By A company receives a serious complaint of workplace sexual harassment. It does not ignore it.
On the contrary, it sets up an Independent Investigation Committee, appoints external investigators and interviews no fewer than 27 people. The employee is issued a Show Cause Letter. In the end, the company decides to dismiss him.
At this point, many employers and HR practitioners would think:
"The company investigated so thoroughly. Surely it's on safe ground?"
The result: the Industrial Court held that the dismissal was without just cause or excuse, and the company was ordered to pay the employee RM358,400.
Why? This case carries a vital reminder for every employer and HR practitioner in Malaysia:
Carrying out an investigation does not mean the company can prove the misconduct.
What happened?
The case arose from an anonymous email dated 29 November 2018, titled "Sexual Harassment at BFM". Besides being sent to the company, it was sent or circulated to members of the media, and it contained serious allegations about the company's working environment and the conduct of its staff. Umapagan was one of the employees named.
Faced with these allegations, the company did not rely solely on an internal HR investigation. It set up an Independent Investigation Committee and appointed external parties to investigate.
- 29 Nov 2018Anonymous email "Sexual Harassment at BFM" sent and circulated
- InvestigationIndependent Investigation Committee set up and external investigators appointed; 27 people interviewed
- 24 Dec 2018Company issues a Notice to Show Cause
- 4 Jan 2019Company terminates the employee's employment
- 21 Sep 2026Industrial Court rules the dismissal was without just cause or excuse
The employee denied the allegations and took the matter to the Industrial Court.
What was the company up against?
A key Employment Law principle comes into play here. When an employee challenges a dismissal, the question is not: "Did the company have reason to suspect the employee at the time?"
The real question is: can the company prove before the Industrial Court that the misconduct relied on to justify the dismissal actually took place?
The standard of proof is the balance of probabilities: on the evidence as a whole, is it more likely than not that the events occurred? This is exactly where the company's case ran into trouble.
A serious allegation does not automatically mean sufficient evidence
The allegations against the employee involved:
- Sexual harassment
- Explicit / inappropriate messages
- Inappropriate remarks
- Unwanted physical contact
- Other conduct considered inappropriate
These are plainly serious allegations. But the Industrial Court's question is not "How serious is this allegation?" but "Has this allegation been proven?" Those are two entirely different things.
What problems did the Industrial Court identify?
According to the published case materials, the Court raised a number of concerns about some of the charges and the evidence, including:
1. Some charges lacked particulars
For instance, some allegations did not clearly set out dates, the persons involved, the specific incidents or sufficient material particulars.
When a misconduct charge is too vague, the employee may not know exactly "which incident am I supposed to answer?", which directly undermines his ability to prepare a defence.
2. Some complainants did not testify in person
HR should take careful note of this. Whatever an internal investigation report says, the Industrial Court will not automatically accept everything in it as proven fact.
If a key allegation comes from a particular complainant but that complainant does not appear to be examined, the Court must ask, when weighing the evidence, whether there is sufficient direct evidence to support that allegation at all.
Investigation Report ≠ automatic Proof. This is one of the most common misconceptions among companies.
3. Screenshots may not be enough
The case also involved electronic communications as evidence. The published materials indicate that the Court had doubts about the completeness and authentication of some screenshots, including the absence of the original message exchanges.
Today, evidence in many misconduct cases comes from WhatsApp, Telegram, email, screenshots, voice messages and CCTV. But having a screenshot ≠ proving the event happened. The company still needs to consider:
- Who provided the screenshot?
- Do the original messages still exist?
- Is the full conversation available?
- Has the surrounding context been cropped out?
- Who can confirm its authenticity?
- Has the other party had a chance to explain?
4. A thorough investigation does not mean a complete charge
This may be the most important lesson in the whole case for employers and HR. The company interviewed 27 people and appointed external investigators; from a management perspective, it took the complaint very seriously.
But in the end, the Industrial Court still looks at: what exactly did the company charge the employee with? And did the company prove that charge?
A company cannot give an employee a vague allegation and then, at the Industrial Court, use more and more evidence to fill in a charge that was unclear to begin with. The charge itself must be sufficiently clear.
How did the Industrial Court decide?
The Industrial Court found that the company had failed to prove, on the balance of probabilities, the misconduct relied on to justify the dismissal, and therefore held: Dismissal without just cause or excuse.
As reinstatement was no longer an appropriate remedy, the Court awarded the employee:
JP Asia HR & Employment Law Analysis
This case is easily misread as: "From now on, if an employee is accused of sexual harassment, the company had better not dismiss him." That is the wrong takeaway.
The real lesson is: sexual harassment allegations must be investigated seriously, but a dismissal must still be supported by evidence.
A company has a duty to provide a safe working environment and should treat sexual harassment complaints seriously. But Serious allegation ≠ Proven misconduct. A company cannot lower the standard needed to prove misconduct just because the allegation is serious.
Suspicion can be where an investigation begins,
but it cannot be where a dismissal ends.
On receiving a complaint, a company can of course investigate, interview witnesses, preserve evidence, take interim measures where necessary, issue a Show Cause Letter and initiate disciplinary proceedings.
But once the investigation is complete, the company must still ask: "If this case reaches the Industrial Court two years from now, is the evidence I have today enough?" That is the question HR should ask before deciding on dismissal.
HR Lesson 1: A Show Cause Letter is not a place for a loose accusation
A line such as "You have sexually harassed your colleague." may fall far short.
Where the company has specific details, it should set them out as clearly as possible: Who? When? Where? What conduct took place? Which company rule was breached? The employee must know the case he has to meet before he can give a genuine explanation.
HR Lesson 2: Don't treat the Investigation Report as the final evidence
An investigation report is very important, but its role is to help the company establish the facts and make a decision. At the Industrial Court, the company may still need to prove the evidence behind the report. So during the investigation itself, consider:
- Have witness statements been kept?
- Have the original messages been kept?
- Has the CCTV footage been backed up?
- Are complete versions of the emails available?
- Is the complainant willing to give evidence?
- Can the evidence be authenticated?
Don't wait until the Industrial Court papers arrive before you start looking.
HR Lesson 3: A sexual harassment investigation must protect both sides
When a complaint comes in, the company cannot assume from the outset that the complainant must be telling the truth; nor can it conclude that "nobody saw it, so it can't have happened". Sexual harassment can, by its nature, occur without any third-party witness.
Investigators therefore need to make an overall assessment based on both parties' accounts, contemporaneous messages, how people reacted after the event, witness evidence, documentary evidence and the surrounding circumstances.
The company must protect the complainant while also giving the accused employee a fair opportunity to respond.
HR Lesson 4: Doing a lot of process is not the same as doing the process right
What employers should reflect on most in this case is that the company was not lacking in process. Quite the opposite: it did a considerable amount of investigative work, and still lost.
So HR management cannot simply be "I issued a Show Cause Letter", "I carried out an investigation", "I engaged a lawyer", "I held a DI". The real question should be: did each step actually achieve what it was meant to achieve?
HR Lesson 5: Run an Evidence Check Before Any Dismissal
Where serious misconduct is involved and dismissal is being contemplated, JP Asia recommends that businesses run a simple internal check first:
- Charge
- What exactly are we accusing the employee of?
- Particulars
- Are the dates, places, people and conduct clearly stated?
- Evidence
- What evidence supports each individual charge?
- Witness
- Are the key witnesses willing to testify?
- Employee’s Defence
- What did the employee say? Did we investigate his explanation?
- Policy
- Which Company Policy / Employee Handbook / Code of Conduct provision did the employee breach?
- Proportionality
- Even if the misconduct is established, is it serious enough to justify dismissal?
If you can't answer several of these: hold off on that termination letter.
Why does the Employee Handbook matter?
A company cannot wait until something happens to tell employees for the first time: "This behaviour is not allowed here." A complete Employee Handbook should set out in advance:
- Sexual Harassment Policy
- Workplace Conduct
- Misconduct
- Gross Misconduct
- Investigation Procedure
- Disciplinary Procedure
- Reporting / Complaint Channel
- Confidentiality
- Electronic Communication
- Possible Disciplinary Actions
The value of a policy framework is not to have something to "fire people with" after the fact. Its real value is this: everyone knows the rules before anything happens.
A Final Reminder for Malaysian Employers and HR
An employee does wrong; the company deals with it. It sounds simple. But what makes Employment Law genuinely difficult is this: believing an employee did wrong and being able to prove it in law are two different things.
Especially with serious misconduct such as sexual harassment, fraud, theft, violence, drug abuse or insubordination, the more serious the allegation, the less a company can afford to act on instinct.
Investigate. Preserve the evidence. Make the charge clear. Give the employee a chance to explain. Make sure the final decision is supported by evidence.
Because the Show Cause Letter, Investigation Report or Termination Letter a company writes today may, years from now, be examined page by page by the Industrial Court.
JP Asia's legal advisory team helps businesses build a complete framework covering Sexual Harassment Policy, investigation procedures, Show Cause, Domestic Inquiry and Termination.
Disclaimer: This article is based on publicly available Industrial Court Awards and case reports and is provided for business management, HR and Employment Law educational purposes only. It does not constitute legal advice on any particular case. Every misconduct matter, sexual harassment investigation and termination case should be assessed independently on its own facts, evidence, company policies and the applicable law.