What is a Domestic Inquiry?
Domestic Inquiry is an internal process conducted by an employer to investigate misconduct allegedly committed by an employee. A Domestic Inquiry offers a chance for an employee to defend him/herself before any disciplinary action is taken against him/her.
Whilst it is not legally mandatory (see Dreamland Corporation (M) Sdn Bhd v. Chong Chin Sooi & Industrial Court of Malaysia [1988] 1 CLJ 1), many employers conduct a Domestic Inquiry to be fair to the accused employee and to ensure that they get as close as possible to the truth before taking any action; it is a commendable exercise.
However, some circumstances may lead to a Domestic Inquiry’s finding being challenged; this article discusses how an employee can do so, to educate employees of their rights and to alert employers on how to protect the integrity of their Domestic Inquiry findings.
What could make a Domestic Inquiry unfair?
A Domestic Inquiry may be deemed as biased and/or unfair when the following occurs:
- Material facts of the alleged charges e.g. identity of the complainant, time, place, and location of the misconduct incident, were not disclosed before or during the Domestic Inquiry.[1]
- The employee is being called to the ‘Domestic Inquiry’ without prior notice or being informed of the purpose of the meeting. [2]
- The composition of the inquiry panel for the Domestic Inquiry consists of individuals who may be biased and/or not impartial; the panel member must not be directly or indirectly a party to the case or someone of a lower rank than the accused employee or someone having the privilege of viewing contents of the incident before the Domestic Inquiry commences.[3]
The above is not an exhaustive list but merely some common scenarios which have led to the integrity of a Domestic Inquiry being challenged.
Challenging the Domestic Inquiry Findings in the Industrial Court
Firstly, the most obvious way for an employee to challenge the validity of a Domestic Inquiry held by his employer against him is challenging it in the Industrial Court.
When dealing with a dismissal that came upon after a Domestic Inquiry, the Court would inquire:
- whether the Domestic Inquiry had applied the correct procedure and principles, in particular the principle of “Audi Alteram Partem” (right to be heard) and “Nemo Judex in Causa Sua” (right against bias); and
- whether the Domestic Inquiry had reached the correct conclusion having regards to all the evidence adduced before the inquiry panel.
In Metroplex Administration Sdn Bhd v Mohamed Elias [1998] 5 CLJ 467, the High Court explained how an Industrial Court should analyse the correctness of a Domestic Inquiry:
Where a domestic inquiry is held and the rules of natural justice have been applied, the Industrial Court should first consider the adequacy or otherwise of the procedure adopted in the proceedings for the domestic inquiry in order to determine whether the domestic inquiry has applied the correct procedure and reached the correct conclusion having regard to all the evidence, documentary and oral, adduced at the domestic inquiry. If at the domestic inquiry, the rules of natural justice were properly applied, the employee being given the opportunity to be heard and to present his case, and should a finding be made against the employee based on the evidence which was presented to the domestic inquiry, the Industrial Court ought to consider the finding of the domestic inquiry in order to conclude whether the employee has been dismissed without just cause or excuse. The rule that a domestic inquiry should be held is after all a rule of the court’s own devising.
In a more recent case of Lini Feinita bt Muhammad Feisol v Indah Water Konsortium Sdn Bhd [2021] 4 MLJ 769, the Court of Appeal emphasized the importance of the DI findings and how an Industrial Court must consider the findings of the IC, despite not being bound it:
[30] We are in agreement with the appellant that, applying the cases of Bumiputra Commerce Bank case and Standard Chartered Bank Malaysia Berhad v Yun Koon Ming [2006] 4 ILR 2637 the fact there was a DI in this case and the findings thereof ought to be considered by the IC and unless the decision of the DI can be shown to be perverse, the respondent cannot be allowed to reargue its case based on all seven charges to justify the termination in the IC. We further agree that the decision of the DI panel is indeed a material factor and ought to be considered by the IC notwithstanding that the IC hears the matter afresh and is not bound by the decision or findings of the DI panel and is entitled to make its own finding.
Can an Employee Go to The Civil Court and Seek A Declaration That The Domestic Inquiry Finding Was Unlawful, Null Or Void?
The catch on challenging a Domestic Inquiry in the Industrial Court, however, is that to do so, the employee must have been dismissed for misconduct after the domestic inquiry.
If the employee was not dismissed by the end of the Domestic Inquiry (such as he was only given a warning letter or freezing of increment / bonus), then he/she would not be at the Industrial Court in the first place, for him/her to simultaneously / consequently challenge the validity of the Domestic Inquiry.
This then begs the question:
“Can an Employee go to the civil court and seek a declaration that the Domestic Inquiry finding was unlawful, null, or void?”
While presently there is no case (as far as we are aware) in which an employee managed to do so successfully, the case of Lim Eye Thun v Majlis Peguam Malaysia & Anor [2010] 2 MLJ 444 seems to suggest that that was possible.
In Lim Eye Thun, the employee filed an application in the High Court, among other claims, seek for a declaration that the Domestic Inquiry held against her as null and void.
When the case arrived at the Court of Appeal, the Court of Appeal dismissed the application as at the time it had become academic, since the employee had dismissed and filed her claim in the Industrial Court. Nonetheless, the Court of Appeal did not reject the possibility of such an action, and said:
[63] In this appeal, we are not concerned about the issue of reinstatement under s 20(1) of the Industrial Relations Act 1967 (Act 177). We are only concerned about the decision of the learned judge of the High Court that was delivered on 27 September 2005. But it cannot be denied that the representation to the Industrial Court by the plaintiff appellant reflects to a large extent the acceptance by the plaintiff appellant that the first defendant respondent had terminated her services. Consequently, the question of whether the domestic inquiry and the suspension of her employment is valid or otherwise has become an academic issue and is spent.
[64] It is trite that a declaration can be used in a ‘wide range of circumstances’ and in a ‘wide variety of cases in terms of subject-matter’ (per Raja Azlan Shah Ag LP (as His Majesty then was) in Dato Menteri Othman bin Baginda & Anor v Dato Ombi Syed Alwi bin Syed Idrus [1981] 1 MLJ 29 (FC) at p 31). And in a proper and suitable case, where a person would otherwise be without any remedy for the injustice done to him, the court has a wide discretionary power to intervene by way of declaration (Barnard & Ors v National Dock Labour Board & Anor [1953] 1 All ER 1113 (CA)). Section 41 of the Specific Relief Act 1950 (Act 137) provides for a declaratory decree. And O 15 r 16 of the Rules of the High Court 1980 also makes provisions for a declaratory relief. They complement one another. Lee Hun Hoe CJ (Borneo) in Datuk Syed Kechik bin Syed Mohamed v Government of Malaysia & Anor [1979] 2 MLJ 101 (FC) at p 107, aptly said:
The prevailing view seems to be that the court’s jurisdiction to make a declaratory order is unlimited subject only to its own discretion.
…
[66] The issues that were raised and the reliefs that were prayed for by the plaintiff appellant had become academic. The declarations sought centred on the issue of the domestic inquiry and the suspension of the employment. These issues are all spent. There is a passage from the judgment of Hashim Yeop A Sani CJ (Malaya) in Menteri Hal Ehwal Dalam Negeri, Malaysia & Ors v Karpal Singh [1992] 1 MLJ 147 at p 149, that merits reproduction. There His Lordship had this to say:
As regards the first preliminary objection it is our view that the matter had indeed, by the time the originating summons came before the learned judge, become academic. There was no living issue before the learned judge. There was no longer any lawful recipient of any benefit of any declaration sought in the originating summons. Cases cited by the learned judge (Sun Life Assurance Co of Canada v Jervis [1944] AC 111; Loknath Padhan v Birendra Kumar Sahu AIR 1974 SC 505; and Mohamed Noor bin Othman & Ors v Haji Mohamed Ismail bin Haji Ibrahim & Ors [1988] 3 MLJ 82) constitute ample authorities for the court not to act in vain. The respondent had by then no real interest in the declarations. It will be a complete waste of judicial time if the court were to deal with the merits of the application in the originating summons solely to determine the question of costs.
In Any Case, An Employee Must Exhaust the Company’s Internal Appeal Process First, If There Is One
In any event, an employee must always exhaust all domestic remedies available before claiming an action against the employer.
In Metroplex Administration Sdn Bhd v Mohamed Elias (1998) 5 CLJ, the Court stated that it is trite law that pursuant to the doctrine of exhaustion of domestic remedies, an aggrieved person is required to exhaust all the remedies available under an internal grievance procedure for the settlement of disputes.
Hence, in Tan Beng Swee, Penang V. Malaysian Airline System Berhad [1981] 1 ILR 129, the Industrial Court observed:
… The claimant was legally obliged to observe the rules set out in the Procedure, one of which (rule 24) is that any workman who is aggrieved by the punishment awarded by the Director of Personnel may appeal to the Board of Directors through the General Manager to have the order of punishment reviewed. By this rule, the doctrine of exhaustion of domestic remedies applied. This doctrine was enunciated by the Privy Council in White & Ors v. Kuzych [1951] AC 538 and was followed by the then Malaysian Court of Appeal in Tharmalingam v. Sambanthan [1961] 1 MLJ 63 and this court in AT Zavier v. Malaysian Airlines System (Award 185 of 1981) and there is no reason why I should not follow the established doctrine because if there is a right of appeal for the claimant, that right should first be exhausted. The claimant should not be encouraged to circumvent any of the rules by which he was bound. He should not be permitted to set at nought the rules agreed upon.
This means that if the employee is not satisfied with the decision of the Domestic Inquiry, the employee should exhaust all available domestic remedies including all domestic appeals available within the company.
Filing an action through the Courts without first exhausting all available domestic remedies may amount to an abuse of the process of the Court, held by Hashim Yusoff FCJ in Bank Pertanian Malaysia v Ahmad Zaki bin Ismail [2009] 2 MLJ 335.
Conclusion
In conclusion, the importance of conducting a domestic inquiry correctly cannot be understated. Any missteps in the same may cause the entire domestic inquiry to be challenged or held invalid, and consequently, the integrity of any dismissal arising therefore may also be questioned.
Thus, employers should always think carefully about whether to conduct a Domestic Inquiry and, if they choose to do so, make sure that it is done properly.
If you need advice on whether to conduct a Domestic Inquiry and how to do so, feel free to contact us.
This article is authored with the help of my able former interns, Ong Kai Ling, Connie Yap, and Oliver Lai.
[1] Anbuselvan a/l Sinnasamy v Indah Water Konsortium Sdn Bhd [2018] ILJU 127; Esso Production Inc v Maimunah Ahmad & Anor [2002] 2 MLJ 458; Intrakota Consolidated Bhd v Mohamad Roslin bin Md Shah & Anor [2008] 6 MLJ 748
[2] Mohd Azizi bin Sohan v Asian Kitchen (M) Sdn. Bhd. [2017] ILJU 164
[3] Maritime Intelligence Sdn Bhd v Mahkamah Perusahaan Malaysia & Anor [2019] MLJU 851