How do foreign AI dismissal rulings guide Malaysian courts on redundancy?

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Foreign Court Decisions on AI-Driven Dismissals Offer Guidance on Redundancy Principles in Malaysia

Foreign court decisions concerning dismissals linked to artificial intelligence adoption, while not legally binding in Malaysia, highlight key principles that resonate with Malaysian employment law regarding redundancy. These international rulings underscore that the introduction of AI does not automatically justify the termination of employees. Instead, employers must still adhere to established legal frameworks, demonstrating genuine redundancy and applying fair, objective selection criteria.
International Rulings Emphasise Employer Obligations Beyond AI Justification

In China, a court awarded compensation to a quality assurance supervisor dismissed after refusing a demotion and salary reduction prompted by AI implementation. The court's stance was that employers cannot use AI as a means to bypass existing labour protections. Similarly, an Italian court ordered the reinstatement of an employee dismissed due to AI, finding the termination unlawful because the employer had not explored redeploying the employee to another suitable position. These cases illustrate a global trend where AI adoption is viewed as a business rationale for restructuring, but not as a standalone justification for dismissing staff.
Malaysian Legal Principles Align with Global Emphasis on Fairness and Objectivity

Malaysian employment law, as guided by principles such as the Code of Conduct for Industrial Harmony, already requires employers to ensure that retrenchment is based on genuine redundancy and that selection criteria are clear, transparent, and objective. While traditional factors like length of service and age are considered, there is an increasing recognition that adaptability and the ability to work with technology should also be weighed. The foreign precedents reinforce the necessity for employers to thoroughly assess roles for genuine redundancy and to apply selection processes that are equitable and justifiable.
Redeployment and Reskilling Remain Crucial Considerations

The Italian case, in particular, underscores the importance of considering redeployment options before resorting to termination. In the Malaysian context, employers are generally expected to explore possibilities of reskilling or upskilling affected employees to fill other roles within the organisation. Retrenchment should typically be a last resort, implemented only after reasonable efforts have been made to find alternative employment for the individual within the company, ensuring that the process is carried out responsibly and transparently.

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How do foreign AI dismissal rulings guide Malaysian courts on redundancy?

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