Employer who does not dismiss an employee in right ways may cause himself to pay a large settlement sum to a disgruntled dismissed employee. For example, ex-Petronas employee awarded RM 1.13 m for wrongful dismissal. Having a fair and proper process to dismissal will help you to reduce legal costs and reduce employee turnover. So, it is not impossible to dismiss an employee lawfully in Malaysia.
Basically, there are 3 acceptable reasons for lawful and fair dismissal –
- Misconduct
- Poor Work Performance
- Redundancy/Retrenchment
Here are the following steps for dismissal.
- Employee must be informed or warned in writing that his/her cause of misconduct/work performance is below expectation with reason.
- Employer must then provide performance improvement plans, such as coaching/consultation session and give suggestion as how to overcome the problem. Please be reminded that all the coaching/consultation sessions should be well documented.
- Employee must be granted with reasonable amount of time to explain for his/her misconduct/poor performance and provided with sufficient opportunities to improve.
- Employer should hold a Domestic Inquiry in the event of a misconduct/poor work performance committed by an employee before the employer execute a punishment, such as dismiss the employee without notice; or downgrade the employee; or impose other lesser punishment, liked suspension without wages which shall not more than two weeks.
- If redundancy/retrenchment is needed, employer are required to follow the legal provisions of the Employment Act 1955 and the general rule of LIFO (Last In First Out). So, Mutual & Voluntary Separation Scheme (MSS/VSS) are the offers where the employer and employee agree to terminate the current employment contract with acceptable compensation.
Last but not least, employer should hire a mindful and knowledgeable human resource team to manage the workforce in compliance with the employment law and have good will to treat employee fairly. In case you need to upgrade your human resource team, we have variety programs for them. Click here to know to more and contact us.