ETHICS, LAW AND CORPORATE SOCIAL RESPONSIBILITY - Malaysian Industrial – Labour Relation, SEXUAL HARASSMENT ISSUE, RETRENCHMENT ISSUE, IMPOSITION ISSUE

1. GMUL 5063
ETHICS, LAW AND CORPORATE SOCIAL
RESPONSIBILITY
PREPARED BY:
BELHIMER MESSAOUD 816228
MUHAMAD HAZWAN BIN HASHIM 816904
MOHD AZRUL BIN ABD AZIZ 816906
ABDELHAK BOUKERIKA 817803
TOPIC 8
EMPLOYMENT LAW

2. THE EMPLOYMENT LAW
 Employment law covers all rights and commitments
inside of the employer-employee relationship - whether
current employees, work candidates, or previous
workers.
 Due to the many-sided quality of employment
relationship and the wide assortment of circumstances
that can emerge, employment law includes legal issues
as differing as discrimination, wrongful termination,
wages and tax assessment, and work environment
security
The main legislations related the employment:
 Employment Act 1955.
 Industrial Relations Act 1967.

3. RELATIONSHIP BETWEEN EMPLOYER
AND EMPLOYEE
 Defined in section 2 Employment Act 1955, any
agreement, oral or in writing, express of implied,
whereby one person agrees to employ another person
as employee the second person agrees to serve his
employer as employee, includes an apprenticeship
contract
Employer
 An employer is any person who has entered into a
contact of service to employ another person as an
employee “the Employment Act 1955”. Includes the
agent, manager or factor of the employee.

4. Employee
 The term Employee means a person or class of persons included in
any category in the first schedule to the extent specified therein, or
in respect of whom the Minister makes an order
● First Schedule, Employment Act 1955:
– Person employed by employer, with wages less than RM1,550
per month.
– Person who, irrespective of wages, enters contract of service for:
● Manual labour, including artisan / apprentice
● Operating / Maintaining vehicle for passengers / goods / reward /
commercial purposes
● Supervises & oversees other employees engaged in manual labour.
● Engaged in a vessel in any capacity (conditions)

5. LEGAL RIGHTS AND RESPONSIBILITIES
 The legal rights are the rights reflected by the law
which should support collective bargaining
arrangement and the freedom of workers to
withdraw their labour
 Employers have legal responsibilities to ensure a
safe and healthy workplace. As an employee you
have rights and you have responsibilities for your
own wellbeing and that of your colleagues.
 Rights and responsibilities g hand in hand, “rights
entail responsibilities

6.  Employer's Duties:
 As an employer, his responsibilities towards the
employees among others:
– Duty to Provide Work - “a skilled man takes
pride in his work. He does not do it merely to
earn money. He does it so as to make his
contribution to the well-being of all.”
– Duty to exercise care – i.e. providing a safe
place for employee to work.
● Traditionally understood as physical health
● Modern jurists include mental health

7. Employee Rights
 Wages
 Deductions from Wages
 Hours of Work
 Bonus
 Minimum Wage
 Rest Days, Public Holidays
 Hospitalization & Sick Leave
 Annual Leave
 Absence Without Leave
 Termination Benefits
 Retirement
 Maternity Leave
 Non-Renewal of Contract
 Management & Union

8. Employer Rights
 Right to Hire, Fire and Transfer
 Right to Terminate & Dismiss
 Termination & Notice

9. Industrial Court/Labour Court
Director General of Labour
 The Director General has the power to inquire and
decide the disputes between an employee and the
employer where dispute pertains to wages or any other
payments in cash due to the employee. These payments
may relate to any term of the contract of service of the
employee, or under any other law or subsidiary
legislation.(Section 69 of industrial Relations Act 1967).
 Also the Director General has the power to confirm or set
aside any decision of the employer made under section
14(1) of the Act. The Director General’s power to
disputes is restricted t employees whose wages are up
to RM 5000.

10. Labour Court
 Under the Employment Act 1955, the Director-General of
Labour, the Deputy Director-General and the others
subordinate officers are given the responsibility to
resolve some disputes between the employer and
employee. The Labour Court is a mechanism
implemented by the Department of Labour to settle
claims by workers against their employers or vice versa.
The Labour Court has the authority to hear and decide
on cases of unlimited amounts.

11. Industrial Court
 The Industrial Court is set up under the Industrial
Relations Act 1967. It consists of a President, appointed
by the Yang di Pertuan Agong, few Chairmen to assist
the President, a panel of persons representing
employers and employees. The Industrial Court meant to
provide a fair, simple and specialized means of resolving
disputes between employers and employees.
 Any party not satisfied with the award of the Industrial
Court cannot challenge or appeal against the award.
However, questions of law which have arisen in the
Industrial Court can be referred to the High Court for
review.

12. Powers of Industrial Court
● The Industrial Court may:
– Order for Reinstatement (Unfair Dismissal)
– Order for maximum 24 months back wages
– Order for recognition of collective agreements
● Industrial Court's Awards are “final and conclusive”
– Section 33, Industrial Relations Act 1967
● However, an unsatisfied party may file a writ or certiorari
at High Court to annul or quash the Award
– Can appeal from High Court to Court of Appeal
and
Federal Court

13. THE ETHICS OF JOB DISCRIMINATION
Job Discrimination
 The wrongful act of distinguishing illicitly among people not on
the basis of individual merit, but on the basis of prejudice or
some other invidious or morally reprehensible attitude
Types of Employment Discrimination
 Workplace discrimination includes biased practices based on
• Age,Disability,Equal Pay/Compensation,Genetic Information,
Harassment,National Origin, Pregnancy, Race/Color, Religion,
Retaliation, Sex, Sexual Harassment.

14. Elements of Employment Discrimination
 1. It is a decision against one or more employees that is
not based on individual merit, such as the ability to
perform a given job.
 2. The decisions derive solely or in part from racial or
sexual prejudice, false stereotypes, or some other kind
of morally unsatisfied against the employee.
 3. The decision has a harmful or negative impact on the
interests of the employees, perhaps costing those jobs,
promotions or better pay.

15. Discriminatory Act
 A discriminatory act may be part of the isolated (no
institutionalized) behavior, intentionally and knowingly
discriminates out of personal prejudice
 A discriminatory act may be part of the routine behavior
of an institutionalized group
 An act of discrimination may be part of the isolated (no
institutionalized) behavior of a single individual who
intentionally and knowingly discriminates against
someone because the individual unthinkingly adopts the
traditional practices and stereotype of the surrounding
society.

16. Discriminatory Practices
 Recruitment Practices: Firms that depend solely on the
word-of-mouth referrals of present employees to enroll
new workers have tended to recruit just from those
racial and sexual groups that have been represented in
their work power
 Screening Practices: Job qualifications are
discriminatory when they are not important to the
occupation to be performed.
 Promotion Practices: Promotion, job progression, and
transfer practices are discriminatory when employers
place White males on occupation tracks separate from
those open to women and minorities.
 Conditions of Employment not given to people who are
doing essentially the same work.

17. Discrimination and the Law
 Civil Rights Act of 1964 made it illegal to base hiring,
firing, or compensation decisions on race, color, religion,
sex, or national origin
 created the Equal Employment Opportunity Commission
(EEOC) to administer the Act
 Executive Order 11246 required companies doing
business with the federal government to take steps to
redress racial imbalance in workforce
 Equal Employment Opportunity Act of 1972 gave EEOC
increased power to combat “under representation” and to
require affirmative action programs

18. Utility, Rights, and Justice of Discrimination
 Utility: which claim that discrimination leads to an
inefficient use of human resources
 rights arguments: which claim that discrimination
violates basic human rights
 which claim that discrimination results in an unjust
distribution of society’s benefits and burdens.
Affirmative Action
 Affirmative action programs designed to achieve a more
representative distribution of minorities and women
within the firm by giving preference to women and
minorities.
 Claims affirmative action will secure equal opportunity
and claims affirmative action is a morally legitimate
means

19. Utilitarian Argument for Affirmative Action
 Claims affirmative action minimize need by reaping
helpful benefits minorities and women in need, and for
that reason raises utility and Criticized in good grounds
in which their costs outweigh their advantages and this
other methods associated with lowering need will create
higher utility.

20. CODE OF CONDUCT FOR INDUSTRIAL
HARMONY
Introduction
 Industrial sector in Malaysia recorded rm46.9
billion as on January 2011
 Boosted by high technology and knowledge based
industries
 Drive Malaysian into 17th largest exporting nation
in the world
 Needs to integrate n cooperation between
industrial players government

21. Malaysian Industrial – Labour Relation
 Industrial relation:
“systems that encourage the industrial harmony which
regulate the relations between employers and employees,
trade union and prevention and lastly for settlement of trade
disputes”
 Main aspects focused:
1) relationship between employer and union,
2) employment law and discipline procedures,
3) Terminating the services contract

22.  Malaysian scoped industrial relation:
1) Employer
2) Employees (represented by union)
3) government
 Main institution in administration and implementation of
industrial relation and labour is the “minister of human
resources” or “MOHR”.
 Main responsibilities of MOHR:
1) Policy deployment
2) Human resources planning

23.  British colonial system
1) Trade unions enactment 1940
2) Industrial courts ordinance 1948
3) Trade dispute ordinance 1949
 Post independences of Malaysia
1) Essential regulation and industrial arbitration tribunal,
1965.
2) August 1967, government introduced industrial relation
act 1967 to replace trade dispute ordinance 1949 and
essential regulation 1965.

24. Introduction
 Firstly introduced in February 1975.
 Created with tripartite initiative of ministry of labour (now
mohr), Malaysian councils of employers organization
(mceo) and Malaysian trade union congress (mtuc).
 The aim for code of conduct for industrial harmony:
“lay down principles and guidelines for employers and
workers on the practice of industrial relations for
achieving the greater industrial harmony”

25. The History
 During the Malaysia-Indonesia confrontation 1963-1966,
government set up “emergency essential regulations”.
 The regulation empowered government to declare these
economy sectors were “essential sectors”.
 After the confrontation, the “essential sectors” was
incorporated into legislation called “industrial relations (ir)
act 1967”.
 The racial riot in 1969 and unions industrial action has
made government to encouraged the mtuc to commit
industrial harmony.
 February 1975, the code of conduct for industrial
harmony has been established.
 The code endorsed by the mtuc and mceo with the
mediation of ministry of labour (now mohr).

26. The code
 The code has four main areas which are:
1) responsibilities.
2) employment policy
3) collective bargaining
4) communication and consultation
 The code covered fifty (50) issue which encompassed of the four main
area stated above
 There is no legal obligation for the employer to adhere to the contents
of the code, however section 30 (5a) of industrial relations act 1967
states:
“in making its award, the court may take into consideration any
agreement or code relating to employment practices between
organizations, representative of employers and workmen respectively
where such agreement or code has been approved by the minister”

27. NATURAL JUSTICE IN DOMESTIC
INQUIRY
The Concept of Natural Justice
 Natural justice refers to the fairness to the employees in
an organization where employees have the right to speak
and receive proper justice if there are any problems or
conflicts at work.
 It can also be defined as a legal concept, which
represents the highest principles of procedure developed
by the courts, judicial power and the administration of
justice which must be followed in making any decision that
would give bad for a person's individual rights.
 In other words, natural justice means fairness, equity and
equality.

28. The Principle of Natural Justice
a) Audi Alteram Partem
 It is a principle of fundamental justice or equity in most
legal systems. This principle includes the rights of a
party or his lawyers to confront the witnesses against
him, to have a fair opportunity to challenge the evidence
presented by the other party.
The features:
 Prior notice requirements of errors encountered by the
workers
 Opportunity for making representations
 The right to question witnesses and the right to be
represented by counsel

29.  The right to be informed of the decision and the reasons
for the decision
 Consideration of the earlier case (autrefois acquit)
 Right of appeal and the trial resumed.
b) The Principles of Impartiality (bias)
 In Latin, it is also known as nemo judex in causa sua
potest or nemo debet judex in propria sua causa which
means someone who is interested in a case handled
Bias and prejudice may occur for two reasons:
 The parties have an interest
 Biased because there is a relationship or affiliation

30. Domestic Inquiry
 Domestic enquiry is a disciplinary procedure to be
followed by all the establishments they are willing to take
strong action against employee.
 This enquiry is based on the principle of natural justice
and has to be conducted unbiased manner.
 Usually, a domestic inquiry is made for major misconduct
or errors that can cause a huge penalty. For the
examples, like job termination, demotion, suspension
and so on.

31. The Relationship between Natural Justice and
Domestic Inquiry
 Before taking disciplinary action against a worker,
management must hold a domestic enquiry based on the
principles of natural justice.
 The principle of natural justice states that no man should
be held guilty without getting an opportunity to explain
his point of view and it also states that the employee be
given a fair chance which are to present evidence of his
own choice and also to explain his point of view without
any pressure or fear.

32. ISSUE 1:
SEXUAL HARASSMENT

33. What Is Sexual Harassment?
 Unwelcome sexual advances, requests for sexual favors
and other verbal or physical contact
Types of Sexual Harassement
 Quid Pro Quo: Decisions affecting employees from
requests sex, or a sexual relationship, in return for not
firing or otherwise punishing the employee or in return
for favors for example, advancements or raises.
 Hostile Work Environment: Verbal or nonverbal
behavior in the workplace (sexually provocative
photographs, foul or hostile language or inappropriate
touching).

34.  Sexual Harassment and Law: The International Labor
Organization (ILO) is a specialized United Nations agency
that has addressed sexual harassment as a prohibited form of
sex discrimination under the Discrimination (Employment and
Occupation) Convention (No. C111)
 The ILO has made clear that sexual harassment is more than
a problem of safety and health, and unacceptable working
conditions, but is also a form of violence
Who can be a victim of sexual harassment?
 subordinate harassment of a supervisor, men can be
harassed by women, same sex harassment, third party
harassment ( co-workers, or non-employees, such as
customers, vendors, and suppliers).

35. International and local perspective
 Globally, the phenomenon of Sexual harassment has
always been looked from a woman’s perspective, and in
most instances victims are women. There is still large
amount of men who are still unclear about what is sexual
harassment is all about and feels that their sexual
attitude is normal for men. This is further substantiated
with the fact there is no laws on this behavior
 in Malaysia and most organizations still do not take
report made on sexual harassment seriously. Taking into
considerations that there is a general lack of knowledge
on the real definition of sexual harassment amongst men
 it can be that sexual harassment should not be viewed
as a personal problem but a social problem.

36. CASE OF SEXUAL HARASSMENT
Passananti v Cook County
 PROCEDURAL POSTURE: Plaintiff former employee
appealed from the United States District Court for the
Northern District of Illinois, Eastern Division, where she
brought claims under 42 U.S.C.S. § 1983 and Title VII
of the Civil Rights Act of 1964 against defendants, a
county, its sheriff's department, and her supervisor. A
jury awarded her a total of $4.1 million in damages, but
the district court granted defendants' motion for
judgment as a matter of law

37.  OVERVIEW: The employee claimed that her supervisor
subjected her to sexual harassment and that she was
fired because of her sex. Affirming the district court's
decision to set aside the jury's verdict on the
discriminatory termination claim, the court determined
that it simply lacked any evidentiary support. However,
the court concluded that the employee presented
sufficient evidence to allow the jury to find that the
gender-based harassment she suffered was severe and
pervasive, and that she did not unreasonably fail to take
advantage of available corrective measures in her
workplace

38.  OUTCOME: The court reversed the grant of defendants'
motion for judgment as a matter of law and reinstated
the verdict on the sexual harassment claim. The grant of
defendants' motion for judgment as a matter of law on
the termination claim was affirmed. The court remanded
the case for entry of judgment in favor of the employee
and against the county for $70,000. The judgment was
affirmed to the extent it was for the supervisor in his
individual capacity.

39. MORAL,ETHICS AND CSR VIEW
Moral View
 Guidelines prohibit intimidating, hostile, or
offensive working environment. But it is really
sometimes difficult to distinguish this from male
rudeness not intended to degrade women
 It prohibit also verbal or actual physical contact of
the sexual nature any time it has the particular
effect regarding unreasonably interfering through
an individual’s operate efficiency it is generally
seems need to use strictly summary judgments.

40. Ethics View
 Sexual harassment is inappropriate and will be an ethical
violation.it truly is perpetrated at all levels of
organization, most often by an individual, frequently
acknowledged or supported by the immediate work
group and sometimes condoned by even top
management.
Corporate Social Responsibility View
 Employees and their trade unions have a clear role to
play in helping to create a climate at work which is free
from sexual harassment. Employees can do much to
discourage sexual harassment by making it clear that
they regard such behavior unwelcome and
unacceptable.

41. ISSUE 2:
RETRENCHMENT

42. CASE OF RETRENCHMENT
Roselina Binti Abdullah v Konsortium
Transnasional Berhad
 The claimant (Roselina) appointed as head of talent and culture
development of the company (Konsortium) with basic salary
rm12,000 and car allowance rm2,500 on 2 November 2009.
 The claimant employment for 2 years contract for service subject
to probationary period of 6 month.
 The claimant report to the company executive director, Tengku
Mohd Hasmadi Tengku Hasim (cow1)
 1st may 2010, end of 6 month probation period, the claimant was
not confirmed and neither was informed by the company that her
probation period was extended.
 30th June 2010, the claimant received a letter of non-
conformation informing that she was terminated with immediate
effect.

43.  The reason of termination was the cow1 did not like her for
the reason. There are no warning or inquiry held against
claimant.
 The claimant contends that there was element of biasness
and her dismissal was without just cause or excuse.
 The court has determine the following issue:
1) Whether the claimant had been formally appraised.
2) Whether performance appraisal had been reasonable
under the circumstances.
3) Whether the company’s action had been reasonable
under the circumstances.
4) Whether claimant had been given sufficient
opportunity to improve.
5) Whether the dismissal with just cause to excuse.

44. LEGALAND ETHICS VIEW
The Legal View
 After considering the evidence adducted by both parties and bearing
in mind section 30 (5) industrial relations act 1967 to act according to
equity, good conscience and the substantial merits of the case, the
dismissal of the claimant was without just cause and excuse.
 The company failure to comply with the code of conduct for industrial
harmony as the retrenchment of the employee being view as unfair.
 The court order the company to pay the claimant the sum of
rm72,000.00 less statutory deduction if any through the claimant
solicitors within 30 days from the date of awards.

45. The Ethics View
 The company was unethical because the company had
breach the company's code of conduct in which the
company has dismissed the claimant with the
unreasonable reason and have no solid evidence that
states that the claimant rude.
 According to the Kant in the theory of ethics, the theory
that is based on the behavior right or wrong regardless
of the impact called non-consequentialist.
 In this case, the company of Konsortium Transnational
Berhad make a hasty decision whether right or wrong
regardless of the consequences that imposed.

46. ISSUE 3:
IMPOSITION

47. CASE OF IMPOSITION
Wal-Mart Employment Practices Class Action Lawsuit
Walmart Lawsuit: Barnett v. Wal-Mart Employment
Discrimination Lawsuit
 Result: $35 million settlement plus injunction to prevent
wage and hour violations
 The Court approved in July 2009 to a settlement valued
at up to $35 million on behalf of workers in Washington
State who alleged they were deprived of meal and rest
breaks and forced to work off-the-clock at Wal-Mart
stores and Sam’s Clubs.
 In addition to monetary relief, the settlement provided
injunctive relief benefiting all employees. Wal-Mart was
required to undertake measures to prevent wage and
hour violations at its 50 stores and clubs in Washington,
measures that included the use of new technologies and
compliance tools.

48.  Plaintiffs filed their complaint in 2001. Three years later,
the Court certified a class of approximately 40,000
current and former Wal-Mart employees. The eight years
of litigation were intense and adversarial. Wal-Mart,
currently the world’s third largest corporation, vigorously
denied liability and spared no expense in defending
itself.
 This lawsuit and similar actions filed against Wal-Mart
across America served to reform the pay procedures and
employment practices for Wal-Mart’s 1.4 million
employees nationwide. In a press release announcing
the Court’s approval of the settlement, Wal-Mart
spokesperson Daphne Moore stated, "This lawsuit was
filed years ago and the allegations are not representative
of the company we are today." Lieff Cabraser served as
court-appointed Co-Lead Class Counsel

49.  The Deontologist may Argue
 From Wal-Mart spokesperson says we can see that the
managers of Wal-Mart felt that their action to force the
employees to work off-the-clock considered morally
wrong.
 Consequentialist might think that deprive workers of
meal and rest breaks and forced them to work overtime
adds value and benefits for the company then that action
is ethical issue to increase the performance of workers
and support the firm to get more profits

50. The Ethics View
 Should Wal-Mart managers think about their image and
brand which can be harmed by like these actions. It
would realize the most satisfaction and least harm if Wal-
mart managers respect the employee rights like the
works hours and the rest time. Thus from the Utilitarian
theory the action to prevent employees of rest time and
forced them to work off-the-clock is morally wrong and
incorrect action.