Employees Can Only Get 24 Months in Backwages if Reinstated
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The Court of Appeal has upheld a High Court ruling that a dismissed worker who is asked to return to work with the same employer is only entitled to a maximum of 24 months in backwages for the period they were out of the job.
According to lawyer T Thavalingam, a three-member bench chaired by Hanipah Farikullah regarded that the Industrial Court Act 1967's Second Schedule had capped such payments.
Thavalingam, who represented the company, said the bench also dismissed its appeal over the sacking of the ex-chief financial officer Leong Chee Kong in 2015. The bench held that the dismissal was wrongful.
However, the bench also ruled that the Industrial Court made an error in reinstating Leong to his former position. Supang Lian and See Mee Chun were the other judges on the bench.
The bench then forwarded the issue to the Industrial Court to compute compensation due to Leong in place of reinstatement.
On January 22, 2014, Leong was dismissed for misconduct. He was out of work for 58 months until the Industrial Court ordered his reinstatement.
Industrial Court ruling
On March 4, 2019, Bernard John Kanny, the then Industrial Court chairman, allowed Leong's claim and said the Second Schedule of the Act that restricted backwages to 24 months was not appropriate when a reinstatement was ruled.
Kanny said that reinstatement is the primary remedy for dismissal without a just cause. In such situations, reinstatement being the standard rule, one shall follow it with full back wages.
However, if an employee is terminated without a just cause but is not reinstated, they are to be awarded compensation to a maximum of 24 months.
He ordered the employer to pay Leong RM870,408 as total backwages for the 58 months and reinstate him.
In 2018, Kanny deemed Leong's termination unfair and ordered a reinstatement effective October 1, 2018, with the employer to pay full backwages for the duration he was out of employment.
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In 2019, Kanny ordered the employer to pay Leong RM870,408 as total backwages for the 58 months and reinstate him.
However, Leong and the employer disagreed on the payment amount, which resulted in a garden leave for Leong. Garden leave refers to the practice whereby an employee leaving a job is instructed to stay away from work during the notice period while remaining on the payroll.
Leong then filed an application for interpretation under Section 33 (1) of the Industrial Court Act 1967, and the case was heard on February 14 2019. You can read more about the case here.
Source: FMT
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