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Laws on Transfer of Employees
by Hew Soon Kiong
THE law on the transfer of employees is well settled. The right to transfer an employee from one department to another or form one part of an establishment to another or from one branch to another is the prerogative of the management and the consent of the employee is not required in the exercise of such prerogative.

In Industrial Disputes Law in Malaysia, (C.P. mills, 1984, page 75, second edition), it was stated: “Similar principles have been held to apply to the transfer of an employee from one job to another. It is well settled that, normally, the right to transfer an employee from one place to another is the prerogative of the management and an employer is entitles to requite his employee to work anywhere.”

Transfer of an employee is therefore in the discretion of the management provided that the terms and conditions of his service are not adversely affected. Assuming that there was no provision for transfer, court’s view was that the right to transfer was implied. It could only be taken away or curtailed in express term.

In Employees’ Misconduct by Alfred Avins, 9168, it was stated: “The liability to be transferred from one place to another by the employer is an implied condition. It could only be taken away or curtailed or regulated by express term.”

The author (supra) further said: “It will commonly be a term of the contract, express or implied, that the employer may require the workman to accept a transfer of his place of work to meet the needs of the organization. So long as this is done in good faith, the court will generally not interfere with the decision to transfer, but the transfer must not operate to the prejudice and detriment of a worker. If it causes him economic loss, it will be regarded as ‘quite unreasonable’.”

The employer is in the best position to judge how to distribute his employees between different jobs or branches. However, the power bested with the company is not absolute and in exercising its prerogative power to transfer, the company must ensure that the status and remuneration of the employee are not affected. The company must also ensure that the transfer is not mala fide, and unfair labour practice or an act of victimization. Whether a transfer is mala fide or not is a question of fact for the court to decide.

It is not for the Industrial Court to interfere unless the transfer is found to be tainted with ulterior motives, arbitrariness or capriciousness. In other words, the judicial adjudication will be justified where there is reason to believe that the management resorted to transfer mala fide, or for some ulterior purpose like punishing an employee for his trade union activities. The onus of showing such vitiating circumstances that undermine the proper exercise of the employer’s prerogative lies with the employee.

B.R. Ghaiye on Misconduct In Employment said: “The power to transfer is however subject to the following well-recognized restrictions…
(a) There is nothing to the contrary in the terms of the employment;
(b) The management has acted bona fide and it is in the interests of its business;
(c) The management is not actuated by any indirect motive or any kind of mala fide;
(d) The transfer is not made for the purpose of harassing or victimizing the workman;
(e) The transfer does not involve a change in the conditions of service.”

While the court recognized that the transfer of employees in the interest or exigencies of the employer’s business is a management prerogative, such prerogative is, however, not absolute as it must be exercised in good faith. It cannot be exercised unreasonably and arbitrarily to the detriment of the employee, which is against the spirit of Section 13(3)(b) of the Industrial Relations Act 1967.

When as employee has hot certain difficulties or objections in complying with the transfer order, it generally happened that he lodges his protest against the said transfer in writing giving the reasons. The employer should, on equitable grounds consider the objections and grievances of the workman on merits. It is pertinent to note that it is a good industrial relations practice for an employer to investigate complaints against an employee before proceeding to transfer him on such complaints. By refusing to hear their problems, as a good employer should have done, the company had not treated the employee with respect and was an unfair labour practice.

Thus, the prerogative or right of the management to transfer an employee is subject to certain restriction. The transfer should not operate to the prejudice or detriment of a workman or cause economic loss to the employee and his family and loss of estimation among his fellow employees. The right to transfer must be exercised in good faith.