PETALING JAYA: The Kota Kinabalu Industrial Court has awarded a former senior manager RM931,770 in compensation after ruling she was constructively dismissed by a state-owned company without just cause or excuse three years ago.
Court chairman Indra Ayub said Borneo Samudra Sdn Bhd’s transfer of claimant Siti Mariam Abdul Rahman to the company’s Tawau office was in effect a demotion and “certain to force (her) out of the company”..
Borneo Samudra is a subsidiary of Sawit Kinabalu Sdn Bhd, an entity wholly owned by the Sabah government.
“The transfer to a position where she had to perform tasks which she had performed before she became senior manager, was a demotion in rank and reduction in responsibilities notwithstanding that there was neither a salary reduction or change in job grade,” Indra said in a 31-page award issued last week.
In his award, Indra acknowledged that the decision to transfer any employee was within management prerogative.
“Such prerogative, however, was neither absolute nor unfettered and could not be exercised unreasonably and arbitrarily,” he said.
The court found that under the terms of her employment contract, Siti Mariam, who was placed in salary grade M5, could be transferred from one unit to another provided it did not involve a reduction in pay or “work status”..
However, Indra found Siti Mariam’s transfer to the Tawau region in January 2021 involved taking over the post of an M6 employee and had the effect of reducing her “work status” by downgrading her work scope and responsibilities.
“This clearly amounts to a fundamental breach of the employment contract by the company which justified the claimant leaving her employment on March 19, 2021,” the award read.
Siti Mariam joined the company as regional accountant in 1996. She was promoted to senior manager of financial accounting 10 years later.
Following her transfer, she reported to the company’s Tawau office for work as senior manager of regional accounts on Feb 17, 2021.
However, five days later, she wrote to the company protesting the move, saying that it amounted to a demotion in rank and resulted in reduced responsibilities. She resigned from the company on March 19, 2021, citing constructive dismissal.
Siti Mariam claimed that following her transfer she ended up performing the functions and duties of an M6 grade staff.
In a letter to the company dated Feb 22, 2021, she protested the transfer saying it was tantamount to a demotion in rank.
“Thereafter, the claimant gave the company sufficient opportunity to remedy the breaches.
“Once it became clear that (the company) was not prepared to remedy the breaches and had demonstrated that it was no longer interested to be bound by the employment contract, she tendered her resignation.”
“She rightly claimed this as constructive dismissal,” the award read.
Indra awarded Siti compensation in lieu of reinstatement totalling RM517,650, being one month’s salary for each of her 30 years of service based on her last drawn monthly basic pay of RM17,255.
He also awarded her 24 months’ back wages totalling RM414,120.
The claimant was represented by Joan Goh, while S Vanugopal acted for the company.
