General article on misconduct

Handling Disciplinary Issues at the workplace

From a legal standpoint, it is important for an employer to effectively deal with disciplinary issues in the workplace. The description “disciplinary issues at the workplace” is also commonly described as “misconduct” at the workplace.
In dealing with misconduct at the workplace, below are some factors that employers should consider: –

1) No condonation!

Condonation in this context refers to the employer accepting the behaviour of an employee that is regarded to be wrong. This can take the form of

– Word(s)

– Action(s)

– Non-action,

by the employer.

The general principle behind condonation is that an employer must act against employee(s) in all situations of misconduct. Failure to do so may be regarded as the employer having condoned the misconduct. Consequently, the employer, cannot at a later stage, use the same misconduct to dismiss the employee.


The Employment Act 1955 applies only to those employees who earn RM2,000 and below (subject to several exceptions contained in the First Schedule). Section 14 states that an employee may be punished for misconduct after “due inquiry”.

Due inquiry” in this context means that the employer must investigate the misconduct, and must provide the employee with the opportunity to defend him/herself. This necessitates the employer ensuring that that stages of disciplinary process (described below) are followed.


As mentioned in my previous article, employers cannot dismiss an employee by merely following the notice provision as per the employment contract. This is because of a law known as the Industrial Relations Act 1967 which states that termination of employment must be with just cause or excuse. Section 20 (hereafter referred to as “S.20 IRA”) states that any employee who feels that s/he was dismissed without just cause or excuse can bring legal action against his/her former employer for reinstatement.


Also mentioned in my previous article is the unique feature of s.20 IRA. The unique feature is that the employer must prove to the court that there was just cause or excuse in dismissing the employee, despite the fact that it is the employee who initiated the claim in the Industrial Court. If the employer is unable to do so, the Industrial Court may order reinstatement of the employee, or penalize the employer by awarding back-wages of up to 24 months plus compensation in lieu of reinstatement.

For an employer to stand a chance at succeeding in the Industrial Court, it must demonstrate that the stages of disciplinary process were duly followed and that the principles of natural justice were adhered to by providing the employee with the opportunity to defend his/her case.

Stages of disciplinary process:
1. Preliminary investigation
2. Service of Show Cause Letter
3. Letter of Explanation from the employee
4. Notice of Domestic Inquiry
5. Suspension Pending Domestic Inquiry
6. Appointment of Panel Members for Domestic Inquiry
7. Conduct of Domestic Inquiry
8. Panel Decision and Report
9. Punishment.

The above steps are in a situation where the entire process is followed. Factors to be considered are- severity of the misconduct (i.e. whether it is a minor or major misconduct), whether the employee already admitted to guilt, past records, years of service, etc.

It is also essential that the above steps are documented. Always be mindful that in the absence of any documentation, it becomes a contention of one party’s version of the story versus the other party’s. And typically, in this situation, the Industrial Court will take the side of the employee.

The employer must prove that dismissal of the employee was with just cause or excuse. Employers are advised to carry out the stages of disciplinary process stated above. Failure to do so may expose the employer to an unfair dismissal claim and may render the company liable to pay a large compensation.

It is therefore prudent to obtain the services of specialist in Malaysian employment law to identify any potential issues that may arise.

Legal Disclaimer

The articles posted are for general information purposes only and should not be construed as legal advice. Facts and circumstances differ from case-to-case. Please consult your lawyer for specific legal advice and action to be taken.

This article is brought to you by Justin Lee and is copyrighted accordingly. Justin is an employment law specialist who can advise, draft and train your human resource managers.