Lawyer pans order to pay full back wages to sacked employees

PETALING JAYA: A lawyer has called for a review of a recent Industrial Court finding that sacked employees who are asked to return to work should be paid full compensation.

Calling the ruling erroneous, N Sivabalah said the High Courts had ruled that back wages are limited to only 24 months, whether an employee is given his job back or paid compensation in lieu of reinstatement.

“I have managed to get a number of cases from the Industrial Court quashed, and back wages paid for only 24 months,” he told FMT.

Sivabalah, who usually appears for employers in labour tribunals, said the matter should now go to the High Court for resolution.

He was responding to Industrial Court chairman Bernard John Kanny’s ruling last week that the Second Schedule of the Industrial Court Act, which restricts wages to 24 months, is not applicable when a reinstatement is ordered.

“It must be remembered that reinstatement is the primary remedy for dismissal without just cause. In such circumstances, reinstatement being the normal rule, it shall be followed with full back wages,” Kanny said.

On the other hand, if an employee is dismissed without just cause but not reinstated, he is to be awarded compensation of a maximum of 24 months, he said.

Kanny made this ruling when parties returned before him to interpret his earlier award in favour of an employee against Novartis Corporation (M) Sdn Bhd.

He had ordered compensation of RM870,408 to be paid to Leong Chee Kong, who was the company’s chief financial officer, as full back wages.

Last year, he ruled that Leong’s dismissal was unfair and ordered reinstatement effective Oct 1, with the employer to pay full back wages for the 58 months Leong was out of a job.

Leong was dismissed for misconduct on Jan 22, 2014.

However, he and the employer could not agree on the payment amount as he was on garden leave at the time.

Lawyer P Jayasingham said the Industrial Court chairmen had the discretion to award full back wages or up to 24 months’ when reinstatement is ordered.

“I recently came across another Industrial Court order that awarded full back wages that went beyond 24 months,” he added.

He said each case depended on its particular facts and circumstances.

Meanwhile, lawyer T Thavalingam, who represented Novartis Corporation, said he had been instructed to file for a judicial review to quash Kanny’s ruling.

“A ruling by a High Court will serve as precedent to be followed by all Industrial Courts,” he added. - FMT