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2021 MarsdenLR 4005
HIGH COURT MALAYA MUAR
TOP EMPIRE SDN BHD – Appellant
Versus
SANTHI RAHMAN & ANOR – Respondent
[Civil Appeal No: JB-16-1-01/2021]
Failure to comply with statutory notice and inquiry requirements leads to constructive dismissal and entitles employees to termination benefits under the Employment Act 1955.
Headnote:(A) Employment Act 1955 – Section 14 – Appeal against decision of the Labour Department – Conduct of the employer in suspending employees without follow-up and failing to conduct due inquiry upheld as constructive dismissal – Employees entitled to termination benefits despite employer's claims of operational issues due to pandemic restrictions. (Paras 1-3, 60-77)
(B) Constructive Dismissal – Employees not recalled to work post-suspension for five months without reason – Employer's actions revealed intention not to adhere to contract terms. (Paras 30, 36)
(C) Right to a fair inquiry – Lack of due process and natural justice breached, affecting the validity of dismissal. (Paras 50, 62)
Facts of the case: Two employees (husband and wife) were suspended by employer under ambiguous circumstances and not recalled for several months, resulting in their claim for benefits.
Findings of Court: The employer's failure to comply with the Employment Act regarding notice and inquiry procedure established constructive dismissal.
Issues: The legality of the suspension, adherence to statutory notice, and fairness of dismissal proceedings.
Ratio Decidendi: Upholding the principle that employers must adhere strictly to statutory and procedural requirements when terminating employment to ensure fairness and justice.
Result: Appeal dismissed, ruling in favor of employees' claims for termination benefits.
JUDGMENT
Introduction
[1] This is an appeal against the decision of the Director-General of Labour Department sitting in Muar which was given on 3rd December 2020 whereby the Director-General of Labour made the following awards:
i. That Top Empire Sdn Bhd (Company No. 269493-K) whose address for service is at No. 16037 Jalan Teknologi 6, Kawasan Perindustrian Tangkak, 84900 Tangkak, Johore is to pay Santhi a/p Rahman and Sasitharan a/l Vasoo the sum of RM18,362-40 only.
ii. The payment is to be made within 14 days from the date of the award.
iii. Any late payment shall be subjected to a penalty which is calculated at the interest rate of 8% per annum on all outstanding sum and the interest is to be calculated from last day of each month until its full and final settlement.
[2] The Cause Papers are as follows:
i. Notice of Appeal. (Enclosure 1)
ii. Appeal Record. (Enclosure 3)
iii. Memorandum of Appeal. (Enclosure4)
iv. Supplementary Appeal Record. (Enclosure 6)
Background Facts
[3] The 1st Respondent started working with the Appellant on 17 November 2005 and there was an Employment Agreement vide a letter signed by parties on that date. Her last drawn salary was RM1,550-00.
[4] The 2nd Respondent started working with the Appellant on 1 January 2018. There was also an Employment Agreement vide a letter signed by the 2nd Respondent on 1st January 2018. His last salary was RM1295-00.
[5] Both Respondents (who are husband and wife) worked at the production line of the Appellant's factory.
[6] The Appellant alleged that both Respondents had disciplinary problems and had many verbal warnings and were suspended before this incident. Among the alleged disciplinary problems were coming in late for work, taking recess not at the specified allowed time and exceeding the time limits for such breaks, not following working instructions, negligent in carrying out their duties.
[7] It was further alleged that the Appellant had put up many reports for these disciplinary violations including warnings to terminate their employments but the Respondents were recalcitrant and had refused to change their ways.
[8] On the 7th March 2020, the 2 Respondents were suspended from work for a week but after the week passed, the Appellant did not call them back for work.
[9] The Appellant alleged that the Movement Control Order ("MCO") implemented by the Government to control the spread of the coronavirus SARS-CoV-2, that brought an illness called COVID19 which prevented it, from recalling the Respondents at the time, apart from various other issues.
[10] The 2 Respondents complained to the Labour Department seeking retrenchment benefits and back dated unpaid salaries on 14 September 2020 and the case was numbered as KBR No. 10104/2020/0135.
[11] The Labour Department held a hearing on 15th October 2020 at 10 a.m. with both Respondents present and one Tey Hiang Heng who acted as representative of the Appellant. During the hearing, the 1st Respondent told the Labour Officer that she and her husband were forced to take unpaid leaves on the ground that there were factory shutdowns. She was not satisfied because only she and her husband were affected and no one else.
[12] When she was suspended on 7 March 2020 for a week, she was told by one Encik Sumip that he will call her back for work but the call never came through. After the complaint to the Labour Department the Appellant called her to the office on 3 September 2020, when both Respondents went to the office. The 1st Respondent was told by an officer of the Appellant that her March salary will be paid if she withdrew her complaint at the Labour Department. Mr Tay Hiang Heng (a representative of the Appellant) gave evidence before the Labour Officer that from September 2019 until December 2019 the 1st Respondent's records were bad and she was often late for work as well as playing truant.
[13] The Management of the Appellant alleged that it had to suspend her from 7 March 2020. On 25 August 2020 Enci
