LEGAL OPINION WRITING Activity 4 Slides

LEGAL OPINION WRITING ACTIVITY 4 EXERCISE ON TOPIC 2 & 3 DR ANITA

Introduction • We have been asked to advise regarding legal issues that are currently facing by Mr Azman, an employee of PilihKasih Company. The relevant party is facing issues on breach of contract and employment demotion. • Based on the above matter we state our opinion as follows.

Brief Facts • On the 1st March 2017, Azman joined as a Sports Manager with PilihKasih Company for a duration of two (2) years. • Through a letter, PilihKasih Company informed Azman that his position in the company was reviewed and PilihKasih Company had revised his scope of work which was evidenced by a revised letter of appointment. • This revised letter of appointment was dated on the 1st December 2018 and was signed between PilihKasih Company and Azman. • Essentially, the revised letter of appointment was considered to have superseded the first letter of appointment that had been issued in 2017. • Due to it, PilihKasih Company had re-designated Azman as the ‘Assistant Sports Manager’ of the company. • However, his salary was increased to RM5500.00 per month effective from 1st December 2018. • Unfortunately, Azman was uncomfortable with this new position re-designation and seeked us at Naufal & Associates for advice on his legal rights.

Issues (Liability & Quantum) • Whether Mr Azman is subjected to the revised contract of employment?  Ng Bee Yoong v Capital Development Sdn Bhd (Award No. 186 of 2016)  The court held that it is well-settled that the right to transfer an employee from one department to another, or from one post of an establishment to another, or from one branch to another, or from one company to another within the organization, is the prerogative of the management.  The Industrial Court will ordinarily not interfere, unless the transfer is actuated with improper motive.

Issues (Liability & Quantum) • Whether Mr Azman is subjected to the revised contract of employment?  The power of transfer is subject to the following restrictions:  There is nothing to the contrary in the terms of employment.  The management has acted bona fide and in the interest of its business.  The management is not actuated by any indirect motive or any kind of mala fide.  The transfer is not made for the purpose of harassing and victimizing the employee.  The transfer does not involve a change in the conditions of service.  The right to transfer an employee is an implied right of the employer. No express term in the contract is necessary.

Issues (Liability & Quantum) • Whether the re-designation was made in good faith for the sole benefit of the company?  Nippon Paint (M) Sdn Bhd v Abd Rahim Md Ibrahim [2008] 2 LNS 0654  The Court held that while an employer has the right to demote an employee, an employee should only be demoted or downgraded within the same category of service.  For example, a senior manager can be demoted to a junior manager, or a Level 1 Executive can be demoted to a Level 2 Executive.  Similarly, a sales supervisor may be demoted to a normal sales staff.

Issues (Liability & Quantum) • Whether the re-designation was made in good faith for the sole benefit of the company?  Rahayu Binti Razalli v Matrix Power Network Sdn Bhd (Award No.: 3143 of 2019)  The Industrial Court found that:  While it is true that the employer has the right or prerogative to transfer its employees, it must be done without malice, bona fide and with a clear intent to benefit the employer by using the employee’s expertise and experience as the justification.

Conclusion (Summary of Cause of Action) • Mr Azman does not have ‘cause of action’ to further bring the action to the court as there is no breach of term and condition on the letter of appointment. • In fact, Mr Azman had agreed to the re-designation on the scope of work when he signed the revised letter of appointment on 1st December 2018. • Mr Azman is estopped from making the assertion. • Even though Mr Azman was demoted, the re-designated post is still within the same category of service. • There is no fault on behalf of PilihKasih company if the demotion was made in good faith and the fact that there is salary increment shows that element of mala fide is absent regarding the said action. • Mr Azman may proceed for the legal proceeding if only he could provide other evidence that PilihKasih intended to humiliate or victimize him.