Employment

Must an employer hold a domestic inquiry before dismissing an employee?

Domestic inquiries, fair dismissal and the lessons from Fatin Hamamah v COMM-IT Consultancy Services

Messrs. Koo Jia Hung15 October 2026 · Legal insights

An employer receives a serious complaint about an employee. Management believes the evidence is clear and wants to dismiss the employee immediately. Must it first hold a domestic inquiry?

An employer should give the employee a fair opportunity to answer the allegations before deciding on dismissal. However, the absence of a domestic inquiry does not automatically mean that the employee will succeed in an unfair dismissal claim. The employer must still prove that the dismissal was justified.

This distinction was applied in Fatin Hamamah binti Jamaluddin v COMM-IT Consultancy Services Sdn Bhd, Award No. 428 of 2026, delivered by the Industrial Court in Kuala Lumpur on 9 March 2026.

What is a domestic inquiry?

A domestic inquiry is an internal process for examining allegations against an employee and hearing the employee’s response before disciplinary action is decided.

For employment governed by the Employment Act 1955, section 14(1) provides for dismissal without notice for misconduct after due inquiry. That requirement should not be confused with whether a dismissal will ultimately survive a challenge in the Industrial Court. The court’s ability to examine the merits does not remove the employer’s responsibility to follow a fair process.

What happened in this case?

The company employed Fatin as a project manager. It issued a show cause letter containing seven allegations described as poor performance. These included complaints about tender work, reporting, staff matters and responses to urgent work after office hours.

Fatin denied the allegations and provided explanations. She later attended meetings with management and was dismissed on the same day. The company claimed that it had conducted a domestic inquiry.

The court disagreed. She had not been given prior notice of an inquiry to prepare her defence or an opportunity to call witnesses. The people conducting the meeting were themselves involved in the allegations. The court also found that the complainant had already concluded that she was guilty.

Calling the meeting a domestic inquiry did not make it a fair hearing.

Did the lack of a domestic inquiry decide the case?

No. The Industrial Court still examined the allegations and the evidence supporting them.

It found that the company had failed to prove its case. Many allegations lacked specific details, duties and instructions were unclear, and Fatin’s explanations were largely unrebutted. The evidence pointed to personality clashes and a breakdown in communication rather than the poor performance alleged.

The dismissal was held to be without just cause or excuse. The court awarded RM259,900 in back wages and compensation in lieu of reinstatement, subject to any statutory deductions.

The Federal Court has already explained the principle

In Maritime Intelligence Sdn Bhd v Tan Ah Gek [2022] 1 MLRA 56, the Federal Court explained that an employer ought to hold a domestic inquiry before dismissing an employee for misconduct. Nevertheless, where no inquiry was held, or it was defective, the employer may still prove before the Industrial Court that the dismissal was justified.

There is an important limit: the employer must justify the reasons that actually led to the dismissal. It cannot dismiss first and later introduce a different reason to make the decision appear justified.

In Maritime Intelligence, the employer attempted to rely on allegations about the employee’s academic qualifications that had not been the basis of her dismissal. The Federal Court rejected that approach. Later discoveries may affect the appropriate remedy, but they do not retrospectively become the reason for an earlier dismissal.

What should employers do before deciding to dismiss?

Identify the actual complaint and the evidence supporting it. Describe the incident, instruction or duty involved, rather than relying on general labels such as bad attitude or poor performance. Give the employee enough information and a reasonable opportunity to respond.

Keep the decision open until that response has been considered. Where an inquiry is held, those deciding the allegations should be impartial. Check the employment contract, handbook and any applicable collective agreement for the procedure the employer has committed to follow.

Ensure that the dismissal decision matches the allegations and evidence considered. A warning letter or an inquiry meeting will not rescue a decision based on unproven complaints. Equally, an employee challenging dismissal should address the allegations themselves rather than rely solely on the absence of an inquiry.

For employers, the useful time to review the evidence and disciplinary process is before issuing the dismissal letter, while shortcomings can still be addressed fairly.