In CSY v Lepcon Tools (M) Sdn Bhd (Award No. 1 of 2024) the Industrial Court took a stern stance against an employee who failed to respect the Industrial Court’s system by ordering her to pay costs to her employer after her unfair dismissal claim was rejected. The court noted the Claimant’s recurrent litigation history, having pursued unfair dismissal claims against at least 10 former employers prior to this instance.

Brief Facts

  • The Claimant was still under probation at the time of her dismissal. The Company’s grounds for dismissal included:
    • There were complaints from customers about her service. 
    • Failure to fulfil her duties and responsibilities and did not follow the Company’s directions. 
    • Attended to personal matters during working hours.
    • Behaved badly towards her colleagues.
    • Provided false information in her resume which was later discovered.
  • Even though the Claimant’s probation was extended, she still did not improve and was therefore dismissed.
  • The Claimant sued her employer for unfair dismissal. However, aside from one mention date, the Claimant failed to attend all other mention dates and was absent during the hearing.

Findings of the Industrial Court

While the Award deals with issues of the Claimant’s performance and whether her dismissal is with just cause and excuse, the Court’s order for costs is of significance. 

While Regulation 5 of the Industrial Relations Regulations 1967 allows the Industrial Court to make cost orders, in practice, each party generally bears their own costs. The Industrial Court will only award costs where the conduct of parties become questionable. 

Here, the Industrial Court observed that the Claimant’s record of dragging 10 of her former employers to Court suggests that she is a serial and vexatious litigant, and the Industrial Court must take proactive steps to deter such claimants:

“…litigants should not abuse the forum presented by the Industrial Court to air their grievances on employment issues in order to make personal financial gains by hauling up their employers to Court. From the evidence before this Court, the modus operandi and the frequency in which the Claimant had dragged her employers to the Industrial Court for unfair dismissal cases certainly shows a worrying trend where the Industrial Court might be seen to be more of a goldmine rather than a place to seek justice.”

The Industrial Court found itself justified to order costs of RM3,000 against the Claimant, not only as a deterrent to the Claimant but to other litigants from filing multiple claims against their former employers.

Key Takeaways

Serial litigation in unfair dismissal claims presents a multifaceted challenge within our employment landscape.

With no filing fees required and the option for self-representation, employees may find it tempting to pursue such claims without significant financial risk. Conversely, the potential for high financial exposure motivates companies to settle, thereby perpetuating the cycle of frivolous claims. Since there is no proper process for summarily dismissing frivolous claims, employers may be burdened with incurring time and costs to defend such claims.

In addressing this issue, the Industrial Court’s decision to award costs, although modest in its amount, marks a positive step forward. While concerns regarding access to justice must be carefully considered, the judicious exercise of discretion in imposing costs can serve as a deterrent against serial litigants without impeding legitimate claims. This approach, if consistently applied, has the potential to mitigate the prevalence of serial litigation in employment disputes, fostering a fairer and more efficient landscape for both employer and employee.

***

This article was written by Sabrina Chang (Associate) from Donovan & Ho’s employment law practice. 

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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