The court ruled that the respondent's claim of immunity under the IFSB Act was not established, allowing the claimant's constructive dismissal claim based on breach of employment contract.

AWARD

Mohd Taufik Mohd @ Mohd Yusoff:

Reference

[1] This is an order of reference dated 28 June 2021 by the Minister of Human Resource pursuant to subsection 20(3) of the Industrial Relations Act 1967 arising out of the alleged dismissal of Nirvana Jalil Ghani (the claimant) by Islamic Financial Services Board (the respondent) on 12 August 2020.

Preliminary

[2] This case was heard by YA Tuan Ahmad Zakhi Mohd Daud before his retirement. This court has been instructed to hand down the award for this case and the award is handed down accordingly.

Brief Facts Of The Case

[3] The respondent, as an international organisation, was established by an international agreement titled the Articles of Agreement of the Islamic Financial Services Board dated 3 November 2002 (herein after referred to as "the Agreement").

[4] On 17 June 2019, the claimant signed an employment agreement with the respondent. The duration of her employment with the respondent would be for a period of two years until 16 June 2021, which was renewable upon satisfactory appraisal of the respondent.

[5] According to the Letter of Appointment and employment agreement dated 17 June 2019 respectively, the basic salary of the claimant is USD2,000 only and subject to be reviewed by the Secretary-General of the respondent.

[6] However, on 12 August 2020, the claimant, on her own accord, left the employment on the grounds of breach of employment contract and unfair treatment, which she later treated herself of having been constructively dismissed by the respondent.

The Questions To Be Decided

[7] There are four issues to be ventilated and discussed by the court and they are as follows:

a. Whether the respondent has privileges and is granted with immunity provided under the Islamic Financial Services Board Act 2002 (Act 623) ("IFSB Act")?

b. Whether the Industrial court has the jurisdiction to decide this present matter when in fact the respondent is immune from legal process?

c. Whether the claimant was constructively dismissed by the respondent?

d. Whether the dismissal, if any, was done with just cause or excuse?

Preliminary Issue

[8] Before we delve further into the substantive issues of the case, there is one important question raised by the respondent before the hearing started that whether the respondent has privileges and is granted with immunity provided under the Islam Financial Services Board Act 2002 (Act 623) ("IFSB Act") and whether the Industrial court have the jurisdiction to decide this present matter.

[9] To start off, the counsel for the respondent in his written submission outlined on the establishment of the respondent and the court quoted the relevant excerpt in verbatim as follows:

"E. Establishment Of IFSB

5. Before we submit further, we wish to explain the background of the Company and/or IFSB which form the crux of our submission today.

6. The Company is an international organisation established by the Articles of Agreement of the Islamic Financial Services Board ("Articles of Agreement') which is governed by the IFSB By-Laws.

7. According to Chapter I, art 3 has of the Articles of Agreement, it is well acknowledged that IFSB is established in Kuala Lumpur whereby there must be ensurance by the host country of Secretariat that IFSB is immune and has privileges in respect of its assets, properties, incomes and operations as follows (Please refer to the Appellant's Bundle of Authorities at TAB 1 on p 8):

"Article 3

The IFSB shall be established and located in Kuala Lumpur; Malaysia which shall host the Secretariat. The host country of the Secretariat shall ensure that the IFSB and its constituent organs (as set out in art 5) shall be exempted from all taxes, duties, fees and levies, and shall be granted other immunities and privileges in respect of its assets, properties, incomes and operations."

8. Thus, Malaysia as one of the host of the Secretariat bear a great responsibility to ensure the enforcement of art 3 of the Articles of Agreement, that is IFSB is immune and have p