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2019 MarsdenLR 1876

INDUSTRIAL COURT KUALA LUMPUR
NOOR HAZLINA KAMARUDIN – Appellant
Versus
NUSAPETRO SDN BHD – Respondent
Award No: 2846 Of 2019 [Case No: 24(22)/4-2418/18]



Constructive dismissal occurs when an employer's serious breach of contract, such as failure to pay wages, leads an employee to resign; the court affirmed the contract test to determine constructive dismissal.

Headnote:The case involves a claim for constructive dismissal based on the employer's failure to pay the employee's salary, which constituted a serious breach of the employment contract. The court found that such non-payment entitled the employee to resign and deemed her resignation a constructive dismissal. The court established that the employer's actions irreparably impaired the foundational terms of the contract. The main issues included whether the failure to pay wages constituted a serious breach and whether the resignation could be treated as constructive dismissal. The court ruled the lack of payment as a fundamental breach, thus validating the constructive dismissal claim. Consequently, the court ordered the employer to compensate the claimant with an amount of RM209,916.00 for the claims associated with the constructive dismissal.

Table of Content
1. claimant's assertion for ex-parte hearing due to company absence. (Para 1 , 2)
2. details of the claimant's employment and issues with salary payments. (Para 3 , 4 , 5 , 9 , 10 , 11 , 12 , 13)
3. details of salary payment delays leading to resignation. (Para 6)
4. legal standards governing constructive dismissal in employment contracts. (Para 14 , 15 , 16 , 17)
5. analysis of company’s failure to remit wages as a breach. (Para 19)
6. failure to pay wages constitutes serious breach of employment contract. (Para 20 , 21 , 22)
7. resignation treated as constructive dismissal due to significant salary breaches. (Para 23 , 24 , 26)
8. court ruling for compensation rather than reinstatement owing to relationship breakdown. (Para 27 , 29)
9. ruling in favor of claimant; orders compensation payment. (Para 28)

[1] This is a case involving a claim by the Claimant based on constructive dismissal. The hearing of this matter commenced on 26 June 2019. At the hearing, the Claimants Counsel was present but the Companys representative was absent. Counsel for the Claimant informed the Court at the outset that on 25 June 2019 at about 4:00 p.m. the Companys HR Executive Puan Safinaz Binti Md Noh ("Puan Safinaz") informed Court 24 Interpreter Puan Fatin Amamah that the Companys representative in charge of this case will not be present to conduct the hearing.

[2] Counsel for the Claimant requested the Court to exercise its powers under s 29(d) of the Industrial Relations Act 1967 ("the Act") to proceed with this matter ex-parte. Accordingly, the Court ordered for this matter to be proceeded forthwith pursuant to s 29(d) of the Act since the Companys representative was absent. The hearing then commenced.

Brief Facts

[3] The Claimant joined BC Petrochemical Sdn Bhd on 7 November 2005 as a Proposal Engineer with a starting salary of RM1,200.00 per month. The Claimants tenure of employment with BC Petrochemical Sdn Bhd continued until BC Petrochemical Sdn Bhd changed its name to Nusapetro Sdn Bhd on 23 December 2014.

[4] The Claimant was confirmed in her position as Proposal Engineer on 15 May 2006 with an increment in salary to RM2,600.00 per month.

[5] The Claimant was subsequently given salary increment with effect from 1 March 2014 to RM5,950.00 per month.

[6] Thereafter, the Company vide letter dated 11 March 2015, gave the Claimant another salary increment with effect from 1 March 2015 wherein her new monthly salary was increased to RM6,247.50 per month. This remained as her last drawn salary.

[7] The Claimant carried out her duties and responsibilities in the Company in a diligent manner.

[8] It is the Companys policy to pay the salaries of employees by 28th of each month.

[9] However, from April 2017 till January 2018, the Company began paying the Claimants salaries late, in any event after the 7th of the subsequent month. The Company had also made the necessary statutory deductions for KWSP, Zakat, LHDN and SOCSO from the Claimants salaries. However, despite the said deductions, the Company had failed, neglected and/or refused to pay the said deductions to the respective authorities ("the said statutory deductions" ).

[10] The situation became progressively worse when the Company had failed, refused and/or neglected to pay the Claimant her salaries from the month of February 2018 till 15 May 2018 ("the said non-payment of salaries for the said period").

[11] The Claimant had on numerous occasions approached one Puan Safinaz, who was the Senior Executive of Human Resources in the Company to request for her salaries. However, the explanations given and promises made were never fulfilled.

[12] The Claimant had also on numerous occasions requested the Human Resources Department to set an appointment with the Management of the Company in order to resolve the salary issue but her requests were denied as the Human Resources Department had refused to cooperate with the Claimant to resolve the issue.

[13] Hence, the Claimant was left with no option bu

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