2 November, 2017
IN THIS ARTICLE, REENA ENBASEGARAM CONSIDERS THE HIGH COURT DECISION ON INJUCTIONS.
Introduction
Recently, a ripple was caused within the banking industry when the National Union of Bank Employees, State of Malaya (“NUBE”) obtained an ex-parteinjunction which directly challenged a bank’s contractual right to transfer its employees.
NUBE’s membership is open to all employees whose job contents consist mainly of clerical functions irrespective of the designation; excluding those who are employed in a managerial, executive, confidential or security capacity in commercial banks in Peninsular Malaysia.
The right to transfer
In industrial jurisprudence, the right to transfer can be both expressed and implied[1]. The courts have long recognised the implied right to transfer especially in instances where the entity in question has branches elsewhere.
The Malayan Commercial Banks’ Association (“MCBA”), of which a significant number of banks are members, has entered into collective agreements, on behalf of its members, with various unions including NUBE. The provisions of those collective agreements bind the member banks as well as the relevant union. The terms of the collective agreements form part of the employment terms of the employees who fall within the scope of the applicable collective agreement.
One of the pertinent provisions in the collective agreements between MCBA and NUBE is Article 15[2], which expressly provides that the member banks have a right to transfer the relevant employees.
This is over and above any transfer clause that may be found in the individual employment contracts of the employees.
The reasonableness of a transfer instruction
Contractual right aside, it is trite that, in the event the employer is able to establish that the transfer instruction was not tainted with mala fide/capriciousness/unfair labour practice[3], the Industrial Court will uphold the transfer instruction.
Injunctions as a means of fettering the right to transfer
In KLHC Originating Summons No: WA-24-98-08/2016 between NUBE v Bank Muamalat Malaysia Berhad & 1 Ors, NUBE had filed an action in the High Court seeking an injunction against Bank Muamalat’s transfer instruction issued against some of its clerical staff who held messenger positions, transferring them to Kuala Lumpur. The employees had proceeded to transfer to Kuala Lumpur under protest.
The injunction sought by NUBE was in direct contravention of section 20(1)(b) of the Specific Relief Act 1950. The aforesaid contractual provision is also consistent with the common law position as espoused by the Federal Court inFung Keong Rubber Manufacturing (M) Sdn Bhd v Lee Eng Kiat[4], and the Court of Appeal in the case of Dr David Vanniasingham Ramanathan v Subang Jaya Medical Centre Sdn Bhd[5] that, as a contract of employment is dependent on the volition of the parties, it cannot, in the absence of special circumstances, be specifically enforced.
The long-established legal position notwithstanding, NUBE succeeded in obtaining an ex-parte mandatory injunction, ordering those messengers back from Bank Muamalat’s headquarters in Kuala Lumpur to their respective original branches. As a result of the ex-parte injunction, Bank Muamalat was compelled to transfer the relevant employees back to branches where there was no work for the messenger position as the same has been undertaken by other employees following a restructuring exercise. Subsequently, vide letters dated 12 August 2016, the services of those employees were terminated on the basis that the position of messenger no longer existed.
Legal status quo resumed when the High Court subsequently declined to extend the injunction when the matter came up for inter partes hearing. The High Court noted that the application before it was to maintain the position of the three employees pending the determination before the Industrial Court, related to three articles in the collective agreement.
In dismissing the application, the High Court took the position, inter alia, that the provisions of Article 15 on transfer was quite clear, and that those employees had already been terminated which made the application academic. The High Court also noted that there was other recourse available including a complaint of unfair dismissal under section 20 of the Industrial Relations Act 1967.
Conclusion
The High Court reaffirmed the long-established legal position of a bank’s prerogative and contractual right to transfer its employees.
[1] In the case of Ladang Holyrood v Ayasamy Manikam & Ors [2004] 2 CLJ 697, the Court of Appeal inter alia held that: “Nevertheless, an employer always has the implied right to transfer its employees. As the right is one that is ‘implied’ no express term in the contract of services is necessary. The right to transfer exist even in the absence of contract of service unless there is a contract to the contrary”.
[2] Article 15 of the Collective Agreement, provides as follows:
“1. Transfer of employees within the same city of town may be made by the Bank at any time at its sole discretion.
2. PROVIDED THAT where the Bank is satisfied that undue hardship will be caused, then the transfer of the employee concerned shall not be carried out without the employee being given a reasonable period of time to organise his affairs. The period of time allowed in such cases shall not exceed three (3) months from the date of first notification of the transfer.”
[3] BR Ghaiyee, in Misconduct in Employment, wrote that the power to transfer is subject to the following well-recognised restrictions:
a) there is nothing to the contrary in the terms of employment;
b) The management has acted bona fide and it is in the interest 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 victimising the workman; and
e) The transfer does not involve a change in the conditions of service.
[4] [1981] 1 MLJ 238
[5] [2007] 1 CLJ 107
For further information, please contact:
Reena Enbasegaram, Partner, Shearn Delamore & Co
reena@shearndelamore.com
