5 Employers Who Lost Big (over RM1 Million!) in Q1 2025!
Posted on April 6, 2025 by Jassmine Joseph
In Q1 2025 alone, employers paid nearly RM17 million in unlawful dismissal claims — a costly reminder that process, not just purpose, matters in termination decisions.
The Industrial Court can be a costly battleground if not managed properly. In Q1 of 2025, 5 employers found themselves in undesirable positions when the Industrial Court awarded in excess of RM1 million for each of their unlawful dismissal cases filed under s.20 of the Industrial Relations Act 1967. Ouch!
In this article, we break down these key cases and highlight the lessons to help businesses avoid similar costly mistakes.
The Partner Who Forgot to Show Up
Case Name: Sim Chin Hu v CJ Polymers This case involved a dispute between the founders / business partners of the Company where the claimant, in his capacity as General Manager (Founder 1), was accused of questionable transactions, secret profits and insubordination for failure to return company belongings when instructed.
The Company issued a show cause letter which was signed off by the Claimant’s business partner (Founder 2). After the claimant’s reply to the show case, he was immediately terminated without a domestic inquiry (“DI”).
At the Industrial Court, the perspectives from both parties were discussed at length. However, the Court repeatedly emphasized the absence of the claimant’s business partner (Founder 2) as a key witness. This oversight significantly weakened the Company’s case.
The Court held:
“It is a principle of industrial law that the person who decides to dismiss the Claimant must be called as a witness. The failure to call him meant that the Claimant could not cross-examine him about the charges and also as to why he decided to dismiss the Claimant…”
“I am of the view that since the Company had failed to call a crucial and material witness and this is fatal to the Company’s case.”
The Claimant, for the reasons above (and the proven facts of his narrative) was awarded 24 month’s backwages (less 30% post dismissal earnings) and 15 months for compensation in lieu of reinstatement for his 15 years of service, amounting to a total of RM2.22 million.
Key Takeaway: When dismissing an employee, it’s essential to ensure that the decision-maker is available to testify as a witness. Failing to do so can significantly undermine your case, as seen in this instance, where the absence of a critical witness led to a costly award for the claimant. Always ensure your termination process is thorough and legally compliant.
The High-Ranking Exec Who Got the Axe – No DI
A Senior Vice President of HR was terminated after being accused of acting against the best interest of the Company. He filed a case for unlawful dismissal, arguing that the grounds for dismissal on misconduct were unfounded.
The Court found that though the employee had acted in a manner without the approval of the Board of Directors, there was a gap in the investigation process whereby no DI was conducted to obtain a consistent version of the events that transpired. As DI was an integral part of the disciplinary process in accordance with law and the Company’s policy and it was not conducted, the Company had wrongfully terminated the employee.
The Court concluded that there were wrongful allegations contained in the show cause letter and based on the sequence of events, there were issues that arose during the board of directors meetings before the charges against the employee were initiated. As such, the disciplinary process was initiated in bad faith by the Company.
The Employee was awarded RM 601,926.65 as backwages and RM 828,563.00 as compensation in lieu of reinstatement, which totals to RM 1,430,489.65.
Key Takeaway: Conducting a DI is a critical step in the disciplinary process. Failing to carry one out, particularly in cases involving serious allegations that lead to termination, can result in an unlawful dismissal and costly financial repercussions for the employer.
The PIP that Didn’t Add Up!
Case Name: Tung Yoke Leng v Maxis Broadband Sdn Bhd
The employee was terminated on grounds of poor performance. In this case, the Company followed a structured PIP format and claimed that the employee failed to improve despite the opportunities presented during the PIP.
The Court found that the employee was not given sufficient and clear warning and the Company had not documented the counseling sessions as required under their policies. In determining whether the employee was given sufficient opportunities to improve, the Court found that the Company’s resources given to support the employee (her team) was highly inexperienced. This in turn, had burdened the employee instead.
The employee served the Company for 25 years and the Court found that her termination was not done in good faith. The Industrial Court ordered 24 months backwages (less 30% post dismissal earnings) and 25 months for compensation in lieu of reinstatement for her 25 years of service, amounting to a total of RM1.03 million.
Key Takeaway: When implementing a PIP, it’s crucial to provide clear warnings, proper documentation, and adequate support to the employee. Failing to do so can result in the dismissal being deemed unjustified, leading to costly financial consequences. Additionally, if you are terminating an employee who has been with the Company for many years for poor performance, extra care is needed. Ensure the process is fair, transparent, and well-supported, as failure to do so can make the dismissal even more vulnerable to legal challenge with significant financial consequences for the company.
The Unilateral Termination That Backfired!
Case Name: Andrew Jackson Lee v Hunter Douglas Asia Holding BV
The employee received an email, informing him that as a result of the Covid-19 pandemic, the Company was undergoing financial pressures and outlined the necessity for cost cutting measures to be undertaken. In the same email, he was also informed that he may be transferred to Canada and some of his current benefits will be suspended, i.e travel passage for his family. The Claimant presented his disagreement via a meeting. A week later, he was terminated.
In his termination letter, there was no mention of any restructuring or redundancy. All that was mentioned in his termination letter was a termination with a 6-month notice as per his employment contract. The Court found this to be a unilateral termination.
At the Industrial Court, the Company raised the issue of performance and absenteeism. The Court found this to be an afterthought since this was never mentioned in the past.
The employee was awarded 24 months backwages (less 20% post dismissal earnings) and 9 months for compensation in lieu of reinstatement for his 9 years of service, amounting to a total of RM1.05 million.
Key Takeaway: If a Company is terminating an employee due to restructuring or redundancy, it must provide the appropriate documentation and follow the correct procedures for such terminations. This includes clearly stating the reasons for the termination and ensuring that the process is compliant with the legal requirements. Failure to do so can result in an unlawful dismissal and significant financial repercussions for the Company.
The Mysterious Dismissal! Case Name: Ang Chin Gaik v WV Services Malaysia Sdn Bhd
The Claimant, a Director and General Manager of the Company was terminated by the Company without any reasons. At the Industrial Court, the Company was not present or represented. The Industrial Court came to an ‘irresistible conclusion’ that the termination was nothing more but a termination simpliciter which has no place in Malaysia.
The Claimant was awarded 20 months backwages amounting to a total of RM1.38 million.
Key Takeaway: In Malaysia, a termination simpliciter, which is a termination based solely on providing the required notice without a valid reason, is not considered valid. Employers must ensure that terminations are based on valid grounds, properly documented, and follow due process.
In Q1 of 2025 alone, the Industrial Court has awarded nearly RM17 million in unlawful dismissal cases. Our analysis reveals a sharp rise in these figures over recent years. For context, the total awards for 2024 amounted to approximately RM48 million. These increasing numbers highlight the growing financial risks, urging employers to take proactive measures when handling terminations to avoid expensive payouts.
Total Awards (nationwide) | 135 |
Total Employer Wins | 71 (52.6%) |
Total Employer Losses | 64 (47.4%) |
Here’s a quick look at the unlawful dismissal cases in Q1 2025
With employment disputes on the rise and substantial awards being granted, businesses must ensure that dismissals are justified, well-documented and carried out in good faith to mitigate potential legal and financial consequences.
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