Non-payment of salaries and statutory contributions constitutes a fundamental breach of an employment contract, justifying a claim for constructive dismissal.

Headnote:(A) Industrial Relations Act 1967 - Sections 20(3), 30(1A), 30(6) - Constructive dismissal - Claimant alleged non-payment of salaries and statutory contributions for 6.5 months - Court found employer's conduct breached fundamental terms of employment contract, justifying constructive dismissal - Court ruled absence of employer in proceedings as acceptance of claimant's evidence. (Paras 1, 18, 31, 40, 46)

(B) Burden of proof - On employer to prove dismissal was with just cause or excuse - Court found employer failed to discharge this burden due to absence in court. (Paras 12, 42)

Facts of the case:
The claimant was dismissed constructively due to non-payment of salaries amounting to RM42,250.00 and failure to make statutory contributions, leading to a claim for reinstatement or compensation.

Findings of Court:
Dismissal was without just cause; employer breached fundamental contract terms; claimant awarded RM94,250.00 in back wages and unpaid salaries.

Issues: Whether the claimant proved constructive dismissal and if the dismissal was with just cause or excuse.

Ratio Decidendi: Non-payment of salaries constitutes a fundamental breach of contract; employer's absence in court signifies acceptance of claimant's claims.

Result: Claimant awarded RM94,250.00.

AWARD

Syed Noh Said Nazir @ Syed Nadzir:

Reference

[1] This is a reference dated 16 May 2023 made under s 20(3) of the Industrial Relations Act 1967 ("the Act") arising out of the dismissal of Amnie Izzaty binti Mohd Soji (hereinafter referred to as "the Claimant") by Velocity Technology Sdn Bhd (hereinafter referred to as "the Company") on 14 February 2022.

[2] The reference in this case required the Court to hear and determine the Claimant's complaint of constructive dismissal by the Company on 14 February 2022. Hearing proceeded and concluded before Chairman of this division of Court 21 on 12 August 2024 pursuant to the instructions from the learned President of the Industrial Court of Malaysia in order for a final award be handed down.

Procedural History

[3] Having received the reference by the Director General of Industrial Department dated 16 May 2023 pursuant to s 20(3) of the Industrial Relation Act 1967, this Court had proceeded to fix dates for e-mention for 27 June 2023, 16 August 2023, 6 September 2023, 12 October 2023, and 23 November 2023. The parties to the proceeding were duly informed of the first e-mention date on 27 June 2023 vide Form F dated 9 June 2023 was sent by AR Registered.

[4] Before the Assistant Registrar ("AR") on 27 June 2023, the AR proceeded to fix the dates for filings of the Statement of Case (18 July 2023), Statement in Reply (8 August 2023), Rejoinder (15 August 2023) Witness Statements as well as Bundles of Documents (29 July 2024), and dates for hearing (12 August 2024 and 13 August 2024). The company was absent and had only appeared once in the online session on 12 October 2023 and had not appointed any counsel to act on its behalf, failed to comply with the Court 's direction to file a Statement in Reply according to the deadline provided by the Court and failed to appear despite many opportunities given by this Court .

[5] By way of Form G dated 11 July 2023 (Notis Perbicaraan) sent by personal service on both parties, the company and the claimant were informed that hearing date for the matter had been fixed for 12 August 2024 and 13 August 2024.

[6] Based on the above timeline, the company had been sufficiently informed of the hearing dates fixed for this case. There is no excuse for the Company for failing to turn up in Court on the dates fixed for hearing. Hence, the hearing was ordered to proceed Ex-Parte on 12 August 2024 pursuant to s 29(d) of the IRA 1967. In relation to this, the Court is guided by the case of Lee Mei Wan v. Ultimate Media Group Pty Ltd .

Overview

[7] The Claimant holds the position that constructive dismissal applies in this case arises from the non-payment of her monthly salaries and the Company's failure to make salary payments for 6 and ½ months amounting to RM42,250.00 to the Claimant ("Unpaid Salary") and failing to make mandatory statutory contributions and deductions for EPF, income tax and SOCSO for the Claimant throughout her employment [EPF and SOCSO statements for year 2021 & 2022, Enclosure AI-13, CLB-1 at pp 180-187] that constitutes fundamental breach of the terms of the contract of employment by the company; such dismissal without just cause or excuse and therefore seeks for an order that he be reinstated to the former position without any loss of wages, allowance, service, seniority, privileges or benefits of any kind and/or any other alternate relief as this Court deems fit and proper.

Cause Papers, Witness Statements, Bundles Of Documents And Written Submissions

[8] The following documents had been filed by the Claimant for the purpose of trial:

Cause Papers
(i) Statement of Case dated 30 August 2023.
Witness Statements
(ii) Claimant's Witness Statement marked as CLWS-1.
(iii) The Witness Statement for the Claimant, Nagshaathiree a/p Thiagarajan as a Human Resource and Training Manager of the Company marked as CLWS-2.
(iv) The Witness Statement for the Claimant, Noor Hidayatus Shahidah bt Md Isa as a Senior System Analyst of the Company ma

Click Here to Read the rest of this document

2024 MarsdenLR 466

INDUSTRIAL COURT KUALA LUMPURAMNIE IZZATY MOHD SOJI – AppellantVersusVELOCITY TECHNOLOGY SDN BHD – RespondentAward No: 1831 Of 2024 [Case No: 21/4-879/23]

Non-payment of salaries and statutory contributions constitutes a fundamental breach of an employment contract, justifying a claim for constructive dismissal.

Cases Referred (2)

INDUSTRIAL COURT KUALA LUMPUR
AMNIE IZZATY MOHD SOJI – Appellant
Versus
VELOCITY TECHNOLOGY SDN BHD – Respondent
Award No: 1831 Of 2024 [Case No: 21/4-879/23]