TENGKU MOHD HASMADI BIN TENGKU HASHIM

INDUSTRIAL COURT OF MALAYSIA

CASE NO: 22(26)(22)/4-398/16

BETWEEN

TENGKU MOHD HASMADI BIN TENGKU HASHIM

AND

KONSORTIUM TRANSNASIONAL BERHAD (KTB)

AWARD NO: 1509 OF 2019

BEFORE : Y.A. DATO' FREDRICK INDRAN X.A. NICHOLAS

CHAIRMAN

VENUE : Industrial Court Malaysia, Kuala Lumpur.

DATE OF REFERENCE : 06.01.2016.

DATES OF MENTION : 11.03.2016, 01.06.2016, 01.09.2016, 04.10.2016,

14.12.2016, 13.02.2017, 20.03.2017, 02.05.2017,

13.06.2017, 26.07.2017, 08.08.2017, 19.02.2018,

12.04.2018.

DATES OF HEARING : 13.09.2018, 14.09.2018, 03.12.2018, 02.11.2018,

13.12.2018, 14.12.2018.

REPRESENTATION : Mr. Muhendaran Suppiah together with Ms. Srividhya

Ganapathy(Claimant’s Counsel)

Messrs Muhendaran Sri

(Solicitors for the Claimant)

Mr. A. Ramadass together with Ms. Kavitha

Thilagar(Company’s Counsel)

Messrs Ramadass & Associates

(Solicitors for the Company)

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AWARD

The Reference:

1. Tengku Mohd Hasmadi bin Tengku Hashim (‘the Claimant’), ceased from his

erstwhile service at Konsortiun Transnasional Berhad (KTB) (‘the Company’) with

effect from 1.4.2015.

2. The Claimant, being aggrieved by the circumstances surrounding the cessation of

his employment, made written representations to the Director General for Industrial

Relations, Malaysia on 3.4.2015; under s. 20 (1) of the Industrial Relations Act 1967

(‘the Act’). The said representations were duly entertained by the said Director

General as it was formally; and regularly filed well within the sixty-day period ~

allowed under s. 20 (1A) of the Act.

3. The conciliatory exertions thereafter undertaken by the said Director General’s

office in pursuance of that representation turned out to be unsuccessful; wherefore

that office, being convinced that the matter could not be amicably resolved thereat,

duly notified the Honourable Minister of Humans Resources, Malaysia; of that failed

reconciliation process. This notification was made pursuant to s. 20 (2) of the Act.

4. Upon the perusal of this notification and its ancillary papers; and by virtue of s.20

(3) of the Act, the Honourable Minister found it appropriate to exercise those powers

under that section to refer this matter to the Industrial Court of Malaysia for due

determination and final disposal.

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5. As a result, the Claimant’s initial representations were transformed into a

Ministerial Reference for an Award before this Court. The said Ministerial Order

was dated 6.1.2016; which was received by this Court’s Registry at Kuala Lumpur on

12.2.2016.

6. Prior to the commencement of the trial of this case before this Court, the said

Ministerial Reference took the route of a judicial review to and through our superior

courts. A stay of proceedings was granted with regard to the proceedings here, by

the High Court, in the second quarter of 2016. Having exhausted that judicial

process and upon the Federal Court disallowing leave to appeal thereto, it was finally

remitted to this Court to proceed with the matter. The instant Court was informed of

the same on 12.4.2018; whereupon the required directions on certain outstanding

issues were handed down; and this matter set down for hearing commencing from

13.9.2018. The trial then went on from that date; and from time to time, until

13.12.2018.

7. The Company then filed its written submissions and authorities on 7.2.2019;

whereupon the Claimant replied with his response on 4.3.2019. To this the Company

replied on 14.3.2019.

8. All that remains, is for this Court to hand down its written Award, which it does by

this:

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The Matrix:

9. The Claimant commenced employment at an entity called Nadicorp Holdings Sdn.

Bhd. (‘Nadicorp’) as its General Manager with effect from 1.9.2003, on a fixed term

contract of 2 years; expiring on 31.8.2005 (see Exhibit ‘CL-1’ in the Statement of Case).

Notwithstanding the expiry of his contract on the said date, the Claimant continued in

his employment and went on to be appointed as a Director of the said company on

27.9.2005.

10. With effect from 1.1.2006 the Claimant was promoted to the position of Chief

Operating Officer of the Transport Division encompassing all the transport entities

under Nadicorp (see Exhibit ‘CL-2’ in the Statement of Case).

11. Vide a letter dated 1.2.2007 (see Exhibit ‘CL-3’ in the Statement of Case), the

Claimant was informed that he had been transferred from Nadicorp to the

respondent Company in this case, following the Company’s listing in Bursa Malaysia.

Also, vide a Board of Directors special meeting convened on 23.5.2007 the Claimant

was appointed as Executive Director of the Company with effect from 1.6.2007, with

the commensurate variation to his salary and benefits (see Exhibit ‘CL-4’ in the

Statement of Case).

12. The Claimant’s role as the Chief Operating Officer / Executive Director are set

out in Clause 8 of the Statement of Case.

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13. The Claimant continued in this position until 30.3.2015; when upon returning

from a stint of annual leave, he was rather taken aback to receive a memorandum

dated 13.3.2015, which had been circulated to all the Company’s personnel, that

announced that one Muhammad Hariz Mohd Nadzmi was to be appointed as the

Company’s Head of Group Support Services with effect from 1.4.2015 (see Exhibit

‘CL-6’ in the Statement of Case).

14. This Muhammad Hariz Mohd Nadzmi happened to be the son of the Company’s

Chairman / Managing Director.

15. This impugned action by the Company had been initiated and carried out sans

the prior knowledge of, nor in consultation with the Claimant; and was ostensibly in

breach of the “Limits of Authority” set previously by the Board of Directors (see pages

36 to 42 of bundle marked ‘C’).

16. Feeling aggrieved by this unilateral action by the Company the Claimant issued

the following missive dated 1.4.2015 (reproduced in exact copy here):

~ the remainder of this page is intentionally left blank ~

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(*1)

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17. The Claimant is now before this Court to seek the appropriate relief for what he

believes to have been fundamental breaches by the Company of his contract of

employment; thus considering himself as constructively dismissed.; whilst the

Company is of a contrary view; and urges this Court to view his cessation of

employment as a voluntary resignation and/or an abandonment of his job.

18. At the time of his cessation of service it is undisputed that the Claimant’s total

remuneration was as set out in Clause 26 of the Statement of Case (reproduced

here for ease of reference):

(*2)

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The Issue:

19. The factual matrix of this case puts it squarely under the domain of what has

become known as “constructive dismissal” within the realms of Malaysian Industrial

jurisprudence. The issue consequently is two-fold - the first to be answered in the

affirmative - before there is a need for the second to be deliberated upon, i.e.:

i) was there a dismissal - de facto & de jure?

{And, if established in the affirmative by the facts and circumstances of the case ….}

ii) was the said (constructive) dismissal with just cause or excuse?

20. As groundwork for the consideration of this “two-fold question” it is perhaps best

that we first reconnoiter the established industrial jurisprudence in this type of

Industrial Court case.


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The ‘General Law’ followed by the ‘Specifics’:

The General Law:

21. When dealing with a reference under section 20 of the Industrial Relations Act,

1967 the first thing that the Industrial Court has to consider is the question of

whether there was, in fact, a dismissal. If this question is answered in the

affirmative, it must only then go on to consider if the said dismissal was with or

without just cause or excuse. Reference is drawn to that noteworthy utterance of the

then Lord President, the Right Honourable Mr. Justice Tun Salleh Abas in the case

of WONG CHEE HONG v. CATHAY ORGANISATION (M) Sdn. Bhd. [1988] 1 CLJ

45; [1988] 1 CLJ (Rep) 298 (of the then Supreme Court of Malaysia), which has

practical relevance here; it goes like this:

“When the Industrial Court is dealing with a reference under s. 20, the first thing that

the Court will have to do is to ask itself a question whether there was a dismissal, and

if so, whether it was with or without just cause or excuse.”

22. In GENERAL CONTAINERS Sdn. Bhd. v. YIP SIEW LING (Award No. 418 of

1994) it was stated:-

“It is a trite principle of industrial law that only a workman who has been dismissed

by his employer may seek the remedies available under section 20 of the IRA. This is

a jurisdictional fact which is more often than not a matter which is not disputed.

Where, however, the employer denies that he had dismissed the workman and alleges

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that it was the workman who had resigned, then the Industrial Court has the duty to

decide first of all the preliminary issue whether there was a dismissal. Once it is

established that there was a dismissal, the issue that is left for the court to decide is

whether or not the employer had just cause or excuse for dismissing the workman.”

[emphasis added]

23. In COLGATE PALMOLIVE Sdn. Bhd. v. YAP KOK FOONG [1998] 2 ILR 965

(Award No. 368 of 1998) it was held as follows: -

“In a section 20 reference, a workman’s complaint consists of two elements: firstly,

that he has been dismissed, and secondly that such dismissal was without just cause or

excuse. It is upon these two elements being established that the workman can claim

his relief, to wit, an order for reinstatement, which may be granted or not at the

discretion of the Industrial Court. As to the first element, industrial jurisprudence as

developed in the course of industrial adjudication readily recognizes that any act

which has the effect of bringing the employment contract to an end is a ‘dismissal’

within the meaning of section 20. The terminology used and the means resorted to by

an employer are of little significance; thus, contractual terminations, constructive

dismissals, non-renewals of contract, forced resignations, retrenchments and

retirements are all species of the same genus, which is ‘dismissal’.”

[emphasis added]


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The Specific Jurisprudence on Constructive Dismissal:

24. In the case of RAVI CHANTHRAN S SITHAMBARAM v. PELITA AKADEMI

Sdn. Bhd. [2007] 1 ILR 475 (Award No. 130 of 2007) the instant Court held @ 483

that: -

“Constructive dismissal is a creation of the law, a fiction, where a workman ceases

employment on his own volition as a result of the conduct of his employer and

thereupon claims that he has been dismissed. As with all legal fictions it is subject to

strict requirements being proved for it to sustain itself as a dismissal de facto and de

jure; and not convert into a (voluntary) resignation; where those prerequisites are

wanting.”

25. The principle underlying the concept of ‘constructive dismissal’, a doctrine that

has been firmly established in our industrial jurisprudence, was expressed by Tun

Salleh Abas LP in the case of WONG CHEE HONG v. CATHAY ORGANISATION

(M) Sdn. Bhd. (supra) in the following manner: -

“The common law has always recognized the right of an employee to terminate his

contract and therefore to consider himself as discharged from further obligations if the

employer is guilty of such a breach as affects the foundation of the contract, or if the

employer has evinced an intention not to be bound by it any longer.”

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26. In WESTERN EXACAVATING Ltd. v. SHARP [1978] 1 QB 761 (The Court of

Appeal) that late and great English judicial-luminary Lord Denning adroitly elucidated

this doctrine as follows:

“If the employer is guilty of conduct which is a significant breach going to the root of

the contract, or which shows that the employer no longer intends to be bound by one

or more of the essential terms of the contract, then the employee is entitled to treat

himself as discharged from any further performance. If he does so, then the employee

terminates the contract by reason of the employer’s conduct. He is constructively

dismissed. The employee is entitled in those circumstances to leave at the instant

without giving any notice at all or, alternatively, he may give notice and say he is

leaving at the end of the notice. But the conduct must in either case be sufficiently

serious to entitle him to leave at once. Moreover, he must make up his mind soon after

the conduct of which he complains; for, if he continues for any length of time without

leaving, he will lose his right to treat himself as discharged. He will be regarded as

having elected to affirm the (varied) contract.”

27. In ANWAR bin ADDUL RAHIM v. BAYER (M) Sdn. Bhd. [1998] 2 CLJ 197 His

Lordship Mahadev Shanker J. decreed as follows: -

“It has been repeatedly held by our courts that the proper approach in deciding

whether constructive dismissal has taken place is not to ask oneself whether the

employer’s conduct was unfair or unreasonable (the unreasonableness test) but

whether ‘the conduct of the employer was such that the employer was guilty of a

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breach going to the root of the contract or whether he has evinced an intention no

longer to be bound by the contract’ ” [emphasis added].

28. [See also the cases of HOLIDAY INN, KUCHING v. ELIZABETH LEE CHAI

SIOK [1992] 1 CLJ 141; WONG CHEE HONG v. CATHAY ORGANISATION (M)

Sdn. Bhd. (supra) and KONTENA NASIONAL Bhd. v. HASHIM ABD RAZAK

[2000] 8 CLJ 274].

29. And in; LEONG SHIN HYUN v. REKAPACIFIC Bhd. & Ors. [2001] 2 CLJ 288

the High Court referred with approval to the principle stated in the case of LEWIS v.

MOTORWORLD GARAGES Ltd. (C.A.) [1986] ICR 157 which was as follows:

“It is now well established that the repudiatory conduct may consist of a series of act

or incidents, some of them perhaps quite trivial, which cumulatively amount to a

repudiatory breach of the implied term of the contract of employment, that the

employer will not without reasonable and proper cause conduct himself in a manner

calculated or likely to destroy or seriously damage the relationship of confidence and

trust between employer and employee.”

30. The case above must be read together with the English Employment Appeal

Tribunal case of WOODS v. WM CAR SERVICES (Peterborough) Ltd. (1981) IRLR

p. 307 where it was said: -

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“In cases of constructive dismissal, an employee has no remedy even if his employer

has behaved unfairly, unless it can be shown that the employer’s conduct amounts to a

fundamental breach of the contract. Experience has shown that one of the

consequences of the Court of Appeal’s decision in Western Excavating (ECC) Ltd.

V. Sharp has been that employers who wish to get rid of an employee, or alter the

terms of his employment without becoming liable either to pay unfair dismissal

compensation or a redundancy payment have resorted to methods of “squeezing out”

an employee. Stopping short of any major breach of the contract, such an employer

attempts to make the employee’s life so uncomfortable that he resigns or accepts the

revised terms. Such an employer, having behaved in a totally unreasonable manner,

then claims that he has not repudiated the contract and therefore the employee has no

statutory right to claim either a redundancy payment or compensation for unfair

dismissal. For this reason, the implied term that the employers will not, without

reasonable and proper cause, conduct themselves in a manner calculated or likely to

destroy or seriously damage the relationship of mutual confidence and trust is of great

importance.”

31. [See also the case of UNITED BANK Ltd. v. AKHTAR (1989) IRLR 507 where

Knox J. held that this is an “overriding obligation” that an employer owes to his

employee].


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32. Dr. Dunston Ayadurai in his text Industrial Relations In Malaysia: Law &

Practice 3rd Edition at page 297 states: -

“A workman can seek a remedy under section 20 only if he had been dismissed. More

often than not, there is no dispute that there was an actual dismissal of the workman

by his employer. The only issue for the Industrial Court to determine is whether the

dismissal had been for just cause or excuse, the onus of proving the existence of the

same being cast upon the employer. Where, however, the workman’s claim for

reinstatement under section 20 is founded on a constructive and not an actual

dismissal, the workman is basing his claim on the repudiatory conduct of the

employer which gave him the option to treat the contract as having been terminated.

Consequently, in section 20 proceedings of this type, the onus of proving that he has

been constructively dismissed by his employer is cast on the workman.”

33. [See also the case of CHUA YEOW CHER v. TELE DYNAMIC Sdn. Bhd. [1999]

1 LNS 104].

34. The learned author went on to say on the same page of his authoritative text: -

“To prove that he has been constructively dismissed, it will be necessary for the

workman to establish the following:

(a) that the employer had by his conduct breached the contract in

respect of one or more of the obligations, owed to the workman;

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the obligations breached may be in respect of either express terms

or implied terms, or of both;

(b) that the terms which had been breached go to the foundation of the

contract; or, stated in other words, the employer had breached one

or more of the essential terms of the contract;

(c) that the workman, pursuant to and by reason of the aforesaid

breach, had left the employment of the employer; that is, that the

workman had elected to treat the contract as terminated; and

(d) that the workman left at an appropriate time soon after the breach

complained of; that is, that he did not stay on in such

circumstances as to amount to an affirmation of the contract,

notwithstanding the breach of the same by the employer.”

35. Once these preconditions for constructive dismissal have been established by

the Claimant in reference to a dismissal under section 20 of the Act, the Industrial

Court then moves into the next limb of inquiry; and that is to determine whether the

employer had just cause or excuse for the dismissal.

36. Here the burden shifts upon the employer.


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37. Raus Sharif J. in PELANGI ENTERPRISES Sdn. Bhd. v. OH SWEE CHOO &

Anor. [2004] 6 CLJ 157 refers to this ‘shift of the burden’; calling that upon the

workman as “the first burden of proof” at page 165 and that upon the employer as

the “second burden of proof” at page 166.

38. And where this onus or burden of proof is upon any party in an Industrial Court

case, it is to be proved by that party to a standard of a balance of probabilities (see

UNION of CONSTRUCTION, ALLIED TRADES AND TECHNICIANS v. BRAIN

[1981] ICR 542, [1981] IRLR 224, CA; SMITH v. CITY of GLASGOW DISTRICT

COUNCIL [1987] ICR 796, [1987] IRLR 326, HL; POST OFFICE (Counters) Ltd V.

HEAVEY [1990] ICR 1, [1989] IRLR 513, EAT; IREKA CONSTRUCTIONS BERHAD

v. CHANTIRAVATHAN a/l SUBRAMANIAM JAMES [1995] 2 ILR 11 and

TELEKOM MALAYSIA KAWASAN UTARA v. KRISHNAN KUTTY SANGUNI NAIR

& Anor. [2002] 3 CLJ 314).

39. For further legal authority on the principles canvassed above see also the cases

of: -

MPH BOOKSTORES Sdn. Bhd. v. LIM JIT SENG [1987] 1 ILR 585;

WIRA SECURITY SERVICES Sdn. Bhd. v. ABDUL RAZAK ABDUL LATIFF

[1996] 2 ILR 1396 (Award No. 526 of 1996);

MOO NG v. KIWI PRODUCTS Sdn. Bhd. JOHOR & Anor. [1998] 3 CLJ 475;

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WELTEX KNITWEAR INDUSTRIES Sdn. Bhd. v. LAW KAR TOY & Anor.

[1998] 7 MLJ 359;

QUAH SWEE KHOON v. SIME DARBY Bhd. [2000] 2 MLJ 600;

LIFELONG STAINLESS EXHAUST (M) Sdn. Bhd. v. TAN DEE MEI [2004] 1

ILR 1037;

TENG TONG KEE v. NIKMAT JASA PILING Sdn. Bhd. [2006] 1 CLJ 1199;

FEDERAL AUTO HOLDINGS Bhd. & Anor. v. MD MAZLAN ABD HALIM

[2010] 1 ILR 358 (Award No: 39 of 2010);

CARSEM (M) Sdn. Bhd. v. GOPALA KRISHNAN A/L K. VELLASAMY

(Award No. 1012 of 2010); and

SARAH LOUISE NEILD-LE CONTE v. THE INTERNATIONAL SCHOOL OF

PENANG [2014] 3 ILR 55 (Award No: 357 of 2014).


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A Short Preamble to the Evidence

40. In an effort to be free of the drag and load of an excess of detail; and the

redundant repetition of evidence that can, with no trouble, be found in the notes of

evidence of this case, I will attempt to distil its appraisal to its essence. As a

precondition for this exercise, surplus detail of inefficacious minutiae that have no

tangible significance to the decision making process, will be left out; and the

narrative of the evidence be whittled down to the essentials. Unless otherwise

indicated in the context, this narration is an amalgam of the plausible evidence which

was presented in this case; and more importantly, upon which the final order is

based.

The Evidence:

The Claimant’s Perspective

41. The Claimant’s case, in gist, was that he claimed constructive dismissal as the

events of March 2015, when taken cumulatively, not only humiliated the Claimant but

also undermined his position and authority as the Chief Operating Officer / Executive

Director. Prior to the said measures, the Claimant was solely responsible for the

group operations and the group support services. He oversaw 10 subsidiaries within

the group which comprised approximately 3000 employees.

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42. The purported “restructuring” which was to take effect from 1.4.2015 was in point

of fact the rearrangement of only the Claimant’s roles and responsibilities; and no

one else; done without any notice, consultation, approval or even “by your leave” of

the Claimant; and was in clear breach of the delegation of the “Limits of Authority”

issued by the Board of Directors. This exercise removed a considerable portion of

the Claimant’s responsibilities; which was handed over to the Company Chairman’s

son ~ a 27-year-old at the time who, according to the Claimant, had not even

completed his studies.

43. This, the Claimant stoutly believed, constituted explicit conduct which reflected

that the Company was guilty of a breach going to the root of his contract of

employment and/or evinced an intention no longer to be bound by the said contract.

44. To reinforce his point of view, the Claimant referred to 2 charts which reflected

the organizational arrangements of the Company; the original and the restructured -

which led to the circumstances before this Court.

45. Chart 1 (see Exhibit ‘CL-5’ in the Statement of Case – exact copy follows below) shows

the original state of affairs at the Company which was in place since 1.10.2014:


21

(*3)

22

46. Chart 2 (see Exhibit ‘CL-7’ in the Statement of Case – exact copy follows below) shows

the restructured set up that had upset the Claimant:

(*4)

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The Company’s Position

47. It is the Company position that its Chairman / Managing Director (witness

designated ‘COW 1’ ~ Tan Sri Mohd. Nadzmi bin Mohd. Salleh) had replied to the

Claimant’s letter of 1.4.2015 ((*1)) the next day, denying the contention of

constructive dismissal and went on to explain the decision to reorganize the

Company’s departments thus (exact copy):

(*5)

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48. As the Claimant was dissatisfied over the restructuring exercise the Company

decided to restore two departments to the Claimant, as reflected in a Memo dated

2.4.2015 and an Organizational Chart of even date (exact copy follows):

(*6)

25

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49. This effort by the Company was of no avail with regard to the Claimant, who

refused to report back to work as instructed whilst maintaining that the breach had

not in fact been remedied by the Company.

50. COW 1’s position was that this exercise was his “succession plan” for what he

perceived to be his company, notwithstanding insouciantly that it was in fact a

public listed company.

The Claimant’s Response

51. The 3rd Organizational Chart (see (*6) above) hardly changed his unilaterally

altered position in that, 2 new positions were created, which were lateral to his. His

pre-eminent place as in Chart 1 was now shared with and indeed diluted by the

Chairman’s son and one other, who incidentally, had been previously a subordinate

of his. Where he was once solely and directly responsible to the Chairman; he now

would have to share that honour, privilege and responsibility with two others, one of

whom, as already stated, was the Chairman’s young and inexperienced son; and in

all the circumstances of the case & in reality was no different to Chart 2 (see (*4)

above) which was the root cause of all the trouble, in the first place. Further, these 2

new positions; and particularly that of the Chairman’s son, had the continuing effect

of removing from him (the Claimant) the duties and responsibilities as Head of

Support Services.


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Supplementary Point

52. To complete the picture, it must be stated that there was further exchange of

correspondences between the parties hereto; where, in essence, the Company

refuted the Claimant’s stand on constructive dismissal, pleading good faith in their

actions and instructing the Claimant to report back to work immediately; whilst the

Claimant repeatedly reiterated his position on the issue and the fact that the

Company had not, as a matter of fact, redressed and/or remedied their breach of his

contract of employment ~ … amongst other things (see Exhibits ‘CL-10’, ‘CL-11’, ‘CL-

12’, ‘CL-13’ & ‘CL-14’ in the Statement of Case).

The Evaluation:

Was there a Fundamental Breach of the Contract of Employment?

53. The crucial point here is to ascertain what term(s) the employer is alleged to

have breached. Having identified that the Court will have to consider whether the

said term(s) were essential to the contract of employment. For this the Court will

have to assess the evidence adduced to determine whether the employer had by its

conduct committed such a breach of contract as to entitle the Claimant to consider

himself constructively dismissed.

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54. In LEWIS v. MOTORWORLD GARAGES Ltd. (supra). Glidewell L.J. stated the

principle as follows: -

“In order to prove that he has suffered constructive dismissal, an employee

who leaves his employment must prove that he did so as the result of a breach

of contract by his employer, which shows that the employer no longer intends

to be bound by an essential term of the contract ….”

55. In that case the employee had claimed that the employer’s repudiatory breach

was that of the implied term that “the employer would not undermine the

relationship of mutual trust and confidence between employer and employee”.

56. And in relation to “implied terms”, Lord Reid in STERLING ENGINEERING Co.

Ltd. v. PATCHETT [1955] AC 534 said:

“Strictly speaking, I think that an implied term is something which, in the

circumstances of a particular case, the law may read into the contract if the parties

are silent, and it would be reasonable to do so; it is something over and above the

ordinary incidents of the particular type of contract …. But the phrase ‘implied term’

can be used to denote a term inherent in the nature of the contract which the law will

imply in every case unless the parties agree to vary or exclude it.”

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57. Upon considering all the evidence before it, this Court finds that the Claimant has

succeeded in establishing the breach of the following implied essential term of the

contract of employment by the Company; and that is of preserving the relationship

of mutual trust and confidence between employer and employee. He (the

Claimant) was expected, despite the perhaps somewhat indecorous treatment that

he was subject to by the unilateral exercise of removing a portion of his

responsibilities, to resume his altered responsibilities as usual and to undertake

his duties in good faith, at the instance of the Company.

58. That implied & essential term of his contract of employment of preserving that

relationship of mutual trust and confidence between employer and employee,

i.e. that “overriding obligation” that an employer owes to his employee [see UNITED

BANK Ltd. v. AKHTAR (supra)]; has effectually been breached by the Company in

this case; thereby placing the Claimant into a position of reasonably perceiving that

he was being “squeezed out” of employment [see WOODS v. WM CAR SERVICES

(Peterborough) Ltd. (supra)]. The fact that there may be elements adduced in

evidence of perhaps an anticipatory breach here does not digress from the point, for

in the case of MOO NG v. KIWI PRODUCTS Sdn. Bhd. Johor & Anor. [1998] 3

CLJ 475 Abdul Malik Ishak J. held at page 497 at paragraph h that:

“In a broad sense constructive dismissal occurs when an employer repudiates a

contract of employment. The repudiation may take the form of a breach, anticipatory

breach or notice of intention. It may be express or implied and it must go to the

substance of the contract.” [emphasis added]

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59. Further in that case and at page 498 the learned Judge referred to the definition

of constructive dismissal by Lambert JA in the case of FARQUHAR BUTLER

BROTHERS SUPPLIES Ltd. 23 BCLR (2d) 89 @ 92, which went like this:

“A constructive dismissal occurs when the employer commits either a present breach

or an anticipatory breach of a fundamental term of a contract of employment, thereby

giving a right, but not an obligation, to treat the employment contract as being at an

end ….” [emphasis added]

60. In such circumstances, the doctrine of constructive dismissal in this s. 20 claim

for reinstatement can be called in aid to establish the jurisdictional fact that there had

been a dismissal in this case. Thus, in law and applying the legal fiction of this

doctrine, there is a dismissal in the instant case notwithstanding that the Company

had not literally “dismissed” the Claimant; but rather had forced him to leave his

employment by their repudiatory conduct; and so be it the ruling of this Court, in this

case.

Did the Claimant leave the employment of the Company by reason of the

Company’s conduct, at the appropriate time?

61. This Court finds that the Claimant had put in his resignation when he did solely

by reason of the repudiatory conduct of the Company. He had therefore rightly

exercised his option to bring the contract of employment to an end.

31

62. Under the circumstances, it is the finding of this Court that the Claimant, by

tendering his resignation when he did, had acted decisively and had not failed or

delayed in acting firmly in refusing to accept; and indeed by this very action, had

protested against the Company’s breach of a fundamental term of his contract of

employment.

Did the Company have just cause or excuse for causing the constructive

dismissal?

63. The burden here is upon the Company to show on a balance of probabilities that

the Claimant’s termination from employment was for just cause or excuse [see then

cases of UNION CONSTRUCTION, ALLIED TRADES AND TECHNICIANS v.

BRAIN [1981] IRLR 224; SMITH v. CITY of GLASGOW DISTRICT COUNCIL

[1985] IRLR, Court of Session; IREKA CONSTRUCTIONS BERHAD v.

CHANTIRAVATHAN a/l SUBRAMANIAM JAMES [1995] 2 ILR 11 and TELEKOM

MALAYSIA KAWASAN UTARA v. KRISHNAN KUTTY SANGUNI NAIR & Anor.

[2002] 3 CLJ 314].

64. This whole case revolved around the Claimant’s grievance against the

restructuring of his duties and responsibilities almost by way of ambush. The

Company abdicated its responsibility to adequately address the issue, or indeed

address it at all effectively; in order to right the situation in a fair and rational manner.

Having thus relinquished its obligation at the relevant time in question, all that was

actually said in this Court was that the Organizational Chart was readjusted for the

3rd time to seemingly but not actually, put the Claimant back into his original position.

32

In the whole scheme of things in this case, it certainly comes across as a colourable

exercise of managerial authority and is clearly tainted by unfair labour practice.

67. To sum up, all the evidence, on a balance of probabilities, points to a strong

indictment against the Company which it is unable to refute. The consequence is that

the dismissal is found to be without just cause or excuse, and so it is the ruling of this

Court.

The Remedy:

68. Given the circumstances under which the parties hereto parted ways and also to

the amount of time that has elapsed therefrom, it would not be in the interest of

either party nor to the cause of industrial harmony as a whole, to order reinstatement

of the Claimant to his former post. Such being the banjaxed employment situation,

compensation in lieu of reinstatement and backwages shall be the alternative

remedy ordered here.

69. It is undisputed that the Claimant’s total remuneration was as set out in Clause

26 of the Statement of Case (reproduced above under (*2)). From this it is derived

the following:

Compensation in lieu of reinstatement:

33

70. It is undisputed that the Claimant had served the Company for a period of

approximately 12 years. The multiplier will therefore be 12 months, which for ease

of convenience is translated into 1 year.

71. The multiplicand shall be the Claimant’s annual salary and allowances as in

(*2) above ~ less ‘Child Education Assistance’; Insurance Coverage’; Telephone

Bills’; ‘Entertainment’; and ‘Medical Benefits (for Claimant & Family)’.

72. The multiplicand is therefore RM 818,505.00.

73. In the circumstance, compensation under this head amounts to RM 818,505.00

[RM 818,505.00 x 1].

Backwages:

74. In this case the effective date of constructive dismissal was 1.4.2015 (the date of

the Claimant’s letter marked as (*1) above) and the hearing of this reference was

effectively concluded on 13.12.2018, a period of 3 years and 8 months or so.

However, this court is mindful of the Second Schedule to the Act, introduced by the

Industrial Relations (Amendment) Act 2007 (Act A1322) which came into force on

28.2.2008 (PU(B) 84/08); which provides that back pay may be ordered from the

date of dismissal based on the last drawn salary but subject to a maximum of 24

months (i.e. 2 years) [emphasis added]

34

75. The amount of backwages hence awarded is RM 1,637,010.00 [RM 818,505.00

x 2].

Proviso:

76. As the principles of equity and good consciences have to be applied in the

exercise of discretion in the granting of monetary relief, consideration ought to be

had to the possibility of rescaling the monetary award ordered above. [see the case

of RAVI CHANTHRAN S SITHAMBARAM v. PELITA AKADEMI Sdn. Bhd. [2007]

1 ILR 475 (Award No. 130 of 2007) which dealt with the issue of ‘rescaling

compensation’]. To that end, this court will now reflect upon the head that it

considers possibly relevant under which the recompense may be rescaled; and in

the instant case it is under the head of:

“Gainful Employment”

77. In DR. JAMES ALFRED v KOPERASI SERBAGUNA SANYA Bhd. SABAH &

Anor [2001] 3 CLJ 541 Steve Shim CJ (Sabah and Sarawak) (as His Lordship then

was) ruled that the Industrial Court in assessing the quantum of backwages should

take into account the fact that a workman has been gainfully employed elsewhere

after his dismissal.

78. And in the case of PELANGI ENTERPRISE Sdn. Bhd. v. OH SWEE CHOO

(2001) 1 ILR 492 (Award No. 155/01) the learned Chairman, Y.A. Tuan John Louis

O’Hara (as His Lordship then was) remarked: -

35

“This Court is required to make an adjustment where the workman has found other

employment. In making the adjustment this Court has to be fair to both parties.”

Rescaling Compensation:

79. It is in evidence that the Claimant, due to his age and circumstance, did not

secure any regular employment after his termination from the Company; and was

surviving on his life savings. Whatever was said by the Claimant on this issue went

unchallenged by the Company.

80. Hence and under the circumstances, applying the relevant principles, this Court

does not see it fit to rescale the award for backwages to any extent.


36

The Final Order:

81. This Court now orders that the Company do pay the Claimant the sum of

RM 2,455,515.00 less statutory deductions for EPF contributions for the Claimant;

which sum is to be paid over to the EPF Board in favour of the Claimant, together

with the Company’s share (at 18%) of these contributions, not later than 45 days

from the date of receipt of this Award by the Company’s Solicitors. The above said

sum is made up as follows:

Compensation in lieu of reinstatement: RM 818,505.00

Backwages: RM 1,637,010.00

Total compensation before statutory deductions: RM 2,455,515.00

==============

Under My Hand.

HANDED DOWN AND DATED THIS 23rd DAY OF MAY, 2019.

-Signed-

( FREDRICK INDRAN X.A. NICHOLAS ) CHAIRMAN

INDUSTRIAL COURT OF MALAYSIA AT KUALA LUMPUR

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