What happens when an employee is too sick to work? How are medical board outs handled under Malaysian law?

What happens when an employee is too sick to work? How are medical board outs handled under Malaysian law?

Employers may have deal to with situations concerning employees who are incapacitated due to a medical illness or disability thus preventing them from carrying out their job functions. If the employee’s medical condition is severe enough with little prospects of recovery, the employer may feel like they have no choice but to terminate the employee on medical grounds.  The process in which this is done is commonly known as a “medical board out”.

While the law recognises that employers cannot be expected to go unreasonable lengths to accommodate an employee who is unable to carry out their job, it does not mean that employers can simply axe employees on a whim as there are requirements and standards to meet before medically boarding out any employee. The primary question to be asked when faced with a medically ill or disabled employee is usually: “whether, in all the circumstances, can the employer be expected to wait any longer and if so for how much longer?

In Malaysia, employers can only terminate an employee when the illness or disability suffered has severely crippled their ability to perform their designated tasks and recovery is unlikely. An employer must take into account several factors before contemplating termination on medical grounds. Such factors to be considered include (but are not necessarily limited to):

  • The nature of the employee’s illness;
  • The likely length of the employee’s absence during the recovery period;
  • The nature and functions of the employee’s job;
  • The likelihood of the illness/disability recurring or some other illness arising;
  • The length of various absences and the spaces of good health between them;
  • The need of the employer to employ another employee to get the work done;
  • The impact of absences by the ill employee on other employees;
  • Whether the employee is able to be re-designated, or perform other functions, performance of which would not be impeded by the illness;
  • Whether the employee has been appraised of the difficult situation which the company is faced with in respect of his medical condition.

An employer must therefore ensure that it has thoroughly contemplated the circumstances surrounding the illness or disability. The employer must show that based on the information gathered, a dismissal on medical grounds would be just.

An example can be seen in the Malaysian case of MHS Aviation Sdn Bhd v Zainol Akmar Mohd Noor [2001] 2 MELR 133 whereby the company had dismissed its employee after he was diagnosed with acute inferior and posterior myocardial infarction. The Court however held that the termination was unfair as the company had not made any enquiries on the illness suffered by the employee and merely issued the termination notice based on the assumption that the illness was permanent in nature.

Aside from the statutory sick leave and hospitalisation leave available to employees covered by the Malaysian Employment Act, Malaysian law does not set minimum requirements for a medical board out procedure.  For example, there is no legal requirement for a company to put the employee on no-pay sick leave (or half-pay sick leave) for a few months prior to termination on medical grounds. The medical board out procedure would therefore be subject to contract ie what is stated in the employment contract, or in the company’s policies and procedures.  A formal medical board out procedure, if adopted and followed consistently, could assist an employer in demonstrating that the termination was not capricious.

There are competing interests between having a productive and efficient workforce, and having compassion for employees who are, through no fault of their own, disabled or incapacitated from performing their duties.  Employers should approach the issue of dismissing ill employees with sympathy and understanding, and consult employees on the extent of their medical illness before putting down the dismissal card.


About the author: Amirul Izzat Hasri is an associate in the dispute resolution practice group at Donovan & Ho. He has experience in a diverse area of practice, including general civil and corporate litigation, judicial reviews, land related matters, defamation, debt recovery, and shareholder and boardroom disputes. He has also appeared in Industrial Court proceedings, having represented both employers and employees in unfair dismissal claims.


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