A domestic inquiry is an internal investigation process that is launched when an employer needs to determine whether an employee has committed an act (or acts) of misconduct. Under section 14 of Malaysia’s Employment Act 1955, employers have a statutory obligation to conduct a ‘due inquiry’ to ascertain whether an employee is guilty of misconduct before they can dismiss or impose a major penalty on them.
Aside from being a statutory obligation, domestic inquiries are reliable proof that an employer has taken necessary steps to ensure that an employee is fairly treated should alleged misconduct be reported. In the event that an employee files a case against their employer for wrongful or unfair dismissal, a judge will definitely look to the domestic inquiry for proof that an employer’s actions were fair and adequate.
However, although launching a domestic inquiry is stated as a statutory obligation under the Employment Act 1955, the Act does not specify how one should be conducted and what amounts to a satisfactory ‘due inquiry’ under the law. There is, therefore, a wide scope for interpretation on how to conduct a domestic inquiry that will usually depend on specific circumstances and the severity of the employee’s misconduct.
This lack of legal resources may confuse employers and Human Resource (HR) professionals, but it should not deter them from carrying out a proper domestic inquiry as to the penalty for failing to do one can be severe if an employee decides to file a wrongful/unfair dismissal claim.
A domestic inquiry should always be seen as a last resort – if the issue can be resolved through discussion with the involved parties and handled appropriately, there is no need to perform a domestic inquiry.
Should other steps fail to resolve the issue, members of management and HR should then take note of several important steps in carrying out a domestic inquiry:
1. The issuance of a “show cause” letter
A “show cause” letter is, as the name suggests, a letter that shows the exact reasons and causes for concern. The letter is also used to clearly and precisely outline the allegations of misconduct and provide a timeline for an employee to explain their side of the story informal writing. Issuing a show-cause letter is a delicate process and should be handled professionally to prevent unnecessary problems.
A good show cause letter should contain the following:
2. Suspension of the employee
The suspension is only necessary if the employer feels that it would prevent interference with the investigation process and/or bar the employee from committing further misconducts. Under the Employment Act, the employee can only be placed on a period of suspension not more than 2 weeks and be given half their wages during this period. Should the employee be deemed not guilty later on, the employer is required to pay back the remaining wages.
3. Preparing for the domestic inquiry hearing
If the employee’s written explanation and response to the show cause letter is not satisfactory, the employer may then start to prepare for a domestic inquiry hearing.
Appointment of Panel Members
The employer will have to select and appoint a panel of senior employees and members of the management to judge and make a final decision during the domestic inquiry hearing.
Panel members should:
It is also important to select panel members that will respect the confidentiality of the domestic inquiry hearing and not leak information out to other uninvolved parties.
Assistance for the Employee
The employee that was charged with alleged misconduct should also be provided with some information or assistance to ensure that they are aware of the procedures of the domestic inquiry. Examples include:
4. Carrying out the domestic inquiry hearing
Domestic inquiries are commonly modelled after court proceedings. There will be two sides: the prosecution (which acts on behalf of the employer), and the defence (which consists of the accused employee). Both parties should be able to call on witnesses to testify and provide evidence to support their respective arguments. To ensure objectivity during the inquiry, the accused employee should be allowed full opportunity to present their case.
Employers may also consider recording the entire domestic inquiry in order to preserve evidence in case there is a need for it in the future.
Should the panel members find the employee to be guilty of the misconduct(s), the company will then need to determine what kind of punishment should be given.
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