Failure to pay salary

Getting calls that some  companies are refusing to pay the workers' salaries because of the Covid-19 and low revenue.

Salary must be paid on time whether he or she is a Malaysian or a foreign worker.  The employee cannot be treated as an expendable chattle or an object without feelings and emotions by not paying their salary on time.  They, the worker entered into a contract of employment with the company by way of contract  or by conduct for a wage. 

Failure to pay the wage or salary will go to the root of the contract and can lead to a  breach of contract of employment.  The worker can workout and be considered he or she to be constructively dismissed by the employer. 

In a decided case called S Santhi v Tetuan Devan Hussin [2011] 2 ILR 383  the Chairman of the Industrial Court, YA Ahmad Terrirudin Mohd Salleh, he was of the opinion that payment of salary is the most basic and fundamental term in a contract of employment.  Failure to pay the salary is a serious breach and the claimant can walk out of her employment.

Demand your salary if it is due to you.

Ramu

Retrenchment must be fair and justificable in the interest of commerce

There are many calls I received in this pressing times.  Looks like the employers are taking advantage to cut down their labour force by way of retrenchment.  Retrenchment is part and parcel of running a viable business but it should not be  done to cut cost to make more profits.  

Cutting down the work force to decrease the expenses is fine but it must be done legitimately on the best practices of industrial harmony and it must be done according to the law and procedure of the labour law.

In the case of Harris Solid State (M) Sdn Bhd & Ors v Bruno Gentil Peirara and Ors [1996] 4 CLJ 747, the learned Gopal Sri Ram JCA at that time made a observation and it is as follows:-

"An employer may re-organize his commercial undertaking for any legitimate reason, such as promoting better economic viability.  But he must not do so for a collateral purpose, for example, to victimize his workman for their legitimate participation in union activities.  Whether the particular exercise of managerial power was exercised bona fide or for  collateral reasons is a question of fact that necessarily falls to be decided upon the particular circumstances of each case"   

In the above case, the company wanted to sack the worker for his union activities but in our inquiry can the company use the present Covid-19 pandemic and the partial lockdown to cut down the work force to avoid more losses? My opinion, is a no.

What if the company was doing very well in the year 2018 and 2019 with payment of bonuses and increment of salaries to the workers and had expended the work force?

By looking at the case of Harris Solid (M) Sdn Bhd's case and the quota of Gopal Sri Ram JCA, managerial power must be exercised in a bona fide manner. The company should not victimise the workers by sacking them by reason of losing money because of Covid-19 and the partial lockdown.

Ramu