All Rights Reserved AAM 2053 HUMAN RESOURCE MANAGEMENT Dr. Khairunneezam Mohd Noor FKP USIM DrNeezamNoorFKPUSIM2014 Chapter 4 – 1

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 2 DrNeezamNoorFKPUSIM2014 Chapter 9 – 2 All Rights Reserved DISCIPLINARY SYSTEMS AND TERMINATION OF SERVICE 9 CHAPTER

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 3 PREVIEW  Effective systems for taking disciplinary action.  The problems relating to transfer of workers.  The criteria to be used in promoting workers.  Methods for handling employee grievances.  Dealing with absenteeism.  The role of the Industrial Court in termination of an employee’s contract.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 4 PREVIEW (cont.)  Expiry of a fixed-term contract.  Resignation and retirement.  Causes of redundancy and recommended procedures for retrenching workers.  Appropriate dismissal procedures to be used in cases of misconduct and poor performance.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 5 DISCIPLINARY SYSTEMS  A disciplinary system must be fair and just.  In a fair disciplinary system, employees know the rules, and know what they can do and what they cannot do.  When employees behave in an unacceptable manner, they are punished.  The purpose of punishment is to change the employee’s behaviour and to send a warning to other employees that unacceptable behaviour will not be tolerated.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 6 PENALTIES  Oral warning  Written warning(s)  Suspension without pay  Demotion or downgrading  Dismissal When employees commit misconduct, they may be penalized. Penalties that may be imposed include:

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 7 POTENTIALLY PROBLEMATIC ISSUES Transfer Transfer is a lateral move of an employee from one job to another, or from one department to another, or from one site to another.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 8 TRANSFERS (cont.) Employers transfer employees:  To fill vacancies for experienced workers  To solve people problems  To provide training to employees Employees may request transfers:  For personal, non-work related reasons  To have an opportunity to learn  To overcome boredom

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 9 TRANSFERS (cont.)  Any express clause in the contract of employment.  The reason for the transfer must be a legitimate business reason.  The reason for the transfer must not be for the purpose of harassing or victimizing the employee.  The transfer must not be to the detriment of the employee’s terms and conditions of employment. Transfer is a managerial prerogative. Employers have the right to transfer an employee, but the right is subject to:

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 10 PROMOTION OF EMPLOYEES Promotion is reassignment of an employee to a job at a higher level in the organization. Promotion opportunities motivate employees, providing the promotion system is perceived as being fair and transparent.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 11 PROMOTION OF EMPLOYEES (cont.) Criteria for Promotion  Seniority  Merit An effective performance appraisal system is required to identify which employees are suitable for promotion.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 12 GRIEVANCE HANDLING Effects of Unresolved Grievances  Resignation of employees  Depression amongst employees  Poor quality and quantity of work  High accident rate  High rate of illness  Complaints from customers  Complaints to the Department of Labour and other bodies  Aggressive unionism  Reduced output  Lowered productivity  Lowered profitability

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 13 GRIEVANCE PROCEDURES  A grievance procedure is a formal process for hearing and resolving employees’ complaints.  A grievance procedure will establish deadlines for each stage at which a grievance is heard.  Grievances should be settled at the lowest level possible.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 14 GRIEVANCE PROCEDURES (cont.) Grievance handling requires:  Listening skills  Understanding of rights of employees and employers  Counselling skills  Problem-solving skills Managers must be trained on how to handle grievances.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 15 ABSENTEEISM  Keep records  Have clear procedures  Take disciplinary action, when necessary Workers who are regularly absent from work without permission granted in advance cause problems. Employers must have systems in place to reduce unauthorized absences.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 16 ABSENTEEISM (cont.) Employers may encourage full attendance by offering incentives.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 17 PENALTIES FOR ABSENCE  Absence without leave for more than 2 consecutive days is a breach of contract for which the employee may be dismissed.  Prior to any dismissal, proper procedures must be followed. Employees may be punished for absence. Employees within the scope of the Employment Act or Sabah/Sarawak Labour Ordinances:

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 18 THE INDUSTRIAL RELATIONS ACT AND TERMINATION OF EMPLOYMENT 1. File request for reinstatement at the nearest Department of Industrial Relations (IR). 2. Attend a conciliation meeting with the ex- employer, called for by the Department of IR. All employees in the private sector have the right to challenge the termination of their contract of employment by taking the following steps:

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 19 THE INDUSTRIAL RELATIONS ACT AND TERMINATION OF EMPLOYMENT (cont.) 3. As a result of conciliation:  the employer may agree to reinstate the employee, or  the employee may agree to withdraw their claim, or  the employer and employee may agree on a compensation package to settle the claim, or  the employer and employee may not reach any agreement.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 20 THE INDUSTRIAL RELATIONS ACT AND TERMINATION OF EMPLOYMENT (cont.) 4.Where no agreement is reached, the Director- General of Industrial Relations will inform the Minister of Human Resources who will decide whether or not to refer the dispute to the Industrial Court. 5.If the dispute is referred to the Industrial Court, an arbitration hearing will be held.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 21 THE INDUSTRIAL RELATIONS ACT AND TERMINATION OF EMPLOYMENT (cont.) 6. The Industrial Court will decide whether the employee was dismissed with or without just cause or excuse. 7.If the dismissal was without just cause or excuse, the court will either:  order the employer to reinstate the employee, or  order the employer to pay compensation to the employee for loss of his employment.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 22 COMPENSATION FORMULA FOR DISMISSAL WITHOUT JUST CAUSE OR EXCUSE Typically, the formula followed is:  back wages from the date of dismissal up to the date of the court decision, with a maximum of 24 months, and  one month’s wages for every year of the employee’s service. The Industrial Court has the power to decide on how much compensation should be paid to the employee by the employer.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 23 COMPENSATION FORMULA FOR DISMISSAL WITHOUT JUST CAUSE OR EXCUSE (cont.) The formula is frequently varied depending upon the circumstances of each case.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 24 FIXED-TERM CONTRACTS Fixed-term contracts expire at the end of the agreed time period. Fixed-term contracts are acceptable to the Industrial Court if they are for genuine business reasons. An employee on fixed-term contract may file a claim under the Industrial Relations Act if his contract is not renewed.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 25 FIXED-TERM CONTRACTS (cont.) The Industrial Court will not interfere with an employer’s decision not to renew a fixed-term contract if the employer has an acceptable reason for the decision.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 26 RESIGNATION Employees have the right to resign without assigning any reason. Prior to resigning, an employee must give notice to the employer as required by his contract of employment.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 27 RETIREMENT  What should the retirement age be for employees?  How can an employer help employees prepare for retirement?

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 28 REDUNDANCY AND RETRENCHMENT Redundancy may be caused by:  Mergers and acquisitions  Restructuring  Financial problems  Changes in technology Redundancy occurs when an employer has excess employees.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 29 REDUNDANCY AND RETRENCHMENT (cont.) Redundant employees may be retrenched. Because of the negative consequences of retrenchment to employees and society, employers are expected to avoid retrenching employees, if possible.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 30 REDUNDANCY AND RETRENCHMENT (cont.) To avoid retrenchment, employers could:  Freeze external recruitment and redeploy employees into any vacancies which arise.  Conduct a voluntary separation scheme (VSS).  Reduce costs.  Reduce wages if employees agree.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 31 REDUNDANCY AND RETRENCHMENT (cont.) Procedures for Retrenchment  Consult the trade union and inform the workforce  Choose who to retrench  Provide outplacement services  Inform the Labour Department  Pay termination or retrenchment benefits

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 32 DISMISSAL FOR MISCONDUCT Misconduct is any behaviour which is in conflict with the employer’s interests. Employers have the right to punish an employee for misconduct. Major misconduct may be punished by dismissal.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 33 DISMISSAL FOR MISCONDUCT (cont.)  Carefully record any complaint of alleged wrongdoing.  Investigate the complaint thoroughly.  Charge the employee.  Hold a domestic inquiry. Before dismissing an employee on grounds of misconduct, an employer must:

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 34 DISMISSAL FOR POOR PERFORMANCE  Warn the employee.  Assist him to improve his performance.  Give him adequate time to improve. Before dismissing an employee on grounds of poor performance, an employer must:

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 35 FRUSTRATION OF CONTRACT For example:  Detention by the authorities for a lengthy period of time  Serious illness or medical incapacity  Withdrawal of license required for the job Frustration of contract occurs when an employee is unable to perform the work for which he was employed because of reasons beyond his control.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 36 CONSTRUCTIVE DISMISSAL Tests for Constructive Dismissal  The employer must have breached the employee’s contract of employment.  The breach of contract must be a breach of a major or key element in the contract.  The employee must leave his employment in a timely manner.  The employee must leave his employment as a result of the breach, and not for any other reason.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 37 REVIEW  Effective systems for taking disciplinary action.  The problems relating to transfer of workers.  The criteria to be used in promoting workers.  Methods for handling employee grievances.  Dealing with absenteeism.  The role of the Industrial Court in termination of an employee’s contract.  Expiry of fixed-term contracts.

All Rights ReservedDrNeezamNoorFKPUSIM2014 Chapter 9 – 38 REVIEW (cont.)  Resignation and retirement.  Causes of redundancy and recommended procedures for retrenching workers.  Appropriate dismissal procedures to be used in cases of misconduct and poor performance.