Section 69 of the Employment Act 1955 (“EA”) empowers the Director General of Labour to investigate and decide on payment disputes, with the proceedings commonly called “Labour Court” inquiries. These inquiries pertain to matters relating to payment of wages or any other cash payments, which are typically triggered by an employee’s complaint. 

However, what happens if an employee withdraws their complaint? Does this automatically close the case, or can the Labour Court continue to hear the matter? The recent case of Poosai Pandian Gunasekaran & 47 Ors v AJN Energy (M) Sdn Bhd saw the Court of Appeal tackle this question, offering a crucial decision on the matter.

Brief Facts

  • The Appellants, 48 Indian nationals, lodged a complaint to the Department of Labour claiming unpaid wages for September and October 2018.
  • At the hearing in the Labour Court, several Appellants indicated that they wished to return to their home country as soon as possible and were willing to forego their complaints.
  • The Deputy Director General of Department of Labour (“Presiding Officer”) proceeded to hear the matter, and decided in favour of all Appellants.  The employer was ordered to pay RM95,617.00 to all Appellants.
  • The employer appealed to the High Court, where the High Court set aside the Presiding Officer’s order on the grounds that there is no longer a cause of action once the Appellants have agreed to withdraw their complaint. As such, the Labour Court should not have granted an order or relief not claimed by the Appellants.
  • The Appellants appealed to the Court of Appeal.

Court’s Findings

The Court of Appeal allowed the Appellants’ appeal and held: 

  • The Presiding Officer was allowed to conduct the investigation and decide on the complaint. His discretion to inquire into a payment dispute is not premised upon a complaint being made, but rather on whether the dispute on wages has been resolved by way of settlement or payment.
  • The Presiding Officer was right in deciding that the Respondent must pay wages under the employment contract and EA regardless of the Appellants’ withdrawal of complaint.
  • The EA is a social legislation (as it affords protection to employees). It must be interpreted liberally and equitably in favour of the Appellants (who were poor and likely illiterate foreign workers).
  • Here, not all Appellants agreed to forego their complaints, and even amongst the ones that did, the Court of Appeal noted that it was not a clear and express indication they wanted to waive or forego their unpaid wages. Even if the Appellants were willing to withdraw their complaints, it does not mean that the employer need not make payment to its employees under the employment contract and the EA. 

Key Takeaways

The Court of Appeal has clarified that the Labour Court can still proceed with a claim related to non-payment of wages, even if the employee who filed the complaint is no longer interested in pursuing it. Employers should know that the ‘abandonment’ of a complaint by the employee does not necessarily mean the end of a Labour Court inquiry. Despite the employee’s withdrawal, the Labour Court may still continue with the hearing.  The Court of Appeal noted that the Labour Court’s jurisdiction and power is only forfeited if there is a negotiated settlement or prior payment of the unpaid wages.

This decision will be relevant to all employees regardless of their wages, as the Labour Court inquiry is now open to all following the amendments to the Employment Act 1955. Therefore, employers should exercise caution and seek legal advice when faced with a Labour Court inquiry.

***

This article was written by Donovan Cheah (Partner) and Tiffany Chin (Pupil-in-chambers). Donovan has been named as a recommended lawyer for labour and employment by the Legal 500 Asia Pacific for 2017-2022, and he has also been recognised by Chambers Asia Pacific and Asialaw Profiles for his employment law and industrial relations work.

Donovan & Ho is a law firm in Malaysia, and our employment practice group has built a reputation for providing strategic employment advice to local and global organisations.  Our team of employment lawyers provide advice on employment law and industrial relations including review of employment contracts, policies and handbooks, advising on workforce reductions, and managing dismissals of employees for poor performance or misconduct. We also represent clients in unfair dismissal claims and employment-related litigation. Have a question? Please contact us.

 

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