Constructive dismissal occurs when an employer makes a fundamental breach of the employment contract, effectively forcing the employee to resign. So the question is… What constitutes to a “fundamental breach”?
Here are some examples of changes or actions that could be considered fundamental breaches leading to constructive dismissal:
1. Changes to Job Role or Responsibilities. Reducing the employee’s role, authority, or title without valid justification. For example, an employee hired as a manger is reassigned to an entry- level role. It can also involve assigning tasks completely outside the agreed-upon scope of work e.g., a graphic designer is suddenly required to handle finance tasks.
2. Reduction in Pay or Benefits. This is straightforward – reducing pay without the employee’s agreement. For example, cutting the employee’s salary from RM6,000 to RM4,000 without discussion. It can also include removing benefits such as health coverage, bonuses, or allowances stated in the employment contract.
3. Changes to Work Conditions. Forcing the employee to move to a significantly distant location without their agreement. For instance, requiring a Kuala-Lumpur based employee to relocate to Johor Bahru. This also includes imposing dramatic and unreasonable changes to working hours, such as switching an employee from a day shift to a night shift without prior discussion.
4. Termination or Reduction of Employment Terms. Drastically reducing work hours, effectively rendering the position redundant, and forcing resignation. For example, cutting a full-time position to part-time without discussion. It also includes ignoring key terms of the employment contract, such as promotion opportunities or agreed bonuses.
If an employee resigns due to such fundamental breaches, they may claim constructive dismissal and pursue compensation or reinstatement through the Industrial Relations Department. However, my advice would be, before making such decisions, it’s best to seek proper legal counsel to avoid actions backfiring.
xoxoxo, AuntyHR
