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2021 MarsdenLR 495
COURT OF APPEAL PUTRAJAYA
NG TECK FAY – Appellant
Versus
MAHKAMAH PERUSAHAAN MALAYSIA & ANOR – Respondent
[Civil Appeal No: W-01(A)-690-12-2019]
Constructive dismissal occurs when an employer's actions constitute a significant breach of the employment contract, entitling the employee to consider themselves dismissed.
Headnote:(A) Industrial Relations Act – Section 20 – The appellant was constructively dismissed and contended that the restructuring and demotion by the 2nd respondent constituted a breach of his employment contract – The Industrial Court dismissed his claim, but the High Court's dismissal of the Judicial Review led to this appeal. (Paras 1-2, 24-45)
Facts of the case: The appellant, employed as Assistant General Manager, was demoted to Senior Manager without having previously held that position, claiming constructive dismissal after being given two letters enforcing the demotion. (Paras 5-12)
Findings of Court: The Court found the restructuring did breach the appellant’s contract, justifying his claim of constructive dismissal and quashed the previous decisions. (Paras 24-50)
Issues: The central issue was the legitimacy of the demotion and whether it constituted a breach of the employment contract warranting constructive dismissal. (Paras 17-20)
Ratio Decidendi: The Court ruled that demotion and alteration of job responsibilities constituted a breach of contract that entitles an employee to consider himself constructively dismissed. (Paras 24-33)
Result: Appeal allowed with costs of RM15,000 and quashing of previous decisions. (Paras 50)
JUDGMENT
Introduction
[1] The appellant contended he was constructively dismissed by the 2nd respondent and referred his constructive dismissal to the Industrial Court ("the 1st respondent") and the chairman of the 1st respondent ("chairman") after hearing the appellant's reference, handed down Award No 316 Year 2018 on 3 December 2018 ("the award"), dismissing the appellant's claim.
[2] The appellant then filed an application for Judicial Review at the Kuala Lumpur High Court pursuant to O 53 r 2 of the Rules of 2012 ("RHC") to quash the award handed down by the 1st respondent. The application for Judicial Review was dismissed by the learned High Court Judge ("the learned High Court Judge"). Hence, this appeal to the Court of Appeal.
[3] For ease of reference, the parties herein will be referred to as they were in the proceedings before this Court.
[4] We heard the appeal and after due deliberation and having carefully considered the submissions of both parties, we found that there are merits in the appeal and unanimously allowed the appeal with costs. We propose to give reasons for our decision with respect to the appeal.
The Salient Facts
[5] The appellant commenced his employment on 11 April 2008 as an Assistant General Manager with the 2nd respondent at a monthly salary of RM14,000.00 and a travel allowance of RM1000.00. On 11 August 2008, the appellant was confirmed in his position of Assistant General Manager. His last drawn salary was RM17,150.00 per month.
[6] As a result of the 2nd respondent's restructuring, the 2nd respondent informed the appellant that with effect from 1 July 2009, he was appointed as the Head of the Family Claims department and the 2nd respondent maintained the position of the appellant as the Assistant General Manager.
[7] The appellant was given annual salary increments and bonus throughout his service with the 2nd respondent. In the year 2013 the appellant was nominated by a Committee of the 2nd respondent and offered a total of 9900 ordinary shares in the 2nd respondent.
[8] On 6 May 2014, the appellant received a Show Cause letter for sending an internal email to the 2nd respondent's Third-Party Administration (PM Care). The appellant in his explanation letter, apologised to the 2nd respondent for the oversight of extending an internal email to PM Care.
[9] On 19 May 2014, the appellant received a warning from the 2nd respondent. On the following day, that is 20 May 2014, the 2nd respondent's General Manager of Human Resources informed the appellant that he was required to attend a meeting with the Group Managing Director on 22 May 2014. At the Group Managing Director's office, the General Manager of Human Resources in the presence of the Group Managing Director, handed over two letters both dated 22 May 2014 to the appellant. The Group Managing Director told the appellant that if he did not agree to the contents of the two letters then he can resign.
[10] One of the said letters dated 22 May 2014 which was entitled 'Change of Job Scope', reduced the appellant's scope of duties by taking away the medical claims for health insurance products from him. As regards the other letter bearing the same date, it was entitled "Job Regrading to Senior Manager", the 2nd respondent demoted and downgraded the appellant from his position as Assistant General Manager (Grade 3) to Senior Manager (Grade 4) with effect from 26 May 2014.
[11] On 30 May 2014, four days after his demotion came into effect, the appellant in his letter bearing the same date, cited constructive dismissal and left the service of the 2nd respondent. He gave the reason for alluding constructive dismissal as he was demoted, re-graded and his benefits were reduced.
[12] The matter was then referred to the 1st respondent and after hearing the reference, the 1st respondent delivered and handed down the award, dismissing the appellant's claim.
[13] The appellant then filed an application for Judicial Review at the High Court and which
