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Defending Unfair Dismissal Claim

Updated: Sep 11, 2023

Nowadays, employees are getting more knowledgeable about their rights with the readiness to institute litigation to protect their rights from being infringed in the workplace.

Following the representations filed by the employees to seek redress for unfair dismissal, the Industrial Court has in several instances ordered the employer to pay substantial compensation to the employee. In 2017, the Industrial Court awarded Norzaifizy Khalid Nordin, a former Murphy Sarawak Oil Co Ltd employee, about RM1.2 million (back wages and compensation) after ruling that he was unfairly dismissed. Further, in 2019, Tengku Mohd Hasmadi Tengku Hashim, a former employee of Konsortium Transnasional Berhad (KTB) was awarded about RM2.45 million against his former firm for constructive dismissal.

However, the fact that Malaysia provides a “pro-employee" legislative landscape does not imply that dismissing an employee is an impossible mission. In an unfair dismissal case, the employer bears the burden to prove that it had “just cause and excuse” for dismissing the employee and that the dismissal was done in good faith. Grounds for dismissal include misconduct, poor performance, retrenchment, etc., and there are specific procedures applicable to each ground of dismissal.


There is a statutory obligation imposed on the employer to conduct a due inquiry to determine whether an employee is guilty of misconduct before the employee can be dismissed.

Poor Performance

To dismiss poor-performing employees, the employer must give a warning to the employee about their poor performance and give the employee sufficient opportunity to improve. Failure to sufficiently improvement by the employee may lead to termination.


Conducting such a retrenchment exercise requires absolute compliance with the Code of Conduct for Industrial Harmony.

The employers must satisfy all legal requirements in taking termination actions. As such, employers nowadays should arm themselves with the right skills, knowledge, and qualifications in managing employment relations and dealing with complaints of unfair dismissal. This is to ensure that the dismissal was carried out with “just cause and excuse”. Consequently, it will also serve as the best defense of the employers in protecting themselves against unwanted consequences when a claimant institutes an unfair dismissal lawsuit against them


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