that he had committed gross negligence in endorsing two deeds of assignment where he stated that the whole purchase price of the 2 properties had been paid in full when in fact this was not true.
  • In his defence, the employee admitted to endorsing the two deeds of assignment but argued that he was carrying out the instructions of his superior.
  • The employee filed a complaint of unfair dismissal. The Industrial Court ruled in the employee’s favour and held his dismissal to be unfair.
  • The company, being dissatisfied, sought judicial review of the Industrial Court’s decision.

The matter eventually ended up in the Federal Court. The Federal Court upheld the decision of the Industrial Court and agreed that the employee’s dismissal was unfair. The Federal Court held:

“…  it may well be that an employee is caught in the situation that he is required to obey an order and he is doubtful whether the order is legal or not. Under those circumstances, the proper course is for the employee to obey the order first and to challenge its legality in separate proceedings.

The Federal Court held that an employee has a duty of obedience to comply with all lawful and reasonable orders given by his employer, with respect to the performance of such functions within the scope of his employment.  The Federal Court took a step further and expressly stated that an employee is not entitled to disobey the orders of his superior even if the employee is aware that such orders are manifestly wrong or illegal.

The reasoning behind this decision could be the protection of the employer’s rights to maintain discipline and industrial peace. If the law allows an employee to disobey any order he thinks is not legal, it would then be impossible to get any work done.

In closing, the Federal Court gives very concise advice to employees who are thinking of disobeying their employer’s instructions:

“If the employee takes it upon himself to disobey the order which he thinks to be unlawful and unreasonable two courses are open to him. He can point out his difficulties, if any, to the superior and if the latter insists on the order being carried out, he can do the work and take the matter further in proceedings against his employer or to complain to his union. If he disobeys, he must take the risk if the court finds the order to be lawful and reasonable.”

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About the author: Joanne Ong is an associate in the dispute resolution practice group of  Donovan & Ho.  She graduated with a LLB (Hons) from the University of Manchester and is an advocate and solicitor of the High Court of Malaya. She has worked worked on a wide range of dispute matters involving debt recovery, conspiracy, fraud, land, bankruptcy, insolvency and defamation.

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