Monday, January 17, 2011

Employer to claim through Labour Department


Director General’s power to inquire into complaints


(2)The powers of the Director General under subsection (1) shall include the power to hear and decide, in accordance with the procedure laid down in this Part, any claim by—…

…(iii) an employer against his employee in respect of indemnity due to such employer under subsection 13(1), and to make such consequential orders as may be necessary to give effect to his decision.

Claims for indemnity for termination of contract without notice

69C. (1) In the exercise of his powers under subsection 69B(1),the Director General may inquire into and decide any claim concerning any indemnity due to the employer or employee where the contract of service is terminated by either party without notice, or if notice was given, without waiting for the expiry of that notice.

(2) The indemnity due to the employer or employee under subsection (1) shall be a sum equal to the amount of wages which would have accrued to the employee during the term of the notice or during the unexpired term of the notice.

Employment Act 1955 (Act 265) has given employer the opportunity to claim from their former employee indemnity in lieu of notice as prescribed in both Section 69(2)(iii) and Section 69C.
Issue arises when employer embodied in their offer letter/ contract of service damages clause or even Bond that has monetary value. Can they (employer) enforce this clause through Labour Department?
The answer is negative, since the only power grant to the Director General of Labour through Employment Act 1955(Act 265) is in relation to the payment of wages in lieu of notice as per said sections.

Employer can always execute the said clause through civil claim by engaging legal advice.

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