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Court of Appeal Held that Employee’s Resignation Upon Suggestion by Employee Does Not Amount to Forced Resignation

Precedential Decision by Judiciary or Regulatory Agency

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

The Court of Appeal, on December 9, 2022, held in the case of Matrix Global Education Sdn Bhd v Felix Lee Eng Boon [2023] 2 CLJ 34, that the conduct of the employee, in entertaining and entering into negotiations for settlement on terms, could not support the employee’s subsequent claim for constructive dismissal. The court held that the employee needed to be seen to have dissociated and distanced himself from actions of the company, and to forthwith walk out of his employment and treat himself as being constructively dismissed. The fact that the employee had negotiated for a better severance package showed that the advice to him to resign was no longer the proximate cause of his alleged forced resignation. The moment the employee tendered his letter of resignation on terms agreed, that was a concluded contract and no longer a case of constructive dismissal.

The court further held that in a case where the company considers the employee to have committed a misconduct, not of the criminal kind but of, poor performance, parties may enter into a negotiation for a severance of the employment contract on terms mutually agreed and this may even have been commenced after the company had suggested that the employee should consider or even should resign.

High Court Held Employer Must Honestly Believe on Reasonable Grounds that the Employee is Incapable and Incompetent

Precedential Decision by Judiciary or Regulatory Agency

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

The standard used to gauge the performance of an employee is left to the employer who does not have to prove that the employee is incapable or incompetent. However, before the employee can be dismissed for poor performance the employee must be given the opportunity to improve and if the employee continues to perform unsatisfactorily, the dismissal is justified after an explanation has been sought and considered by the employer. Secondly, dismissal is not justified or is without just cause and excuse where the employer does not honestly believe on reasonable grounds that the employee is a poor performer or on mala fide intentions. Mala fide intentions include procedural unfairness, victimization, discrimination, and unfair labor practice.

Social Security Incentives for Hiring Special Groups

Proposed Bill or Initiative

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

Malaysia’s Social Security Organization (PERKESO, also known as SOCSO) will provide an incentive of MYR 600 monthly for three months in addition to the salary offered to employers who hire Technical and Vocational Education and Training (TVET) graduates.

SOCSO will also provide incentives for employers to employ vulnerable groups such as persons with disabilities, ex-convicts, the homeless, and chronically unemployed for up to MYR600 monthly for up to three months.

The Government will cover up to MYR4,000 in training fees for gig workers to undergo micro-credentials upskilling programs. SOCSO also provides an allowance of MYR300 for three months as a replacement income for active gig workers undergoing training programs. Overall, MYR40 million is allocated to benefit 30,000 gig workers.