This reference concerned the dismissal of the nine claimants by the company on 22 March 1999.

On 18 January 2002 the company was wound up by order of the Penang High Court and on 16 September 2003 an order by consent was made herein, vide Adorna-Rmt Sdn Bhd & Anor lwn. Catherine Pau Kwei Fang & Yang Lain; [2003] 3 ILR 988 , joining the official receiver, Malaysia, as a party to these proceedings.

The company headed a group of companies called the Adorna Group. One of its business undertakings was an educational institute. The claimants had been variously employed by the company to serve the institute as lecturers, assistant lecturers, assistant registrar and laboratory technician. Since constructive dismissal was alleged the Court directed that they begin the case.

The Claimant's Evidence

The evidence on the substantive issue of dismissal was given
through the first claimant Catherine Pau Kwei Fang, with the others
adopting her testimony.

In summary the first claimant's testimony was that some time in late 1998 the company started to default in paying their salaries. For example, for November they received only half their salary, the other half remaining unpaid until March 1999. In February 1999 their December 1998 and January 1999 were in arrears, and they were only given an advance of RM500 each as Chinese New Year advance to tide them over. Discussions with the management staff drew a blank. At a meeting with a director of the institute, a Terri Hew, on 8 February 1999 promises were made by the company to pay salaries on time. Relying on this promise the claimants continued carrying on doing their jobs. On 11 February 1999 the staff members wrote a letter concerning the long overdue salaries. Following this the director, Terri Hew,
called for a meeting on 22 February 1999 promising to pay " once the
money arrives " but otherwise offering no solution to the claimants' plight.
The remainder of her testimony was basically a retelling of the claimants' continued pleas for payment, responded to by more empty promises until, finally, on 21 March 1999, the claimants wrote letters claiming constructive dismissal with effect from 22 March 1999, on which date they walked out. Such oral testimony was amply substantiated by the documentary evidence compiled in two bundles, CLB1 and CLB2 ie, correspondence between the parties and minutes of the meetings testified to by the first claimant. Several of the company's letters bore frank admissions of the salary defaults, citing poor enrolment of students and recession affecting the company's other business interests.

During cross-examination, N Dharmasegaran, the assistant official receiver, put to the first claimant that she had voluntarily resigned knowing that the company was in financial difficulties. She denied this, saying that the company had kept on promising to make good the arrears and that was why she and her co-claimants stayed on, continued to work, and waited. To another question, the first claimant agreed that she and the others had filed claims in the Labour Court for such arrears, adding that summary judgment, had been obtained, on which judgment also, the company had defaulted. The rest of the cross-examination laboured on the matter of the first claimant's post-dismissal earnings.

The Company's Evidence

Dharmasegaran informed the Court that the company's only witness, its human resources manager, had passed away and hence he was not calling any witness for the company.

The law

In dealing with a reference under s. 20, of the Industrial Relations Act 1967 , the first thing the Industrial Court has to do is to ask itself whether there was a dismissal, and if so, whether it was with or without just cause or excuse. Further, since the claimants allege constructive dismissal (as against direct dismissal) the Court will speak of such dismissal in the context of what is commonly referred to as the contract test. The then Supreme Court in the case of Wong Chee Hong v. Cathay Organ