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2024 MarsdenLR 1717
INDUSTRIAL COURT KUALA LUMPUR
ZULKARNAIN SHAH ABANG ZAIDI – Appellant
Versus
TENNOZ TECHNOLOGY SDN BHD – Respondent
Award No: 697 Of 2024 [Case No: 8/4-1332/23]
Non-payment of salaries constitutes a fundamental breach of contract, justifying a claim for constructive dismissal under the Industrial Relations Act 1967.
Headnote:(A) Industrial Relations Act 1967 – Section 20(3) – Constructive dismissal – Claimants alleged constructive dismissal due to non-payment of salaries for five months – Court finds non-payment constitutes a fundamental breach of contract – Claimants established conditions for constructive dismissal – Court awards back wages and compensation in lieu of reinstatement. (Paras 10, 41, 46, 68)
(B) Burden of proof – Claimants must prove employer's conduct amounts to a fundamental breach – Delay in leaving employment must not be deemed as condonation. (Paras 21, 22)
(C) Remedy – Reinstatement not appropriate due to breakdown of relationship – Monetary compensation awarded instead. (Paras 63, 66)
Facts of the case: Six Claimants employed by Tennoz Technology Sdn Bhd claimed constructive dismissal after non-payment of salaries from November 2022 to March 2023. (Paras 2, 10)
Findings of Court: Court finds non-payment of salaries for five months constitutes a fundamental breach of contract justifying constructive dismissal. (Paras 41, 46)
Issues: Whether the Claimants were constructively dismissed due to non-payment of salaries and if the delay in resigning constituted condonation. (Paras 17, 54)
Ratio Decidendi: The court ruled that non-payment of salaries is a fundamental breach of the employment contract, entitling the Claimants to treat themselves as constructively dismissed. (Paras 41, 42)
Result: Claimants' case allowed with monetary compensation awarded. (Paras 68)
AWARD
Reference
[1] This is an order of reference dated 14 August 2023 by the Director General of Industrial Relations Department pursuant to subsection 20(3) of the Industrial Relations Act 1967 arising out of the alleged dismissal of Zulkarnain Shah Bin Abang Zaidi (the Claimant) by Tennoz Technology Sdn Bhd (the Respondent) on 13 March 2023.
Background
[2] This award is prepared for the six Claimants who claim a constructive dismissal against the Company in case number 8/4-1327/23, 8/4-1328/23, 8/4-1329/23, 8/4-1330/23, 8/4-1331/23 and 8/4-1332/23
[3] The Company is Tennoz Technology Sdn Bhd, with a business address at 1st Floor, Lot 13364, Riveredge Commercial Centre, Jalan Tun Abdul Rahman Yaakub, 93050 Kuching, Sarawak.
[4] The Claimant in case number 8/4-1327/23 commenced employment with the Company on 2 February 2020 as a Principal Consultant-Transmission and considered himself constructively dismissed on 13 March 2023 with the last drawn basic salary of RM18,050.00.
[5] The Claimant in case number 8/4-1328/23 commenced employment with the Company on 2 February 2020 as a Principal Consultant-Network Quality Assurance and considered himself constructively dismissed on 13 March 2023 with the last drawn basic salary of RM17,000.00.
[6] The Claimant in case number 8/4-1329/23 commenced employment with the Company on 2 January 2020 as a Principal Consultant-RF and considered herself constructively dismissed on 13 March 2023 with the last drawn basic salary of RM18,700.00.
[7] The Claimant, in case number 8/4-1330/23 commenced employment with the Company on 5 October 2020 as a Principal Consultant-Radio Network Controller (RNC) and Core Network and considers himself constructively dismissed on 13 March 2023, with the last drawn basic salary of RM14,300.00.
[8] The Claimant in case number 8/4-1331/23 commenced employment with the Company on 2 January 2020 as a Principal Consultant-Network Quality and Assurance and considered himself constructively dismissed on 13 March 2023 with the last drawn basic salary of RM17,000.00.
[9] The Claimant in case number 8/4-1332/23 commenced employment with the Company on 2 January 2020 as a Principal Consultant-(PMO) and considered himself constructively dismissed on 13 March 2023 with the last drawn basic salary of RM20,700.00.
[10] Later, the Company failed to pay all six Claimants their salaries and EPF from November 2022 to March 2023.
[11] The Claimants claimed constructive dismissal via a letter dated 13 March 2023 after they issued the Company a Notice of Demand dated 6 March 2023 for all their outstanding salaries, EPF, and other dues.
Standard Of Proof
[12] The Claimants claim constructive dismissal, this Court seeks guidance from the case of Hong Leong Bank Bhd v. Phung Tze Thiam John Phung , , which the Court Of Appeal decides:
that the word constructive dismissal has no magic in the phase. The test for constructive dismissal is where the conduct of the employer amounts to a breach of a fundamental term of the contract of employment or whether he has evinced an intention no longer to be bound by the contract of employment. The Court said: In considering whether there was a constructive dismissal, the consideration was not whether there was any domestic inquiry but whether the employer was guilty of a breach of the contract of service going to the root of the contract or whether he had envinced an intention to no longer be bound by the contract.
[13] Further, in the case of Alan Thomas Bohlsen v. Draftworldwide Sdn Bhd , , High Court Judge, YA Abdul Malik Ishak decided that:
Only in those cases where the employer's conduct amounts to a significant breach, going to the root of the contract, would the employee be entitled to resign and claim for constructive dismissal. Only when the employer's wrongful conduct is serious, amounting to a fundamental breach of the contract where a reasonable person would be able to conclude that the Safwan Zaid Mohammed Al Othmani lwn. My Milk Manufacturi
