Can your company force you to take unpaid leave?
During my trip to Penang, a good friend of mine told me that some of his friends have been asked to take forced leave by their companies. This is not normal forced leave, but forced unpaid leave. I was shocked. My immediate response was “Isn’t that equivalent to terminating them, but without compensating them?”
It is. By forcing these employees to go on unpaid leave, the employers are indirectly forcing them to resign. After all, who can live without getting paid for so long especially when everything is so expensive now. By making them resign on their free will, the employers do not need to pay any form of compensation. Pretty good deal right?
But can the employers actually force the employees to take unpaid leave?
It’s very subjective.
Anyway, based on my conversation with some friends in the HR field, my sister and my father, here are some of the factors which might be associated with this.
- The company can come out with a memo which requires a selected group of (or all) employees to take forced leave. If you have no annual leave (usually those under probation), then you will have to take unpaid leave.
- The company has such records in the past and does not mind its image and reputation being tarnished.
- The company is trying to get rid of a large group of people but not willing to pay the compensation.
- If you are a contract staff, you might not have any annual leave and by forcing you to take leave, it is indirectly asking you to take forced unpaid leave.
- Some employment contracts do not allow the employee or employer to end the contract without mutual consent. However, the employer can requires the contract employee to take forced unpaid leave as a mean to terminate the contract.
The points above are based on my opinions and might not be entirely correct. However, I truly believe that contract staff is the group of people who is most vulnerable to this “scheme”. For permanent staff, the companies supposedly cannot ask you to go on forced unpaid leave (unless you no longer have annual leave) for an extended period of time.
At the end of the day, it is best to save your annual leave if possible and read the terms & conditions of your employment letter THOROUGHLY. If you have any doubts, refer to your HR, lawyers or call the labor department for help.
Last but not least, all the best and hopefully this kind of thing will not happen to any of you. It has already happened to some people, but I’m not sure about the actual situation. If you know anyone who has experienced this, feel free to drop a comment here. I’m sure most of us want to know what actually happened.
Hope it helps.
I think that is being practice in Malaysian’s company …the ‘force’ unpaid leaves…
My previous company does that and one of the smarter exec make a complain to the GMD, well..seems like she was excused for it
anyway, I think legally they are not allowed to do so, but then again….. it is practice here..
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I’m sure there are employment laws that deal with this but personally, I think companies who can afford to pay salary should not force anyone to take unpaid leave. If the company is insolvent, it doesn’t matter whether you’re on forced leave or not because you won’t get paid anyway.
@ Lisa
Unfortunately, our labor dept is not that strong in Malaysia and many employees are not aware of their rights, and what is legal.
@ Damien
But for long term, forcing someone to leave is easier if there’s nothing in the pipeline. 1 way to cut cost. And to force someone to leave w/o paying him, the person has to resign willingly. If you don’t get your salary, then it’s another story and you can actually bring it to the legal department.
err, even ryanair (aviation company)is doing that too..what should we say then >.<
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@ little jennifer
maybe the employees are mostly contract staff?
My company is down-sizing now.
In fact, I am serving my resignation notice of 1 month now. So most likely I will be forced to take unpaid leave. I am very much interested to know whether or not I can seek any legal advice to protect myself from being forced?!
I need advice to against this kind of unfair treatment!
@ Jenny
Sorry to know about that. Unfortunately, I cannot give you an answer since I’m not sure about it too. Maybe you can try to talk to your lawyer friend? There are actually several companies who are doing such downsizing, and yet, I have not heard of anyone taking legal stance against the companies.
So your only hope is to talk to your lawyer friend, or to call up the labor department.