• In Chua Yeow Cher v Tele Dynamics Sdn Bhd [2000] 1 MLJ 168, the High Court held that:

An employer has the power to transfer its employees at its absolute discretion. An employee can be transferred even though not on a promotion. And the employee has no right to question the right of the employer unless, as has been stated above, the transfer was not bona fide. Sufficient evidence has to be adduced by the employee on a balance of probabilities that his transfer by the employer was not bona fide. A ground that an employee would receive less earning if transferred to another place because he would receive less commission or no commission at all is not a valid reason. An allegation of victimisation, can be valid reason to establish mala fide. But in an action against constructive dismissal the burden is on the employee to prove. In this case the application had failed to prove it before the Industrial Court. As I said earlier, the issue of getting less earning on being transferred out cannot be a valid reason to allege that the order of transfer is mala fide. Even if it is true that the employee would receive no commission at all after having been transferred to less commission another place, this would not be a valid reason to say the order of transfer was unlawful because a transfer order can only be regarded as unlawful if it is made with a bad intention.”


  • In Kannon Perumal v Alps Electric (Malaysia) Sdn Bhd [2010] 2 LNS 0904 (Award No 904 of 2010), the Industrial Court found that the claimant’s claim was redundant as the Cylinder Head Department had to be closed down and he had refused to be transferred to another department.


  • In TWI Training and Certification (SE Asia) Sdn Bhd v Jose A Sebastian [1998] 2 ILR 879 at 882, the Industrial Court stated that “as long as it is a genuine commercial and economic consideration that a company undertakes a restructure evercise, it is within managerial prerogative to decide in the best interest of its business arrangements to identify its own area of weaknesses.


  • In William Jacks Co (M) Sdn 8hd v S Balasingom [1997] 3 CU 235 at 241, the Court of Appeal stated that, “so long as that managerial power is exercised bona fide, the decision is immune from examination even by the Industrial Court.”


  • In Power Kinetics Technology Sdn Shd v Lim Koon Keong [2010) 2 ILR 637 (Award No. 597 of 2010), it was held that the exercise of the respondent’s right to transfer the claimant, had been unreasonableness, unfairness or want of bona fides, more so when the transfer was made in the nature of a demotion and downgrading. The decision to transfer the claimant to a lower position in the Manufacturing Engineering Department under the Planning and Production Department was held not made in the interest of the claimant.


Industrial Relations Act 1967

13.Collective bargaining

(1)        Where a trade union of workmen has been accorded recognition by an employer or a trade union of employers—

(a)the trade union of workmen may invite the employer or trade union of employers to commence collective bargaining; or

(b)the employer or the trade union of employers may invite the trade union of workmen to commence collective bargaining.

(2)        …

(2A)    …

(3)       Notwithstanding subsection (1), no trade union of workmen may include in its proposals for a collective agreement a proposal in relation to any of the following matters, that is to say—

(a)the promotion by an employer of any workman from a lower grade or category to a higher grade or category;

(b)the transfer by an employer of a workman within the organization of an employer’s profession, business, trade or work, provided that such transfer does not entail a change to the detriment of a workman in regard to his terms of employment;


Source: Retrenchment (The Law and Practice in Malaysia). Sweet & Maxwell Asia.




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Employer’s Rights to Transfer Workers-Part 2