Thursday, 11 March 2010

Law updates - Labour law (Malaysian law unless otherwise stated)

HC = high court  
COA = court of appeal 
FC = federal court
Telekom Malaysia Berhad v Ramli bin Akim [HC]
The Industrial Court, or the High Courts and the appellate courts possess the jurisdiction to interpret the law as to the amount or the number of months of back wages that may be awarded in any case. The courts may make their decision upon an interpretation of the relevant law and not at the direction to do so as attempted by the said practice note. In the circumstances, the law that called for interpretation was s 30 of the Industrial Relations Act 1967 (the Act), which governed the powers of the courts to make an award. Further, the Act does not contain any pre-set limit as to the numbers of months of back wages that may be awarded. It was not wrong in law per se if an award of back wages exceeded the 24 months limitation provided in the said practice note. Although it was neither party's fault that the hearing had been delayed, the respondent should not be made to suffer the repercussions. The applicant on the other hand was the party that should be made to shoulder the delay as being a consequence of their wrongful dismissal of the respondent. Employers should ponder very carefully before they embark on the dismissal of their employees and must take into account that the hearing may be protracted, resulting in a higher amount of back wages. The matter of the respondent's unsuccessful venture into business was not necessarily irrelevant because if the respondent had been successful, the profit would have to be brought into account when deciding on the amount of the back wages. Therefore, when the respondent failed in his business venture, it did not mean that he was unemployed at that time since he still was. The period during which he was unemployed, and not the failure of the business venture, was the actual factor that was taken into account when determining the amount of back wages due to him. Since the respondent was not expected to be able to obtain similar employment for the fact he had lost touch with his previous position, it meant that he would be out of employment and was thus rightly compensated by way of back wages. The loss of future earnings covers an entirely different period for which the respondent could not, for various reasons, be expected to secure similar employment, nor reasonably be expected to return to work for the applicant. The respondent would have been entitled to work till he was 55 years old if not for his wrongful dismissal on June 1, 1997 and therefore, would have been entitled to earn the wages from that period till his compulsory retirement age of 55 years. It mattered not what label was attached to the award of wages for that period but it was lawful to award the same from the date of the dismissal to the date of his compulsory retirement age. Deductions would then be made taking into account various factors, e.g. an employee having found alternative employment or having been gainfully engaged in business. None of the factors that would warrant a deduction was present in this case.

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