KUALA LUMPUR | The High Court today ruled that sacked employees are only entitled to a maximum 24 months of back wages.
“Back wages cannot exceed 24 months, irrespective of whether the employee is given back his job,” judge Mariana Yahya said in allowing a judicial review application by Novartis Corporation (M) Sdn Bhd.
The company took its complaint to the High Court to quash an Industrial Court award after it was ordered to pay full back wages to its chief financial officer, Leong Chee Kong.
Mariana said the Industrial Court should base its ruling only on the Second Schedule of the Industrial Court Act, which restricts wages to 24 months.
She also ruled that Leong is now entitled to 12 months in back wages.
However, the judge maintained the findings of Industrial Court chairman Bernard John Kanny that the dismissal was without cause and the reinstatement order was correct.
Kanny, in his decision, said the Second Schedule, which restricted wages to 24 months, is not applicable when a reinstatement is ordered.
On the other hand, he said if an employee is dismissed without just cause but not reinstated, he is to be awarded compensation of a maximum of 24 months.
Last year, Kanny ruled that Leong’s dismissal was unfair and ordered reinstatement, effective Oct 1, with the employer told to pay full back wages of RM870,408.
The Industrial Court has the power to also award back wages plus compensation in lieu of reinstatement, which is one-month salary of the number of years of service.
