CHAPTER 11 EMPLOYEE RIGHTS AND DISCIPLINE 1 INTRODUCTION

CHAPTER 11: EMPLOYEE RIGHTS AND DISCIPLINE 1

INTRODUCTION The topics to be discussed in these lecture as follows: Disciplinary action. Transfer of workers. Promotion of workers. Grievance procedures. Dealing with absenteeism. Terminating an employee’s contract of employment. These topics are interrelated. 2

cont’d. . Transfer and promotion may become cause for a worker to file a grievance. A worker by-passed for promotion and absent without permission must be counseled. If counseling is not successful, disciplinary action may be necessary. When these issues are not addressed fairly, productivity tends to deteriorate and turnover become higher. 3

DISCIPLINARY SYSTEMS Every employer need a fair and reasonable disciplinary system. In such system, employees are aware of the rules and know what they can and cannot do. They also understand that if they transgress, they are liable to be punished accordingly. Employees came from diverse background and therefore behave differently. Disciplinary system will control employees’ behavior as required by the employer. 4

Penalties in a Disciplinary System A fair and just disciplinary system is progressive. In a progressive disciplinary system, each time an employee commits misconduct he or she will be punished and the penalties will become increasingly severe each time until the ultimate punishment of dismissal is used. 5

Penalties in a Progressive Disciplinary System low 1. 2. 3. 4. 5. 6. Oral warning First written warning Final written warning Suspension without pay Demotion or downgrading Dismissal SEVERITY high Counseling session should come in between 6

Sample of warning letter Date…………………. . Mr/En/Ms/Puan…………………. . . ………………. Department Dear…………………………… WARNING With regret, it is noted that at……. (time and date of offence) you………(description of offence). The company considers this behavior to be a serious act of misconduct. You have already been warned about this behavior on the……. . (date of oral warning). If there should be any further repetition of this behavior, we may have no choice but to impose a heavy penalty on you. We hope there will be no recurrence of such behavior. …………. . . (Signature) Manager …………… (Signature) Human Resource Manager 7

DEALING WITH EMPLOYEE PROBLEMS Employee problems include: Transfer and promotion. Grievance and absenteeism. Transfer The lateral movement of an employee with the organization (i. e. change job) One branch to another branch in the same organization (i. e. relocation). Move to a different job and the same level of responsibility and pay (i. e. re-designation) 8

cont’d. . Why are transfer necessary? Employee request relocation. Variety in his working life. Dual career families. Need more challenging job. Establishment of new branches. Remedial reason – work generally good but having no “chemistry” with the superior. Excess workers in one department (i. e. redeployment) Part of training and career development usually in large organizations especially among executive staff. 9

cont’d. . The right to transfer Transfer is considered a prerogative (power) of the management, union has no say in it. It must be stated in the contract of employment. Transfer must NOT be at the disadvantage of the employees. (from lower cost of living area to high cost of living area; if so employee must be paid a higher COLA). 10

cont’d. . The cost of transfers Normally, the cost of transfer will be borne by the employers i. e. transportation, accommodation and food allowance while in transition and timeoff for settling down. Usually, transfers are NOT frequent but if it happens then the employee may not be happy and unproductive. Assistance must be given to the employee to acclimatize with the new environment i. e. looking for new house, school for their children and other basic requirements. 11

Promotion of Employees Promotion is reassignment of an employee to a job at a higher level in the organization. Workers may value and welcome promotion as they can achieve higher standard of living with higher pay and benefits. Other may want promotion for status and respect which is related with higher-level job. Close relationship between promotion and motivation. Promotion must be seen as fair and unbiased. 12

cont’d. . A number of issues need to be settled in relation to promotion policies. These are: Whether to have promotion from within policy. Whether the system is to be formal or informal, and The criteria to be used in the deciding who to promote. 13

Promotion-from-within policy Most organizations have stated policy of promoting existing staff to higher level position. It can be an effective motivating factor. Employers know their employees abilities and records. But, there are time when external staff are taking in from outside to fill up senior post vacancies. 14

Formal or Informal? Informal are more common in small and nonunionized establishment. Promotion is kept secret and not permitted workers to apply. Does not motivate people if there is no perceived link between job performance and upward mobility in the organization. Promotion depends on ‘who you know and who you are’. Morale of staff may be negative. In general, it is better to have a formal system whereby non-entry level job vacancies are advertised internally and employee who believe they are qualified are allowed to apply. 15

Criteria for promotion Two major criteria normally used: Seniority. Merit. Seniority Length of service is an objective way of choosing who should be promoted. No chance of abuse. No competition. Disadvantage – unsuitable candidate might be promoted. 16

cont’d. . Merit Can be used to decide who to be promoted. As a reward for good performance. Effective performance appraisal system must be in place. 17

Grievance Handling A worker with a grievance is a dissatisfied and unproductive worker. All organization must have a mechanism or procedure to sort out grievances (ununionized workers). Discontented workers will create disharmony. Discontent may be seen as; (i)increase in union activities, (ii) deteriorating quality and quantity of work, (iii) high medical bills, (iv) increase absenteeism turnover and (v) complains are brought to the attention of outside authorities such Labor Dept. , NGO and media. 18

cont’d. . GRIEVANCES EFFECTS • Resignation of employees • Depression among employees • Poor quality and quantity of work • High accident rate • High rate of illness • Complaints from customers • Complaint from Govt. authority • Aggressive unionism • Reduced output Lower productivity Lower profitability 19

What causes Grievances? - Gillespie (1981) suggests: Broken promises – about duties, hours of work, pay, working conditions, promotion-made by interviewers at the time of recruitment and by supervisors. Inequitable pay (internal and external equity) and benefits. Personal and sexual harassment. Dangerous and uncomfortable working conditions. Unjust disciplinary action by the supervisor. 20

cont’d. . Because grievances lead to negative effects, organization should introduce grievance procedures. The content of the grievance procedure will vary depending on whether the workers in the organization are unionized or not. In an unionized organization, workers will be represented by his union when discussing his grievance with the management. Supervisors and managers must be trained so that they are equipped with necessary skills to deal with employees problems. 21

cont’d. . Grievances must be settled earliest possible. Useful approach to handling grievances are: Be prompt. Investigate and record. Keep cool and calm. Listen. Use counseling skills. 22

Absenteeism of Workers Absenteeism is when the worker is not at work. Lateness, taking extended lunch breaks and not at the workstation are all forms of absent. Common types of absent that cause problems to employers are sickness (medical leave) and absent without reasonable excuse or permission. 23

cont’d. . Lateness A regular problem for employer everywhere. Cumulative lost of working hours is huge. Habitual lateness is considered serious offense and action must be taken. Need coaching and training in time management. Work part-time elsewhere to supplement income. Occasional lateness for genuine reason is acceptable. Disrupt workflows in case where their present is needed on time to get thing done. 24

cont’d. . Encouraging full attendance Offering incentives to encourage full attendance. Incentives will be given to those who have no unauthorized absences. Taking sick leave when they are not truly sick. This kind of behavior is called malingering. If employer can prove that the employee was not ill, disciplinary action will be taken against them. Tey (2005) has come with some suggestions for reducing absenteeism: - change management style. - changing working conditions. - providing incentives. - developing clear attendance policy. 25

Penalties for Absence The law (Employment Act 1955, The Sarawak and Sabah Labor Ord. ) provides certain remedies to employer. Under the law, if an employee absent without permission more than 10% of working days during 12 -months period in respect of which he should be entitled to annual leave, such leave is forfeited. An employer should NOT pay a worker for unreasonable absences. 26

cont’d. . If a worker is absent for more than two consecutive working days without leave, he is deemed to have broken his contract of employment unless he has reasonable excuse. The employer must NOT assume the employee has breached contract. Inquiry must be conducted and if no adequate explanation, punishment is warranted. Punishment or penalties must be made progressively along with the concept of progressive disciplinary system. 27

TERMINATION OF AN EMPLOYEE CONTRACT OF EMPLOYMENT Either party to a contract of employment can terminate the contract by giving notice. When an employee choose to end his contract, he is said to have resigned. An employer can retire a worker, retrench or dismiss (fire)him. When an employer terminates the service of an employee , he must pay all monies due (i) wages up to the date of termination, (ii) termination benefits, (iii) any other contractual benefits, indemnity in lieu of notice, (iv) payment lieu of any annual leaves NOT taken. Employees can challenge the termination, if he found that his dismissal was done without just cause and excuse. 28

Guidelines on Termination of Service Employers do NOT have the right to dismiss workers as they please. Employers must have good reasons for dismissing a worker. There is no laws which specify the circumstances under which dismissal can take place except for the Employment Act 1955, the Sabah and the Sarawak Labor Ord. which say: “an employer may, on the grounds of misconduct inconsistent with the fulfillment of the express or implied conditions of his service, after due inquiry – (a) Dismiss without notice, the employee, (b) Downgrade the employee, and (c) Impose any other lesser punishment as he deems just and fit. ” 29

cont’d. . The above three laws do NOT define misconduct and due inquiry, therefore they must be read in conjunction with the Industrial Relations Act 1967 because it establishes the machinery for any dismissed to make representation to the Director. General of Industrial Relations within 60 days of his dismissal and to request for reinstatement the return of his job). 30

Machinery for any dismissed worker to make representation Employees Director-General of Industrial Relations Reconciliation Minister of Human Resource Industrial Court Arbitration and Settlement 31

Resignation Any employee has the right to voluntarily terminate his service with the organization. Before he resign, he must given written notice of his intention as required by the contract of employment. Written notice must be tendered in time before resignation starts. If no specific time is mentioned, the three laws will apply. 32

cont’d. . Not less than 4 weeks if working less than 2 years. 6 weeks if he worked for more than 2 years. 8 weeks if he worked for more than 5 years. If he resigns in 24 hours, he is required to pay back a month salary to the employer. If there be a force resignation (resignation under duress), then the employee must be brought this matter to the attention of the authorities for settlement. 33

cont’d. . When an employee resigns, the employer should undertake “exit” interview to discover reasons for his leaving. It serves two purposes: To persuade the employee to stay if he is a good and effective workers. To get feedback on the problems and weaknesses of the organization. 34

Expiry of a Fixed-Term Contract A contract can be for a fixed period of time, at the end of which neither party need take any action or give notice. The contract automatically expires. It is offered when: Employer has a temporary need of extra workers. The work is likely to be for a fixed, short-term period. Replacing staff who passed the retirement age. Foreign workers hired to fill manual jobs. Expatriate staff who are recruited for their expertise that are not available locally. 35

Retirement Malaysia has no law that governed the retirement age. Company is free to set its own policy. The majority of employers follow the practice of the public sector and set their retirement age, somewhere between 55, 56 and 58. Now, 60. If the employer wish to employ the retiree/ pensioner, he may do so usually on fixed-term contract. Pre-retirement courses were normally conducted to prepare employee for the years to come. 36

Redundancy and Retrenchment is the termination of an employee’s services because he has become redundant. The term redundant means that the company no longer has work for the employee to do. Redundancy is caused by: Changes in technology (computerized jobs, using robots - reduce manpower need). Reduced demand (due to competition, product obsolescent). Financial losses (cut down operation/downsizing). Mergers and organization restructuring (rightsizing). 37

Consequences of retrenchment To the individual means: Financial problems (less income to support family needs and other commitments). Psychological stress (embarrassment). Ill health (stress will lead to illness related to ulcers and heart attack). To employer means: Lowered morale amongst remaining workers (the remaining workers also worried that one day they will be retrenched). Loss of public confidence (investors will run away, customers may buy elsewhere). High short-term expenditure (fund for payment of termination benefits). 38

Actions to Avoid Retrenchment Job Freeze - no new intake (redundant workers will be retrained in new skills-multiskilling and giving new tasks -multitasking should vacancy happened through attrition or erosion). Voluntary Separation Scheme(VSS) (encourage workers to resign or retire early). Characteristics are: Design a compensation package to be offered to employees. 39

cont’d. . the scheme will be put in writing and formally offered to all workers not to selected few workers, inviting them to apply to join the scheme. - interested employees apply for the scheme for a brief period. - the employer will decide which of the applicants is to be allowed to leave. - VSS is acceptable and were conducted with the agreement of the trade unions concerned. - VSS application must be voluntary. - Offer can be between 1. 8 and 2 months’ salary for each of service, as well as the usual payment in lieu of notice and unutilized leaves. - 40

cont’d. . Cost cut The employer must ensure he takes action to cut down expenditure. Tight control on overheads. Workers may forgo part of their income. Cut on overtime. Reduced working hours combined with lower wages. If all actions have been taken but retrenchment is still necessary, certain procedures should be observed. 41

Procedures for Retrenchment Consult the union and inform the workforce. The reason for the proposed retrenchment. The estimated numbers and categories of employees involved. The timing of the retrenchment exercise. Choose whom to retrench. The management must decide on the criteria for choosing which workers to retrench. Last In First Out – LIFO principle (check the records and identify the category of workers). Need for efficient operation. The ability, skills and qualities of individual workers. Strong justification must be made. Expatriate must go first before Malaysian workers lose their jobs. 42

cont’d. . Inform the Labor Department. One month in advance of any retrenchment exercise. Submission based on standing procedures. Provide outplacement services. Outplacement is about helping the employee who is about to be retrench to find another job and adapt to life post-retrenchment. Counseling. Register with online recruitment agencies. Workshop on how to run a small business. Workshop on job hunting. 43

cont’d. . Provide retrenchment benefits (who are entitle to? ). All employees covered by the Employment Act 1955. All employees covered by a collective agreement with a retrenchment benefit provision. Any employee with a provision for retrenchment benefit written into his contract of employment. Employees with less than a year’s service are not entitle to benefit. 44

cont’d. . For those with more than a year’s service the benefit is as follows: Length of service Benefit 1 -2 years 10 day’s wages for every year of service 2 -5 years 15 day’s wages for every year of service More than 5 years 20 day’s wages for every year of service 45

Dismissal for Misconduct Robinson and Greenbergs, 1998 described misconduct as antisocial behavior, workplace deviant, organizational misbehavior, workplace aggression, organizational retaliation behavior, non-compliant behavior and organizational motivated behavior. May be defined as any act or omission inconsistent with the fulfillment of the express or implied terms of the contract employment. In conflict with the employer’s interests or breaks the organizational rules – this would be clearly be considered misconduct. 46

cont’d. . Major or minor misconduct? Policies and guidelines must be in place to determine and classify misconduct. Major misconduct - major penalties and minor misconduct -minor penalties. It is only fair and proper that the employee’s punishment should be appropriate to his misdeeds. 47

Dismissal for Poor Performance Differ from dismissal for misconduct. Related to the quality and quantity of work done. Must have a fair performance appraisal. Managing employee performance through performance appraisal provides a means for managers to: Direct the work of their subordinate by setting objectives or output targets. Monitor the work done. Evaluate or appraise the finished work; and Make decision whether to: Reward. Training. Disciplinary action. 48

Procedures for Dismissing A worker Carefully record any complaint of alleged wrongdoing. Investigate the complaint thoroughly. Charge the employee. Hold a proper domestic inquiry. Adequate notice must be given to the accused employee. Availability of witness and evidence. Impartiality of the inquiry panel. 49

Other Reasons for Termination Frustration of contract – external event beyond the control of either party(e. g. the employee is imprisoned or so ill for a long period). Termination of probationers (the employee under probation is unable to perform after a trial period is given and his contract will be terminated). Constructive dismissal ( a situation in which an employer breaches the employment contract thus giving the right to the employee to leave their employment and claim that they have been dismissed without just cause and excuse. ) 50

cont’d. . For constructive dismissal to be effective, 4 criteria must be met as follows: The employer must have breached the employee’s contract of employment. The breach of contract must be a breach of 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. 51

cont’d. . Employers have the right to retrench workers when they are redundant but this step should only be taken as a last resort. Employees may be dismissed for misconduct or poor performance, after proper procedures have been followed. Thank you 52