Medical board out presentation

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The first of its kind, this seminar is held to provide participants with the knowledge and skills to effectively manage the documentation and processes for employees with prolonged illness or employees with inability to work due to occupational hazards, leading to medical boarding out.
  • 2.© i-HR ConsultingSdn Bhd Employers may have to deal with situations concerning employees who are incapacitated due to a medical illness or disability thus preventing them from carrying out their job functions. If the employee’s medical condition is severe enough with little prospects of recovery, the employer may feel like they have no choice but to TERMINATE THE EMPLOYEE ON MEDICAL GROUNDS. THE PROCESS IN WHICH THIS IS DONE IS COMMONLY KNOWN AS “MEDICAL BOARD OUT” INTRODUCTION
  • 3.© i-HR ConsultingSdn Bhd A situation where an employer has no other choice but to terminate the services of an employee who is medically unfit or incapable to perform his duties any longer due to a medical condition. However, this requires the employer to have conducted a thorough medical examination and certified by a medical professional to validate that the employee is incapable of performing his duties any longer. DEFINITION OF MEDICAL BOARD OUT
  • 4.© i-HR ConsultingSdn Bhd The Employment Law has two provisions: Provision 1: Sick/Medical Leave Below 2 years of service: 14 days of medical leave Between 2-5 years of service: 18 days of medical leave Above 5 years of service: 22 days of medical leave Provision 2: Hospitalization Leave Up to 60 days of medical leave due to hospitalization, as certified by the medical professional WHAT DOES THE LAW PROVIDE FOR EMPLOYEES WHO ARE ILL?
  • 5.© i-HR ConsultingSdn Bhd ASIDE FROM THE STANDARD SICK LEAVE AND HOSPITALIZATION LEAVE, The law does not set a minimum requirement for a medical board out procedure. There is no requirement for the employer to put the employee on no-pay leave or half pay sick leave for a few months prior to the termination on medical grounds. The medical board out procedure would therefore be in accordance with the contract i.e. provisions in the employment contract or in the company’s policies and procedures. A formal medical board out policy and procedure, if adopted and followed consistently, could assist an employer in demonstrating that the termination was not capricious. The balance between having a productive workforce and compassion is key. OTHER PROVISIONS?
  • 6.© i-HR ConsultingSdn Bhd Most multinational and large companies have a provision called “Prolonged Illness Leave” due to critical illness or industrial accidents as follows: First 3 months: With Full Salary Next 3 months: With Half Salary Next 3-6 months: Treated as Unpaid Leave (This is a common practice, the details of the provision may vary from one Company to another) Thereafter, with the confirmation of the medical condition by a professional medical practitioner, the Company reserves the right to terminate the employment of the employee, due to his incapacity to perform his duties. GOOD PRACTICES BY COMPANIES
  • 7.© i-HR ConsultingSdn Bhd While the law recognizes that employers cannot be expected to go on unreasonable lengths to accommodate an employee who is unable to carry out their job, it does not mean that employers can simply axe employees on a whim, as there are requirements and standards to meet before medically boarding out any employee. The primary question to be asked when faced with a medically ill or disabled employee is usually: “whether, in all the circumstances, can the employer be expected to wait any longer and if so for how much longer?” QUICK PREVIEW OF WHAT THE LAW SAYS
  • 8.© i-HR ConsultingSdn Bhd In Malaysia, employers can only terminate an employee when the illness or disability suffered has severely crippled their ability to perform their designated tasks, and recovery is unlikely. An employer must take into account several factors before contemplating on termination on medical grounds. The factors to be considered include (but are not necessarily limited to): • The nature of the employee’s illness; • The likely length of the employee’s absence during the recovery period; • The nature and functions of the employee’s job; • The likelihood of the illness/disability recurring or some other illness arising; • The length of various absences and the spaces of good health between them; • The need for the employer to employ another employee to get the work done; • The impact of absences by the ill employee on other employees; • Whether the employee is able to be re-designated, or perform other functions, performance of which would not be impeded by the illness; • Whether the employee has been appraised for the difficult situation the Company is faced with in respect of his medical condition. KEY FACTORS FOR CONSIDERATION
  • 9.© i-HR ConsultingSdn Bhd An employer must therefore ensure that it has thoroughly contemplated the circumstances surrounding the illness or disability. The employer must show that based on the information gathered, a dismissal on medical grounds would be just. An example can be seen in the case of MHS Aviation Sdn Bhd v Zainol Akmar Mohd Noor [2001] 2 MELR 133 whereby the company had dismissed its employee after he was diagnosed with acute inferior and posterior myocardial infarction. The Court however held that the termination was unfair as the company had not made any enquiries on the illness suffered by the employee and merely issued the termination notice based on the assumption that the illness was permanent in nature. CASE STUDY 1
  • 10.© i-HR ConsultingSdn Bhd Gopalakrishnan Vasu Pillai v Goodyear Malaysia Berhad is a good starting point when considering the position of an employee who has a long term medical condition with little prospect of recovery. The Claimant, who was a master technician, suffered from a recurrent right knee injury. After numerous medical examinations , the doctors recommended that the Claimant be given light duties. The company was however, unable to accede to the Claimant’s request as its operations involved using heavy machinery. The company, whilst accepting that the Claimant had been an excellent worker, medically boarded him out due to the knee injury and the long periods of medical leave that had been taken. The Claimant, however, contended that his dismissal had been unjust as he had not been offered or recommended alternative employment in the company. In handing down an award in favour of the company, the Industrial Court referred to the English authority of Spencer v Paragon Wallpapers Ltd2 wherein it was stated, “Every case depends on its own circumstances. The basic question which has to be determined in every case is whether, in all the circumstances, the employer can be expected to wait any longer and if so, how much longer?” And he added that the relevant circumstances include “the nature of the illness, the likely length of the continuing absence, the need of the employers to have the work done, which the employee was engaged to do.” CASE STUDY 2
  • 11.© i-HR ConsultingSdn Bhd In arriving at the conclusion that the dismissal was justified, the Industrial Court in Goodyear Malaysia Berhad considered the following issues: • Did the medical reports state that the Claimant will recover and return to work normally; • The number of days the Claimant had been on medical leave; • Did the company foresee that the Claimant will be bound to take many more days of medical leave which will inevitably affect the productivity and profits of the company. The Industrial Court in Goodyear Malaysia Berhad also acknowledged the fact that the company, just like any other companies, was incorporated to carry on business with a view to profit and was not a charitable organization or a welfare home. According to the English case of Lynock v Cereal Packaging Ltd3, “The approach of an employer in this situation is, in our view, one to be based on those three words which we used earlier in our judgement – sympathy, understanding and compassion.” CONT; CASE STUDY 2
  • 12.© i-HR ConsultingSdn Bhd Lynock goes on to state that one should look at the entire historical background as the mere fact that a workman is fit at the time of his dismissal does not make his dismissal an unfair dismissal. The case further states that a company in reaching what must inevitably be a difficult decision, should among other things, also look into the following factors: • the nature of the illness; • the likelihood of recurring or some other illness arising; • the length of the various absences and the spaces of good health between them; • the need of the employer to get the work done by the particular employee; • the impact of the absences on others who work with the employee; • whether the Claimant has been appraised of the difficult situation which the company is faced with in respect of his medical condition. CASE REFERENCE
  • 13.© i-HR ConsultingSdn Bhd Kempas Edible Oil vs Abu Bakar bin Talib The Claimant, sometime in 2000, had been diagnosed with a sleep/anxiety disorder. Subsequently in August 2001, the Claimant had been diagnosed to be suffering from dysthymia with narcolepsy. Despite the medical attention which the Claimant had been receiving, his medical condition continued to deteriorate, to the extent that the Company then tried to determine if he could be medically boarded out pursuant to the provisions of the insurance policy which the Company had taken out for the benefit of all its executive employees. The insurance underwriters, had, however, on two separate occasions rejected the Company’s application for the Claimant to be medically boarded out. In 2002, the Claimant had been on paid medical leave for 87 days. In 2003, the Claimant never came in to work at all. The Claimant had in fact been on paid medical leave from 1 October 2002 till the date he was dismissed, on 11 September 2003. In view of the fact that the Claimant was unable to perform his work due to his medical condition, the Company terminated his employment on medical grounds. The Industrial Court concluded that since the Claimant was unable to perform his duties any longer because of his illness, the contract of employment had therefore become frustrated. CASE STUDY 3
  • 14.© i-HR ConsultingSdn Bhd I was hospitalized about 4 months back. I almost had kidney failure, which resulted in my blood sugar level increasing and experiencing nerve damage to my feet. Although the condition of my kidney and blood sugar are in control, the damage to my feet appears to be permanent. I have concerns driving as I experience pain on both feet; as a result, I don't sleep well at nights. I have noticed too that now I'm less mobile, preferring to be seated due to my recent development. I would like to check if this condition can be deemed as permanent illness and therefore allow me to ask my company for a board out. Upon checking with my HR Manager, the company does pay for board out cases. What would be the recommended steps I should proceed to make a determination to pursue this option? CASE SCENARIO – FOR DISCUSSION
  • 15.© i-HR ConsultingSdn Bhd EMPLOYEE WITH HIV/AIDS THE stigma of being a HIV patient and the discrimination against them in employment remains a pressing problem in Malaysia. However, some multinational companies should be applauded as they have strict laws that forbid stigmatization and discrimination. The Human Resources Ministry's Department of Occupational Safety and Heath has a Code of Practice on Prevention and Management of HIV/AIDS at the workplace. It places emphasis on the employer's responsibility to be non-judgmental and to have in place non- discriminatory policies for HIV-positive employees. They should have the right to continue working as long as they are able to and do not pose any danger to themselves, their co-workers and other individuals at work. The procedure for termination of employment on medical grounds for them should be the same as for any other diseases.
  • 16.© i-HR ConsultingSdn Bhd Disciplinary action should be taken against any employer who discriminates against or stigmatizes HIV-positive employees. However, many employers are oblivious to this code of practice. Many companies mandate pre-employment HIV blood-testing as a prerequisite before gaining employment. Some doctors are caught in an ethical dilemma between divulging the HIV results to the employer, employee, or both. CONT; HIV/AIDS
  • 17.© i-HR ConsultingSdn Bhd ILO’S STATEMENT An International Labour Organisation study released recently reveals that people living with HIV who are employed are almost 40 per cent more likely to stick to HIV treatment than those without a job. Studies also reveal that treatment reduces the risk of a HIV-infected person transmitting the infection to another by as much as 96 per cent. Stigma and discrimination undermines prevention, treatment and care of people living with HIV and AIDS. These patients become reclusive, and are discouraged from informing their spouses or partners. Their opportunity for employment is curtailed.
  • 18.© i-HR ConsultingSdn Bhd • To provide support to the physically unfit employee in terms of obtaining necessary assistance for sustenance and to facilitate lifestyle adjustments. Permanent Disablement Benefit by SOCSO Employees with permanent disability due to employment injury may claim for the Permanent Disablement Benefit after the last day of their temporary disablement diagnosis; provided, the permanent disablement has been confirmed by the following authorities: i. Medical Board ii. Specialist Medical Board (for Occupational Diseases) iii. Medical Appeal Board (if the insured person or SOCSO is not satisfied with the diagnosis by the Medical Board) EMPLOYER’S RESPONSIBILITY IN EMPLOYEE MEDICAL CASE
  • 19.© i-HR ConsultingSdn Bhd Permanent Disablement Benefit by SOCSO Assessment and Payment: Claims will be referred to the Medical Board for permanent disability assessment. 1) If the assessment does not exceed 20%, payment can be made in a lump sum. 2) If the assessment exceeds 20%, the employee is given an option to commute 1/5 of daily rate of the benefit into a lump sum payment, while the balance will be paid monthly for life. However, the option of lump sum payment is subjected to the aggregate loss of earning capacity as a replacement to any lump sum payment not exceeding 20%, if claims were previously made by the insured person EMPLOYER’S RESPONSIBILITY IN EMPLOYEE MEDICAL CASE (CONT’D)
  • 20.© i-HR ConsultingSdn Bhd Permanent Disablement Benefit by SOCSO Rate of Payment: 1) The daily rate is based on 90% of assumed average daily wage of the insured person; calculated as one-thirtieth (1/30) of the assumed average monthly wages for the insured person The assumed average monthly wage is equivalent to the sum of the assumed monthly wages per month for which contributions of the first or second category have been paid or were payable during the continuous period of 6 months immediately preceding the month in which the employment injury occurred, divided by the number of months for which such contributions were so paid or payable 2) Daily rate of Permanent Disablement Benefit: Minimum of RM30.00 per day (w.e.f. 1January 2014) Maximum RM118.50 per day EMPLOYER’S RESPONSIBILITY IN EMPLOYEE MEDICAL CASE (CONT’D)
  • 21.© i-HR ConsultingSdn Bhd Permanent Disablement Benefit by SOCSO How to claim? Application for permanent disablement benefit must be made in writing through SOCSO office with the following documents: 1. Application letter 2. Photocopy Of Identification Card 3. Latest Medical Report EMPLOYER’S RESPONSIBILITY IN EMPLOYEE MEDICAL CASE (CONT’D)
  • 22.© i-HR ConsultingSdn Bhd STEPS TO BE TAKEN IN A MEDICAL BOARD OUT SITUATION Step 1: The HR department together with the employee’s superior will make an initial assessment on whether the employee is able to perform his/her work. Once it has been established that the employee is unable to perform the work, the following three steps will apply: Step 2: The company will go about determining the extent the employee’s disability is hampering his/her ability to perform the job. This will normally involve: a) Discussions with the employee; b) Discussions with the employee’s immediate superior and departmental head; c) Interviews and/or medical reports obtained by doctors treating the employee. The company also has the right to require the employee to go to another medical specialist in seeking an independent medical opinion of the employee’s medical condition.
  • 23.© i-HR ConsultingSdn Bhd STEPS TO BE TAKEN IN A MEDICAL BOARD OUT SITUATION Step 3: The company will then take steps to inquire into ways that it can adapt the work’s circumstances to accommodate the employee’s disability. If this cannot be achieved, the company will then explore to what extent it can adapt the employee’s work duties. This will normally involve exploring means such as placing the employee in a different job scope more accommodating to his disabilities (within his current department) or reducing / reorganising the employee’s work hours. Step 4: The company will then enquire whether there is any suitable work within the company for the employee. This will involve the company considering alternatives such as vacancies existing within the company that are more suitable for the employee. If no alternatives can be found to accommodate the employee at this stage, the company will commence medical board-out procedures.
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