MANAGING MISCONDUCT &

DOMESTIC INQUIRY PROCEDURES

Dr Balakrishnan Muniapan
Praxis Skills Training & Consultancy Sdn Bhd
Email: [email protected]
INTRODUCTION & ICE BREAKER
 IDENTIFYING YOUR ORGANISATIONAL
CHALLENGES IN MANAGING MISCONDUCT
AND DOMESTIC INQUIRY
1.______________________________________________

2.______________________________________________

3.______________________________________________

4.______________________________________________

5.______________________________________________
EMPLOYERS’ RIGHT –
SECTION 13(3), IRA 1967
MANAGEMENT PREROGATIVES
Section 13(3) of IRA 1967 states no trade union
of workmen may include for proposal for
collective agreement the following matters:-
• The promotion by an employer of any workman from a
lower grade or category to a higher grade or category;
• The transfer by an employer of a workman within the
organization of employer’s profession, business, trade or
work, provide that such transfer does not entail a change to
the detriment of a workman in regard to his terms of
employment;
 MANAGEMENT PREROGATIVES
• Employment by an employer of any person that he may
appoint in the event of a vacancy arising in his establishment;
• The termination by an employer of services of a workman by
reason of redundancy or by reason of reorganization of an
employer’s profession, business, trade or work or the criteria
for such termination;
• The dismissal and reinstatement of a workman by an
employer
• The assignment or allocation by an employer of duties or
specific tasks to a workman that are consistent or compatible
with terms of his employment
LIMITS TO EMPLOYERS’ RIGHT
The Industrial Court in Lim Sim Tiong and Palm Beach Hotel
(Award 48/1974), stated:

“It is the basic principle of industrial law that a court would be

wrong to interfere with bona fide exercise of powers which are
given to management ……. However as a court of equity and
good conscience, this court will interfere not only where there
has been victimization, but also where it is opinion that upon
the substantial merits of the case the action taken by the
management was perverse, baseless or unnecessarily harsh
or was not just or fair, or where there has been a violation of
principles of natural justice, or where there has been unfair
labor practice or other mala fide action on the part of the
management in the exercise of its powers”.
 INDUSTRIAL COURT STATISTICS
(AWARDS ON DISMISSAL CASES)
TYPES OF
200 200 200 200 200 201 201 201
TERMINATIO
5 6 7 8 9 0 1 2
N

Constructive 22 42 97 126 140 135 91 96

214 205 120

Misconduct 878 613 608 639 540
4 1 0

Retrenchment 16 32 422 155 114 67 90 62

Others 0 0 402 573 328 479 640 735

TOTAL 2182 2125 2121 1732 1195 1460 1433

1289
 DISMISSAL: BURDEN OF PROOF
In Stamford Executive Centre v. Puan Dharsini Ganesan
(Award 263 of 1985) the Industrial Court observed:

“In a dismissal case the employer must produce convincing

evidence that the workman committed the offence or
offence of the workman is alleged to have been committed
for which he has been dismissed. ……. He must prove the
workman guilty and it is not the workman who must prove
himself not guilty. This is so basic a principle of industrial
jurisprudence that no employer is expected to come to this
Court in ignorance of it...”
 THE LAW ON UNFAIR DISMISSAL
Section 20 (1) of the Industrial Relations Act,
1967 states:
"Where a workman, irrespective of whether he is a member
of a trade union of workmen or otherwise, considers that he
has been dismissed without just cause or excuse by his
employer, he may make representations in writing to the
Director General to be reinstated in his former employment;
the representation may be filed at the office of the Director
General nearest to the place of employment from which the
workman was dismissed."
RESPONSIBILITIES
Managers and Supervisors
 Ensure that disciplinary rules (according to
terms of employment or company policy) are
not breached.
 This applies to both themselves, those they
supervise & those who report to them.
 HR plays the training and advisory roles to
the managers and supervisors.
MISCONDUCT IN
EMPLOYMENT
 MISCONDUCT
• The word “MISCONDUCT” is made of two
words namely “MIS” meaning “BAD” and
“CONDUCT” means “BEHAVIOR”.
• Literally meaning wrong or improper conduct,
bad behavior, unlawful behavior or conduct.
conduct
• The doer intentionally doing something he
knows is wrong.
 EA 1955 – SECTION 14(1)
An employer may, on grounds of misconduct
inconsistent with the fulfillment of the express or
implied conditions of his service, after due inquiry-

 dismiss without notice the employee

 downgrade the employee
 impose any other lesser punishment as he deems
just and fit.”
 INDUSTRIAL COURT ON
MISCONDUCT
“Misconduct is any conduct on the part of the
employee inconsistent with the faithful discharge
of his duties or any breach of the express or
implied duties of an employee towards his
employer would constitute an act of misconduct”

(Industrial Court in Malayan Thung Pau Bhd v Four

Workmen - IC Award 17/1974).
MISCONDUCT IN EMPLOYMENT
What are the express/implied conditions
of service?
 Terms & conditions which are in the contract
of service
 Terms not in the contract of service but are
understood and applied in practice/by
habit/by common consent
MISCONDUCT IN EMPLOYMENT
Acts occurring outside premises of company or
after working hours are also construed as
misconduct if…..

• The act tarnishes the image of the company,

• The act is work related,
• The act is serious enough to destroy company’s
faith in his integrity and his ability to continue to
function in his job .
MISCONDUCT IN EMPLOYMENT
• Drunkenness, adultery, wife (or husband)
beating, child abuse, drug abuse, immoral
behavior, gambling committed outside
working hours and premises are social
misconduct; but if such behaviour has no
bearing on the employee’s job performance or
attendance, the management should not
consider them as misconduct.
MISCONDUCT IN EMPLOYMENT
Industrial Court in Subramaniam & Sarathambal vs
Merlimau Pegoh Ltd (Award 32/75):

“…although an employer has the right to regulate conduct

in the factory, an employee's outside activities, even if
criminal, do not concern the employer, unless they
have given the employer bad publicity, impairing its
reputation and risking loss of clientele, or it would
disturb relations with co-employees or make it risky to
re-employ him.”
MISCONDUCT IN EMPLOYMENT
Misconduct can be broadly dealt under the
three heading as follows:

• misconduct relating to discipline

• misconduct relating to duty
• misconduct dealing with morality
 MISCONDUCT RELATING TO
DISCIPLINE
Industrial Court Award 83/86 – Assault on Superior
Officer – Dismissal Justified
“The Court has time and again held that an assault on
a superior officer is considered serious misconduct,
as otherwise it would be impossible to maintain
discipline inside the management. The claimant
deserves no other punishment than dismissal.”
 MISCONDUCT RELATING TO
DISCIPLINE
Industrial Court Award 17/94 – Defiance of a written lawful
order is misconduct – dismissal justified.
“It is the finding of this Court, in the context of employer-
employee relationship, that the willful and deliberate
defiance of written lawful order is not a minor infringement of
the established standards of conduct. It is a serious
infringement of the expressed or implied condition of the
contract of employment, and the appropriate punishment is
dismissal.
 CASE STUDY 1
Ahmad was employed as a factory operative. He was a good employee until very recently when there was
talk that he had taken on a second wife. His attendance at work began to be marked with absence on
and off. The factory manager did not mind as it was a low crop period and there was a reduction in
the oil palm fruits brought to the factory to be processed. However the following month was a busy
period and Ahmad’s absence was causing concern. He had absented a total of 5 days till the second
week. And now he was again absent for three days from the 21st till the 23rd. When Ahmad returned to
work on 24th the Factory Manager called Ahmad to his office, gave him a shelling and told him to
improve on his attendance. At the end of the month the HRD on receipt of the returns of absence and
no pay leave from the factory viewed the absence and Ahmad’s records, sent out a show cause letter
to Ahmad through the Factory Manager, for his absence on 21st till the 23.rd On receiving the reply the
Personnel Manager advised the Factory Manager to dismiss Ahmad with immediate effect as the
Personnel Department was not satisfied with the reply. The Factory Manager issued a dismissal letter
dated 30th of the month giving reasons for the dismissal as “absence from work from 21 st till the 23rd
without permission or reasonable excuse”. Ahmad’s claim went up to the Industrial Court and his
counsel argued that the employer had condoned the absence as Ahmad was allowed to work from
the 24th till the 30th and that the dismissal was unfair. The Industrial court agreed and ordered
payment of compensation in lieu of reinstatement as Ahmad had already found another job.
 MISCONDUCT RELATING TO
MORALITY
• Industrial Court Award 98/93 – Employee having illicit
intercourse with another worker – pleaded guilty –
punishment justified.
• The claimant, on one night invited a female employee of the
company home to have sexual relations with him, when his wife
was away. When four persons came knocking the door, he
helped the girl escape. When charges were filed against him, he
pleaded guilty to have committed a serous breach of company
regulation. He was punished with a reduction in RM 80 per month
(from his pay of RM 800 per month).
 CASE STUDY 2
Flat Plank Sdn.Bhd. is a plywood company. It is situated in Bandar Muadzam Shah, a rural town
in Pahang. It employs 80 females and 10 males. There are vacancies for 20 more workers.
Sudin is employed as a boilerman in the company. He has been employed for 10 years and
now his pay is RM 800 per month. On 25th of October 1993 he was working on the 2nd shift.
After his shift, he invited a female worker Milah to his house for the night as his wife was away
at her parent’s house. At approx. 4.30am., on the 26 th morning while he and his companion
were in his house, the HR Manager, a policemen and 2 other males came to the house and
knocked on the door. Sudin did not come out but assisted Milah to escape through the
window. He remained in the house and the rude visitors too left after a while. The next day the
company issued a show cause letter. The charge read: On the 26 th of October 1993 at about
4.30am. at house No.123, Bandar Muadzam Shah, you were found cohabiting with Milah,
employee No. 41, a Production Worker of the company. Your action is a serious breach of the
Company rules by having ill repute to the company. The following day Sudin admitted the
charge and pleaded for leniency. On the 4th November 1993 the Company conducted a
domestic inquiry. He also pleaded guilty at the inquiry. The panel recommended that his salary
be reduced to RM720 a month. He filed in a representation for reinstatement under Section 20
of the I.R. Act 1967 alleging that reduction in salary was tantamount to constructive dismissal.
 MISCONDUCT RELATING TO
DUTY
Industrial Cort in Soo Jim Weng v Guinness Anchor Marketing Sdn
Bhd (2012):
• An employee should do his job faithfully and entirely for his
employer's benefit and should not further his own interests or
those of any third party contrary to his employer's interests.
• In a case dealing with alleged irregularities with regards to the
approval of distributor's claims, the Industrial Court held inter
alia, that the claimant, by his conduct had shown a dereliction of
duty, was negligent and failed to work with care and diligence.
 MISCONDUCT RELATING TO
DUTY
Industrial Court in Palmco Oil Mill Sdn Bhd v Ooi Ching Lang
(Award 47/1994):
“The claimant had effectually been playing around with the company's
assets. Not only was he misleading management but in effect he was also
misleading himself and this made it impossible for him to continue to carry
out his duties and responsibilities. He had already caused considerable
losses to the company which was entitled to also think of its own well-being
and that of its shareholders. The dismissal had been effected with a heavy
heart after the company had taken all relevant factors into consideration
before making its decision. The court therefore does not see any justifiable
reason to disagree with the company's decision to dismiss the claimant.”
 CASE STUDY 3
Rampak is the General Secretary of N.U.C.W. and a clerk with Ajanta Sdn Bhd in
KL. On the 30th July 2003, he was to clear all the vouchers for claims made by
officers in the company. At 10.00 a.m. he came to know that his members in Alka
Trading Co. in Kedah had gone strike over the suspension of a storekeeper.
Rampak applied for leave to go to Kedah but the Managing Director, Koya Kutty
rejected his application as the claims had to be paid off by the 31 st. However
Rampak felt his responsibility was with his union members in Alka Trading Co.
and left for Kedah. He returned to work on the 4 th August 2003 having settled the
strike but was given a suspension letter in which he was asked to show cause
why his services should not be terminated for having stayed away from work
without permission for more than 2 days.

1. Do you think Rampak could be dismissed from service because he was absent
for more than 2 days? State your reasons.
2. If Rampak were to refer his case to the Industrial Relations Office, how would
you, as company’s representative, defend the company’s action?
THE ROOT CAUSE ANALYSIS OF
MISCONDUCT IN YOUR
ORGANIZATION?
 MISCONDUCT: PREVENTIVE
STRATEGIES AND ACTION PLANS
Identify the misconduct preventive strategies and
action plans within the context of your
organization
EMPLOYEE PERFORMANCE
RELATED PROBLEMS
POSITIVE MODEL FOR ANALYSIS
Procedural Steps For Assisting &
Handling Poor Performers
 Process of counseling & disciplinary action should
be instituted.

 To effect improved performance with no

resentment between the employee and the
supervisor, use the positive discipline model.
 POSITIVE MODEL FOR ANALYSIS
EMPLOYEE FAILS TO PERFORM
EMPLOYEE FAILS TO PERFORM
Repeat work no
Did the Employee Understand What Was Wanted?
instructions Did the Employee Understand What Was Wanted?
yes
Train the no
Did the Employee Have the Ability To Perform?
employee Did the Employee Have the Ability To Perform?
yes
Provide necessary no no
Did the Employee Have the Needed Tools & Equipment?
tools & equipment Did the Employee Have the Needed Tools & Equipment?
yes Was It a
no Deliberate and
Was the Failure Due to a Lack of Motivation?
Was the Failure Due to a Lack of Motivation? Willful Act ?
yes
yes
Terminate if no
Is the Employee Worth Saving?
possible Is the Employee Worth Saving? yes
yes
Provide the necessary no
DOMESTIC
Is Discipline Required?
Positive Motivation Is Discipline Required? ENQUIRY
yes

ADMINISTER POSITIVE DISCIPLINE !

ADMINISTER POSITIVE DISCIPLINE !
POSITIVE MODEL FOR ANALYSIS
Step 1

 Identify the problem & ascertain reason for

unsatisfactory work performance

e.g. What should he be doing ?

e.g. What did he do or what is it that he has not
done?
 POSITIVE MODEL FOR ANALYSIS
Step 1
 Counsel employee
- Know the critical success factors (CSF)
- Remove the obstacles
- Identify training needs
- Prove the procedures and instruction

 Encourage if improvement is shown

 POSITIVE MODEL FOR ANALYSIS

Step 2 – if work performance still unsatisfactory

 Serious counseling session

- address lack of interest

- he has had training
- he has had continuous feedback
- Real understanding of procedures and
instruction
 POSITIVE MODEL FOR ANALYSIS

Step 2 – if work performance still unsatisfactory

 Repeat in writing, in firm & friendly manner

- assistance will continue to be provided

- appropriate action taken if no improvement

seen
POSITIVE MODEL FOR ANALYSIS

Step 3 – if work performance still unsatisfactory

 Serious discussions

- Highlight problems/gaps which still exist

- Compared with company’s expectations/

standards
 POSITIVE MODEL FOR ANALYSIS

Step 3 – if work performance still unsatisfactory

 If no reason/excuse given
- Document situation
- Employee to rectify problem – 3 to 6 months
- If so, letter withdrawn
- Meanwhile letter forwarded to HR Dept
 POSITIVE MODEL FOR ANALYSIS
Step 4 – if work performance still unsatisfactory
 Final Warning
- Letter – list out instances of poor performance
etc
- Affirm provision of assistance
- Consequences – disciplinary action –
termination
- Time frame allowed for improvement
 POSITIVE MODEL FOR ANALYSIS
Step 5 – if work performance still unsatisfactory
 Terminate or issue Show Cause letter

- Final corrective effort

- Employee given a choice - stay or leave
- If leave – to discuss with HR on the next step
- If stay – to give letter stating continued failure to
improve – termination
 POSITIVE MODEL FOR ANALYSIS

Step 5 – if work performance still unsatisfactory

 Show Cause letter

- informal inquiry by panel

- review case and listen to his reasons
- recommendation – another opportunity/discipline

 Proceed directly with termination process

POSITIVE MODEL FOR ANALYSIS
Philosophy
 To correct performance in constructive manner
 Supervisor to bear some responsibility for non-
performance
 Industrial Court: incompetency/unsatisfactory
performance is not misconduct per se
 No need to hold domestic inquiry before
dismissing employee
 Compliance with natural justice
NEW TYPES OF
MISCONDUCT IN
EMPLOYMENT
 RECOGNIZED MISCONDUCT
During the last 100 years
 fighting at workplace
 theft of company property
 sleeping at the workplace
During the last 10 years
 abuse of internet facilities
 postings in social media
 sexual harassment
 ABUSE OF INTERNET AND
SOCIAL MEDIA
Examples
 Surfing adult sites during working hours
 Reading/sending personal email during working
hours
 Downloading offensive material
 Downloading copyrighted material
 Disseminating sensitive/confidential information
about company via email/chat groups
 What is the most
common type of
harassment in today’s
workplace?
SEXUAL
HARASSMENT
HOSTILE ENVIRONMENT HARASSMENT

Courts are likely to find an illegal hostile work

environment where there is:

Pornography Degrading Comments

Vulgar Language Embarrassing Questions

Sexual Touching Sexual Jokes

Sexual Propositions
OTHER TYPES OF HARASSMENT
Other types of harassment are equally unacceptable
with equally serious consequences:

Race Religion
Religion National
Race NationalOrigin
Origin

Age
Age Disability
Disability Sexual
SexualOrientation
Orientation

Pregnancy
Pregnancy

Political
PoliticalAffiliation
Affiliation
Physical
PhysicalAppearance
Appearance
 SEXUAL HARASSMENT
• What steps should we take to ensure that
sexual harassment (of any kind) is not
taking place in our workplace?
SEXUAL HARASSMENT
A Milestone in Malaysian legal history

Jennico Associates Sdn Bhd v

Lilian Therera De. Costa (Award No. 606
of 1996)

Note: this award his since been quashed

by the High Court
 SEXUAL HARASSMENT
High Court in Jennico Associates Sdn. Bhd. v. Lillian Therera
De Costa & Anor [1998] 3 CLJ 583:

“The only difference between this case and a normal criminal

sexual charge is that in this case the standard of proof
required for the claimant to prove is on a balance of
probabilities whereas in a criminal charge the standard of
proof is on a beyond reasonable doubt. But the onus of
proof does not shift. The onus shall always be on the
claimant to prove such allegations on a balance of
probabilities relying on her own evidence and other
witnesses and documents.”
SEXUAL HARASSMENT
Constructive Dismissal - Award No. 998 of 1991
- 7 incidents of blatant harassment culminated in
employee being given negative performance appraisals
(previously good ratings)
- No action was taken by the senior manager to whom
she complained
- Employee resigned and claimed constructive dismissal
- Court accepted her evidence and ordered compensation
to be paid
 SEXUAL HARASSMENT
• S.Sivalingam v Northern Telekom Industry Sdn. Bhd.
Penang [1980] 1 ILR 96 - Alleged molestation of the
cleaning woman in the toilet by her supervisor.
Dismissal of the supervisor not upheld for want of
corroborative evidence.
• Lam Soon (M) Bhd v Cik Chong Siew Yuan [1986] 1
ILR 1425 Victimized for rejecting the amorous
advances of the supervisor. Dismissal of the not
upheld for want of corroborative evidence.
 SEXUAL HARASSMENT
• Plaat Rubber Sdn. Bhd v Goh Chok Guan [Award
no.30 of 1995] - A male worker peeping into the
female toilet from the opening in the ceiling. Dismissal
upheld on the ground that it was an immoral act.
• Insco Sdn. Bhd v Swan Hui Mooi [Award no 195 of
1995] - Victimized by her boss for not continuing her
personal involvement with him after she found a new
boy friend. Dismissal of the female account executive
was held unjust.
SEXUAL HARASSMENT

Doesn’t have to be during working hours

or at the workplace

Even when it takes place outside working

hours, sexual harassment is still
misconduct sufficiently serious to justify
dismissal.
MISCONDUCT AND
DISMISSAL
MISCONDUCT AND DISMISSAL
When does an act of misconduct warrant
dismissal?
 Key Question: Is the misconduct major or minor?
 Penalty imposed for misconduct must be appropriate
to the seriousness of wrongdoing
 Disciplinary procedures differ in cases of minor
misconduct compared to more serious ones
 Major or minor - a subjective question
 PROVING THE MISCONDUCT
The employer has to prove the misconduct alleged
against the employee. In Rasa Sayang Hotel and
National Union of Hotel Bar & Restaurant Workers
(Award 82 of 1982) the Industrial Court said:
“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
has been no offence. Before the hotel can show that the
punishment does fit the crime, it must first prove the
crime”.
INVESTIGATING MISCONDUCT
 Fact-finding
 To find out if an offence has been
committed & whether or not accused
has a case to answer
 Statements from witnesses
 Relevant documents
 STAGES OF INVESTIGATION

Complaint received &

documented by
Supervisor/Manager

Forwarded to person in Q: What if complaint is for

breach of discipline of a criminal
charge of investigation
nature?
 STAGES OF INVESTIGATION

Statements from accused

Statements from witnesses

Investigation is
conducted Relevant documents

Sketch Plans
STAGES OF INVESTIGATION
When the investigation is concluded

Misconduct Major/Criminal
Offence

Issue warning/ Issue show cause/ charge letter

show cause letter
 SHOW CAUSE AND DISCIPLINARY
ACTIONS
Show Cause Letter

Employee to reply

Acceptable Admits Denies

explanation the charges the charges

Refer to HR Dept

No further action
SHOW CAUSE AND DISCIPLINARY
ACTIONS
Show Cause Letter

Employee to reply

Acceptable Admits Denies

explanation the charges the charges

Review by Panel Review by Company

(Recommend/Decide appropriate disciplinary action)
SHOW CAUSE AND DISCIPLINARY
ACTIONS
Show Cause Letter

Employee to reply

Acceptable Admits Denies

explanation the charges the charges
SHOW CAUSE AND DISCIPLINARY
ACTIONS
Employee to reply

Denies
the charges
 Suspended – up to Guilty – Disciplinary
2 weeks on half pay Action
 Formally charged
 Domestic Inquiry held
Not Guilty
 SHOW-CAUSE LETTER
A show cause letter addressed to an accused employee must be
in writing & must have the following:-

1. Must contain the allegation or allegations of the misconduct. Allegation

or allegations must be simple, clear, accurate and precise so that the
accused can know and understand them.
2. Must state that the accused has to show-cause as to why disciplinary
action should not be taken.
3. A reasonable time-frame for the accused to show-cause.
4. If accused does not show-cause within the stipulated time-frame or the
excuse given is not accepted, appropriate disciplinary action will be
taken.
SAMPLE OF SHOW-CAUSE LETTER
Name of Employee
Employee Number
Department
Date

Letter To Show-Cause

You were found to be sleeping whilst on duty in the production area at approximately 9.30 in the
morning on ____________

You are hereby required to show-cause within five (5) working days as to why disciplinary actions
shall not be taken against you. Should you fail to give an explanation within the stipulated period or if
the explanation given by you is not acceptable, the company shall proceed to take disciplinary action
deemed necessary and appropriate.

Yours faithfully
 SHOW CAUSE LETTER VS
CHARGE SHEET
A show cause letter is just a part of preliminary investigation to know whether
there is any element of misconduct on the part of the employee or not. In
reply to the show cause notice, the employee is desired to show the reason
justifying his action, why disciplinary action (by issue of charge sheet) should
not be initiated against him for that act, as considered to be a misconduct.

A charge sheet is issued when during the course of preliminary investigation,

after receipt of the clarification of the employee in reply to the show cause
notice, the disciplinary authority arrives at the opinion that the employee has
committed a misconduct, as per the rules and procedure of the organization.
FRAMING THE CHARGE

O.P. Malhotra in “The Law of Industrial Disputes”

states :-
“…the charge-sheet is the charter of disciplinary
action. The domestic inquiry commences with the
service of the charge-sheet. In other words before
inquiry against an offending employee, he must be
informed clearly precisely and accurately of the
charges levelled against him…otherwise it will amount
to him being condemned unheard.”
CHARGE

CH ARGE

BA S I S FO R DI S M I S S AL I F DEFECT I VE

DI S M I SS A L U N LA W FUL
(W I T H O UT J US T CA U SE O R EX CU S E)
CHARGE DEFECTIVE
CHARGE I S VOI D AB I NI TI O

PROCEDURAL FAI RNESS FI NDI NG OF GUI LT FAI RNESS I N PUNI SHMENT

NULL & VOI D NULL AND VOI D NULL & VOI D

DI SMI SSAL UNLAWFUL

WI THOUT J UST CAUSE OR EXCUSE
 FRAMING THE CHARGES
Esso Production (M) Inc v. Maimunah bte Ahmad & Anor [2002] 2 MLJ 458

The 2 charges against the Claimant :

1. That you received RM400.00 from Aladdin bin Mohd Hashim, knowing
that this sum was part of the money received from the Company’s
contractors, Oilfield Resources Sdn Bhd or its representatives in
return for assistance rendered in relation to payment of that
contractor’s invoice in contravention of the Company’s gift and
entertainment policy and the conflict of interest policy.

2. That you concealed and failed to disclose to the company’s

management, the existence of irregular business practices and/or
violations by employees and/or yourself, of the above mentioned
company’s policies.
 FRAMING THE CHARGES
The High Court held :-

“The applicant should not assume that the first respondent knew all the
particulars in respect of the charges. As regard the two charges, the
applicant failed to state the date, time and place the offence was alleged
to have been committed by the first respondent. Such failure rendered the
charges bad.
A defective charge for want of material particulars is void ab initio. Thus,
the finding of guilt of the first respondent by the board of inquiry should be
set aside thereby rendering the dismissal of the first respondent unlawful.”

The Court of Appeal upheld the High Court’s decision.

 FRAMING THE CHARGES
RHB Bank (M) Bhd v. Zailan Zawawi [2002] 3 ILR 581

That you had submitted a claim of RM150.00 per night for

hotel accommodation from 5 March to 27 March 1998 (23 nights)
amounting to RM3,450.00 while on audit assignment to Perai branch.
Your claim of RM150.00 per night make up of RM95.00 for hotel rate,
RM40.00 for two (2) extra beds and RM15.00 for extra charges.
However, the published rate charged by Hotel Layang-Layang, No. 4
Tingkat Kikik 7, Taman Inderawasih, 13600 Perai, Penang is RM65.00
per night for single room. Your above act thereby render you liable for
disciplinary action.
 FRAMING THE CHARGES
The Industrial Court held as follows:-

“… the charge levelled against the claimant is descriptive and

is a statement of facts but as mentioned earlier wanting in
naming the misconduct or offence alleged to have been
committed.

… the facts as found in the charge leads to diverse conclusions

as to what probably could be the misconduct or offence that
has been committed by the claimant. This goes to show that
the charge framed against the claimant is bad due to its
vagueness.”
 FRAMING THE CHARGES
The Industrial Court held as follows:-

“Though the claimant went through the domestic inquiry without

complaining about the charge and had given his evidence, and
it was also the same during the proceeding before this court, it
does not stop the court from considering the validity of the
charge when it was raised by counsel in the submissions.

The court having found the charge against the claimant is

vague and thus a bad charge, therefore concludes that it
vitiates the domestic inquiry conducted by the bank… As such
the dismissal of the claimant by the bank is without just cause
or excuse.”
FRAMING THE CHARGES

I MPORTANT FACTORS I N FRAMI NG CHARGES

MATERI AL PARTI CULARS NAME THE MI SCONDUCT CLEAR LANGUAGE AVOI D DUPLI CI TY

DATE TI ME PLACE FACTS

DOMESTIC INQUIRY
Domestic Inquiry Is Required By:-
• Statute - Section 14(1) of the Employment Act
1955
• Common Law - The rules of natural justice
before an employee can be punished for an act
of misconduct
DUE INQUIRY IN DISMISSAL
An employer may, on grounds of misconduct
inconsistent with the fulfillment of the express or
implied conditions of his service, after due
inquiry-
 dismiss without notice the employee
 downgrade the employee
 impose any other lesser punishment as he
deems just and fit.”
PURPOSE OF DOMESTIC INQUIRY
• To allow the accused ample opportunity to
defend himself against the charges leveled
against him so that a fair and impartial decision
can be arrived at.

• The effect of this provision is that before an

employer could dismiss, downgrade, or
suspend an employee from work without pay on
grounds of misconduct, the employer must hold
a fair and proper domestic inquiry.
 RULES OF NATURAL JUSTICE
 ‘Hear from the other side’ - audi alteram partem: This means no
man shall be condemned unheard, the accused must be given
sufficient opportunity not only to know the case against him but
also to answer it. He must have the opportunity to actually see,
hear & question all witnesses one by one from whom statements
were taken.

 ‘No man shall judge for his own cause’ - nemo judex in causua
sua: This means the person who sits in judgments must be an
independent person who is neither the accuser nor the accused
or any person who has any interest in or dislike of any parties
involved or any bias in any respect. This is to ensure that the
person who sits in judgments is able to act impartially & without
bias.
 NATURAL JUSTICE
“If the right to be heard is a real right which is
worth anything, it must carry with it a right in the
accused to know the case which is made against
him. The accused must be given sufficient
opportunity not only to know the case against
him but also to answer it”.

Lord Dennings in B Surinder Singh Kanda v Govt of the

Federation of Malaya (1962)
NATURAL JUSTICE
Natural justice requires that no man may be
condemned unheard and applies to every case
where an individual is adversely affected by an
administrative action. The accused should not only
know the case against him but he must have the
opportunity of confronting, questioning or repudiating
the witness, statements or evidence against him.

Industrial Court in Husin b Md Sam v Nakufreight Sdn Bhd (Award

75/1980)
 UPHOLD THE RULES OF
NATURAL JUSTICE
 Hold inquiry as early as possible after
suspension
 Give employee particulars of his
misconduct
 Allow employee reasonable time before
inquiry to prepare his case
 MEMBERSHIP OF THE PANEL

 No prior involvement/personal interest

 Free from bias
 Objective and unprejudiced mind
 Representative of different
departments in the company
 Fair racial composition
 REQUIREMENT OF THE PANEL
 To write a Domestic Inquiry report based on
the evidence produced before the panel

 To make clear & precise findings

 To give reasons for the findings

 To require conclusive proof of misconduct

 REQUIREMENT OF THE PANEL
 The application of the burden of proof in the
Domestic Inquiry is not to be as rigid as the
standard set in the Criminal Court

 To demonstrate good faith and impartiality

during the DI – in such a case the Industrial
Court will not normally interfere with the
decision made by the Company
DOMESTIC INQUIRY PROCEDURES
 Introduction of panel to all present by name,
designation and role e.g.
- Prosecutor for the Company
- the accused employee
- co employee representing the employee

 Panel to ensure witnesses, observers & those

who have no right to be in the inquiry room,
leave the room
DOMESTIC INQUIRY PROCEDURES
 Determination of language of
proceedings

 An interpreter if necessary

 Explanation of ground rules to all

DOMESTIC INQUIRY PROCEDURES
Ground Rules
 The panel asks the employee whether he has read
the charge and understood it
 Charge(s) read for the record – panel to ensure that
the employee understands the charge(s)
 Explanation of charge
 Plea taken – clear and unequivocal terms “I plead
not guilty” or “I plead guilty”
DOMESTIC INQUIRY PROCEDURES
Ground Rules
 The Company will present its case first
 The employee and/or co-employee will be
permitted to question the witnesses
 The employee will be permitted to produce his
own witnesses
 No one is to speak out of turn without the
permission of the Chairman of the Panel
DOMESTIC INQUIRY PROCEDURES
Ground Rules
 Each party is to keep its own record of the
proceedings
 The panel informs the parties of the schedule
of the proceedings e.g. breaks and closing
for the day
DOMESTIC INQUIRY PROCEDURES
Where employee pleads guilty
 Employee to understand full nature and
consequences of pleading guilty

 Investigation Officer - disclose the facts of the case,

Employee must admit the facts as correct

 Mitigation - employee is asked to explain why he

committed the misconduct
DOMESTIC INQUIRY PROCEDURES
Where employee pleads guilty
 Plea may be treated as NOT GUILTY if :-

- employee does not admit the material facts

- mitigation indicates a defence to the charge

e.g. self-defence in respect of charge of
assault
DOMESTIC INQUIRY PROCEDURES
Conclusion of hearing
 Panel to inform employee that he continues to
be suspended from work until:-

- Panel has submitted its recommendation to

the Company

- HR informs employee of the decision

 EMPLOYEE ABSENT ON THE DAY
OF INQUIRY
Investigating Officer
 To furnish evidence that the Employee has been
informed of the date and time of the inquiry e.g.
acknowledgment on the copy of the letter written to
the Employee.

 To check with the Employee’s Immediate

Supervisor as to whether any information has been
received from the Employee in this regard
EMPLOYEE ABSENT ON THE DAY
OF INQUIRY
 Inquiry postponed for 1 hour

 If the Employee still does not show up, the Panel is

to fix another date - 3-4 days’ time

 To ensure that the Employee is informed of the new

date

 Hand delivery of the written notice of the new date

EMPLOYEE ABSENT ON THE DAY
OF INQUIRY
Not to conduct hearing ex parte on 1st occasion
 May result in a total waste of time if Employee
subsequently proves a reasonable excuse for
absence e.g. he was hospitalised on the day.

 An ex-parte hearing should only be carried out if

there is evidence that the Employee was
deliberately absent.
 EMPLOYEE LATE FOR INQUIRY
Inquiry has already proceeded ex parte
 Employee to explain reasons for being late
 The Panel repeats Procedure for Domestic
Inquiry
 Recall of witnesses – evidence read out to
employee – allowed to cross-examine them
 The Inquiry then continues as usual
EMPLOYEE PLEADS NOT GUILTY
Procedure
 The Panel first asks the Investigation Officer
and then the employee how many witnesses
they would be calling
 Investigating Officer to give a brief outline of
the facts of the case
EMPLOYEE PLEADS NOT GUILTY
Procedure – Company’s Witnesses
 Investigating Officer calls witnesses one by one.
Each witness is to be dealt with in the following
manner.

- Introduction of witness
- Examination in Chief
- Cross-Examination
- Re-Examination
EMPLOYEE PLEADS NOT GUILTY
Procedure – Company’s Witnesses
 Panel then examines witness

- Further questions by parties after their turn

- Panel has discretion to refuse
- Answers to the Panel’s questions are not
subjected to cross-examination
EMPLOYEE PLEADS NOT GUILTY
Procedure – Company’s Witnesses
 After the witness has given his testimony,
witness released with a caution not to discuss
his testimony with anyone
 The Investigation Officer confirms that he has
no more witness and closes his case
EMPLOYEE PLEADS NOT GUILTY

Procedure – Defence Witnesses

 The Defence is now called

 The employee is required to testify first
 The employee calls his witnesses one by one
 After the employee confirms that he has no
more witnesses, the Defence closes its case
EMPLOYEE PLEADS NOT GUILTY
Procedure – Adjournment & Submissions
 The Panel can call for a short adjournment

 Both parties now prepare their submissions

EMPLOYEE PLEADS NOT GUILTY
Procedure – Conclusion of Proceedings
 The proceedings are now over and the Panel thanks
all the parties for their participation
 Employee is informed that the Panel will submit its
findings to the Company
 Employee is informed that he continues to be
suspended until the decision of the Company is
made known to him
 EX PARTE INQUIRY
Conduct
 Investigation Officer reads the charge and
gives a brief outline of the facts

 The Company’s witnesses are called in one by

one and examined by the Investigation Officer
 EX PARTE INQUIRY
Conduct
 The Panel to examine each witness by asking
the kind of questions that the Employee, if
present, would have asked

 The Investigation Officer concludes the case

with submissions on the evidence presented
 GROUNDS OF FINDINGS
Breakdown of charge
 Charge is broken down into its components by the
Panel e.g. on a charge of insubordination, the
components the Prosecution must prove are:

- that the employee was instructed to do something

- that the person who instructed him was his superior
- that the instruction was lawful and reasonable and part of
the duties of the employee
- that the employee wilfully refused to follow the instructions
 GROUNDS OF FINDINGS
Breakdown of charge
 Identification of defence to the charge e.g. to a
charge of fighting - self-defense or grave and
sudden provocation

 Examination of both sides’ evidence

 Conclusion from the evidence presented whether or

not the Prosecution has proven the charge
 GROUNDS OF FINDINGS
Notes of Inquiry
 Recorded by one of the panel members or an
appointed secretary. Verbatim report is advised.
 Panel to make marginal notes on the demeanor of a
witness – reliability of witness at the end
 If secretary uses shorthand - notes to be preserved
together with the typed transcripts
 GROUNDS OF FINDINGS
Notes of Inquiry
• Tape Recordings not advisable
• Tape Recordings can only be used as evidence if
the tapes are sealed in envelopes and both parties
sign it
• Tape Recordings cannot be opened in the absence
of one party
 GROUNDS OF FINDINGS

Notes of Inquiry
 Copies of the notes of inquiry – if to be given to the
employee –
- read back to him the evidence after the testimony of
each witness
- employee to sign each page
 The Company need not give a copy to the
Employee but must provide facilities for the
Employee to record his own notes
 GROUNDS OF FINDINGS

Notes of Inquiry
 Once the inquiry is completed it cannot be reopened
to admit fresh evidence unless :–
- could not by reasonable diligence have been
obtained at the time of the inquiry; and
- it is material and entirely changes the outcome of the
case
 GROUNDS OF FINDINGS
Findings & Punishment
 Findings to focus on the charges.
 Should not contain criticism of the Company’s systems or
ways to improve
 Panel not to avail themselves of the past record of the
employee at the time of passing judgment - prejudicial
information without any probative value
 Panel not to decide on the punishment to be imposed on the
guilty employee.
 DISCIPLINARY ACTION

Effective discipline should be likened to what

happens when you touch a hot stove

Predictable
Immediate
Consistent
Impersonal
DISCIPLINARY ACTION
In deciding the nature of disciplinary action to be meted
out, consideration to be taken into account:-
1. the severity of the misconduct committed.
2. the extent to which the employee is responsible.
3. the circumstances under which the misconduct was
committed.
4. the past record of the delinquent employee, including his
length of service.
5. bad past record would be aggravating and good past
record would be mitigating.
TYPES OF DISCIPLINARY ACTION
 Dismissal
 Downgrading
 Suspension without pay
 Withholding/non-payment of increment
 Non-payment of bonus
 REMEDY FOR DISMISSAL
WITHOUT JUST CAUSE OR
EXCUSE
Whether a workman is a member of a trade union or not, he can
file a representation to the DGIR in writing seeking for
reinstatement to his former employment if he considers he was
dismissed without just cause or excuse.
To qualify for this remedy -
•must be workman
•file representation within 60 days of the dismissal
Upon receipt of the representation, DGIR will take steps as
necessary or expedient for a settlement.
 BURDEN OF PROOF
In Stamford Executive Centre v. Puan Dharsini Ganesan
(Award 263 of 1985) the Industrial Court observed:

“In a dismissal case the employer must produce convincing

evidence that the workman committed the offence or
offence of the workman is alleged to have been committed
for which he has been dismissed. ……. He must prove the
workman guilty and it is not the workman who must prove
himself not guilty. This is so basic a principle of industrial
jurisprudence that no employer is expected to come to this
Court in ignorance of it...”
 SECTION 20, IRA 1967
“It is well established and well known that for an
employer to dismiss any workman, there must be just
cause or excuse. The just cause or excuse must be
based on the facts of each case, either a misconduct,
negligence or poor performance. The onus is on the
employer to prove just cause or excuse.”

Industrial Court in Great Wall Shopping Sdn Bhd v Gan Shang Eng,
241/1988)
THE LAW ON UNFAIR DISMISSAL
Section 20 (1) of the Industrial Relations Act, 1967
states:-
"Where a workman, irrespective of whether he is a member
of a trade union of workmen or otherwise, considers that he
has been dismissed without just cause or excuse by his
employer, he may make representations in writing to the
Director General to be reinstated in his former employment;
the representation may be filed at the office of the Director
General nearest to the place of employment from which the
workman was dismissed."
CONSTRUCTIVE DISMISSAL
“An employer does not like a workman. He does not
want to dismiss him and face the consequences. He
wants to ease the workman out of his
organization……… Generally speaking he will make
life so unbearable of the workman so as to drive the
latter out of employment.”

Dato’ Gopal Sri Ram, JCA in Quah Swee Khoon vs.

Sime Darby Berhad (2000)
 UNFAIR DISSIMAL &
CONSTRUCTIVE DISMISSAL
Unfair Dismissal - the
employer must prove a fair
reason for dismissal.

Constructive Dismissal - the

employee must prove that the
dismissal was constructive.
THE LANDMARK CASE
The Supreme (now Federal) Court in
Wong Chee Hong V. Cathay Organisation (M) Sdn. Bhd. [1988] 1
CLJ 298
- Salleh Abbas LP stated the principle underlying the concept of
constructive dismissal as follows:

“The common law has always recognized the right of an

employee to terminate his contract of service and therefore to
consider himself as discharged from further obligations if the
employer is guilty of such breach as affects the foundation of the
contract or if the employer has evinced or shown an intention not
to be bound by it any longer”.