According to the case of Moorthi Patchai v Sigma Water Engineering (M) Sdn Bhd (2024) 1 ILR 686, an employee is not entitled to receive both temporary disablement benefits and salary simultaneously because it would result in unjust enrichment. The purpose of temporary disablement benefits, provided by the Social Security Organisation (SOCSO), is to compensate employees for the loss of earnings during periods of injury or illness caused by workplace accidents. These benefits replace the employee’s salary when they cannot work.
Key Reasons:
- Preventing Double Compensation: Temporary disablement benefits are designed to cover an employee’s income loss during recovery. If an employee were to receive both these benefits and their full salary, it would result in double compensation, which is legally prohibited. Section 60F(4) of the Employment Act 1955 and Rule 109 of the Employees’ Social Security (General) Regulations 1971 specifically prohibit receiving both payments concurrently.
- Employer’s Right to Adjust Salary: Employers are not required to pay wages when employees are receiving temporary disablement benefits. If an employer has paid wages during this period, they can legally deduct the amount equal to the disablement benefits to prevent overcompensation.
- Unjust Enrichment: If an employee receives both salary and SOCSO benefits, it leads to unjust enrichment—where the employee receives more compensation than what is necessary to cover their lost wages. This is considered unfair both to the employer and to the social security system.
This principle ensures fairness and prevents employees from financially benefiting beyond the intended compensation during periods of temporary disablement.
At J. Lee & Co., we provide legal services in resolving industrial-related and employment disputes. Do contact us for legal assistance.
