On Monday, Jan 19, there was picketing by the staff of Poly Glass Fibre Manufacturing Sdn Bhd.

At the factory’s premises in Penang.

Briefly, the reasons for the said picketing have been reported to be as being:

a. Local employees forced to go on unpaid leave from Jan 23 to February 9, 2009.

b. Foreign workers allowed to work during the said period; and

c. Employees salary cut/reduced by 15%.

It important that companies should comply with the provisions of the Code of Conduct for Industrial Harmony and should take the following steps, namely:

(i) Get employees to take their annual leave, as a first step, and not force them to take unpaid leave. Unpaid leave is only to be taken if annual leave has been exhausted. Since this is just the beginning of the year, the employees could not have exhausted their annual leave.

I have received calls saying that companies prefer employees to take unpaid leave as it is another form of cost cutting. In my view this is wrong, unacceptable and mala fide (bad) in law. So please let employees exhaust their annual leave first

(ii) There must not be any discrimination between local and foreign workers. The same law applies to all employees.

(iii) The law is that companies cannot reduce/cut salaries without the consent of the employees and where there is a union, without the prior agreement of the union. Otherwise, the employees have the right to leave and sue for constructive dismissal

(iv) When dealing with unionised employees, you must deal with national union for official purposes. You can discuss the issues with your in-house union but the law only recognises the national union ie, the union that is a party/signatory to the collective agreement (CA).

(v) First stop overtime (OT), then stop working on days off, rest days and public holidays. If necessary, reduce hours of work, have shut downs and only then, if the situation still does not improve, proceed to carry out a voluntary separation scheme (VSS.). A last resort is retrenchment.

The above steps will ensure that the company has been fair and reasonable in dealing with its employees. Please do not forget that whilst the companies and management are faced with problems, so too are your employees.

They have families to support and commitments to meet. They were your main asset during good times, so let us treat them with concern and due respect. Explain to them the issues and avoid acting arbitrarily and in a highhanded manner.

Remember that since the law does not allow an employer to cut salaries or force employees to take unpaid leave, the company would automatically be in breach of the labour laws. So employers should ‘sell’ or ‘market’ these moves through persuasion so that you can have a ‘win- win’ situation by obtaining their consent.

Top management must also show a good example eg, by taking a pay cut themselves and reducing their perks and other benefits. This will be a more convincing way, rather than merely insisting on management’s rights and prerogatives. Bad times are not going to last forever, so let us try and overcome the bad times together, with our employees.

The law is clear. The final decision on whether to reduce the number of employees or even shut down the business is that of the employer. However, as a good citizen and a caring employer, the management must institute steps in stages to mitigate the impact on employees, their families and the economy of the state.

In the event the matter is referred to the industrial court, the court will look into matters to see if the employer had acted as a fair and reasonable employer should. Employers should be guided by the above.

The writer is chairperson, State Human Resources Liaison Committee, Penang.