This reference concerns a claim by Oh Swee Choo ('the claimant') wherein she by letter dated 8 November 1996 considered herself as being dismissed by Pelangi Enterprises Sdn. Bhd. ('the company').

Background Facts

The company is Dr. Ismail Abdul Rashid's (COW1) personal company, which he founded sometime in the late 1970s. In early 1992 COW1 was asked by Halim Saad if he was interested to establish a hospital. As COW1 was leaving from Vancouver during that time he asked a friend Dr. Wong Wai Peng, to help in recruiting staff and also to work on the layout plan for the hospital which was to be called Taman Desa Medical Centre (TDMC).

Dr. Wong Wai Peng knew the claimant, a state registered nurse, who retired from the government service at the age of 50. Sometime in January 1995, Dr. Wong offered the claimant the post of general manager at TDMC. The claimant accepted the offer of employment dated 1 February 1995 (CLE1). The claimant was placed on probation for three months and was confirmed in her employment with effect from 1 May 1995 (CLE2).

While in the employ of TDMC, the claimant had commenced on 28 April 1995 a two year part time M.Sc Course in Healthcare Management conducted locally, after working hours. The claimant paid the first instalment of the course fees amounting to RM6,000 while the remaining three instalments of RM18,000 were paid by TDMC under the terms of a sponsorship agreement dated 13 July 1995 (CLE3). It was expressly stated in CLE3 that upon the completion of her course which would be in April 1997, the claimant who was working full time during the course was to serve TDMC for a period of three years i.e. from April 1997 to March 2000. This meant that the claimant who was born on 31 October 1941, would be 55 years and six months when she completed the course in April 1997, and 58 years six months when she completed serving the bonded period.

On 21 May 1996, COW1 issued a "notice" (CLE4) to all management committee members of TDMC informing of a reorganisation of the management committee. This management committee was headed by the claimant.

On 1 June 1996, as directed by Dr. Wong Wai Peng, the claimant by letter (CLE5) tendered her resignation as general manager of TDMC. By the same letter she was re-employed by and under the company without any loss or benefits under the very same terms and conditions of employment as she was under TDMC.

The management committee prepared an employees handbook (CLE7) for TDMC. The claimant, as general manager and head of the management committee signed its approval on 18 September 1996 which approval was subject to further approval of the board.

On 11 October 1996, the claimant received a letter dated 7 October 1996 (CLE8) from COW1 informing her that she would be retiring on 31 October 1996 upon reaching the age of 55 years. She was awarded a gratuity of RM20,000 and was freed from any obligation to serve the bonded period of three years upon completion of the M.Sc in Health Management Course under CLE3. COW1 then offered the claimant reemployment vide letter dated 31 October 1996 (CLE10) on less favourable terms. The claimant wrote COW1 a letter (CLE11) dated 16 October 1996 but sent to him only on 1 November 1996. In the last paragraph of CLE11 the claimant asked COW1 to revoke his letter (CLE8) but she received no reply. So she sent COW1 another letter CLE12 dated 5 November 1996, in which she stated that she was unable to sign and accept the terms as contained in CLE10. She asked that CLE8 and CLE10 be withdrawn by 8 November 1996 failing which she would consider herself dismissed by the company with effect from 9 November 1996. The company did not reply to CLE12 but instead sent her another letter of reemployment dated 7 November 1996 (CLE13). In view of all the preceding actions of the company, the claimant treated herself as having been constructively dismissed by the company with effect from 9 November 1996.

The Law In Regard To Constructive Dismissal

The law relating