The Employees’ Social Security Act 1969 (“SOCSO Act”) is the foundation of Malaysia’s workplace injury compensation system. It ensures that employees who suffer injuries, disabilities, or death in the course of employment are compensated under a no-fault, statutory framework. Central to this system is Section 31, Section 31 of the SOCSO Act reads as follows:
“31. Liability of employer and his servant.
An insured person or his dependants shall not be entitled to receive or recover from the employer of the insured person, or from any other person who is the servant of the employer , any compensation or damages under any other law for the time being in force in respect of an employment injury sustained as an employee under this Act:
Provided that the prohibition in this section shall not apply to any claim arising from motor vehicle accidents where the employer or the servant of the employer is required to be insured against Third Party Risks under Part IV of the Road Transport Act 1987 [Act 333].”
Section 31 provides that an employee or their dependants who are entitled to SOCSO benefits are generally barred from bringing civil claims against the employer or the employer’s servants in respect of the same injury. SOCSO, in this sense, operates as the exclusive remedy for workplace injuries. The only statutory exception expressly recognised is for motor vehicle accidents, which remain actionable under the Road Transport Act 1987.
The rationale for Section 31 is straightforward. Parliament intended to prevent “double recovery,” where an employee could claim both statutory compensation and civil damages. Since employers already contribute to SOCSO, they are protected from additional financial liability beyond the scheme. Employees, on the other hand, benefit from guaranteed and timely compensation without the burden of proving fault, an important safeguard in cases where negligence might be difficult to establish.
For decades, this exclusivity meant that even where employer negligence was evident, employees were confined to the statutory benefits provided under SOCSO. For example, if a worker slipped on a wet floor in a warehouse because the employer failed to install warning signs, he would receive SOCSO benefits but would not be able to sue the employer in civil court for negligence. His compensation would be limited to SOCSO’s fixed formula payouts, which often fall short of common law damages.
The Rajendiran Exception: When Gross Negligence Crosses the Line
This rigid position was revisited in the landmark Court of Appeal decision of Rajendiran Manickam & Anor v Palmamide Sdn Bhd & Anor [2020] MLJU 2565. In that case, the Court held that Section 31 does not shield employers from liability for aggravated or exemplary damages where they have been grossly negligent in ensuring a safe working environment. The Court reasoned that SOCSO contributions cannot be used as a shield against accountability for conduct that goes beyond ordinary negligence and amounts to wilful disregard or reckless indifference to employee safety.
The Rajendiran decision recognises an important distinction: while ordinary negligence claims remain barred under Section 31, claims for gross negligence may proceed in civil courts. This means that even if an employee receives SOCSO compensation, they may still pursue aggravated or exemplary damages against the employer if they can prove gross negligence.
Balancing Social Security with Accountability
This carve-out reflects a policy balance. On one hand, SOCSO continues to operate as a no-fault safety net, ensuring universal and immediate protection for workers. On the other hand, the law now recognises that egregious employer misconduct should not be immunised simply because SOCSO benefits exist. It also aligns with the broader principle that social legislation must be interpreted in favour of protecting employees, particularly where ambiguity exists.
From a fairness perspective, the system remains contested. Supporters of Section 31 argue that it promotes industrial harmony, ensures speedy compensation, and spreads risk across all employers. Critics, however, point out that employees injured by grossly negligent practices often face lifelong losses far beyond what SOCSO benefits can cover. By allowing civil claims for gross negligence, the courts have introduced a measure of justice for such cases, but ordinary workers harmed by simple employer negligence remain confined to the statutory scheme.
Conclusion
In summary, Section 31 still reflects the principle of SOCSO as the exclusive remedy for workplace injuries, but Rajendiran Manickam clarified that the bar is not absolute. Employers may still be held civilly liable where their conduct amounts to gross negligence, and employees may pursue aggravated and exemplary damages in such circumstances. The result is a hybrid position: SOCSO provides baseline security, but the courts preserve accountability where employer misconduct is especially grave.
Radhia is a contributor covering legal insights with the aim of keeping legal discourse relevant, accessible, and impactful in today’s changing world. More about Radhia.
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