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2024 MarsdenLR 935
COURT OF APPEAL PUTRAJAYA
CHONG FUI THUNG – Appellant
Versus
SENA DIECASTING INDUSTRIES SB – Respondent
[Civil Appeal No: W-01(A)-112-03-2023]
The concept of condonation cannot be applied against an employee in constructive dismissal cases; it is a defense for employees against wrongful dismissal claims.
Headnote:(A) Industrial Relations Act 1967 – Section 2 – Judicial review – Constructive dismissal – The High Court quashed the Industrial Court's award in favor of the appellant based on a finding of condonation that was not pleaded before the Industrial Court – The Industrial Court found constructive dismissal and awarded back wages and compensation. (Paras 5, 7, 8, 37)
(B) Condonation – The learned High Court Judge erroneously applied the concept of condonation against the employee, which is a principle that should only be used against an employer – The court clarified that condonation cannot be applied to an employee's actions in the context of constructive dismissal. (Paras 22, 30, 35)
Facts of the case: The appellant was employed as a general manager and later became an executive director. Disagreements with another director led to a strained relationship, resulting in the appellant treating himself as constructively dismissed. The Industrial Court found in favor of the appellant, awarding him compensation. (Paras 2-4)
Findings of Court: The High Court erred in quashing the Industrial Court's award based on unpleaded issues. The Industrial Court's findings were within its jurisdiction and not unreasonable. (Paras 36-37)
Issues: Whether the High Court erred in law by considering unpleaded issues of condonation and whether the appellant was constructively dismissed. (Paras 1, 8)
Ratio Decidendi: The court held that the High Court's reliance on condonation was misplaced as it was not pleaded, and the Industrial Court's findings were justified based on the evidence presented. (Paras 10, 36)
Result: Appeal allowed, High Court's order set aside, Industrial Court's award reinstated. (Paras 37)
Introduction
[1] The main issue before this Court was whether the learned High Court Judge had erred in law in his decision on a judicial review application to make a finding of fact vis-a-vis an act of condonation by the appellant when this fact was not pleaded and ventilated before the Industrial Court. The learned High Court Judge premised on this finding of fact to conclude that the Industrial Court's award was wrong. Consequently, the learned High Court Judge quashed the Industrial Court's award which was in favour of the appellant. Dissatisfied with the decision of the learned High Court Judge, the appellant appealed before us.
Brief Facts
[2] On 1 July 2001, the appellant, Chong Fui Thung, was employed by the respondent, Sena Diecasting Industries Sdn Bhd, as an employee with the position of general manager. On 23 June 2005, while the appellant was still under employment, he was appointed as a director of the respondent company, and re-designated as an executive director. As the appellant's career progressed, he became a shareholder in the respondent company as well.
[3] Sometime in 2017, the appellant and one Tan Boon Hock, another director and shareholder of the respondent company, could not agree over some financial issues in the company. Friction in the relationship between the appellant and Tan Boon Hock started to grow after the disagreement.
[4] On 8 June 2017, an argument broke out between the appellant and Tan Boon Hock over the use of outsourced workers by the respondent company. Flowing from the argument, several events occurred which led to the appellant's relationship with the management staff in the respondent company becoming strained. The appellant was "advised" to resign from the respondent company. On 1 August 2017, the appellant had no choice but to treat himself as constructively dismissed by the respondent company.
At The Industrial Court
[5] There were only three issues before the Industrial Court, namely, (i) whether the appellant had been constructively dismissed by the respondent company, and if the answer is in affirmative, then (ii) whether the dismissal was with just cause or excuse; and (iii) whether the appellant was a workman under s 2 of the Industrial Relations Act 1967 . With regard to the last issue, the Industrial Court found the appellant was a workman under s 2 of the . The decision was premised on the fact that the final decision making in the respondent company was still in the hands of Tan Boon Hock, therefore, the appellant's position remained the same as a general manger despite holding the post of an executive director. The Industrial Court also found "no evidence to show that the Claimant (the appellant) initial contract of employment has expired and of no effect when he was appointed as Executive Director of the Company."
[6] With regard to the first issue, the Industrial Court was satisfied that the appellant had proven his case of constructive dismissal relying on the conditions set down in the case of Bayer (M) Sdn Bhd v. Anwar Abd Rahim, pp 55, [1996] 2 CLJ 49. The Industrial Court found Tan Boon Hock "was guilty of breach which goes to the root of the contract." The Industrial Court also found "it was obvious the Company had intended to completely remove the Claimant's executive powers by restricting his role in Business Development and Operation." The appellant was asked to vacate his room and to move somewhere else, and the appellant had no room to use and was compelled to use the conference room to meet his customers. The Industrial Court further found that "the Company's conduct by removing the Claimant's executive power as well as removing him from his room shows its intention to humiliate and embarrass the Claimant."
[7] On the second issue, the Industrial Court opined that the appellant had rightly given notice of constructive dismissal, and that premised on the above circumstances the dismissal was without just cause and excuse. In conclusi
