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Malaysia - Substantive requirements for dismissals


Substantive requirements for dismissals (justified and prohibited grounds) - Malaysia - 2013    

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Obligation to provide reasons to the employee: No
Remarks:
  • No statutory obligation.
    However sec. 10(2) EA states that every written contract of service should include a clause setting out the manner in which the contract concluded may be terminated by either party.


Valid grounds (justified dismissal): none
Remarks:
  • Sec. 12 (1) EA: termination by either party at any time provided that the notice requirements are observed: no ground for dismissals required in the laws reviewed. This does not result in a total freedom to terminate the contract: it must be understood in light of the existence of prohibited grounds.

    The EA authorizes termination without notice in the following cases:
    Sec. 13 (2) EA: termination by either party without notice in the event of any wilful breach of contract.
    Sec. 14 (1) EA: summary dismissal on the grounds of misconduct.
    Sec. 15 (2) EA: termination of the contract of an employee who has been continuously absent from work without reasonable excuse.
    New as of April 2012:
    The 2012 amendments to the EA have introduced a new part on Sexual harassment. According to the new amendments, the employer is required to inquire into a complaint of sexual harassment he/she has received, and to take disciplinary action against the employee concerned if he/she has been found guilty, including dismissing the employee without notice (Sec. 81(c) EA).


Prohibited grounds: pregnancy; maternity leave; trade union membership and activities
Remarks:
  • * Trade union activities: sec 5 (1) (d) and 59 (1) IRA.
    New as of April 2012
    *Maternity leave and pregnancy: Section 37 (4) has been inserted in the EA and it states that dismissing an employee during maternity leave constitutes an offence (former section 40 (3) EA). Unlike the previous Section 40 (3) EA (which now has been deleted), sec. 37 (4) of the amended EA provides that the prohibition of dismissal during maternity leave does not apply to termination on the grounds of the closure of the employer's business.
    New as of April 2012
    Prior to the 2012 amendments the provisions on maternity leave were applicable to female employees depending on their wages. As of April 2012, a new Section 44A has been introduced in the EA, and it states that maternity leave entitlements are now extended to all female employees, irrespective of their wage.
    *Constitutes also an offence the dismissal of a female employee who remains absent from work after the expiration of the protection period as a result of illness arising out of her pregnancy or confinement (sec. 42 (1) EA).


Workers enjoying special protection: pregnant women and/or women on maternity leave; national employees
Remarks:
  • New as of April 2012
    *Maternity leave and pregnancy: Section 37 (4) has been inserted in the EA and it states that dismissing an employee during maternity leave constitutes an offence (former section 40 (3) EA). Unlike the previous Section 40 (3) EA (which now has been deleted), sec. 37 (4) of the amended EA provides that the prohibition of dismissal during maternity leave does not apply to termination on the grounds of the closure of the employer's business.
    New as of April 2012
    Prior to the 2012 amendments the provisions on maternity leave were applicable to female employees depending on their wages. As of April 2012, a new Section 44A has been introduced in the EA, and it states that maternity leave entitlements are now extended to all female employees, irrespective of their wage.

    Constitutes also an offence the dismissal of a female employee who remains absent from work after the expiration of the protection period as a result of illness arising out of her pregnancy or confinement (sec. 42 (1) EA).

    In addition, sec. 60N EA provides specific protection to local employees in case of collective dismissal as it stipulates that no employer can retrench a local employee unless it has first terminated the services of a foreign employee employed in a similar capacity.