In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.
Employers are frequently caught off-guard when they have to respond to a sudden development that threatens to damage their corporate image or reputation. These days, a common example would be where an incident involving an employee goes viral on social media, in a negative way.
Although social media virality does spread a lot faster than traditional media, the legal issues are not new. I have advised employer-clients many times over the years on the proper process to follow when employees are the subject of negative media coverage, including instances where employees have been arrested.
Despite the urgency and sensationalism that comes with an employer being named in media reports, employers have to be clear-headed in responding to such situations (See: “Handing employee dismissals properly under Malaysian law”), as an over-reaction can have expensive consequences.
This was illustrated in the recent Industrial Court award in Abas Tuah v Malaysia Airports Holdings Bhd (Award No. 1749 of 2022).
The employee in Abas Tuah (“the Claimant”) had served the Malaysia Airports Berhad group (“the Company”) for 37 years. He was arrested by the Malaysian Anti-Corruption Commission (“MACC”) on 6 August 2018. His arrest was widely reported in the news, with the Company named as his employer. The Claimant was remanded for four days by the MACC to assist in an investigation.
The Company received a letter from the MACC on 7 August 2018, informing the Company of the Claimant’s arrest on suspicion of committing an offence under the Malaysian Anti-Corruption Commission Act. The Company issued a suspension letter to the Claimant on 8 August 2018 to facilitate an internal investigation.
The Company issued a show cause letter to him on 16 November 2018 and, after finding the Claimant’s response unsatisfactory, subsequently dismissed him on 10 December 2018, as the Company concluded that his arrest had blemished the Company’s image and reputation. The Company also claimed that the arrest — which was related to alleged bribery — had led to the Company losing trust and confidence in the Claimant’s credibility and integrity.
The Claimant submitted an appeal letter against the dismissal on 28 December 2018, but the Company saw no reason to overturn the decision to dismiss.
The Claimant was dissatisfied that the Company did not conduct a domestic inquiry before deciding to dismiss him, and submitted that this failure meant that the Company had acted in bad faith and denied him natural justice. However, the Industrial Court cited the well-established principle that the absence of a domestic inquiry does not invalidate a dismissal, as any procedural breach of natural justice could be cured by the Industrial Court hearing.
The Claimant also submitted that the Company’s failure to tender an investigation report as evidence in Court meant that the Company failed to conduct a proper investigation. The Court concluded that there was no strict requirement that an investigation report needed to be tendered in Court.
The Claimant submitted that the Company acted arbitrarily in dismissing him while his case was still under investigation by the MACC, and he had not been convicted in court at the time of dismissal. The Court emphasised the importance of the presumption of innocence, which was a fundamental right, and that no person can be considered guilty of a crime until he has been found guilty by a court of law. In this case, the Claimant was only a suspect, and at the time of dismissal he was only under investigation, and he had only been remanded to assist with an investigation.
In fact, at the time of the dismissal, the Claimant had not even been charged in court. Although during the Industrial Court hearing, the Claimant was already charged in court and facing five charges under the Penal Code, the hearing had not commenced. The Industrial Court added that even if the Claimant had subsequently been found guilty and convicted of the charges, the Company could not dismiss him until the entire legal process had been exhausted — the Claimant would still have the right to appeal to a higher court.
In relation to the Company’s contention that the Company’s image and reputation had been blemished, the Court found that this was only a personal perception based on the media reports, and the Company had failed to provide reasonable evidence to substantiate this claim.
The Court concluded that the Company had acted hastily in dismissing the Claimant, and deemed the termination unjust and unlawful. The Claimant was awarded 61 months’ wages, comprising backwages (24 months’ wages) and compensation in lieu of reinstatement of one month’s salary per year of service (37 months’ wages).