Natural Justice in Employment Laws

The rules of natural justice plays a large role in Malaysian labour laws. What it means is simple:

No man shall be condemned unheard and secondly, the decision making must not be tainted by biasness.

My question is, in a company of 5 individuals, how would you satisfy the 2nd element being free from bias? Would you conduct a domestic inquiry even when you know that the element of bias is an obstacle to an inquiry adhering to the rules of natural justice?

In Poon Kam Yoong v Tew Lai Eng (2009) 1 LNS 956, the employee was dismissed for misconduct in the course of his employment. The panel members in the proceedings comprised of the MD and 2 of his relatives. The Assistant Director of Labour held that the rule of natural justice was not adhered to but this position was reversed by the High Court who relied on the case of Perusahaan Kemas Maju Sdn Bhd v Ramli bin Abu Hassan [1994] 2 ILR 118:

“Practical considerations sometimes must be taken into account. In very small places of employment consisting of a handful of staffs there can hardly be enough personnel to wear the hats of complainant, witness, prosecutor and judge. Ex necessitate therefore some official may have to wear two hats or more. If the rule of bias is applied in a technical way, then such an employer can never dismiss his employee however serious the latter’s misconduct as any attempt to do so will be deemed as contrary to natural justice. Such a process of reasoning which leads to a reductio ad absurdum cannot be right.”

The High Court concluded that any defective inquiry should not be fatal to a case and a proven defective inquiry can be re-tried at the Industrial Court.


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