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Legal and Ethical Issues

Info: 5394 words (22 pages) Essay
Published: 6th Aug 2019

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Jurisdiction / Tag(s): Malaysian law


There are two acts particularly deal with employment relation in Malaysia, The Employment Act (EA) 1955 and Industrial Relation Act (IRA) 1967. Both acts define what the word ‘employee’ in Malaysia means is.

While Industrial Relation Act 1967 describe ‘Employee/Workman’ as any person, including an trainee, employed by an employer under a contract of employment to work for appoint or repayment and for the functions of any measures related to a trade dispute involve any such person who has been dismissed, discharged in relation with or as a effect of that dispute .

2. Relationship between employer and employee:

One of the most important questions in employment law is how to conclude the Relationship between employer and employee?

Determining employer and employee relations is an important part of business, not only because it determines the obligations and responsibility of both the employer and the employee but also because the survival of such relationship vests an employer with certain rights and duties.

Employer employee relations regard to the communication that takes place between representatives of employees and employers. Much of the employee relations engage employees and employers working together.

The employment contract must compile with local labor laws that establish minimum employment standards such as the minimum wage minimum benefits and rights.

Employees and Employers have responsibilities to each other; they must also look forward to their rights to be upheld. These rights and responsibilities relating to areas such as Health and Safety, the provision of Terms and Conditions of Employment,

The relationship between employer and employee is ruling by the Employment Act 1955. The act covers all instruction manual workers and non-manual workers gain below RM 1500. Current, amendments to the Act as well permits for all workers to complain to the employment Department if his or her employer infringes any circumstances within the employee’s contract of service.

2.1 The relationship between the employee and the employer under the Employment Law 1955.

employment relationship.gif

The Employment Act 1955 regulates the employment relationship between the employer and employee in addition to the terms and conditions under which employers may employ employees. The employment relationship foreseen by the Act is the old “master and servant” relationship, i.e. the well-known “contract of service” relationship. And among the terms and conditions regulated by the Act are the hours of work wages and the benefits, as well as other terms and conditions, of employment and work.

2.3 Employment contract:

When you want to determining any legal relationship, you have to look at the agreement or a contract between the parties.

The instant an applicant totally accepts your offer of a job, a contract of employment comes into existence. The terms of the contract can be oral, written, implied or a mixture of all three.

Hitchcock v Post Office (1980) [1] :

Mr. Hitchcock ran a sub-post office. The post office exercised some control over his activities, such as the payments of benefits, sale of stamps etc. but he could delegated his work to others and took the risk of profit or loss.

Court held he was an independent contractor. The control the post office did have was due the need to ensure financial control and security rather than to control his role as a manger.

Even if you do not issue a written contract, you are under a legal duty to provide most employees with a written report of main employment details within two months of the start of their employment with you. If you have an employee who is going to work overseas for more than a month within two months of beginning work, you must give them their written statement before they leave. The written statement is not itself the contract but it can provide proof of the terms and conditions of employment between you and the employee if there is an argument later on. This direct lays out your legal obligations when issuing a contract of employment or a written statement.

3.0 The rights and responsibilities of an Employer:


As with the employee, the employer must take all reasonable steps to make it possible for the employee to perform his or her part of the agreement and must not divest the employee of the opportunity to perform the work. The law increasingly has been suggesting that an employer does not have the right to just have someone sitting around so long as the employer pays him or her. In short, there may also be a responsibility to give an employee something essential to do. This is still a growing area of law and if an employer has no work to provide it may lead to the employee’s reduction of expenditure.

The common law provides rights of employer are implied into contracts of employment as well as those covered by the employment Act 1955.

3.1 The rights:

The common law rights of employer include among others-

Right to be indemnified by the employee

Referring to the employment act 1955, employer has right to secure that employee is going to use his or her all skills, awareness and capabilities to achieve the tasks will be assigned by employer.

Right to be obeyed in lawful orders by employee

Employer has the rights to receive compliance from employee in lawful orders, the lawful orders according to the employment contract, they have signed. And if employees will not comply with, he will be termed unruliness and he has to be disciplined.

Right to be rendered service from employee

The employer has right to receive services which will be provided by employee according to the employment act 1955. And if the employee not complies the disciplinary will be taken upon him or her.

Right to be complied with statutory obligations by employee

The employer has to receive the statutory obligations from employee, it means the employee has to carry out his lawful duties and a responsibility according to the employment act instance employee has to show good faith to the employer.

Right to receive service from employee in relation to the work during spare time

This means employees are to work for their employer in their working time according to the employment contract, and allowed to work elsewhere when it is different kind of business, it does not interfere with normal work and conducted during spare time.

Right to receive reasonable skill and knowledge from employee

An employee has to implement reasonable care and skills in the performance of his work to the employer. And this right ought to be practical to work for which the employee has been hired to do and which he has claimed he is competent to do.

3.2 The duties (responsibilities):

The common law provides duties of employer are implied into contracts of employment including those covered by the employment Act 1955.

Employer be obligated the following duties to their employees-

The duty to pay remuneration:

This duty normally exists even if there is no work to be done, particularly in relative to fixed-term contracts. on the other hand, instead of offering a wage, some employers may choose to pay an employee for work done or services provided by means of commission, fee, or receipt of tips from customers. Nevertheless, it ought to be well-known that this duty is affected by legislation or award provisions which successfully allow an employer to legally stand down employees in certain situation.

The obligation to provide work:

The justification being that workers paid by time ought to be paid for being ready, able and willing to work for the period of the agreed hours. There is commonly no duty to provide work if pay is still ongoing .on the other hand, it has been pointed out that in these days a man has, by insinuation in the employment contract, a right to work, whether or not the employer has this obligation is dependent on the category of employment contract.

The duty to indemnify:

The employer ought to indemnify the employee for all expenses, sufferers and liabilities legally incurred by the employee in while performing the work instructed. nevertheless, the employer is absolved of this duty in cases where-

The employee knew that he was doing an unlawful act; or

The employee knew that the employer had no right to give the order in matter

Duty of care:

The employer has to provide-

Safe environment and make sure that the equipment which the employee uses is safe; and

A safe scheme of work.

The employer is only requisite to take reasonable care, but where there are strange situation, particular safety procedures should be taken. however employers are not bound to provide total safety to employees, based on the normal of reasonableness required for employers, they are still liable for-

Intrinsic risks, reasonable foresee ability risk of damage, seriousness of the risk, cost.

Janata Bank v Ahmed (1981) [2] :

Mr., Ahmed worked as a bank manager. Over several years he had agreed to give bank loans and mortgages to customers who were obviously bad credit risks. The bank supposed that in doing so he had been negligent in performing his duties. After dismissing him, Janata sued him for damages amounting to $ 34 640.

Court held: Janata’s claim was upheld because Ahmed failed to exercise the good care and skill required under his contract of employment

Duty to treat employee with respect and trust:

There appears to be a trend issued by recent cases that an employee ought to be treated and trust and not in an random or vindictive manner.

Isle of Wight Tourist Board v Coombes (1976) [3] :

A manager was overheard discussion to another employee. He said that his personal secretary was ‘an intolerable bitch on a Monday morning’. She was upset and resigned.

Court held the manager had breached the duty of trust and respect.

Duty to give testimonials and references:

An employer is not lawfully obliged to offer a reference. Although, when the employer does so it have to be true and fair to the best of his awareness. every statement must not be misleading. An employer owes a duty of care together to the subject of the reference and to the receiver, and has to take reasonable care in its groundwork. Ought to an employer fail to do so, he might negligent in a civil action if the employee or the recipient suffers damage consequently.

Duty to comply with statutory obligations:

An employer ought to abide by all related legislation, e.g. worker’s compensation, occupational health and safety, etc.

3.3 Malaysian Case:

Court Award (1)


Right to be obeyed in lawful orders by employee:

Whether there is justification for the Claimant in refusing to comply with the directive given by his superior? Whether an employee is required to obey orders if it is doubtful whether the orders are legal or not.

This is a Ministerial reference to the Industrial Court under section 20(3) of the Industrial Relations Act 1967 made on 28th August 2006 for an award in respect of the dismissal of Zainudin bin Kassim (“the Claimant”) by Johan Ceramic Berhad (“the Company”).

Facts from this case

In this case, The Claimant commenced employment with the Company on 11th August 1983 and was subsequently confirmed on 16th November 1983. The Claimant has worked in various positions in the Company and in 2005; he was assigned to work in the spray dryer section. On 26th November 2005 the Claimant reported to work on the morning shift at 7.00 am and started to work at the Spray Dryer Section. At about 8.30 am the Claimant’s superior, the Production Superintendent came to the spray dryer section and directed the Claimant to do mixing and sieving. The supervisor had been directed to do some other work. A day prior to 26th November 2005, the Production Superintendent had rearranged the work schedule of the Claimant by arranging another worker to take over the duties of the Claimant. A problem arose, when the Claimant refused to comply with the directive given and questioned it.


There is now a respectable line of authority for the proposition that an employee owes a duty to his employer to comply with any lawful direction.

It is generally held that the proper course for an employee is to obey the orders when it is given and protest about its illegality in separate proceedings.

The right to control employees is a distinguishing feature of the contract of employment. The right to control implies the right to ask the employee what work to do.

generally true that willful disobedience of an order will justify summary dismissal, since willful disobedience of a lawful and reasonable order shows a disregard – a complete disregard – of a condition essential to the contract of service, namely, the condition that the servant must obey the proper orders of the master

Decision court in this case:

In conclusion, for the reasons given, it is the finding of the Court that the dismissal is for just cause or excuse.


The claim is hereby dismissed.

Court Award (2)

Lim Kim Hai electric sdn. Bhd. [5] (1984)

The duty to pay remuneration:

This is an appeal against the decision of the assistant commissioner for labor at port kelang. The respondent claimed that he was entitled to overtime payments and payments for work during public holidays and annual leave on the basis that he was an employee of the appellant, who on the other hand, said that the respondent was an independent contractor. The main issue was whether the relationship between the two was based on a contract of service, or a contract for service.

The respondent and a friend went to look for employment as guards at the appellant’s business premises. The appellant was willing to pay them $250,000 per month each. Upon the respondent’s friend refusing the appointment, the respondent was offered $500, 00 per month which the respondent accepted. In addition to monthly payment, the respondent also received “ang pows” for Hari Raya Puasa and Chinese New Year. The working hours were fixed. After the appellant moved into new premises, the respondent was required to clock in at every two hours, beginning at 10 p.m. when on leave, the respondent arranged for an employee of the appellant to replace him.


For a contract of service to exist, the following four factors should be present:

The master’s power of selection of his servant;

The payment of wages or other remuneration;

The master’s right to control the method of doing the work’ and

The master’s right of suspension or dismissal.

From the facts, there was no doubt that the appellant selected the respondent for employment as a guard. Although it was difficult to conclude positively as to whether the monthly remuneration was wages or security fees, nevertheless it was clear that based on the facts, the appellant had the right to determine what work the respondent had to do, and also how to perform the guard duties not as a person in a business of his own. Thus, he was employed on a contract of service. As for the master’s right of suspension or dismissal, the appellant had the right to dismiss the respondent for misconduct during duty hours and also the right to terminate the respondent’s services which in fact is dismissal, for industrial misconduct.

4. Unfair dismissal:


4.1 Definition:

Termination of a contract of employment for unfair or inadmissible reasons, When challenged in a court, the employer ought to establish that the dismissal was based on a good reason such as disgusting misconduct, require of qualification, powerlessness to perform assigned duties, or joblessness. In such cases, the courts frequently take the employee’s statutory rights into thought. [6]

4.2 unfair dismissal in the common law:

At common law an employer can legally dismiss an employee by giving him the requisite notice of dismissal. The sacked employee if he be able to show that he has been wrongfully dismissed. The law on unfair dismissal seeks to remedy this situation by giving the employee the right only to be legally dismissed if that dismissal can be exposed to be fair. An unfair dismissal claim is a statutory claim. Claims for unfair dismissal can only be through to the Employment Tribunal.

4.3 What is unfair dismissal:

There are a number of ways your dismissal might be unfair:

your employer does not have a just reason for dismissing you (ex. if there was nothing incorrect with your job performance)

your employer did not comply with a process when dismissing you (ex. if they have not followed their company dismissal processes)

you were dismissed for an automatically unfair reason (ex. since you required to take maternity leave)

4.4 Automatic unjust dismissal

There are a little reasons for dismissal that are automatically unjust, ex. for the reason that of your gender or age. If you are dismissed for any of these reasons then you ought to be able to make a claim to and Employment Tribunal for unfair dismissal.

4.4.1 What is an automatically unjust dismissal?

Definite dismissals are “automatically unjust” in which case the employee just has to be evidence for that the dismissal was for one of the following reasons:

Membership (or non membership) of a trade union or for trade union actions.

Something regarding to health and safety.

Bringing measures against the employer for breach certain statutory employment rights.

Illegal discrimination on basis of race, sex, disability, religion or belief, sexual orientation or age.

Pregnancy or any other reason related with the pregnancy.

looking for to enforce rights in the National Minimum Wage Act

creation a protected disclosure under the screech blowing legislation

Trying to acquire recognition of an independent trade union

Looking for to implement the right to be accompanied at a grievance or disciplinary hearing.

In relation with the employee’s rights with refer to parental, paternity or espousal leave, time off for seek after dependants, maternity leave or the right to request to work flexibly.

Taking action in relation with part-time workers’ or fixed term workers’ rights.

Rejection by a shop worker to work on Sunday.

Related with an employee’s purpose as a pension fund trustee.

In break of the Information and Consultation Regulations 2004.

In relation with retirement when the employer has not informed the employee of their right to ask for to continue working; or while the procedure is ongoing

4.5 When is a dismissal fair?

The law provides that is fair for employers to dismiss an employee for one of the subsequent reasons:

A statutory requirement

Misconduct at work

Lack of capability (or qualifications) to do the job



Some other substantial reason

Denco v Joinson Ltd (1991): [7]

Mr. Denco was employed as a temporary supervisor on the nightshift at Joinson Ltd. He was also a sop steward. He was summarily dismissed when his employer realised that he had, without authorization accessed the company’s computer system. He had gained access to confidential information, including amongst other things, customer lists and salary accounts.

Court held that his dismissal was lawful; he had deliberately used an unauthorized password in order to gain access to information that he knew was confidential. His actions amounted to gross misconduct and Joinson was entitled to summarily dismiss him.

On the other hand, even if the employer convinces a Tribunal that they dismissed their employee for one of those reasons, they still have to be evidence for that they followed a reasonable process as set out in the (Advisory, Conciliation and Arbitration Service) code of conduct. They ought to also show that the decision to dismiss consider as the reasonable responses open to an employer.

Jeffrey v Laurence Scott & Electromotor (1984) [8] :

Mr. Jeffery waited 3 months after his employer’s breach before resigning and calming constructive dismissal.

Court held that there had been no constructive dismissal; Jeffrey had resigned. Having waited so long, he was taken to have acquiesced to his employer’s actions.

4.6 Unfair dismissal in Malaysia:

The term dismissal in Malaysia legal perspective is in fact creates from termination of employment contract. This is what Ayadurai (1998) make clear; the term ‘Termination’ in Malaysian Industrial Law regard to the termination of employment relationship, but as this connection is a contractual one, it is recognized with the termination of the employment contract. Where the contract is terminated by the employer because of perceived misconduct of the employee, subsequently the termination is termed as dismissal.

The statutory provisions concerning termination and dismissal stated that it’s the management prerogatives. Means that it is the right of the organization to exercise its right, nevertheless it ought to in fulfill with due valid reasons of punitive cases or misconduct and poor work performance.

S. Ahmad (1997) explained that there is no doubt dismissal is the severest punishment which can be awarded to offending employee by his employer for some act of misconduct, however if there is no misconduct, there be able to be no punishment.

5. The ethics of job discrimination:


To discriminate in employment – to make an adverse decision against employees who belong to a certain class because of ethically unfair prejudice towards members of that class.

5.1 Effects of discrimination in the workplace:

Discrimination in the workplace harmfully affects businesses in that discriminatory policies are capable of harm a company’s reputation. A business self-limits itself when it confines advancement to certain groups or sorts of employees. Talking negatively regarding a former employee can be harmful for a potential customer. There is also a direct connection between faithfulness, retention, and discrimination. Employees are more likely to be seeking for new jobs when they sense they have been mistreated. Referring to a report on discrimination at the workplace by the International Labour Organization, “workplace discrimination remains a constant universal problem, with fresh more subtle forms rising.”[1] Sending wrong pointers to potential customers can also cause argument because clients can sense when employees aren’t enthusiastic or don’t trust in their company. This is one reason that it is significant for a job applicant to examine the attitudes of people they hope to work with. Transfer positive signals to employees create a center of attention future potential employees.

Inequality suffers by discriminated groups increase. Outstanding to assenting action policies, a new focal point class has been created that consists of previously discriminated people in some countries but in others, people who are from discriminated groups are normally concerned in the worst jobs, without benefits, public protection, preparation, or credit. Discrimination at a workplace can guide to poverty. “Discrimination creates a web of poverty, forced and child labor and social exclusion.

5.2 Gender discrimination and the workplace:

Albeit there are regulations that are used to encourage fairness within the workplace, discrimination is still out of control. Women still do not determine up to men when it comes to income, employment charge and occupational variety. Women’s average salary is 75 to 87 percent of men’s, also when variables such as education, situation point and job possession are considered. In most countries, the glass maximum is ever present for women and the salary differences are important compared to men. “Discrimination can occur at every stage of employment, from recruitment to education and remuneration, occupational segregation, and at time of layoffs.

R v Birmingham City Council, ex parte Equal Opportunities commission (1989) [9] :

The City Council allocated 390 of 600 available school places to boys and only 210 to girls.

Court held that, this was an example of direct discrimination as the girls would not have received the same treatment had they been boys.

5.3 Unintentional discrimination:

Unintentional discrimination happens when impartial selection practices produce a considerable disparity of conclusion between one group and another. Such perform engage the use of standardized tests in the hiring procedure.

James v Eastleigh Borough Council (1990): [10]

Mr. and Mrs. James both went swimming at their local pool. They were both 61 years of age. Mrs. James was allowed a free swim because she was a pensioner but her husband was asked to pay 75p because he was not. The council hand not intended to discriminate against male pensioners; it was merely observing the ages at which people received their pension.

Court held that; although the council did not intend to discriminate on the grounds of sex, its actions amounted to direct discrimination. As a man Mr. James had been treated less favorably than he would have been had he been a woman.

Some laws forbid unintentional in addition to intentional discrimination, but might have different principles for deciding what is acceptable. Significant disparities in outcome are not essentially unlawful, if the practices that produce them are necessary.

5.4 Laws on Employment Discrimination in Malaysia:

Until lately, Malaysia had no legislation ruling employment discrimination; even though the Federal Constitution does state that there shall be no discrimination against citizens on the ground of race, religion, place of birth or descent. On September 29, 2002, Article 9(2) of the Federal Constitution was amended to disallow gender discrimination through the Constitution Act 2001.This, nevertheless, has yet to be encapsulated in any exact legislation.

In 2001, the Labor Department of the Malaysian Ministry of Human Resources issued the Code of Practice for the Employment of the Disabled in the Private Sector (“Disability Code”).The objectives of the Disability Code are to:

(i) set up guidelines for the registration and job post of the disabled with the private sector;

(ii) Increase the consciousness of private sector employers on the significance of offering employment opportunities to the disabled; and

(iii) Maintain the disabled to arrange themselves in terms of ability, qualifications and skill sets to contribute in the improvement of Malaysia as employees.

While the Disability Code sets out the confident responsibilities of both the employer and the disabled employee, like other similar Codes relating to employment, there are no legal sanctions for non-compliance.

6. Occupational safety and health:


Occupational health and safety is a cross-disciplinary region referring with protecting the safety, health and interests of people according in work or employment. The aim of all occupational health and safety programs is to promote a safe work environment. As a minor effect, it might also protect family members, co-workers, customers, employers, nearby communities, suppliers and other members of the community who are impacted by the workplace environment. It might engage interactions amongst many subject areas, as well as occupational medicine, safety engineering, occupational (or industrial) hygiene, public health, health physics, chemistry.

6.1 Reasons for Occupational health and safety:

The occurrence of an incident at work (such as, fines, compensatory damages, lost production, investigation time, legal fees, lost goodwill from the workforce, from the wider community and from customers).

Occupational health and safety officers promote health and safety procedures in an organisation. They recognize hazards and measure health and safety risks, set suitable safety controls in place, and give recommendations on avoiding accidents to management and employees in an organisation.

Baker v Clarke (1992): [11]

An experienced electrician was injured when he did not lock the wheels of mobile scaffolding. He claimed that his employer had not taken care for his safety.

Held the employer was not liable; the employer did not have to provide constant reminders of the risks involved in putting up scaffolding, or the likelihood of harm if it was not accurately.


The Occupational Safety and Health Act is an Act which provides the legislative framework to secure the safety, health and welfare among all Malaysian workforces and to protect others against hazards to safety or health in relation with the activities of persons at work.

This Act was issued on 13th February 1994 and might be cited as the Occupational Safety and Health Act 1994. This Act is a sensible instrument superimposed on existing safety and health legislation.

6.2.1 The aims of this Act are:

to secure the health, welfare and safety of persons at work against risks to safety or health occur out of the activities of persons at work

to care for person at a place of work other than persons at work against risks to safety or health occurring out of the activities of persons at work

to encourage an occupational environment for persons at work which is adapted to their psychological and physiological needs.

Johnstone v Bloomsbury Health Authority (1991): [12]

Johnston, a junior doctor, was employed by the Authority to work 40 hours per week. His contract also stated that he would make himself available to work a further 48 hours each week. He sued the Authority alleging that by requiring him to work an unrealistic number of hours

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The Malaysian court system is based on the UK legal system familiar to those from common law jurisdictions, but it also incorporates distinct characteristics in the form of Islamic religious courts and two separate High Courts for the Peninsula and for the Borneo states.

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