Best Practices in Handling Disciplinary Issues at Workplace

Best Practices in Handling Disciplinary Issues at Workplace

One of the challenges faced by employers is handling disciplinary issues at the workplace.  “Disciplinary issues” refer to the conduct of an employee that is inconsistent with the faithful discharge of his duties, and/or breaches the express or implied duties towards his employer.

The usual description is “misconduct”.

This article serves to provide suggestions on the best practices in handling disciplinary issues at the workplace.

Do not condone

Employers must act against employee(s) in misconduct cases, because failure to take action may render the employer as condoning that misconduct. The consequence is that the employer cannot, at a later stage, use that same misconduct to justify terminating the employee’s services.

Employment Act 1955

The Employment Act 1955 applies only to employees earning RM2,000 and below (subject to several exceptions in the First Schedule).  Section 14 states that an employee may be punished for misconduct after due inquiry.  Due inquiry here means that the employer must investigate the case and provide the employee with an opportunity to defend himself.

Best Practices in Handling Disciplinary Issues at Workplace
Justin Lee
Associate Dharmen Sivalingam & Partners
[email protected]y

Termination of employment is always subject to the law

Employers cannot terminate the services of an employee by merely serving notice as per the employment contract.  This is because of a legislation known as the Industrial Relations Act 1967.  Section 20 (s.20 IRA) states that any employee who feels that he was dismissed without just cause or excuse can bring an action against his employer for reinstatement.

Employer must prove just cause or excuse

A feature of s. 20 IRA is that the employer must prove to the court that there was just cause or excuse for dismissing the employee.  An employer who is unable to prove just cause or excuse may be ordered by the Industrial Court to reinstate the employee, or to pay back-wages of up to 24 months plus compensation in-lieu of reinstatement.

For misconduct, the employer can show just cause or excuse by proving to the court that the disciplinary process was duly followed and principles of natural justice were adhered to by giving the employee an opportunity to defend his case.

Stages of disciplinary process:

  1. Preliminary Investigation
  2. Service of Show Cause Letter
  3. Letter of Explanation from employee
  4. Notice of Inquiry
  5. Suspension Pending Inquiry
  6. Appointment of Panel Members
  7. Conduct of Inquiry
  8. Panel Decision & Report
  9. Punishment

The employer issues a show cause letter after preliminary investigations.  If the employee admits to the misconduct, then the matter ends there and punishment may consequently be imposed.  If the employee denies the misconduct, a domestic inquiry should be convened to determine his guilt.  Where the employee is found guilty after the domestic inquiry, punishment may then be imposed.   In both situations, the punishment would vary according to the nature and severity of the misconduct.  Examples of punishments include summary dismissal, suspension, warning, demotion, deferment of increment, and etc.  Other factors to consider include past records, performance indicators, years of service, general behaviour, level of seniority, and etc.


Always be mindful of s. 20 IRA and carry out the minimum steps of the disciplinary process stated above before imposing punishment on the employee.  Failure to do so may expose the employer to an unfair dismissal claim and at worse, being ordered to pay a large settlement sum.

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