Termination

of Contract
(J09 Q2)

Under EA55, a contract of service may be terminated as follows:

Automatically 1. A contract of service for a specied period of time or for the performance of a specied piece of work will terminate automatically when the specied period of time has elapsed or the specied piece of work has been completed. Section 11(1) EA55

With Notice 2. A contract of service may also be terminated by one party giving to the other notice of his intention to terminate it Section 12(1) EA55 Section 12(4) EA55 requires the notice to be in writing. The notice may be given at any time but must comply with the period of notice stated in Section 12(2) EA55.

Without Notice 3. Either party to a contract of service may terminate it without notice (or if notice has already been given in accordance with s.12, without waiting for the expiry of the notice) by paying and indemnity to the other. Section 13 EA55. The indemnity must be a sum equal to the amount of wages that would have accrued to the employee during the period of notice required under s.12 or during the unexpired term of such notice. 4. Either party to a contract of service may terminate it without notice in the event of a willful breach, by the other party, of a condition of the contract of service. Section 13 EA55 5. Section 14 EA55 An employer may terminate the contract of service, without notice, on the grounds of misconduct of the employee after due inquiry. An employee may also terminate his contract of service without notice, where he or his dependents are immediately threatened by danger of violence or disease which was not undertaken by the employee in this contract of service.

Length of Notice Section 12(2) EA55 the length of notice required to be given by either party to the other in the case of termination by notice is the length of notice stipulated in the contract of service. In the absence of such provision in the contract of service, the following will apply.
Year(s) of completed service with the same employer (no. of years) Period of Notice (no. of weeks)

x < 2 2 x < 5 x > 5

4 6 8

Due Inquiry
Section 14 EA55 the employer may dismiss the employee without notice on the ground of misconduct by an employee. However, the employer may only do so after due inquiry The EA does not sate what constitute due inquiry. However, reference may be made to the following guidelines laid down by the Industrial Court in the case of KJJ Cleetus and Unipamol (M) Sdn Bhd. 1. the inquiry is to be instituted as early as possible after the suspension of the complainant; 2. the complainant is to be given particulars of the misconduct, preferably in writing; and a reasonable time is to be given to him before the inquiry to enable him to prepare his case; 3. Where applicable, the complainant is to be accompanied by his Union or Committee Representative, if any, at the inquiry; 4. the inquiry is to be conducted, as far as possible, by such ocer(s) as not directly connected with the investigation of the misconduct, so as to give the hearing impartiality; 5. examination of relevant witnesses to be allowed at the reasonable discretion of the ocer-in-charge of the inquiry; 6. notes in the form of questions and answers and the nal decision are to be recorded to show that the inquiry was proper, and that the decision arrived at was fair.
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Constructive DismissalRedundancyLay-O
(D08 Q2a; D07 Q2)

Constructive Dismissal
- May said to have occurred where the employee has resigned because the employer has made it intolerable for the employee to continue working for the employer. - This may occur, where, in doing so, the employer has breached the contract of employment thereby entitling the employee to resign. - For example, if the employer had demoted the employee or subjected him to unfair or oppressive working conditions in order to humiliate him tot he extent that he can no longer tolerate it and feels compelled to resign, he may be considered to have been constructively dismissed. Bumpus v Standard Life Assurance Co Ltd

The supreme Court in the case of Wong Chee Hong v Cathay Organization (M) Sdn Bhd

two Factors
to determine if there has been a constructive dismissal.

1. Whether the employers conduct amounted to a breach of the contract of employment going to the root of the contract. 2.Whether the employee made up his mind to leave the employment and acted within a reasonable time after the employers conduct.

Redundancy
A redundancy may be said to occur in the circumstances mentioned in Section 12(3)(a) - (d) EA55 i.e. where: 1. The employer has ceased, or intends to cease to carry on the business for the purposes of which the employee was employed; 2.The employer has ceased or intends to cease to carry on the business in the place at which the employee was contracted to work; 3.The requirements of that business for the employee to carry out work of a particular kind have ceased or diminished or are expected to cease or diminish; 4.The requirements of that business for the employee to carry out work of a particular kind in the place at which he was contracted to work have ceased or diminished or are expected to cease or diminished. Food Specialities Sdn Bhd v Esa bin Mohamd Gold Coins Feedmills Sdn Bhd v Ibrahim Shah Automovitve Sdn Bhd v Subramaniam Andi & Others

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Constructive DismissalRedundancyLay-O
(D08 Q2a; D07 Q2)

Lay-O
A lay-o may be said to occur in the circumstances stated in Regulation 5(1) of the Employment (Termination and Lay-o Benets) Regulation 1980 (Revised 1983) i.e. where: 1. The employer does not provide work for the employee on at least a total of 12 normal working days within any period of 4 consecutive weeks; and 2.The employee is not entitled to any remuneration under the contract for the period or periods (within such period of 4 consecutive weeks) in which he is not provided with work. However, in determining whether an employee has been laid-o, any period during which an employee is not provided with work as a result of a rest day, a public holiday, sick leave, maternity leave, annual leave, any other leave authorized under any written law, or any leave applied for by the employee and granted by the employer, shall not be taken into account.

Lay-O Benets Lay-o benets which an employee is entitled to receive should not be less than:
Year(s) of completed service with the same employer (no. of years) Days of Wages (no. of days)

x < 2 2 x < 5 x > 5

10 15 20

and pro rata basis in respect to an incomplete year, calculated to the nearest month. The regulations require that such lay-o benets must be paid by the employer to the employee not later than 7 days after the relevant date.

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Remedies
(D08 Q2b)

the remedies available to an employee who has been unjustiably dismissed are as follows:

Reinstatement and Backpay

- This is a remedy whereby the employee is put back into the position he would have been in had it not been for the unjustiable dismissal. - Reinstatement requires that the employee should be restored to his previous position so far as his capacity, status and emoluments are concerned. - He is then entitled to backpay, i.e. arrears of salary from the time of his dismissal to the time of his reinstatement. Western India Automobile Association v Industrial Tribunal

Compensation in lieu of Reinstatement and Backpay

- The court may order compensation in lieu of reinstatement and backpay where it is not possible or advisable to order reinstatement. - Reinstatement may be refused where the employer has lost condence in the employee or where such reinstatement may lead to an apprehension of breach of industrial peace. - Reinstatement will of course be impossible, for example, where the employee has died after the commencement of legal proceedings. - The compensation payable is usually at the rate of one months pay for each year of service subject to a maximum of 24 months.

Re-engagement
- Sometimes the employee is not reinstated but is merely re-engaged or re-employed. - This means that the employee is given an opportunity to work for the employer. - All past services will be lost. - The employee will start afresh and he is not entitled to any backpay. Restu Motor Sdn Bhd and Nazaruddin bin Abdul Samad

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