Back
2014 MarsdenLR 1419
HIGH COURT MALAYA PULAU PINANG
TOKIO MARINE INSURANS (MALAYSIA) BERHAD – Appellant
Versus
TAN KOOI LUANG & ANOR – Respondent
[Application For Judicial Review No: 25-12-02/2013]
The principle of constructive dismissal requires clear evidence of a significant breach of contract by the employer, alongside the need for mala fides, which must be specifically pleaded and proven.
Headnote:(A) Industrial Relations Act, 1967 - Judicial review of Industrial Award - Constructive dismissal - Award No 1519 of 2012 held the employee constructively dismissed without just cause - Judicial review application challenging the finding as irrational and perverse. The case arose from the re-designation of the First Respondent from Branch Manager to Manager, Marketing Corporate, without any change in salary or basic employment terms. The court analyzed evidence and established that the re-designation did not amount to a fundamental breach of contract despite the employee’s claims of being sidelined. The court emphasized the binding nature of pleadings and the necessity to establish mala fides for constructive dismissal claims. The Employee's contentions were unsubstantiated, leading the court to quash the 2012 Award and rule in favor of the Applicant. (Paras 1-112)
Facts of the case:
The First Respondent commenced employment as Branch Manager on 1 November 2002. In 2004, following notice of a re-designation, he was officially re-designated without a change in terms of employment. He alleged constructive dismissal due to reduced responsibilities and claimed a fundamental breach of contract.
Findings of Court:
The Industrial Court found the First Respondent constructively dismissed; however, this decision was based on erroneous facts and legal standards. The High Court ruled that the Industrial Court's findings were unsupported by evidence and quashed the award.
Issues: Whether the re-designation constituted constructive dismissal, and if the Industrial Court correctly applied the relevant legal principles in its finding.
Ratio Decidendi: The High Court ruled that constructive dismissal claims require evidence of a significant breach and mala fides. The Industrial Court failed to adhere to the contract test and improperly relied on unreasonable assessments. Thus, the findings were quashed.
Result: Judicial review granted; Award No 1519 of 2012 quashed.
| Table of Content |
|---|
| 1. application for judicial review. (Para 1 , 2 , 3) |
| 2. employment contract terms and transfer implications. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 40) |
| 3. background facts of employment and re-designation. (Para 13 , 14 , 15 , 16 , 17 , 18) |
| 4. principles of constructive dismissal. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26) |
| 5. employer's right to transfer employees. (Para 27 , 28 , 29 , 30 , 31 , 32) |
| 6. judicial review standards and findings. (Para 48 , 49 , 50 , 52) |
| 7. quashing of the industrial court's ruling. (Para 56 , 57 , 58 , 59) |
[1] This is an application for judicial review pursuant to O 53 Rules of 2012 to issue an order of Certiorari to quash the award of the Industrial Court by way of Award No 1519 of 2012 ("the 2012 Award"). In the 2012 Award the Industrial Court held that the First Respondent was constructively dismissed without just cause or excuse by the Applicant.
[2] I have deliberately described Award No 1519 of 2012 as the 2012 Award so as to distinguish it from an earlier award (Award No 1222 of 2010), which relates to the same matter and handed down in 2010 ("the 2010 Award"). The 2010 Award was quashed by the High Court and the case was remitted to the Industrial Court for a second hearing before a different Chairperson.
[3] Thus, the 2012 Award is the product of the second hearing before the Industrial Court and the decision that was given was based on, inter alia, the notes of evidence and documents that were presented in the first hearing. The Industrial Court heard submissions afresh. However, there was no fresh viva-voce evidence that was adduced before the Industrial Court in the second hearing.
Background Facts
[4] The facts leading to this application are these. The First Respondent commenced employment with the Applicant as the Branch Manager of the Applicants Penang branch on 1 November 2002 pursuant to a letter of appointment dated 17 October 2002.
[5] It was an express term of the First Respondents contract of employment that the Applicant had the discretion to transfer the First Respondent. The transfer clause reads as follows:
"Transfer - The Company may at its discretion transfer you to another location (domestic or international), section, department, division, subsidiary or associated company where your services are required."
[6] The narrative of the events, which formed the basis for the First Respondents complaint of constructive dismissal are as follows.
[7] On or around 3 August 2004, the First Respondent was informally notified that a re-designation was imminent. On that date the Applicants General Manager, Marketing Agency & Branches had a meeting with the First Respondent where he was informed in advance that:
i) he will be re-designated to the position of Manager, Marketing Corporate to replace Mr Koh Chin Cheng who was a Senior Manager;
ii) the re-designation was due to the business interest of the Applicant as well as his own interest; and
iii) the re-designation would not affect the terms and conditions of his employment.
[8] Thereafter, by a letter dated 27 August 2004 titled "job re-designation", the First Respondent was officially re-designated from the position of Branch Manager to that of Manager, Marketing Corporate with effect from 13 September 2004. The letter reads as follows:
"Job Redesignation
The Management wishes to advise that effective 13 September 2004 there will be a change in your job designation and reporting line.
You will be redesignated as Manager, Marketing Corporate, and will direct (sic) report to Mr Jayakumar, General Manager for Marketing Corporate.
Your terms and conditions as reflected in the employment letter dated 17 October 2002 shall remain unchanged.
Attached herewith is the new job description effective 13 September 2004 for your reference. We hope that with this change, you will continue to contribute to the success of the company."
[emphasis added]
[9] There was no immediate response by the First Respondent in that he did not initially raise any o
