Constructive dismissal occurs when an employer's actions breach employment contract terms, allowing the employee to claim termination.

[1] This is a reference made under Section 20 (3) of the Industrial Relations Act 1967 arising out of the dismissal of Yong Wee Teck ("the Claimant") by Silverwell Management Sdn Bhd ("the Company") on 11 March 2008. The reference was dated 27 October 2009 and was received by the Court on 3 December 2009.

[2] The Claimant commenced employment with effect from 20 November 2006 as Restaurant Manager to be based at "Just Thai" at 1-Utama Shopping Centre which is one of the restaurants managed by the Company.

[3] Vide a letter 20 March 2007 the Company informed the Claimant that he would be transferred to Head Office as Personal Assistant - Restaurant Operations with effect from 1 April 2007 and he would be reporting to the Executive Director. His basic salary will be increased to RM4,000.00 and entitled to transport allowance of RM500.00

[4] Vide a letter of confirmation dated 30 July 2007, the Claimant was confirmed in his appointment as Personal Assistant - Restaurant Operations to Executive Director with effect from 1 August 2007. His salary was increased to RM4,200.00 and transport allowance maintained at RM500.00.

[5] Vide a letter of transfer dated 15 November 2007, the Claimant was informed inter alia, by the Company that he would be transferred to Just Thai as Senior Restaurant Manager as the Company required him to improve the overall performance of Just Thai as this outlet had shown poor performance for the past few months, He was also informed that his transport allowance of RM500.00 will be "uplifted".

[6] The Claimant accepted the transfer under protest. He then wrote a letter dated 21 November 2007 expressing his disappointment and humiliation as a result of the transfer which he considered had demoted him from Personal Assistant to Executive Director to Senior Restaurant Manager. He requested for an explanation as to why he had been demoted.

[7] The Claimant then had a meeting with the Management of the Company on 22 November 2007 and thereafter the Company issued him with a letter dated the same day whereby the Company informed the Claimant inter alia that in order not to complicate the issue of his designation among himself and the staff, his designation was reinstated to Personal Assistant to the Executive Director - Restaurant Operations with immediate effect. The Claimant was further instructed to take charge and enhance the operations and sales performance of Just Thai.

[8] Vide a letter dated 4 February 2008, the Company issued him with a show cause letter with two charges as follows:

"It has been reported that on 20 February 2008, you, as the appointed 1st Person In Charged, are alleged to have been involved in the following negligence/incompetence.

(i) Failed to ensure and keep the cash proceeds of the day in good order resulting the cash proceeds was stolen and cause the Company lost of RM3,010.15.

(ii) You have failed to report to the Management that prior to the incident happened two stolen cases were happened and some small amount of cash was stolen/missing in the outlet amounting to RM30.00 (1st time) for tips and float money RM60.00 (2nd time)".

[9] The Claimant was told to provide his explanation by 11 February 2008 and was suspended for 14 days with full pay to enable Company to conduct investigation.

[10] Vide a letter dated 11 February 2008, the Claimant denied both the allegations levelled against him as follows:

REF: SHOW CAUSE LETTER DATED ON 4TH FEBRUARY 2008.

With reference to the above show cause letter which was handed to me by hand on the 5th February 2008 at 6:10pm, I would like to explain on the allegations that brought to me which resulted in my 14 days suspension even withou