Home / Malaysia Employment & Labor Law / Benefits, EPF, Pensions & SOCSO Reference Materials Reference Materials To Remedy Benefits Cancelled With Agreement

Reference Materials (modified 0 times) Sunflower Profile Puan Wan Mazira, If an employer were to cancel or alter the employment benefits offered to an employee unilaterally without his written agreement and to his disadvantage, what is the remedial action that the employee can take against the employer? And, if he has a chance to defence himself that the cancellation or alteration of his employment benefits unilaterally by his employer which is to his disadvantage, is illegal and against the law, what are the reference materials that he can use to support his case, e.g. Employment Act, Employment Regulations, Industrial Relations, case law, common law, etc.. Examples can be termination of pension benefit/plan, reduce the number of annual leave entitlement, cancellation of accrue vacation brought forward from previous years, reducing/capping allowable medical claim amount in a year, withdrawal of a benefit scheme previously provided to employee, and so forth. Please assume the employee is earning more than RM5000 and it is not cover by Employment Act 1955. Thank you. YY 23 May, 2003 01:20:34

RE:Reference Materials (modified 0 times) IRADVICE Profile | Email It depends on your contract and company policies and the sort of benefits you are referring to.Some companies confer benefits with a rider clause -that these benefits are given at the discretion of the employer and may be witdrawn at any time with or without notice. But if the breach goes to the very root of the contract eg reduction in salary, demotion then the employee can resign and claim constructive dismissal and file a claim for reinstatement under section 20 of the IR Act. Usually the courts will look at the employer’s conduct as a whole and determine whether it is such that the employee cannot be expected to put up with it. In Bayer (M) Sdn. Bhd. v Anwar Abd. Rahim, I/C Award 171/94 the Industrial Court held there was constructive dismissal when the employee’s responsibilities, car park, secretary and staff and room were taken away. The unilateral reduction of an employee’s salary by an employer constitutes a significant breach going to the root of the contract of employment. It is also a breach, which shows the employer no longer intends to be bound by the essential terms of the contract. Apart from lower earnings, the change in hours of work, place or kind of work, or a significant change in the location of employment or changing the terms of the employee’s work in any of those areas can make working life very trying to prompt resignation. Such conduct on the part of the employer will entitle the employee to resign without notice or with less than notice due for a termination of employment. If the employee fails to respond to the employer’s unilateral action to change the terms of his contract fundamentally, he would be deemed to accept the change and lose the right to treat himself as discharged. In order for the employee to be able to claim constructive dismissal, he must show to the satisfaction of the Court the following:- 1. There must be a breach of contract by the employer. This may be either an actual breach or an anticipatory breach. 2. That breach must be sufficiently important to justify the employee resigning, or else it must be the last in a series of incidence, albeit erroneous interpretation of the contract by the employer, will not be capable of constituting a repudiation in law; 3. He must leave in response to the breach and not for some other, unconnected reason. If the employee leaves in circumstances where these conditions are not met, he will be held to have resigned and there will be no dismissal within the meaning of the legislation at all. (excerpts from book "Discipline at Work - A Guide for managers." iradvice 23 May, 2003 14:14:50

RE:Reference Materials (modified 0 times) Sunflower Profile Puan Ira, Thank you for the quick reply. Based on the information you have provided, it look to me that the employer's action must be amounted to resignation of employees before any action can be taken by employees. Is this the correct understanding? If it is, then employee will be in a disadvantage position in watching his benefits been taken away and there is nothing he can do to stop the change. The service contract or employees benefits guideline is silent on whether the benefits are granted at the discretion of the employer nor any change will require written notification or acceptance by employee. However, in the past practise, any change is notified to the employee. I would think the key point is not whether employer has the right to change employees benefits, but whether employer can change the benefits subsequent to the signing of service contract without the agreement of employees as the change is to the disadvantage to the employees. The changes can be happening over a period of time and may not reach to a degree of constructive dismissal as yet. While these unfair changes are in-progress or in proposal, what is the right of employee to defend his right/benefits originally agreed to him in the service contract. Thanks in advance for the advise. 26 May, 2003 00:53:37

RE:Reference Materials (modified 0 times) C.M. Profile Good day, My company is currently facing the same issue. The HR dept has changes numerous benefits that have enjoyed by the staffs all these years. Namely : 1. We used to enjoy all the public holidays that are available in KL. BUt as of 10 Nov 2004, they have been reduced to 10 days only (conveyed as below inour new employee handbook) : Quote 1.3.2 Public Holidays All employees shall be entitled to a paid holiday at his ordinary rate of pay on only ten of the following gazetted public holidays observed by the Company in any one calender year:- - National Day * - The Birthday of the Yang Di-Pertuan Agong * - Worker's Day * - Birthday of Sultan or Head of State or Federal Territory Day * - New Year's Day ** - Chinese New Year - Hari Raya Puasa - Hari Raya Haji ** - Deepavali - Christmas - Wesak ** - Awal Muharram ** - Birthday of Prophet Mohammad S.A.W ** * Four (4) compulsory gazetted public holidays that shall be included in the ten gazetted holidays observed by the Company as stipulated in the Employemnt Act 1955. ** Additional gazetted public holidays. Any additional gazetted public holidays other than the ten gazetted public holidays observed by the company is at the discretion of the management and this will be communicated to the employees accordingly. Any special public holiday announced by the Prime Minister, the King or a Sultan is usually not gazetted and therefore, the company is not obliged to grant such holidays entitlement to the employees. Such granting of holiday entitlement to employees is at the discretion of the Company. Unquote Question : Do they have the right to reduce the number of holidays that we have been enjoying for the past 10 yrs? I know it is weird, one company should be looking forward, not backward . 2. Termination period - some of our employment contract stated with one month notice period. BUt the latest change is: Quote Termination notice for IT Executives…..three (3) months written notice with no buy out option Unquote Question : This is dilemma to some of us, which condition should we now stick to? To our previously agreed employment contract or this new ruling? If we do not make noise to our boss, do they deem us as being silence as consenting to their demand? 3. Leave days Quote i. The number of study/exam leave days granted for preparation studies and examination days (inclusive) will be one (1) day per paper to a maximum of five (5) days in any one year……instead of previous ‘eight (8) days’. ii.Compassionate Leave is now revised to a maximum of two (2) days paid leave……instead of previous ‘three (3) days’. Unquote Question : Again, do they simply change this benefits as and when they like? All in all, I would like to know as an employee here..what should we do to voice out our grievances with merits? Are we protected by the law that our benefits could not be simply reduced without just cause nor any approval form the employees beforehand. I do hope to hear from you soon. Thanking you in advance. C.M. 13 Nov, 2003 16:20:48

RE:Reference Materials (modified 0 times) John Profile Pn Wan Mazira, I wsa reading through the queries below and was wondering if you have responded to them ie the one regarding the changes in terms & conditions in the original contract. To be more specific, can the employer change the Termination Notice Period from 3 months to 6 months, after working for 5 years ? Is there any redress for the employee to challenge this ? Thanks and regards, john 02 Mar, 2009 17:19:01

RE:Reference Materials (modified 0 times) lee1 Profile Hi , Would like to seek expert's advice : 1) whether we can check with KWSP is the new company( going to join ) is contributing the EPF promptly ? 2)Employer refuses to pay claims ( entitled during employment period ) after resignation . What can the employee do to get back the claim after resigned ? Is it wise to file a claim " Tuntutan Kecil " at Mahkamah Majistret ? Thank you very very much ... 07 Feb, 2012 11:00:42

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