Our partner Donovan Cheah was invited to speak on Malaysian employment law at the Asia Employment Law Congress 2017 in Singapore on 13 – 14 June 2017. The event was attended by more than 60 human resources professionals and legal counsel from all over Asia.

There were more than 12 country specific legal experts addressing employment law issues in their respective jurisdictions. The focus of the congress was to capture practical takeaways going beyond published legal resources, with fresh case studies and audience participation.

Here are some key takeaways from Donovan’s presentation on Malaysian employment law:

  • Despite popular belief, Malaysian employment law is not necessarily “pro-employee”. While the law does set out certain rights of employees, compliance with the law is not too onerous to be unviable commercially. On the contrary, there is a good business case for being compliant with Malaysian employment law.
  • Employers are generally troubled by the “unfair dismissal” landscape in Malaysia, especially due to the significant financial consequences that can arise if a termination is handled poorly.  This does not mean that it’s impossible or difficult to fire an employee. However, a poorly handled termination can result in an employer paying a “bad employee” more than what they would give a “good employee” as a performance bonus.
  • Some practical tips for handling misconduct: (a) don’t overcommit on total anonymity to complainants as that could impede or even prevent proper investigations in certain circumstances; (b) when it comes to disciplinary action, process is as important as substance so don’t overlook the value of conducting your investigative process correctly; (c) document every discussion – a simple email to “recap” your conversation that is sent shortly after your discussion can be admissible as evidence and will serve as a contemporaneous document to corroborate your version of events.
  • Some practical tips for handling poor performance: (a) avoid giving poor performing employees “average” performance ratings, or having “no comments” during performance assessments – be direct about their shortcomings and put it in writing; (b) identify poor performers early so that you can plan and forecast the time needed for a proper performance improvement plan. This takes time and “overnight terminations” run a very high risk of unfair dismissal claims.
  • Employers have a statutory duty to investigate their employees’ complaints of sexual harassment. Failure to do so may attract a fine of up to RM10,000.00
  • Post employment non-competes are not enforceable even if they are “reasonable” or for a limited period or radius. However, employers can still protect their interests by considering non-poaching and non-solicitation clauses, as well as confidentiality clauses.
  • Important changes to look out for next year include the controversial “employee insurance scheme” and mandatory accommodation for foreign workers.

Click here to read our other articles on employment law, or drop us a note if you have any queries.

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