Legal Guide to Unfair Dismissal and Judicial Review Malaysia: What Employees Must Know

Employment termination can be a stressful and complex event for any employee. In Malaysia, the law provides certain protections against unfair dismissal, ensuring employees are not unjustly deprived of their livelihoods. This guide aims to explain what constitutes unfair dismissal in Malaysia, how employees can seek justice, and the role judicial review plays in the legal landscape surrounding employment disputes.

Understanding Unfair Dismissal in Malaysia

Unfair dismissal occurs when an employee is terminated by an employer without just cause or a fair procedure. Unlike termination due to poor performance or misconduct, unfair dismissal involves a breach of legal or contractual rights.

In Malaysia, the Industrial Relations Act 1967 (IRA) governs unfair dismissal claims, protecting employees under certain conditions, particularly those employed in trade or industry and earning below a specified salary threshold.

Legal Framework Protecting Employees from Unfair Dismissal

• Industrial Relations Act 1967 (IRA):
  Provides employees the right to challenge dismissals that are deemed unfair. Section 20(1) of the IRA allows employees to file a claim to the Director General of Industrial Relations within 60 days of dismissal.
• Employment Act 1955:
  Governs employment terms for certain categories of employees but does not specifically cover unfair dismissal claims.
• Common Law:
  Contracts of employment can also impose obligations on employers, and breaches may give rise to wrongful dismissal claims.

Grounds for Unfair Dismissal

Dismissal may be considered unfair if it is based on:

• Discrimination: Due to race, gender, religion, or other protected characteristics.
• Retaliation: For exercising legal rights, such as filing complaints or union activities.
• Lack of Proper Procedure: Termination without proper notice, warnings, or hearing.
• No Valid Reason: Dismissal without genuine reasons such as misconduct or redundancy.
• Constructive Dismissal: When an employee resigns due to intolerable working conditions imposed by the employer.

The Process for Handling Unfair Dismissal Claims in Malaysia

Step 1: Filing a Complaint

The employee must file a complaint with the Director General of Industrial Relations within 60 days from the date of dismissal.

Step 2: Conciliation

The Director General will conduct conciliation sessions to help the parties reach a settlement.

Step 3: Industrial Court Referral

If conciliation fails, the case is referred to the Industrial Court for adjudication.

Step 4: Industrial Court Decision

The court will examine evidence and determine whether the dismissal was fair. Remedies include reinstatement or compensation.

Remedies Available for Unfair Dismissal

• Reinstatement: The employee returns to their former position.
• Compensation: Payment in lieu of reinstatement, often calculated based on length of service and salary.
• Back Wages: May be awarded for the period the employee was unemployed due to dismissal.

What is Judicial Review in Malaysia?

Judicial review is a process where courts review decisions or actions taken by public bodies or tribunals to ensure they are lawful, rational, and procedurally fair. It is not a re-hearing of the case but a check on legality and fairness.

The Role of Judicial Review in Employment Disputes

Judicial review in  Malaysia is often used to challenge decisions made by the Industrial Court or the Director General of Industrial Relations, especially when the affected party believes:

• The decision was made without jurisdiction.
• There was an error of law or procedural impropriety.
• The decision was irrational or unreasonable.

Judicial review is a powerful tool for employees who feel that the Industrial Court’s decision on their unfair dismissal claim was unjust.

How to Apply for Judicial Review

• Time Limit: Applications must be filed promptly, usually within 3 months of the decision.
• Grounds: Must show valid legal grounds such as illegality, irrationality, or procedural unfairness.
• Court Process: Application is made to the High Court and involves written submissions and possibly hearings.

Practical Advice for Employees Facing Unfair Dismissal

• Document Everything: Keep records of employment contracts, communications, and warnings.
• Act Quickly: File complaints within the statutory deadlines.
• Seek Legal Advice: Consult a lawyer experienced in employment law and judicial review.
• Prepare Evidence: Gather proof of unfair treatment or procedural lapses.
• Explore Settlement: Conciliation may resolve disputes without lengthy court proceedings.

Unfair dismissal is a serious issue in Malaysia that requires a clear understanding of employee rights and legal remedies. The Industrial Relations Act provides a structured process to seek justice, while judicial review offers a legal avenue to challenge administrative decisions. Employees must be aware of their rights, deadlines, and procedures to effectively protect themselves. Seeking legal counsel early can help navigate the complexities of unfair dismissal and judicial review processes, ensuring fair outcomes and protection under Malaysian law.