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Title: Discuss the scope of section 12
& section 14 of Employment Act
1955 and highlight important case
law on those provisions.
Industrial Relation Law (LAW 3148)
Semester 1 2017/2018
Section 12 of
Employment Act 1955
Introduction
 Security of tenure in employment is important to every employee as he has
an economic interest to remain in the job as long as he is capable of doing
his job or until he attains retirement age.
 "Work is one of the most fundamental aspects in a person's life, providing
the individual with a means of financial support and as importantly, a
contributory role in society. A person's employment is essential component
of his life or her sense of identity, self-worth and emotional well-being“
(Re Public Service Employee Relations Act (Alta), [1987] 1 S.C.R. 38)
Termination & Dismissal
 The term ‘termination’ refers to the termination of the employment
relationship i.e. termination of the employment contract.
 The contract may be terminated by the employer (e.g. retrenches) or by
the employee (e.g. resigns) or even by an event (e.g. attain age of
retirement, death).
 Meanwhile, dismissal is an act of an employer to terminate the contract of
service unilaterally.
 In other words, dismissal is when the contract is terminated by the
employer because of the perceived misconduct of the employee.
Section 12 of Employment Act 1955 : Termination by Notice
(1) Either party to a contract of service may at any time give to the other
party notice of his intention to terminate such contract of service.
Case: Brindle v Smith Ltd [1973] 1 ALL ER 230 (CA)
• when dismissal is by way of notice, the date of dismissal is the date
on which the notice expires, and this is unaffected by the
circumstances that the employer waives his right to the employee’s
services during this time.
Ctd...
Case: Lees v Arthur Greaves (Lees) Ltd [1974] 2 ALL ER 393
• L was dismissed on 1 Oct 1971 with six months’ notice.
• It was arranged that he should work out his notice (until 31 March 1972) but that
his responsibilities would be more confined than hereto.
• On 28 Jan 1972, L was ‘prevailed upon to finish’ and did in fact finish on that date,
accepting two months’ full gross pay in lieu of working for the months of February
and March 1972.
• The CoA upheld L’s appeal.
• Lord Denning found that the effect of the agreement was that L was still
employed but not required to work for the remaining period of his notice.
Case: Compagnie Due Cambodge (Claire Estate) Cha' ah v Boy Kanamah @
Nadarajah & Ors [2006] 2 MLJ 545
• The first respondent was a mandore and the rest were rubber tappers employed
by the Claire Estate owned by the appellant.
• On 31 October 1995, the appellant gave them eight weeks termination notice to
take effect from 1 January 1996.
• However, some 40 days before 1 January 1996 the appellant withdrew their
termination letter.
• Then, requested the respondent to treat the earlier termination notice as
withdrawn and cancelled and they were told to report for work as usual on 1st
January.
Ctd...
• The respondent refused. They ask appellant to abide the earlier termination by
notice & to make appropriate steps to pay out the termination benefits, as
promised.
• However, the appellant also insist with their decision to withdrew the
termination letter.
• They warned that failure to report for work on that date would tantamount to
abandoning their contract of service with the estate.
• The respondents did not return to work on 1 January 1996.
• Court held in allowing the claim of the respondents for termination benefits
under the Employment (Termination and Lay-Off Benefits) Regulations 1980.
• The appellant has to pay the respondents RM114,001.42 as such benefits
because the appellant could not withdraw unilaterally its notice to terminate the
services of the respondents.
• On appeal, the Court reversed the decision.
• CoA held that the withdrawal of termination of notice dated 31 October
1995 was made before the date which the services of the respondents
were to be terminated.
• There was nothing in the provisions of the 1980 Regulations which required
the appellant to consult the respondents.
• The notice given in the letter of 31 October 1995 was not of immediate
effect.
• It was to be effective only on 1 January 1996.
• Therefore, the respondents would not be entitled to any termination
benefits.
(2) The length of such notice shall be the same for both employer and employee and
shall be determined by a provision made in writing for such notice in the terms of
the contract of service, or, in the absence of such provision in writing, shall not be
less than—
a) four weeks' notice if the employee has been so employed for less than two
years on the date on which the notice is given;
b) six weeks' notice if he has been so employed for two years or more but less
than five years on such date;
c) eight weeks' notice if he has been so employed for five years or more on
such date:
Provided that this section shall not be taken to prevent either party from waiving his
right to a notice under this subsection.
• If the employee’s contract of service does not provide a specific period of
notice that is required for its termination, the ‘minimum periods’ specified by
law will apply.
• However, in the exceptions stated under 12(3) such ‘notice periods’ will still
apply unless the notice in the employee’s contract of service provides for a
longer period.
• If either party agrees to dispense with the notice, it is in order.
• For instance, if the employee gives four weeks’ notice to the employer but
requests the employer to release him immediately, the employer may waive
the notice w/o requiring him to pay in lieu of notice.
Ctd...
Case: Bond Electrical (Kl) Sdn Bhd Lwn Abu Bakar Bin
Chik & Lain-lain [2002] 4 MLJ 139
• The appellant appealed against the decision of the Dungun Labor Officer who
had awarded RM1,600 to each respondent for the balance of 20 days’ salary in
lieu of the notice of termination.
• The respondents worked as electricians with the appellant as employees under
the Act.
• The respondent worked for less than two years. However, the appellant only give
four day notice of termination.
• This was contravened with section 12(2)(a) of the Employment Act which makes
a four week notice mandatory in such a case.
• Therefore, the CoA dismissed the appeal.
(3) Notwithstanding anything contained in subsection (2), where the termination of service of employee is
attributable wholly or mainly to the fact that –
a) The employer has ceased, or intends to cease to carry on the business for the purposes of which
the employee was employed;
b) the employer has ceased or intends to cease to carry on the business in the place at which the
employee was contracted to work;
c) the requirements of that business for the employee to carry out work of a particular kind have
ceased or diminished or are expected to cease or diminish;
d) the requirements of that business for the employee to carry out work of a particular kind in the
place at which he was contracted to work have ceased or diminished or are expected to cease or
diminish;
e) the employee has refused to accept his transfer to any other place of employment, unless his
contract of service requires him to accept such transfer; or
f) a change has occurred in the ownership of the business for the purpose of which an employee is
employed or of a part of such business, regardless of whether the change occurs by virtue of a sale
or other disposition or by operation of law,
The employee shall be entitled to, and the employer shall give to the employee, notice of termination of
service, and the length of such notice shall be not less than that provided under subsection (2) (a), (b) or (c), as
the case may be, regardless of anything to the contrary contained in the contract of service.
a) The employer has ceased, or intends to cease to carry on the
business for the purposes of which the employee was employed
Case: Kerisna A/L Govindasamy V Highlands & Lowlands, Ladang Bukit
Selarong[2003] 6 MLJ 739
• The appellant worked with the respondent as a foreman.
• By a termination notice dated 1 November 1998, the respondent informed the
appellant that his employment would be terminated with effect from 1 January
1999.
• The reason given for the termination was that the respondent had decided to
replant its rubber plantation with oil palm.
• Regarded the termination notice as effective, the appellant did not turn up for
work from 1 January 1999 onwards.
• The appellant then lodged a complaint saying that he did not receive
any termination benefit.
• Held: allowing the appeal.
• The respondent was obliged to give a notice of termination of service
pursuant to section 12(3)(a) and (d) of the Employment Act 1955
because the respondent intended to change the nature of its business
from rubber plantation to palm oil plantation.
Ctd...
(b) the employer has ceased or intends to cease to carry on the
business in the place at which the employee was contracted to work
Case: Metaldek Industries Sdn Bhd V Kamaruddin Bin Tokimon & Ors [1998] 7 MLJ 342
• The respondent worked with the appellant at the sole factory in Shah Alam. Later,
the appellant informed the respondent to move to Ipoh, Perak. It will not affect any
terms and condition of employment of the respondent.
• The respondent should report the work at Ipoh but instead filed their claims for
termination benefits.
• It was in evidence that the respondents had informed the appellant that they would
not report for work in Ipoh and it was also in evidence that the appellant knew that
the respondents did not want to go to Ipoh.
• Held, dismissing the appeal. The employer had the rights to shift the employee.
• However, the effect of the relocation is the matter here. The relocation from Shah
Alam to Ipoh should cause a considerable amount of inconvenience to the
respondents and their families.
• The respondents were entitled to refuse a relocation to a place which was more
than a daily travelling distance from their homes.
• The respondents' services were terminated, thus entitled the respondents to
termination benefits.
• The respondents were contracted to work in the Shah Alam Factory and the
appellants have ceased to carry on the business in that place. Thus the requirements
for the kind of work the respondents were employed for has also ceased in the place
where they contracted to work.
Ctd...
(c) the requirements of that business for the employee to carry out
work of a particular kind have ceased or diminished or are expected to
cease or diminish.
(d) the requirements of that business for the employee to carry out
work of a particular kind in the place at which he was contracted to
work have ceased or diminished or are expected to cease or diminish.
Case : Kerisna A/L Govindasamy V Highlands & Lowlands, Ladang
Bukit Selarong [2003] 6 MLJ 739
(e) the employee has refused to accept his transfer to any other place
of employment, unless his contract of service requires him to accept
such transfer
Case: Ayasamy A/L Manikam & Ors v Ladang Holyrood [2000] 5 MLJ 13
• The appellants were employed as rubber tappers by the respondent and were
informed that as the trees in their division would be felled, they were to be
transferred to the main division, which was 5 km away. The appellants refused
to accept the transfer and requested the respondent to pay termination and
lay-off benefits. The respondent claimed that the relocation of tapping task
was a legitimate right of the management.
• Held: allowing the appeal. The appellants were protected by section 12(3)(e)
that the contract of service must have a provision which required the
employee to accept such transfer before they could be transferred.
(f) a change has occurred in the ownership of the business for the purpose of which an
employee is employed or of a part of such business, regardless of whether the change
occurs by virtue of a sale or other disposition or by operation of law
Case: Barat Estates Sdn Bhd & Anor V Parawakan A/L Subramaniam & Ors [2000]
4 MLJ 107
• The respondents were employed by the appellants on two estates. Later,
the first appellant sold both estates to Prospell Enterprise Sdn Bhd.
• The first appellant wrote a letter to the respondents informing them about
the estates to and said that the change of ownership would not affect the
terms and conditions of the respondents' service and respondents'
employment would continue as if there had been no change in the
employer.
• Prospell also wrote to the respondents offering them to continue their
employment.
• All the respondents accepted Prospell's offer. Later, They claimed an indemnity
under section 13(1) of the Employment Act 1955 on the ground that the appellants
had failed to give them notices of termination of their contracts in accordance with
section 12 of the Act.
• Held, dismissing the appeal.
• Section 12(3) of the Act makes it clear in the context of para (f) that where there is
a termination of service because of a change in the ownership of the business in
which the employee is employed, the employer must give the employee the
appropriate period of notice.
• Apparently, the section did not recognized automatic continuation of employment
with the new owner of the business.
Ctd...
(4) Such notice shall be written and may be given at any time,
and the day on which the notice is given shall be included in the
period of the notice
• ‘and the day on which the notice is given’ means, the day the
notice will become effective.
• Example; if the employee’s letter of resignation is dated January 1
but he gives it to his employer on January 5, his notice is only
effective from January 5 instead of January 1.
Section 14 of
Employment Act 1955
Section 14(1) of Employment Act 1955 : Termination of contract for special reasons
Termination of contract for special reasons
14. (1) An employer may, on the grounds of misconduct inconsistent with the
fulfilment of the express or implied conditions of his service, after due
inquiry
(a) dismiss without notice the employee;
(b) downgrade the employee; or
(c) impose any other lesser punishment as he deems just and fit, and
where a punishment of suspension without wages is imposed, it shall not
exceed a period of two weeks.
TERMINATION FOR MISCONDUCT
• Section 14 gives the right to an employer to dismiss, downgrade or impose any other lesser
punishment on an employee who after holding of a due inquiry is found guilty of
misconduct.
• Prior to holding inquiry, usually know as domestic inquiry.
• The employer wishes to suspend the employee from work for any reason he can do so up
to maximum of two weeks.
• During the suspension period the worker is entitle to half is wages.
• However if he found not guilty of any misconduct, the remaining half pay must be paid
back.
MISCONDUCT
Misconduct has two sources:
1. Rights of employer
2. Basis and responsibilities of the employee
Every employer has such right to establish rules and regulations governing the conduct of his employee at
the workplace and during worktime.
Example of rules and regulation that commonly express in writing:
• Insubordination
• Attendance
• Intoxicant
• Smoking
• Gambling
• Dishonesty
• Example of rules and regulation that commonly not express in writing ie know as implied.
• This rule and regulations governing the private conduct of employee outside the worktime. As example
drug abuse, loose moral or unlawful behavior.
• Any infringement of the rules and regulation would constitute misconduct.
• Although Employment Act 1955 did not formally define ‘misconduct’, section 14 implied that it is conduct
by an employee that is inconsistent with the fulfilment of the express and implied condition of service.
Case: Holiday Inn Kucing and Elizabeth CS LEE
“ A workman has certain express and or implied obligation towards his employer. Any conduct that
inconsistent with his duties, or any breach of the express and implied duties of an employee towards his
employer would constitute an act of misconduct”
Ctd...
• The industrial court indicated that it is for the employer to determine initially whether or
not an employee has committed a misconduct. However, the employer must act fairly
and reasonably after appropriate investigation.
Case: W weddel & co Ltd v Tepper [1980] IRLR 76
“…employers suspecting an employee of misconduct justifying dismissal cannot justify their
dismissal simply by stating an honest belief in his guilty. There must be reasonable ground
and they must act reasonably in all the circumstances, having regard to equity and the
substantial merit of the case. They do not have regard to equity in particular if they do not
give him fair opportunity of explaining before dismissing him. And they do not have regard
to equity or the substantial merits of the case if they jump to conclusion…”
Ctd...
• In addition, the employer has to prove the misconduct alleged against the employee.
Case: Rasa Sayang Hotel and National Union of Hotel Bar & Restaurant Workers
“… the court agrees with the union that there is no denying the right of the
employer to punish, but there is also the right of the employee not to be punished
if there had been no offence. Before the hotel can show that the punishment does
fit the crime. It must first prove the crime…”
• Furthermore, Industrial court has commented not only on the burden of proving
misconduct but also on the standard of proof required to establish misconduct.
Ctd...
Burden of Proof
The burden of proof and the standard of proof, the industrial court has commented on the
following aspects of misconduct:
1. A single act of misconduct
2. Similar misconduct
3. Past misconduct
4. Criminal misconduct
5. Private misconduct
6. Provocation of misconduct
7. Condonation of misconduct
8. Punishment for misconduct
1) A single act of misconduct
Case: Transport Workers Union and Kartar & Sundar Singh Omnibus Co Ltd
“A single act of misconduct may justify dismissal only where the misconduct is such that it
goes to the root of the contractual relation of master and servant so as to indicate an
unwillingness on the part of the servant to be bound upon his original terms of contract.”
2) Similar Misconduct
Case: PA Netto and Kulai Yong Estate
“In the law of evidence, the fact that a person has committed similar misconduct before,
although admissible, should not be prejudicial to show disposition of the person’s mind, but
it meant to rebut the defense, if any, of mistake or accident. The claimant made no such
defence and therefore the court cannot infer that he is likely to have committed now a
misconduct of the same nature as before.”
Ctd...
3) Past Misconduct
Case: Malaysia Airline System and A Kader bin M Zalman
“..if there was a charge against claimant for misconduct, pass misconducts could be considered to have a cumulative effect in
deciding on the punishment. But in the present case, the termination of the claimant’s service was not on the ground of
misconduct…therefore, his past misconduct, even if they were recent misconduct, became irrelevant to the issue before the
court.”
4) Criminal Misconduct
Case: Transport Workers Union and Lori Malaysia Sdn Bhd
“ It is not necessary, and decided by authority, that an employer should await the prosecution of criminal proceedings
against an employee before inquiring into a misconduct. If an employee is dismissed by an employer for misconduct after
due inquiry, there is no obligation to take back the employee even if he is acquitted in criminal proceedings brought against
him. In the present case, a period of over five months had elapsed before the company thought fit to make the claimant
answer his allegation. It could very well have done so earlier… Meanwhile, the claimant had been performing his duties and
earning the agreed remuneration without any interference from or restriction by the company. Even assuming that the
claimant had been negligent, the court is of the view that, by so allowing the claimant to carry on for such a long period, the
company had impliedly condoned such act of misconduct.”
Ctd...
5) Private Misconduct
Case: Transport Workers Union and Syarikat Pengangkutan Kemajuan Sri Perak Bhd
It is not this court concern whether the misconduct alleged amounted to khalwat or maksiat. But
the company did imply a moral misconduct grave enough to ruin the image of the company, and
therefore deserving of dismissal. The court agrees with the finding of EAT in Cassidy v HC Goodman
Ltd [1975] IRLR 86 that:
‘ For an employee to be justifiably dismissed on the ground of his private conduct, it has to be
exceptional gravity or be capable of damaging the employer’s business.’
The court cannot see how the claimant’s spending the night in the Bachelors’ Room could have
affected a public transport business to the extent of ruining its image. The court accordingly finds
her dismissal had been without just cause as the alleged offence was not related to her
employment.
Ctd...
6) Provocation of misconduct
Case: Van Leer Sdn Bhd and Chee Kong (Award 342 of 1987)
‘ Although contumacious and insolent acts towards a superior are in proper circumstances
misconduct, it is against equity and good conscience to mete out the extreme penalty of
dismissal when such acts were provoked by the superior, and that employee is not even-
handedly punished. The court is therefore of the view that the company should have
accepted recommendation of its own board of inquiry and given the claimant (and, it
should be said, the superior as well) ‘a stern and final warning’ instead of dismissing him
alone. The court therefore rules that the dismissal was without just cause and excuse.’
Ctd...
7) Condonation of misconduct
16 Halsbury’s Laws of England (4th Ed), p 439 para 648 under the heading Condonation states:
‘An employer who with full knowledge of his employee’s conduct elects to continue him in service cannot
subsequently dismiss him for the offence which he has condoned.’
Case: Esso Production Malaysia Incorporated and Kesatuan Pekerja-Pekerja Esso Production Malaysia (Award
75 of 1992)
‘Permission may be granted to an employee retroactively to cover a prior misconduct or breach of duty as well as
prospectively. Such retroactive permission is called condonation. The uniform rule is that an employer or his duly
authorised supervisor who continues in employment an employee with full knowledge that the latter has
committed a breach of duty, condones the breach, and such waiver or retroactive permission prevents the
employer from later punishing the employee for it, absent a revival thereof.’
Ctd...
8) Punishment for misconduct
Case: Goodyear Malaysia Bhd and National Union of Employees in Companies Manufacturing
Rubber Products (Award 88 of 1986)
‘It must be noted that not all misconduct deserves dismissal, which has been described as the
capital punishment in industrial relations. Important circumstances which mitigate the offence of the
workman should be taken into account by the employer before he can be said to have made a fair
and reasonable decision to dismiss. For example, a workman’s past record of good service, or the
management’s own actions or omission which contributed to the misconduct, are mitigating factors
which any reasonable company would take account of before dismissing. Length and quality of
service, good untainted record, and past service awards and recognition must also be taken as
extenuating circumstances when an employer decides the appropriate punishment for misconduct.’
Ctd...
KINDS OF MISCONDUCT
 The industrial court has commented on the
following kinds of misconduct:
1.Insubordination
2.Disobedience
3.Lateness and absence
4.Dereliction of duty
5.Threat and intimidation
6.Assault and fighting
7.Gambling & Intoxication
8. Theft and dishonesty
9. Cheating and misappropriation
10. Fraud and misrepresentation
11. Breach of duty fidelity
12. Breach of duty of care
Insubordination
Case: Clarion Sdn Bhd and K Sivalingam
In this case, it shows that the language used in disrespectful towards superior is considered
insubordination. It is insolent, impertinent and derogatory in nature as it is offensively and
tends to lower the dignity and the position of the superior.
Case: Calcutta Jute Manufacturing Co Ltd v Calcutta Jute Manufacturing Workers
Union
Riotous conduct which makes it impossible for higher officers to discharge their duties
properly.
Theft and dishonesty
Case: Multi Purpose Management Sdn Bhd and All Malayan Estates Staff Union
 The theft or attempted theft by an employee of his employer’s property is misconduct warranting
dismissal
 Aiding theft of employer’s property also considered as misconduct and deserve the punishment of
dismissal.
 From the evidence adduce in this court and from the surrounding circumstances of the case, the
court on the view that the claimant participated in one of these offence. The court find that he has
committed misconduct which forfeited the confidence and trust of his employers and permitted
them to dismiss him.
However, in the case A Sinnathamby & K Kuppusamy and Sagie Estate (Award 51 of 1974)
 Attempted theft can be misconduct and the fact that an employee has failed in his attempt to steal
does not bar punishment for the offence.
 The fact that an employee was standing by when an offence was being committed does not absolve
him because it has been held that it is misconduct to encourage or to assist anyone stealing their
employer’s property. Even permitting another to steal the employer’s property is misconduct.
Lateness and Absence
 Case: Hong Voon Holdings Sdn Bhd and Rosnani bte Sidin (Award 378 of 1984)
“the company contended that coming to work late habitually was good ground for
dismissal and cited The Chartered Bank and Kuching Bank Employee Union (Award 10
of 1966) to support the contention. And I agree with the contention and dismiss the
claimant’s claim”
 Absence from work without prior leave is not just a possible misconduct. Under the
Employment Act, it may amount to breach of contract and a willful breach would could
entitle the employer to terminate the contract of employee even if the absence was due to
sickness.
 The industrial court has commented on both kind of absence:
i) Section 15(2) of EA declare that;
“An employee shall be deemed to have broken his contract of service with the employer if he has been continuously absent from work for
more than two consecutive working days without prior leave from his employer, unless he has a reasonable excuse for such absence and has
informed or attempted to inform his employer of such excuse prior to or at the earliest opportunity during such absence.”
ii) Section 13(2) of EA provides that;
“Either party to a contract of service may terminate such contract of service without notice in the event of any willful breach by the other
party of a condition of the contract of service.”
iii) Section 60F(2) of the Act provides that;
An employee who absents himself on sick leave—
(a)which is not certified by a registered medical practitioner or a medical officer as provided under subsection (1) or a dental surgeon as
provided under subsection (1A); or
(b) which is certified by such registered medical practitioner or medical officer or dental surgeon, but without informing or attempting to
inform his employer of such sick leave within forty-eight hours of the commencement thereof,
shall be deemed to absent himself from work without the permission of his employer and without reasonable excuse for the days on which he
is so absent from work.
Ctd...
 Case: P Ramasamy (Pemborong) Ladang Batu Arang and Kesatuan
Kebangsaan Pekerja-pekerja Ladang (Award 52 of 1985) it was said:
“absence without leave for more than two consecutive working days is
deemed to be breach of contract of service by section 15(2) …The
employer can either terminate the employee’s contract of service under
section 13(2) or deal with him under section 14 after a due inquiry on the
ground of misconduct.”
Ctd...
SECTION 14(2)
For the purposes of an inquiry under subsection (1), the
employer may suspend the employee from work for a period
not exceeding two weeks but shall pay him not less than half
his wages for such period:
Provided that if the inquiry does not disclose any misconduct
on the part of the employee the employer shall forthwith
restore to the employee the full amount of wages so withheld.
 Does section 14 of EA really require a proper inquiry before the taking of disciplinary
action?
Case: Ibrahim Hassan and Diamond Cutting Sdn Bhd
“ the requirement of domestic inquiry has acquired great significance in industrial law, and has become a
statutory requirement prior to the inflicting of punishment of misconduct as laid down under Section 14
of EA. The effect of this provision is that before an employer can dismiss an employee on the ground of
misconduct, the employer must hold a proper domestic inquiry”
 In 1970-1980, if the employer dismissed the employee for misconduct without holding the domestic inquiry,
the termination of employee’s contract was automatically without just cause or excuse.
 Section 14 of EA states that the employee can be dismissed on the ground of misconduct after “due inquiry”.
The domestic inquiry should be held before imposing the penalty of dismissal.
Ctd...
 When an employer hold a domestic inquiry before dismissing the employee on the ground of
misconduct, he considered treated his employee justly and fairly.
 Whether absence of a domestic inquiry is fatal
Case: Dreamland Corporation Sdn Bhd v Choong Chin Sooi [1988] 1 MLJ 111
The supreme court stated that (1) absence of a domestic or the presence of defective domestic
inquiry is not fatality but merely irregularity. It is open to the employer to justify his action before
the industrial court (2) unless the industrial court has found that the dismissal was without just
cause or excuse, the court has no jurisdiction to offer any case
Ctd...
 However, this does not mean that a proper domestic inquiry is not necessary. Inquiry
is still essential
Case: Bank Bumiputra and George Thomas
Where the Employment Act concerned, an inquiry is mandatory. For other employee,
justice and fairness require the holding of an inquiry before a decision is made to
dismiss an employee.
Ctd...
 For the domestic inquiry to be useful, it must be according to principle of natural justice which are;
1. rule requiring the fair hearing
2.Rule against bias
 Right where the accused man to know the case which is made against him. He must know what
evidence has been given and what statement have been made affecting him. Then, he must be given a
fair opportunity to correct or to contradict to them.
 Case: Board of Education v Rice [1911] AC 179
No one who has lost case will believe he has been fairly treated if the other side has had access to the
judge without his knowing.
Ctd...
 Industrial court has indicated that as long as the principles or the rules of natural
justice have been observed, or even violated, the domestic inquiry cannot be
faulted or characterised as bad or defective.
 Case: Kuala Lumpur Hilton and National Union of Hotel, Bar & Restaurant
Workers
It is alleged by the union that the domestic inquiry was bad… it is this court’s view
that so long as the basic requirement of natural justice are observed, no strict rules
of procedure need be followed. From the evidence the court finds that the
claimant was informed of the charges against him and that he was given ample
oppurtunity for denying or explaining the alleged misconduct.
Ctd...
 Once the inquiry has been held and the employee found guilty, the employer must decide on the suitable
penalty.
 The punishment must be suitable with misconduct and take into consideration the mitigation factors:
I. The length of service of employee
II. The prior record of employee; and
III. Whether there was any provocation leading the employee to commit the misconduct.
 Under Section 14 of EA gives the employers the right to punish the employee for misconduct includes:
(a) dismiss without notice the employee;
(b) downgrade the employee; or
(c) impose any other lesser punishment as he deems just and fit, and where a punishment of
suspension without wages is imposed, it shall not exceed a period of two weeks.
Ctd...
 The maximum period of suspension shall be for two weeks at half pay
 If a suspension exceeds two weeks, it would appear that full wages would have to be paid
in which case it is no longer a suspension as per the law.
 The two weeks’ period is specified to avoid abuse
 If the inquiry does not disclose any misconduct on the part of the employee the employer
shall forthwith restore to the employee the full amount of wages so withheld.
Ctd...
SECTION 14(3)
An employee may terminate his contract of service with his
employer without notice where he or his dependents are
immediately threatened by danger to the person by violence or
disease such as such employee did not by his contract of service
undertake to run.
 Example: an employee cannot be instructed to work in an area
where the use of certain chemicals make the employees sick
and the employer pays no attention to the health related
problem.
 Therefore, he may terminate his contract of service without
notice
 This section protects employees against unprincipled employer
who offer such contracts of service and put the employee lives
in danger.
Ctd...
Syafawani Mahadi
Prepared by:

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Section 12 & 14 of Employment Act 1955

  • 1. Title: Discuss the scope of section 12 & section 14 of Employment Act 1955 and highlight important case law on those provisions. Industrial Relation Law (LAW 3148) Semester 1 2017/2018
  • 3. Introduction  Security of tenure in employment is important to every employee as he has an economic interest to remain in the job as long as he is capable of doing his job or until he attains retirement age.  "Work is one of the most fundamental aspects in a person's life, providing the individual with a means of financial support and as importantly, a contributory role in society. A person's employment is essential component of his life or her sense of identity, self-worth and emotional well-being“ (Re Public Service Employee Relations Act (Alta), [1987] 1 S.C.R. 38)
  • 4. Termination & Dismissal  The term ‘termination’ refers to the termination of the employment relationship i.e. termination of the employment contract.  The contract may be terminated by the employer (e.g. retrenches) or by the employee (e.g. resigns) or even by an event (e.g. attain age of retirement, death).  Meanwhile, dismissal is an act of an employer to terminate the contract of service unilaterally.  In other words, dismissal is when the contract is terminated by the employer because of the perceived misconduct of the employee.
  • 5. Section 12 of Employment Act 1955 : Termination by Notice (1) Either party to a contract of service may at any time give to the other party notice of his intention to terminate such contract of service. Case: Brindle v Smith Ltd [1973] 1 ALL ER 230 (CA) • when dismissal is by way of notice, the date of dismissal is the date on which the notice expires, and this is unaffected by the circumstances that the employer waives his right to the employee’s services during this time.
  • 6. Ctd... Case: Lees v Arthur Greaves (Lees) Ltd [1974] 2 ALL ER 393 • L was dismissed on 1 Oct 1971 with six months’ notice. • It was arranged that he should work out his notice (until 31 March 1972) but that his responsibilities would be more confined than hereto. • On 28 Jan 1972, L was ‘prevailed upon to finish’ and did in fact finish on that date, accepting two months’ full gross pay in lieu of working for the months of February and March 1972. • The CoA upheld L’s appeal. • Lord Denning found that the effect of the agreement was that L was still employed but not required to work for the remaining period of his notice.
  • 7. Case: Compagnie Due Cambodge (Claire Estate) Cha' ah v Boy Kanamah @ Nadarajah & Ors [2006] 2 MLJ 545 • The first respondent was a mandore and the rest were rubber tappers employed by the Claire Estate owned by the appellant. • On 31 October 1995, the appellant gave them eight weeks termination notice to take effect from 1 January 1996. • However, some 40 days before 1 January 1996 the appellant withdrew their termination letter. • Then, requested the respondent to treat the earlier termination notice as withdrawn and cancelled and they were told to report for work as usual on 1st January. Ctd...
  • 8. • The respondent refused. They ask appellant to abide the earlier termination by notice & to make appropriate steps to pay out the termination benefits, as promised. • However, the appellant also insist with their decision to withdrew the termination letter. • They warned that failure to report for work on that date would tantamount to abandoning their contract of service with the estate. • The respondents did not return to work on 1 January 1996. • Court held in allowing the claim of the respondents for termination benefits under the Employment (Termination and Lay-Off Benefits) Regulations 1980. • The appellant has to pay the respondents RM114,001.42 as such benefits because the appellant could not withdraw unilaterally its notice to terminate the services of the respondents.
  • 9. • On appeal, the Court reversed the decision. • CoA held that the withdrawal of termination of notice dated 31 October 1995 was made before the date which the services of the respondents were to be terminated. • There was nothing in the provisions of the 1980 Regulations which required the appellant to consult the respondents. • The notice given in the letter of 31 October 1995 was not of immediate effect. • It was to be effective only on 1 January 1996. • Therefore, the respondents would not be entitled to any termination benefits.
  • 10. (2) The length of such notice shall be the same for both employer and employee and shall be determined by a provision made in writing for such notice in the terms of the contract of service, or, in the absence of such provision in writing, shall not be less than— a) four weeks' notice if the employee has been so employed for less than two years on the date on which the notice is given; b) six weeks' notice if he has been so employed for two years or more but less than five years on such date; c) eight weeks' notice if he has been so employed for five years or more on such date: Provided that this section shall not be taken to prevent either party from waiving his right to a notice under this subsection.
  • 11. • If the employee’s contract of service does not provide a specific period of notice that is required for its termination, the ‘minimum periods’ specified by law will apply. • However, in the exceptions stated under 12(3) such ‘notice periods’ will still apply unless the notice in the employee’s contract of service provides for a longer period. • If either party agrees to dispense with the notice, it is in order. • For instance, if the employee gives four weeks’ notice to the employer but requests the employer to release him immediately, the employer may waive the notice w/o requiring him to pay in lieu of notice. Ctd...
  • 12. Case: Bond Electrical (Kl) Sdn Bhd Lwn Abu Bakar Bin Chik & Lain-lain [2002] 4 MLJ 139 • The appellant appealed against the decision of the Dungun Labor Officer who had awarded RM1,600 to each respondent for the balance of 20 days’ salary in lieu of the notice of termination. • The respondents worked as electricians with the appellant as employees under the Act. • The respondent worked for less than two years. However, the appellant only give four day notice of termination. • This was contravened with section 12(2)(a) of the Employment Act which makes a four week notice mandatory in such a case. • Therefore, the CoA dismissed the appeal.
  • 13. (3) Notwithstanding anything contained in subsection (2), where the termination of service of employee is attributable wholly or mainly to the fact that – a) The employer has ceased, or intends to cease to carry on the business for the purposes of which the employee was employed; b) the employer has ceased or intends to cease to carry on the business in the place at which the employee was contracted to work; c) the requirements of that business for the employee to carry out work of a particular kind have ceased or diminished or are expected to cease or diminish; d) the requirements of that business for the employee to carry out work of a particular kind in the place at which he was contracted to work have ceased or diminished or are expected to cease or diminish; e) the employee has refused to accept his transfer to any other place of employment, unless his contract of service requires him to accept such transfer; or f) a change has occurred in the ownership of the business for the purpose of which an employee is employed or of a part of such business, regardless of whether the change occurs by virtue of a sale or other disposition or by operation of law, The employee shall be entitled to, and the employer shall give to the employee, notice of termination of service, and the length of such notice shall be not less than that provided under subsection (2) (a), (b) or (c), as the case may be, regardless of anything to the contrary contained in the contract of service.
  • 14. a) The employer has ceased, or intends to cease to carry on the business for the purposes of which the employee was employed Case: Kerisna A/L Govindasamy V Highlands & Lowlands, Ladang Bukit Selarong[2003] 6 MLJ 739 • The appellant worked with the respondent as a foreman. • By a termination notice dated 1 November 1998, the respondent informed the appellant that his employment would be terminated with effect from 1 January 1999. • The reason given for the termination was that the respondent had decided to replant its rubber plantation with oil palm. • Regarded the termination notice as effective, the appellant did not turn up for work from 1 January 1999 onwards.
  • 15. • The appellant then lodged a complaint saying that he did not receive any termination benefit. • Held: allowing the appeal. • The respondent was obliged to give a notice of termination of service pursuant to section 12(3)(a) and (d) of the Employment Act 1955 because the respondent intended to change the nature of its business from rubber plantation to palm oil plantation. Ctd...
  • 16. (b) the employer has ceased or intends to cease to carry on the business in the place at which the employee was contracted to work Case: Metaldek Industries Sdn Bhd V Kamaruddin Bin Tokimon & Ors [1998] 7 MLJ 342 • The respondent worked with the appellant at the sole factory in Shah Alam. Later, the appellant informed the respondent to move to Ipoh, Perak. It will not affect any terms and condition of employment of the respondent. • The respondent should report the work at Ipoh but instead filed their claims for termination benefits. • It was in evidence that the respondents had informed the appellant that they would not report for work in Ipoh and it was also in evidence that the appellant knew that the respondents did not want to go to Ipoh. • Held, dismissing the appeal. The employer had the rights to shift the employee.
  • 17. • However, the effect of the relocation is the matter here. The relocation from Shah Alam to Ipoh should cause a considerable amount of inconvenience to the respondents and their families. • The respondents were entitled to refuse a relocation to a place which was more than a daily travelling distance from their homes. • The respondents' services were terminated, thus entitled the respondents to termination benefits. • The respondents were contracted to work in the Shah Alam Factory and the appellants have ceased to carry on the business in that place. Thus the requirements for the kind of work the respondents were employed for has also ceased in the place where they contracted to work. Ctd...
  • 18. (c) the requirements of that business for the employee to carry out work of a particular kind have ceased or diminished or are expected to cease or diminish. (d) the requirements of that business for the employee to carry out work of a particular kind in the place at which he was contracted to work have ceased or diminished or are expected to cease or diminish. Case : Kerisna A/L Govindasamy V Highlands & Lowlands, Ladang Bukit Selarong [2003] 6 MLJ 739
  • 19. (e) the employee has refused to accept his transfer to any other place of employment, unless his contract of service requires him to accept such transfer Case: Ayasamy A/L Manikam & Ors v Ladang Holyrood [2000] 5 MLJ 13 • The appellants were employed as rubber tappers by the respondent and were informed that as the trees in their division would be felled, they were to be transferred to the main division, which was 5 km away. The appellants refused to accept the transfer and requested the respondent to pay termination and lay-off benefits. The respondent claimed that the relocation of tapping task was a legitimate right of the management. • Held: allowing the appeal. The appellants were protected by section 12(3)(e) that the contract of service must have a provision which required the employee to accept such transfer before they could be transferred.
  • 20. (f) a change has occurred in the ownership of the business for the purpose of which an employee is employed or of a part of such business, regardless of whether the change occurs by virtue of a sale or other disposition or by operation of law Case: Barat Estates Sdn Bhd & Anor V Parawakan A/L Subramaniam & Ors [2000] 4 MLJ 107 • The respondents were employed by the appellants on two estates. Later, the first appellant sold both estates to Prospell Enterprise Sdn Bhd. • The first appellant wrote a letter to the respondents informing them about the estates to and said that the change of ownership would not affect the terms and conditions of the respondents' service and respondents' employment would continue as if there had been no change in the employer. • Prospell also wrote to the respondents offering them to continue their employment.
  • 21. • All the respondents accepted Prospell's offer. Later, They claimed an indemnity under section 13(1) of the Employment Act 1955 on the ground that the appellants had failed to give them notices of termination of their contracts in accordance with section 12 of the Act. • Held, dismissing the appeal. • Section 12(3) of the Act makes it clear in the context of para (f) that where there is a termination of service because of a change in the ownership of the business in which the employee is employed, the employer must give the employee the appropriate period of notice. • Apparently, the section did not recognized automatic continuation of employment with the new owner of the business. Ctd...
  • 22. (4) Such notice shall be written and may be given at any time, and the day on which the notice is given shall be included in the period of the notice • ‘and the day on which the notice is given’ means, the day the notice will become effective. • Example; if the employee’s letter of resignation is dated January 1 but he gives it to his employer on January 5, his notice is only effective from January 5 instead of January 1.
  • 24. Section 14(1) of Employment Act 1955 : Termination of contract for special reasons Termination of contract for special reasons 14. (1) An employer may, on the grounds of misconduct inconsistent with the fulfilment of the express or implied conditions of his service, after due inquiry (a) dismiss without notice the employee; (b) downgrade the employee; or (c) impose any other lesser punishment as he deems just and fit, and where a punishment of suspension without wages is imposed, it shall not exceed a period of two weeks.
  • 25. TERMINATION FOR MISCONDUCT • Section 14 gives the right to an employer to dismiss, downgrade or impose any other lesser punishment on an employee who after holding of a due inquiry is found guilty of misconduct. • Prior to holding inquiry, usually know as domestic inquiry. • The employer wishes to suspend the employee from work for any reason he can do so up to maximum of two weeks. • During the suspension period the worker is entitle to half is wages. • However if he found not guilty of any misconduct, the remaining half pay must be paid back.
  • 26. MISCONDUCT Misconduct has two sources: 1. Rights of employer 2. Basis and responsibilities of the employee Every employer has such right to establish rules and regulations governing the conduct of his employee at the workplace and during worktime. Example of rules and regulation that commonly express in writing: • Insubordination • Attendance • Intoxicant • Smoking • Gambling • Dishonesty
  • 27. • Example of rules and regulation that commonly not express in writing ie know as implied. • This rule and regulations governing the private conduct of employee outside the worktime. As example drug abuse, loose moral or unlawful behavior. • Any infringement of the rules and regulation would constitute misconduct. • Although Employment Act 1955 did not formally define ‘misconduct’, section 14 implied that it is conduct by an employee that is inconsistent with the fulfilment of the express and implied condition of service. Case: Holiday Inn Kucing and Elizabeth CS LEE “ A workman has certain express and or implied obligation towards his employer. Any conduct that inconsistent with his duties, or any breach of the express and implied duties of an employee towards his employer would constitute an act of misconduct” Ctd...
  • 28. • The industrial court indicated that it is for the employer to determine initially whether or not an employee has committed a misconduct. However, the employer must act fairly and reasonably after appropriate investigation. Case: W weddel & co Ltd v Tepper [1980] IRLR 76 “…employers suspecting an employee of misconduct justifying dismissal cannot justify their dismissal simply by stating an honest belief in his guilty. There must be reasonable ground and they must act reasonably in all the circumstances, having regard to equity and the substantial merit of the case. They do not have regard to equity in particular if they do not give him fair opportunity of explaining before dismissing him. And they do not have regard to equity or the substantial merits of the case if they jump to conclusion…” Ctd...
  • 29. • In addition, the employer has to prove the misconduct alleged against the employee. Case: Rasa Sayang Hotel and National Union of Hotel Bar & Restaurant Workers “… the court agrees with the union that there is no denying the right of the employer to punish, but there is also the right of the employee not to be punished if there had been no offence. Before the hotel can show that the punishment does fit the crime. It must first prove the crime…” • Furthermore, Industrial court has commented not only on the burden of proving misconduct but also on the standard of proof required to establish misconduct. Ctd...
  • 30. Burden of Proof The burden of proof and the standard of proof, the industrial court has commented on the following aspects of misconduct: 1. A single act of misconduct 2. Similar misconduct 3. Past misconduct 4. Criminal misconduct 5. Private misconduct 6. Provocation of misconduct 7. Condonation of misconduct 8. Punishment for misconduct
  • 31. 1) A single act of misconduct Case: Transport Workers Union and Kartar & Sundar Singh Omnibus Co Ltd “A single act of misconduct may justify dismissal only where the misconduct is such that it goes to the root of the contractual relation of master and servant so as to indicate an unwillingness on the part of the servant to be bound upon his original terms of contract.” 2) Similar Misconduct Case: PA Netto and Kulai Yong Estate “In the law of evidence, the fact that a person has committed similar misconduct before, although admissible, should not be prejudicial to show disposition of the person’s mind, but it meant to rebut the defense, if any, of mistake or accident. The claimant made no such defence and therefore the court cannot infer that he is likely to have committed now a misconduct of the same nature as before.” Ctd...
  • 32. 3) Past Misconduct Case: Malaysia Airline System and A Kader bin M Zalman “..if there was a charge against claimant for misconduct, pass misconducts could be considered to have a cumulative effect in deciding on the punishment. But in the present case, the termination of the claimant’s service was not on the ground of misconduct…therefore, his past misconduct, even if they were recent misconduct, became irrelevant to the issue before the court.” 4) Criminal Misconduct Case: Transport Workers Union and Lori Malaysia Sdn Bhd “ It is not necessary, and decided by authority, that an employer should await the prosecution of criminal proceedings against an employee before inquiring into a misconduct. If an employee is dismissed by an employer for misconduct after due inquiry, there is no obligation to take back the employee even if he is acquitted in criminal proceedings brought against him. In the present case, a period of over five months had elapsed before the company thought fit to make the claimant answer his allegation. It could very well have done so earlier… Meanwhile, the claimant had been performing his duties and earning the agreed remuneration without any interference from or restriction by the company. Even assuming that the claimant had been negligent, the court is of the view that, by so allowing the claimant to carry on for such a long period, the company had impliedly condoned such act of misconduct.” Ctd...
  • 33. 5) Private Misconduct Case: Transport Workers Union and Syarikat Pengangkutan Kemajuan Sri Perak Bhd It is not this court concern whether the misconduct alleged amounted to khalwat or maksiat. But the company did imply a moral misconduct grave enough to ruin the image of the company, and therefore deserving of dismissal. The court agrees with the finding of EAT in Cassidy v HC Goodman Ltd [1975] IRLR 86 that: ‘ For an employee to be justifiably dismissed on the ground of his private conduct, it has to be exceptional gravity or be capable of damaging the employer’s business.’ The court cannot see how the claimant’s spending the night in the Bachelors’ Room could have affected a public transport business to the extent of ruining its image. The court accordingly finds her dismissal had been without just cause as the alleged offence was not related to her employment. Ctd...
  • 34. 6) Provocation of misconduct Case: Van Leer Sdn Bhd and Chee Kong (Award 342 of 1987) ‘ Although contumacious and insolent acts towards a superior are in proper circumstances misconduct, it is against equity and good conscience to mete out the extreme penalty of dismissal when such acts were provoked by the superior, and that employee is not even- handedly punished. The court is therefore of the view that the company should have accepted recommendation of its own board of inquiry and given the claimant (and, it should be said, the superior as well) ‘a stern and final warning’ instead of dismissing him alone. The court therefore rules that the dismissal was without just cause and excuse.’ Ctd...
  • 35. 7) Condonation of misconduct 16 Halsbury’s Laws of England (4th Ed), p 439 para 648 under the heading Condonation states: ‘An employer who with full knowledge of his employee’s conduct elects to continue him in service cannot subsequently dismiss him for the offence which he has condoned.’ Case: Esso Production Malaysia Incorporated and Kesatuan Pekerja-Pekerja Esso Production Malaysia (Award 75 of 1992) ‘Permission may be granted to an employee retroactively to cover a prior misconduct or breach of duty as well as prospectively. Such retroactive permission is called condonation. The uniform rule is that an employer or his duly authorised supervisor who continues in employment an employee with full knowledge that the latter has committed a breach of duty, condones the breach, and such waiver or retroactive permission prevents the employer from later punishing the employee for it, absent a revival thereof.’ Ctd...
  • 36. 8) Punishment for misconduct Case: Goodyear Malaysia Bhd and National Union of Employees in Companies Manufacturing Rubber Products (Award 88 of 1986) ‘It must be noted that not all misconduct deserves dismissal, which has been described as the capital punishment in industrial relations. Important circumstances which mitigate the offence of the workman should be taken into account by the employer before he can be said to have made a fair and reasonable decision to dismiss. For example, a workman’s past record of good service, or the management’s own actions or omission which contributed to the misconduct, are mitigating factors which any reasonable company would take account of before dismissing. Length and quality of service, good untainted record, and past service awards and recognition must also be taken as extenuating circumstances when an employer decides the appropriate punishment for misconduct.’ Ctd...
  • 37. KINDS OF MISCONDUCT  The industrial court has commented on the following kinds of misconduct: 1.Insubordination 2.Disobedience 3.Lateness and absence 4.Dereliction of duty 5.Threat and intimidation 6.Assault and fighting 7.Gambling & Intoxication 8. Theft and dishonesty 9. Cheating and misappropriation 10. Fraud and misrepresentation 11. Breach of duty fidelity 12. Breach of duty of care
  • 38. Insubordination Case: Clarion Sdn Bhd and K Sivalingam In this case, it shows that the language used in disrespectful towards superior is considered insubordination. It is insolent, impertinent and derogatory in nature as it is offensively and tends to lower the dignity and the position of the superior. Case: Calcutta Jute Manufacturing Co Ltd v Calcutta Jute Manufacturing Workers Union Riotous conduct which makes it impossible for higher officers to discharge their duties properly.
  • 39. Theft and dishonesty Case: Multi Purpose Management Sdn Bhd and All Malayan Estates Staff Union  The theft or attempted theft by an employee of his employer’s property is misconduct warranting dismissal  Aiding theft of employer’s property also considered as misconduct and deserve the punishment of dismissal.  From the evidence adduce in this court and from the surrounding circumstances of the case, the court on the view that the claimant participated in one of these offence. The court find that he has committed misconduct which forfeited the confidence and trust of his employers and permitted them to dismiss him. However, in the case A Sinnathamby & K Kuppusamy and Sagie Estate (Award 51 of 1974)  Attempted theft can be misconduct and the fact that an employee has failed in his attempt to steal does not bar punishment for the offence.  The fact that an employee was standing by when an offence was being committed does not absolve him because it has been held that it is misconduct to encourage or to assist anyone stealing their employer’s property. Even permitting another to steal the employer’s property is misconduct.
  • 40. Lateness and Absence  Case: Hong Voon Holdings Sdn Bhd and Rosnani bte Sidin (Award 378 of 1984) “the company contended that coming to work late habitually was good ground for dismissal and cited The Chartered Bank and Kuching Bank Employee Union (Award 10 of 1966) to support the contention. And I agree with the contention and dismiss the claimant’s claim”  Absence from work without prior leave is not just a possible misconduct. Under the Employment Act, it may amount to breach of contract and a willful breach would could entitle the employer to terminate the contract of employee even if the absence was due to sickness.
  • 41.  The industrial court has commented on both kind of absence: i) Section 15(2) of EA declare that; “An employee shall be deemed to have broken his contract of service with the employer if he has been continuously absent from work for more than two consecutive working days without prior leave from his employer, unless he has a reasonable excuse for such absence and has informed or attempted to inform his employer of such excuse prior to or at the earliest opportunity during such absence.” ii) Section 13(2) of EA provides that; “Either party to a contract of service may terminate such contract of service without notice in the event of any willful breach by the other party of a condition of the contract of service.” iii) Section 60F(2) of the Act provides that; An employee who absents himself on sick leave— (a)which is not certified by a registered medical practitioner or a medical officer as provided under subsection (1) or a dental surgeon as provided under subsection (1A); or (b) which is certified by such registered medical practitioner or medical officer or dental surgeon, but without informing or attempting to inform his employer of such sick leave within forty-eight hours of the commencement thereof, shall be deemed to absent himself from work without the permission of his employer and without reasonable excuse for the days on which he is so absent from work. Ctd...
  • 42.  Case: P Ramasamy (Pemborong) Ladang Batu Arang and Kesatuan Kebangsaan Pekerja-pekerja Ladang (Award 52 of 1985) it was said: “absence without leave for more than two consecutive working days is deemed to be breach of contract of service by section 15(2) …The employer can either terminate the employee’s contract of service under section 13(2) or deal with him under section 14 after a due inquiry on the ground of misconduct.” Ctd...
  • 43. SECTION 14(2) For the purposes of an inquiry under subsection (1), the employer may suspend the employee from work for a period not exceeding two weeks but shall pay him not less than half his wages for such period: Provided that if the inquiry does not disclose any misconduct on the part of the employee the employer shall forthwith restore to the employee the full amount of wages so withheld.
  • 44.  Does section 14 of EA really require a proper inquiry before the taking of disciplinary action? Case: Ibrahim Hassan and Diamond Cutting Sdn Bhd “ the requirement of domestic inquiry has acquired great significance in industrial law, and has become a statutory requirement prior to the inflicting of punishment of misconduct as laid down under Section 14 of EA. The effect of this provision is that before an employer can dismiss an employee on the ground of misconduct, the employer must hold a proper domestic inquiry”  In 1970-1980, if the employer dismissed the employee for misconduct without holding the domestic inquiry, the termination of employee’s contract was automatically without just cause or excuse.  Section 14 of EA states that the employee can be dismissed on the ground of misconduct after “due inquiry”. The domestic inquiry should be held before imposing the penalty of dismissal. Ctd...
  • 45.  When an employer hold a domestic inquiry before dismissing the employee on the ground of misconduct, he considered treated his employee justly and fairly.  Whether absence of a domestic inquiry is fatal Case: Dreamland Corporation Sdn Bhd v Choong Chin Sooi [1988] 1 MLJ 111 The supreme court stated that (1) absence of a domestic or the presence of defective domestic inquiry is not fatality but merely irregularity. It is open to the employer to justify his action before the industrial court (2) unless the industrial court has found that the dismissal was without just cause or excuse, the court has no jurisdiction to offer any case Ctd...
  • 46.  However, this does not mean that a proper domestic inquiry is not necessary. Inquiry is still essential Case: Bank Bumiputra and George Thomas Where the Employment Act concerned, an inquiry is mandatory. For other employee, justice and fairness require the holding of an inquiry before a decision is made to dismiss an employee. Ctd...
  • 47.  For the domestic inquiry to be useful, it must be according to principle of natural justice which are; 1. rule requiring the fair hearing 2.Rule against bias  Right where the accused man to know the case which is made against him. He must know what evidence has been given and what statement have been made affecting him. Then, he must be given a fair opportunity to correct or to contradict to them.  Case: Board of Education v Rice [1911] AC 179 No one who has lost case will believe he has been fairly treated if the other side has had access to the judge without his knowing. Ctd...
  • 48.  Industrial court has indicated that as long as the principles or the rules of natural justice have been observed, or even violated, the domestic inquiry cannot be faulted or characterised as bad or defective.  Case: Kuala Lumpur Hilton and National Union of Hotel, Bar & Restaurant Workers It is alleged by the union that the domestic inquiry was bad… it is this court’s view that so long as the basic requirement of natural justice are observed, no strict rules of procedure need be followed. From the evidence the court finds that the claimant was informed of the charges against him and that he was given ample oppurtunity for denying or explaining the alleged misconduct. Ctd...
  • 49.  Once the inquiry has been held and the employee found guilty, the employer must decide on the suitable penalty.  The punishment must be suitable with misconduct and take into consideration the mitigation factors: I. The length of service of employee II. The prior record of employee; and III. Whether there was any provocation leading the employee to commit the misconduct.  Under Section 14 of EA gives the employers the right to punish the employee for misconduct includes: (a) dismiss without notice the employee; (b) downgrade the employee; or (c) impose any other lesser punishment as he deems just and fit, and where a punishment of suspension without wages is imposed, it shall not exceed a period of two weeks. Ctd...
  • 50.  The maximum period of suspension shall be for two weeks at half pay  If a suspension exceeds two weeks, it would appear that full wages would have to be paid in which case it is no longer a suspension as per the law.  The two weeks’ period is specified to avoid abuse  If the inquiry does not disclose any misconduct on the part of the employee the employer shall forthwith restore to the employee the full amount of wages so withheld. Ctd...
  • 51. SECTION 14(3) An employee may terminate his contract of service with his employer without notice where he or his dependents are immediately threatened by danger to the person by violence or disease such as such employee did not by his contract of service undertake to run.
  • 52.  Example: an employee cannot be instructed to work in an area where the use of certain chemicals make the employees sick and the employer pays no attention to the health related problem.  Therefore, he may terminate his contract of service without notice  This section protects employees against unprincipled employer who offer such contracts of service and put the employee lives in danger. Ctd...