The Industrial Court ruled that Chempro Technology Sdn Bhd had constructively dismissed Chew Chee Siong after his total wages dropped by 70% following the reassignment of his customers to another member of the company’s staff.
Court chairman Augustine Anthony ordered the firm to pay Chew back wages for 24 months at RM16,986 per month, and compensation in lieu of reinstatement equivalent to another eight months’ salary worth RM135,888.
The computation was based on Chew’s last drawn basic monthly salary of RM5,350 per month and an average monthly commission of RM11,636.
He said the reallocation of customers’ accounts, which Chew had been handling and had earned him huge commissions, was done unjustly, resulting in a 70% drop in his gross pay.
“The court finds that the reassignment of company accounts resulting in the claimant (Chew) suffering a reduction in sales commission which forms part of his wages was arbitrary and unjust,” Anthony said in an award dated March 18, sighted by FMT.
The court chairman also found that Chempro had failed to engage Chew in any discussion prior to the reassignment of the accounts and merely notified him of the matter by email.
Following this, Chew sent an email to the company’s management protesting that their actions had drastically reduced his monthly income, especially after it removed Hartalega’s associated companies from his portfolio.
He gave notice that he would treat his employment as terminated if the accounts were not restored to his portfolio.
“As there was no response from the company, the claimant sent a letter (dated May 15, 2020) treating himself constructively dismissed,” said Anthony.
Chempro had contended it had the right and absolute discretion to reallocate customers among its staff, as practised from time to time, adding that it did not dismiss Chew. Instead, the employer said he voluntarily resigned from his employment.
Nonetheless, Anthony said the company’s reservation of its right to reassign customers can only be exercised if the circumstances warrant it.
“This means there must be justification for Chempro’s conduct of reallocating the claimant’s customers to other sales personnel, especially when it is fully aware that any arbitrary removal of existing clients will deprive him of the commissions earned and will disrupt his personal financial planning.
“The company cannot come to this court, which emphasises on the principle of equity and good conscience, saying nonchalantly that it has discretion to treat an employee in a certain manner and that it does not need to justify how it uses or applies its discretion.”
Anthony said such discretion must be judicious in its nature, without which, tyranny will prevail.
“Needless to say, the byproduct of tyranny or despotism is oppression, cruelty and victimisation,” he added.
He said the firm’s conduct in promising so much financial reward for Chee’s hard work, only to snatch it away after having put in all his effort to increase sales, is not only inconsistent with the essential terms of his contract but was also an affront to the very promise made to him.