Friday, November 23, 2012

Labor Law: Constructive Dismissal or Discharge

Many of you may not know about this term but this is something that must know as an employee. Before I touch about this constructive dismissal or constructive discharge - which is the most interesting one, let's look at what procedures an employer must do prior they dismiss an employee and what are the different type of workplace dismissals that we can have.

Dismissal Procedures

Employers must follow a certain process before they terminate or dismiss an employee. They should give an improvement note to the employee and if that doesn't improve, they should start giving you an written warning. If that still doesn't work out, a final written warning will be given to you which states you will be dismissed if you still do not improve in your performance.

Now the dismissal process only starts. To start the dismissal, the employers must start with a written letter to clearly stating out the charges made against the employee. After that, you as an employee can deny or accept the charges and the employers shall make the next move either still insist to dismiss you. In most of the cases, it won't happen until this stage because the employee will usually resign already. In case it does, you can bring the employer to court if you still think you're not fairly treated.

Let's look at different type of dismissals that could have...

Types of Dismissals

  • Fair Dismissal - This is the favor to the employer where the reasons for dismissal are acceptable by labor law and the employment contract.
  • Summary Dismissal - This is usually due to the misconduct of an employee such as watching pornography at office. :)
  • Unfair / Wrongly Dismissal - This is basically illegal where employer does not follow a proper disciplinary and dismissal procedures.This could be arguable because fair or unfair has its own definition in labor law.
  • Constructive Dismissal - This is the interesting one because employee dismiss themselves rather than the employer where the employee is somehow forced to leave his job.

What is Constructive Dismissal?

Well, this is interesting because you don't need to wait for the unfair or wrongly dismissal then you only bring your employer to court. As long as you're being treated as"UNFAIR", then you can dismiss or discharge yourself. A very common case of constructive dismissal is employer is trying to make significant changes to the original of your employment contract. Do you know that removing certain benefits and compensation from you can be considered a violating the employment contract?

But one thing that you want to keep in mind is the "UNFAIR" definition is different for different countries based on the country's labor laws. However before you come into this path, I suggest you is better to get a labor law lawyer for advice unless you have done enough homework and you do not need them. Some people has done that before successfully without a lawyer.

For constructive dismissal, you basically need to resign quickly with a very clear statement in your resignation letter telling that employer made your life so difficult that you have no choice but being forced to resign. Then, you should file a report to the labor law office after you tender your resignation.

After that, 3 possible outcomes can happen. Firstly, the employer will reinstate and ask you back to the office with the agreement from you (e.g. give you back whatever that you suppose to get). Secondly, they will try to compensate you without going to the court and of course get the agreement from you too. Finally, they will usually consider this route as last resource to basically settle this with you in court.

Depends on the labor law of your country, country that favors employee will usually win the court case for constructive dismissal. Good luck!

P/S: I want to write this because I want you to know your rights as an employee. Feel free to share with me if you have any thoughts. Also, if you interested in the minimum compensation for retrenchment in Malaysia, you can visit my previous post:Understand Retrenchment Law in Malaysia


Alvin Lim said...

Malaysia's labor law is kinda weak when it comes to protecting mid to high income employees. :| Experienced it before when my ex-boss decided to force reduction in working days...which means 40% salary cut.

And forced to sign something.... and when we called labor dept, they said they couldn't help us since we are above the low income group. :(

ChampDog said...

I don't think Malaysia's labor law is weak and infact, I think it is pretty strong. Depends on where you go compare to. E.g. compare to US, we're stronger than time which means the labor law is flavor employee rather than the employer.

The "forced to sign something" is the critical part. If the sign is for acknowledge that you accept the salary cut, you basically can't do any legal action. This is what you have agreed.

No one is really hold your hand and force you to sign it. We must be very clear on what we're signing or else just don't sign it.

Also, I don't think labor low protect only the low income group. It should be for everyone regardless how high is your income.

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