Chapter 9: HRM Disciplinary System & Termination of Service PDF

CHAPTER 9 DISCIPLINARY SYSTEM AND TERMINATION OF SERVICE Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.   Effective systems of taking disciplinary action....

CHAPTER 9 DISCIPLINARY SYSTEM AND TERMINATION OF SERVICE Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.   Effective systems of 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. PREVIEW  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.  Rights of employers to terminate employment contracts. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. DISCIPLINARY SYSTEMS In a fair disciplinary system, employees know A disciplinary system must the rules, and know what be fair and just. they can do and what they cannot do. The purpose of punishment is to change When employees behave the employee’s behaviour in an unacceptable and to send a warning to manner, they are other employees that punished. unacceptable behaviour will not be tolerated. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. PENALTIES When employees commit misconduct, they may be penalized. Penalties that may be imposed include: 1. Oral warning 2. Written warning(s) 3. Suspension without pay 4. Demotion or downgrading 5. Dismissal Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. 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. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. TRANSFERS 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 Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.  TRANSFERS (CONT.) Transfer is a managerial prerogative. Employers have the right to transfer an employee, but the right is subject to:  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. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.  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. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. PROMOTION OF EMPLOYEES (CONT.) Criteria for Promotion Seniority Merit An effective performance appraisal system is required to identify which employees are suitable for promotion.  Resignatio n of employee s Depressio Lowered n amongst profitabilit employee y s Poor Lowered quality productivit and y quantity of work GRIEVANCE Effects of Unresolved HANDLING Reduced output Grievances High accident rate Aggressiv High rate e of illness unionism Complaint s to the Departme Complaint nt of s from Labour customers Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. and other bodies Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. GRIEVANCE PROCEDURE 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.  GRIEVANCE PROCEDURE (CONT.) Managers must be trained on how to handle grievances. Grievance handling requires: Understanding of rights of Counselling Problem-solving Listening skills employees and skills skills employers Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. ABSENTEEISM Workers who are regularly absent from work without permission granted in advance cause problems. Employers must have systems in place to reduce unauthorized absences.  Keep records  Have clear procedures  Take disciplinary action, when necessary Employers may encourage full attendance by offering incentives. PENALTIES FOR ABSENCE Employees may be punished for absence. Employees within the scope of the Employment Act or Sabah/Sarawak Labour Ordinances: 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. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. THE INDUSTRIAL RELATIONS ACT AND TERMINATION OF EMPLOYMENT All employees in the private sector have the right to challenge the termination of their contract of employment by taking the following steps: 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. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. 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 his 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. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. THE INDUSTRIAL RELATIONS ACT AND TERMINATION OF EMPLOYMENT (CONT.) 4.Where no agreement is reached, the Director- General of Industrial Relations will refer the dispute to the Industrial Court for arbitration. 5.When the dispute is referred to the Industrial Court, a hearing will be held. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. 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. COMPENSATION FORMULA FOR DISMISSAL WITHOUT JUST CAUSE OR EXCUSE The Industrial Court has the power to decide on how much compensation should be paid to the employee by the employer. 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 formula is frequently varied, depending on the circumstances of each case. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.  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. 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. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. 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. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. RETIREMENT As of 2014, the minimum retirement age for employees is 60. How can an employer help employees prepare for retirement?  Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. REDUNDANCY AND RETRENCHMENT Redundancy occurs when an employer has excess employees. Redundancy may be caused by: Mergers and acquisitions Restructuring Financial problems Changes in technology Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. 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.  REDUNDANCY AND RETRENCHMENT (CONT.) To avoid retrenchment, employers could: 01 02 03 04 Freeze external Conduct a Reduce costs. Reduce wages if recruitment and voluntary employees redeploy separation agree. employees into scheme (VSS). any vacancies which arise. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. REDUNDANCY AND RETRENCHMENT (CONT.) Procedures for Retrenchment 1 2 3 4 5 Consult Choose Provide Inform the Pay the trade who to outplaceme Labour termination union and retrench nt services Departme or inform the nt retrenchme workforce nt benefits  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. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.  DISMISSAL FOR MISCONDUCT (CONT.) Before dismissing an employee on grounds of misconduct, an employer must:  Carefully record any complaint of alleged wrongdoing.  Investigate the complaint thoroughly.  Charge the employee.  Hold a domestic inquiry. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.  DISMISSAL FOR POOR PERFORMANCE Before dismissing an employee on grounds of poor performance, an employer must: Warn the employee. Assist him to improve his performance. Give him adequate time to improve. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved. FRUSTRATION OF CONTRACT Frustration of contract occurs when an employee is unable to perform the work for which he was employed because of reasons beyond his control. For example:  Detention by the authorities for a lengthy period of time  Serious illness or medical incapacity  Withdrawal of license required for the job 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. Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.