Employment & Industrial Relations Update: Not Guilty yet Dismissed: Recent Industrial Court Decision Upheld Termination Despite Domestic Inquiry Findings

In the recent case of Mohd Dzulkarnain Bin Shaharud-Din v TM Technology Services Sdn Bhd (Award No. 245 of 2026), the Industrial Court reaffirmed the well-established principle that an employer is not bound by the findings of a domestic inquiry panel, even where the domestic inquiry panel has found the employee not guilty of the charges preferred.

In this case, the domestic inquiry panel exonerated the claimant of the charges of misconduct against him. However, the employer’s disciplinary committee disagreed with the domestic inquiry panel’s findings and proceeded to dismiss the claimant for misconduct. The claimant argued that the dismissal was unfair due to the “not guilty” finding by the domestic inquiry panel.

The Industrial Court rejected the claimant’s argument and clarified several important principles. A domestic inquiry is primarily a fact-finding mechanism, and its findings are not final or binding on the employer. The employer retains the inherent power to differ from the domestic inquiry panel’s conclusion, provided it applies its mind to the evidence and records reasons for its disagreement.

Further, the Industrial Court emphasised that proceedings before it are heard de novo. As such, the Industrial Court is not concerned with the correctness of the findings made by the domestic inquiry panel. Instead, the Industrial Court’s task is to determine, based on the totality of the evidence adduced before it, whether the employer has established the alleged misconduct on a balance of probabilities, and whether such misconduct amounts to just cause or excuse for dismissal.

Importantly, while the Industrial Court acknowledged that an employer should not lightly disregard a “not guilty” finding by the domestic inquiry panel, it confirmed that such a finding does not immunise an employee from dismissal.

This Industrial Court decision serves as a timely reminder that employers may lawfully terminate employment despite an exonerating domestic inquiry outcome, provided the decision is reasoned, supported by evidence and capable of being justified before the Industrial Court.

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