PETALING JAYA: Employees and employers welcomed the recent Industrial Court ruling that an employer cannot demote or cut the salary of its employee without justifiable circumstances.
“To, me it is a right decision. Employers have no right to punish employees twice by demoting them and deducting their salary,” MTUC president Senator Zainal Rampak said yesterday.
He was responding to Industrial Court chairman N. Rajasekaran’s decision to award assistant group finance controller Mohamed Johari Abdul Rahman compensation and back wages amounting to RM325,605 in his suit against Syarikat Permodalan Kebangsaan Berhad.
Johari had gone ahead and taken his leave to make a residential visit to RMIT University in Melbourne, Australia, in July 1998 after the company failed to respond to his leave application. He was suspended from work the following month.
Johari was later told that his salary would be cut by 20%. Subsequently, he attended a domestic enquiry and was demoted to a position of accountant. His salary was reduced and his company car was withdrawn, leading him to claim constructive dismissal.
Zainal said employers had a choice of retaining the position of employees but deducting their salary for committing any misconduct, or demoting their employees but maintaining their salary following a proper domestic enquiry.
Cuepacs president Nordin Abdul Hamid concurred that employers could not simply demote employees or cut their salary without looking into the merit of the cases.
“When an alleged misconduct happen, it is more relevant for employers to prove the allegation. They should give employees the right to be heard and appeal,” he said.
Malaysian Employers’ Federation executive director Shamsuddin Bardan said the law allowed employers to mete out punishment by demoting employees in justifiable cases.
“The general rule still applies in cases where dismissal is justified, companies can give employees a second chance by demoting them.”