On 25.02.2025, the Industrial Court of Malaysia, presided over by Y.A. Mohd Zulbahrin bin Zainuddin, ruled in favor of our Client, a senior employee challenging an unfair dismissal by a foreign government trade agency (“the Employer“), based in Kuala Lumpur. The Court awarded over RM200K in compensation, reinforcing the importance of procedural fairness in dismissal cases.
Mr. Jonathan Khaw represented the Claimant as counsel in these proceedings
Case Background
Our Client, a Business Development Manager with over 8 years of service, had consistently received positive performance reviews and was even awarded the BD-Emmy Award for excellence. However, just months later, she was suddenly dismissed, with her Employer citing alleged ‘poor performance’ and ‘behavioral issues’. These claims were disputed by documentary evidence and inconsistencies in the witness’ evidence during the proceedings.
The case was built around verifiable employees’ records, cross-examination and procedural fairness, which revealed serious lapses in the Employer’s handling of our Client’s dismissal.
During the trial, Mr. Jonathan Khaw demonstrated that:
- The Employer failed to provide just cause for termination, as required under applicable laws;
- The burden of proof was not met, and no credible evidence substantiated claims of our Client’s poor performance;
- Contradictory performance assessments were evident, as the Employer’s own records showed our Client was previously rated as “Exceeding Expectations”;
- There was no procedural fairness, as our Client was dismissed without prior warnings, performance reviews and/or an opportunity to improve;
- An adverse inference under Section 114(g) of the Evidence Act 1950 was drawn because the Employer failed to call the key decision-maker who authorized the termination, citing that he was residing in his home country and unable to attend Court at Kuala Lumpur. As a result, the Industrial Court inferred that his evidence would have been unfavorable.
Industrial Court’s Findings
The Industrial Court found that our Client’s termination was without just cause or excuse, emphasizing that:
- The Employer failed to prove just cause, rendering their dismissal unjustified;
- The sudden downgrade in performance evaluation was unsubstantiated and inconsistent with our Client’s earlier appraisals;
- The Employer’s failure to produce the key decision-maker led to an adverse inference being drawn against them, undermining their case;
- Compensation awarded totaled RM212,381.41, comprising 24 months’ back wages and compensation in lieu of reinstatement, calculated as 1 month’s salary per year of service. A 20% deduction was applied, taking into account that our Client had secured alternative employment post-dismissal.
Key Takeaways for Employers and Employees
This decision highlights key principles in our employment laws:
- Burden of Proof on Employers: Employers must substantiate claims of underperformance with clear and documented evidence.
- The Importance of Procedural Fairness: Employers must follow proper disciplinary procedures, issue warnings and provide opportunities for improvement before termination.
- Adverse Inference Can Be Detrimental: When an Employer fails to call a key witness (especially a decision-maker), it may result in the Industrial Court presuming that the evidence would have been unfavorable.
- Recognition & Past Performance Matter: If an employee has been consistently recognized for strong performance, a sudden reversal without clear justification and/or evidence will likely be viewed with skepticism by the Industrial Courts.