What must a Malaysian employer do when an employee reports sexual harassment?

Sexual harassment at work stopped being a purely moral or HR question in Malaysia and became a hard legal duty. Since the Employment Act 1955 was strengthened, every employer that receives a complaint has a defined obligation to act, and since 2024 an employee who is brushed off can go straight to a national tribunal. Handle a complaint badly and a single incident becomes a fine, a tribunal award, and an unfair-dismissal claim all at once. Handle it well and you protect your team and your business at the same time.

Two laws sit side by side. The first is the Employment Act 1955, whose Part XVA (sections 81A to 81H) creates an internal, employer-led duty to inquire into complaints involving your own employees. The second is the Anti-Sexual Harassment Act 2022 (Act 840), which set up an independent Tribunal for Anti-Sexual Harassment that a complainant can approach directly. They are not alternatives you choose between; they are two routes that now run in parallel, and your obligations under the Employment Act apply regardless of whether the complainant also goes to the Tribunal.

The distinction matters because it changes your exposure. Under the Employment Act you are the first responder: the duty to inquire, to reply, and to act sits with you. As the law firm Halim Hong & Quek (HHQ) explains, the Employment Act makes it mandatory for employers to inquire into, investigate and make findings on all sexual harassment complaints involving their employees, while the Anti-Sexual Harassment Act provides an impartial tribunal outside the workplace. The two were built to close the old gap where a complaint could simply die on a manager's desk.

Your central obligation is the duty to inquire under section 81B. When an employee lodges a complaint of sexual harassment, you must look into it; you cannot file it away or settle it with a quiet word. The default is to inquire, and the law treats a refusal as the rare exception that has to be justified.

If you do decide to refuse, the Employment Act is specific about how. You must inform the complainant in writing, state the reasons for the refusal, and do so within 30 days. According to Edwin Lee & Partners, an employer must either investigate the complaint or provide written reasons for declining within that 30-day window, and failure to comply exposes the employer to a fine of up to RM50,000. A refusal is only safe where the complaint has already been inquired into and not proven, or where it is frivolous, vexatious, or not made in good faith, as HHQ notes.

There is also a backstop that should shape how seriously you treat the duty. If you refuse to inquire, the complainant can refer the matter to the Director General of Labour, who may direct that an inquiry be held. In other words, declining to act does not end the matter; it usually just moves it to a regulator, and now potentially to the Tribunal as well. The cheapest and safest path is almost always to run a proper inquiry from the start.

The safe path is a documented, repeatable inquiry that protects the complainant, treats the accused fairly, and leaves a clear record. Treat the moment a complaint arrives as the start of a process, not as something to think about later.

1. 1

   Log the complaint and the date

   Record the complaint and when it was received, and keep it confidential. The date matters: it starts the clock on your duty to respond under section 81B.

2. 2

   Decide to inquire

   The default is to inquire. Only refuse on the narrow grounds the Act allows, and if you do, put the refusal and the reasons in writing within 30 days.

3. 3

   Appoint an impartial inquiry

   Choose someone with no stake in the outcome, never the accused's friend, subordinate, or direct report. Impartiality is what makes a finding defensible later.

4. 4

   Hear both sides fairly

   Give the complainant and the accused a real chance to be heard, gather the evidence and any witnesses, and keep careful notes throughout.

5. 5

   Decide on the balance of probabilities

   Make a finding on the evidence. If the complaint is proven, apply a proportionate sanction under section 81C; if it is not, record that clearly too.

6. 6

   Document and protect against retaliation

   Keep the full file, communicate the outcome, and make sure the complainant is not victimised for having come forward. The paper trail is your evidence the duty was met.

The single most important habit is impartiality combined with documentation. A complaint that is investigated by someone close to the accused, or decided without a written record, is the version most likely to unravel if the employee later brings a claim or takes the matter to the Tribunal.

If the inquiry finds the complaint proven, section 81C gives you a graded set of disciplinary options. As HHQ summarises, the available actions run from dismissal down to a capped unpaid suspension, and the sanction should fit the seriousness of what was proven.

The mirror image of these powers is the penalty for doing nothing. Failing to carry out the duty to inquire under Part XVA is an offence, and on conviction it carries a fine of up to RM50,000. That figure is the floor of your exposure, not the ceiling: a botched or absent inquiry also opens the door to an unfair or constructive dismissal claim from the complainant, and, as we will see, to the Tribunal. Inaction is the single most expensive choice an employer can make here.

The Anti-Sexual Harassment Act 2022 (Act 840) was gazetted in October 2022, with its first administrative sections coming into force on 28 March 2023, as reported by The Malaysian Lawyer. Its centrepiece is the Tribunal for Anti-Sexual Harassment, an independent forum a complainant can approach directly. The Tribunal is broader than the Employment Act duty: it is open to any person who has been sexually harassed, not only to an employer's own staff, and it is driven by the complainant rather than the employer.

The Tribunal became real in practice in 2024. According to international law firm Baker McKenzie, it issued its first award on 12 July 2024, in a case where the complaint was proven, and ordered the employer to issue a public apology. The Tribunal can also order compensation, and as Halim Hong & Quek notes, the Act caps that compensation at RM250,000.

For employers, the practical message is blunt. The same firm advises that employers must keep “clear policies to target and prevent sexual harassment from occurring at the workplace,” and that they must comply with their obligation under the Employment Act to investigate complaints as soon as practical. The Tribunal removes the old safety of silence: if a complaint is buried internally, the employee now has a fast, low-cost forum to escalate it, and your failure to inquire becomes part of that record.

Compliance is the floor; prevention is the goal. The most effective protection is a combination of three things: the notice the law already requires, a clear written policy, and managers trained to recognise and handle complaints properly. Each one reduces both the chance of harassment happening and the chance of a complaint being mishandled when it does.

Start with the obligation you cannot skip. Section 81H of the Employment Act requires you to display a notice at the workplace to raise awareness about sexual harassment; the Department of Labour provides a template, and for remote teams it can be circulated on the company intranet. On top of that, a written anti-sexual-harassment policy should define what counts as harassment, set out confidential reporting channels, explain how an inquiry is run, and state the consequences, so that managers are not improvising when a complaint arrives.

The scale of the problem is the reason this is worth doing properly. In a survey of 1,010 Malaysian women by the Women's Aid Organisation and Vase.ai, 62% said they had experienced sexual harassment at the workplace. A clear policy and trained managers are what turn that statistic into a workplace where people feel safe to report, and where you can show a regulator or the Tribunal that you took the duty seriously.

Sources: Employment Act 1955, Part XVA (sections 81A to 81H) on the employer's duty to inquire, the 30-day written-reasons rule, the section 81C disciplinary options, the section 81H notice, the fine of up to RM50,000, and the RM250,000 Tribunal compensation cap, as analysed by Halim Hong & Quek and Edwin Lee & Partners; Anti-Sexual Harassment Act 2022 (Act 840) commencement per The Malaysian Lawyer; the Tribunal's first award of 12 July 2024 and the quoted guidance per Baker McKenzie; and the 62% workplace-harassment figure from the 2020 survey of 1,010 women by the Women's Aid Organisation and Vase.ai. Verified 26 June 2026; always confirm the current law on the official KESUMA, JTKSM and Attorney General's Chambers sources, as guidelines may be updated. This article is general information, not legal advice.