03/04/2022
HOW TO FIRE YOUR EMPLOYEE PROPERLY
Are you a boss contemplating to fire someone in your company?
Maybe he is not doing his job properly.
Maybe he has committed some serious misconduct such as stealing money from the register/account.
Maybe you simply can’t stand the sight of him.
This article is a must-read if you are considering terminating an employee.
Broadly speaking, there are 5 rules to keep in mind.
RULE 1 – DO NOT SIMPLY TERMINATE YOUR EMPLOYEE
“Why must I care? I am the boss and I’m allowed to fire whoever I want.” You might think.
This is an extremely dangerous approach and will get your company into deep trouble.
The employment law of Malaysia strictly prohibits termination simplicitor i.e. termination without any reasons (much like “simply terminate”), doing so would amount to unfair dismissal.
If the employee sues your company in the Industrial Court and you are unable to show “just cause and excuse” for firing him. The Industrial Court may award the employee backwages up to 24 months.
Assuming the employee’s monthly salary is RM5,000.00, that would be a whopping RM120,000.00 of damages.
RULE 2 – THE TERMINATION CLAUSE IS NOT ENOUGH
Your letter of employment with the employee might contain something to the effect that:-
“Either party may terminate this employment contract by giving 2 months’ notice.”
Only the employee may exercise this clause without giving reasons, the employer cannot as doing so would amount also to termination simplicitor (supra).
An employer always needs to show “just cause and excuse” to terminate an employee.
RULE 3 – JUST CAUSE AND EXCUSE
The bottom line is that an employer can only terminate an employee with “just cause and excuse”.
What is “just cause and excuse” depends on any given set of facts.
Here are some common ones:-
-the employee has committed some serious misconduct such as stealing from the company, sexually harassing his colleague or taking drugs in the workplace.
-the employee is performing his job poorly such as messing up his works, absent or coming to work late.
-the company simply cannot afford to pay the employee anymore.
RULE 4 – FOLLOW FAIR AND PROPER PROCEDURE
Apart from showing “just cause and excuse”, fair and proper procedure must be adhered to as well.
For example, say you find that an employee has been slacking in his job, coming late and/or not meeting his deadlines, you are not allowed to ask him to leave or resign to save his dignity. You must afford him an opportunity to improve such as putting him on a performance improvement plan or sending him warning letters to forewarn him.
Say you suspect that an employee in the accounts department has helped himself to the company’s money. You cannot simply slap a termination letter on his table and ask him to leave. You are required to send him a show cause letter requiring his explanation and, if the employee denies doing so, conduct a domestic inquiry to investigate the situation and the alleged misconduct.
Once a decision to terminate has been reached based on just cause and excuse, you would also have to prepare a letter of termination setting out all the grounds for his termination.
RULE 5 – SPEAK TO A LAWYER
No doubt the law and process of terminating an employee would seem overwhelming, and one is unlikely to get it all right without any kind of legal support.
It is therefore wise to consult a lawyer from the outset to assess the matter and assist you with the termination process.
A good employment lawyer will be able to work together with your HR department seamlessly to handle employment matters of this kind.
Our partners in D’Cruz & Sia have wide experience in advising Multi National Company in regard to terminating employees or other kind of disciplinary action.
