Case Update: When an employee transfer can amount to a constructive dismissal

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

It is a well-established principle in employment and industrial relations law in Malaysia that the right to transfer an employee is a prerogative of the management which the Industrial Court would rarely interfere with. However, there are factors which may affect an employer’s ability to transfer an employee without consent, including the following:

  • Whether the transfer is between different roles or departments within the same location, or from one branch or location to another, or between different companies within the same Group.
  • Whether the transfer is brought about by bona fide or genuine business reasons.
  • In some cases, the practical effect of the transfer may also be relevant (eg the impact of a change in work location or job functions).

In short, employee transfers are not always straightforward. Transferring an employee without consent may result in a breach of contract or constructive dismissal.

The Industrial Court considered these issues in Ng Bee Yoong v. Capital Development Sdn Bhd (Award No. 186 of 2016).

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