Here are some frequently asked questions about unfair dismissal in Malaysia

Here are some frequently asked questions about unfair dismissal in Malaysia

My employment contract says that either party may terminate the contract by providing 1 month’s notice in writing or by making payment in lieu of notice. Does this mean that my employer can terminate my contract for any reason as long as he gives me 1 month’s notice or payment in lieu?

Despite the notice clause in your contract, your employer is still required to show “just cause and excuse” before terminating your contract of employment. This means they must show good grounds for the termination and cannot merely rely on the notice clause to terminate the employment.  Termination by an employer based solely on the notice clause could result in an employer facing a claim for unfair dismissal.   Please note that the requirement to show “just cause and excuse” only applies to the employer – an employee can terminate their employment/resign from employment for any reason by following the notice clause.

Is it true that the Industrial Court in Malaysia is “pro-employee”?

The Industrial Court is a creature of statute. It is a court of equity and good conscience, and as such is not strictly bound by technicalities or legal form. This means the Industrial Court has a wide range of discretion and flexibility in determining cases. The Industrial Court is motivated by social justice, but this means justice to both the employee and the employer. As such, the Industrial Court is neither “pro-employee” or “pro-employer” and will decide cases based on its substantial merits.

What sort of remedy or damages can I get if I win my case at the Industrial Court?

The Industrial Court will usually award backwages (capped at 24 months of the last drawn salary for confirmed employees, and 12 months for probationers) and reinstatement. In the event reinstatement is not feasible (which is usually the case since the employer-employee relationship may have broken down by the time the matter goes to trial), the Industrial Court may also award compensation in lieu of reinstatement. There is no fixed formula for how much will be awarded as compensation in lieu of reinstatement, but the usual practice is one month’s salary for every year of service. This sum is still subject to reduction at the discretion of the Court depending on the circumstances such as the employee’s conduct and whether they are already gainfully employed.

I am not a Malaysian citizen but I am employed by a Malaysian company. Do I have any recourse for unfair dismissal under the Malaysian Industrial Relations Act?

Yes. The right to file a representation under the Industrial Relations Act is available to all employees in Malaysia and is not limited to Malaysian citizens.

I am earning more than RM2,000. Does this mean I cannot file a complaint at the Industrial Relations Department for unfair dismissal? 

This is inaccurate. Any employee, regardless of monthly wages, can file a complaint to the Industrial Relations Department for unfair dismissal pursuant to Section 20 of the Industrial Relations Act.

If I file an unfair dismissal claim against my employer, can they counter-sue me in the Industrial Court?

No. The Industrial Court has no jurisdiction to entertain counterclaims by the employers. However, if your employer has a cause of action against you, there is nothing to stop them from commencing legal action against you in the civil courts.

Do I have to pay anything to file a complaint of unfair dismissal?

No. There are no filing fees. However, if the matter is referred to the Industrial Court, you will have to incur legal fees if you wish to appoint a lawyer to represent you.

If I am successful in my Industrial Court claim, can I recover my legal fees from the employer? Alternatively, if I lose, do I have to pay the employer’s legal fees?

Each party will bear their own legal fees whether they win or lose.

I filed a complaint at the Industrial Relations Department. During the conciliation meeting, the employer made me a settlement offer but I think it is too low. Am I obliged to accept his offer?

You are not obliged to accept any settlement offer proposed by the employer. The Industrial Relations Department also has no power to compel you to accept such offers. You can make your own decision as to whether to accept any settlement offer or not.  Please note that what happens during the conciliation meetings are private and confidential and cannot be adduced as evidence in later proceedings.

The Industrial Relations Department refused to refer my case to the Industrial Court. Do I have any other options?

You may apply to the High Court for judicial review of the Industrial Relations Department’s refusal to refer your case. This must be done within 3 months from the date you were notified of their refusal. You will need to appoint a lawyer to handle the judicial review application for you.

How long does it take for an unfair dismissal claim to be heard?

There is no fixed time period and various factors could affect the length of an unfair dismissal claim (eg: complexity of the case, the court’s schedule, whether interlocutory applications are filed, etc). Once a matter is referred to the Industrial Court, it can typically take between 1 – 2 years for a trial to be completed, and a few months after that for an award to be issued.

I won my case in the Industrial Court, but the employer refused to honour the Award and hasn’t paid me the award sum. What can I do?

You will have to lodge a complaint of non-compliance with the Industrial Court, after which you may apply to have the Award recorded as a judgment of the High Court or Sessions Court and it can be enforced like a normal judgment from the Court.

Are Industrial Court cases public information?

If the matter proceeds to a full trial and the Industrial Court has made an award on the merits, this award is public information and can be obtained from the Industrial Court website.  If parties have reached an amicable settlement, they may request that the Industrial Court only record the fact that an amicable resolution has been reached. Parties are free to opt whether to have their settlement terms recorded in an award (in which case, it will also be publicly available).


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