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2024 MarsdenLR 428

HIGH COURT MALAYA PULAU PINANG
K-GE RESTAURANT SDN BHD – Appellant
Versus
GERARD ELIAS – Respondent
[Appeal No: PA-16A-8-10-2023]



Petitioner Advocates:Goh Jun Geng ,Respondent Advocate: Adrian Jayaraj

Constructive dismissal occurs when an employer's actions fundamentally breach the employment contract, allowing the employee to consider themselves dismissed, regardless of any delay in raising the issue.

Headnote:(A) Industrial Relations Act 1967 – Section 30 – Constructive dismissal – The Respondent, an Operations Manager, claimed constructive dismissal due to unlawful salary deductions and late payments, which the Industrial Court found constituted a fundamental breach of contract. The Appellant's actions were deemed to have affected the roots of the contract, justifying the Respondent's claim. (Paras 17, 21, 22, 39)

(B) Constructive Dismissal – The court affirmed that constructive dismissal occurs when an employer's actions fundamentally breach the employment contract, allowing the employee to consider themselves dismissed. The Respondent's continued employment for 19 months did not constitute waiver of rights. (Paras 28, 30, 31)

Facts of the case: The Respondent claimed constructive dismissal after the Appellant unlawfully deducted salaries and delayed payments, leading to a claim for back wages and compensation. (Paras 6, 9)

Findings of Court: The Industrial Court found that the Appellant's failure to pay salaries constituted a fundamental breach, entitling the Respondent to claim constructive dismissal. (Paras 21, 22)

Issues: Whether the late payment of salary constituted a breach of contract and whether the Respondent was constructively dismissed. (Paras 17, 28)

Ratio Decidendi: The court ruled that non-payment of wages is a fundamental breach of contract, justifying a claim for constructive dismissal. The Respondent's delay in raising the issue was justified due to circumstances surrounding the Covid-19 pandemic. (Paras 26, 30)

Result: The award of the Industrial Court is affirmed, ordering the Appellant to pay RM57,524.40 to the Respondent. (Para 39)

JUDGMENT

Azizan Md Arshad JC:

Introduction

[1] This is an appeal against the decision of this Court on 29 January 2024 which affirmed and upheld the decision of the Learned Chairman of the Industrial Court (IC) who allowed the Respondent's claim on 10 October 2023 and ordered the Appellant to pay a sum of RM76,950.00 to the Respondent subject to the statutory deductions and contributions (if there is) against the Respondent.

[2] For the convenience and accuracy of the facts as presented by the parties in the High Court, in this judgment, the parties are referred to as they were in the High Court.

Cause Papers

[3] The cause papers that have been referred to by the parties during the appeal before this Court are as follows:

(i) Rekod Rayuan (Bahagian A) (hereinafter referred to as 'RR1') [which consists of the Notice of Appeal, the cause papers filed at Industrial Court, memorandum of appeal and the Award dated 10 October 2023];

(ii) Rekod Rayuan (Bahagian B dan C) (hereinafter referred to as 'RR2') [which consists of all the documents referred by parties at the Industrial Court and Witness Statements by parties].

The Trial At The Industrial Court (IC)

[4] Witnesses called to testify during the Trial at the Industrial Court:

(i) The Appellant's witness, Tan Qi Sheng (hereinafter referred to as 'COWS-1')

(ii) The Appellant's witness, Tan Ah Kok (hereinafter referred to as 'COWS-2')

(iii) The Appellant's witness, Lai Phooi Theng (hereinafter referred to as 'COWS-3')

(iv) The Respondent witness, the Respondent himself (hereinafter referred to as 'CLW-1')

Background Facts

[5] For the accuracy of facts such as submissions, the Court cited the facts presented by the parties in their written submissions and were not disputed.

[6] The Respondent, who had filed a claim against the Appellant at that material times was the Operations Manager of the Appellant's restaurants, cafe, bistro and KTV business He claims that that he has been "constructively dismissed" by the Appellant.

[7] The Respondent was appointed by the Appellant by a Letter of Appointment on the 15th of October 2019 as an Operations Manager with a basic monthly salary of RM4,500.00. The Letter of Appointment dated 15 October 2019 [page 107-112 of RR2] was signed by one Byron Tan (COWS-1), the Executive Director of the Appellant. The Respondent was duly confirmed to his position on 15 January 2020.

[8] Sometime between 15 October 2019 and December 2020, the Respondent was paid his monthly salary of RM4,500.00 by way of cheques. The Respondent submits that for the three months beginning from his employment with the Respondent, the cut-off date for the payment of his monthly salary was the 15th of the following month. However, for the month of January 2020, his salary was paid at the end of the following month. In summary the payment of his salaries [page 113-125 of RR2] are as follows:

[9] The Respondent has claimed as follows:

(a) That the Respondent pays all unlawfully deducted salaries from March 2020 till May 2021 amounting to RM33,322.00;

(b) That the Respondent pay the unpaid salaries of RM36,000.00 from April and May 2020 and between June 2021 to his dismissal on 1 November 2021;

(c) Back-wages from date of dismissal to date of reinstatement;

(d) That in computing the Claimant's salary on his reinstatement, the Respondent shall include all the salary increment and adjustments and other benefits, monetary or otherwise, from the date the Claimant was dismissed to the date of reinstatement and/or any other relief was dismissed to the date of reinstatement and/or any other relief which the Court may deem fit to grant;

(e) That the Claimant be paid his bonus that has been declared and paid by the Company;

(f) That the Company pays the appropriate contribution towards EPF and Socso;

(g) All monies due to the Claimant to be paid to him through his Solicitors M/s Domnic Pragasam Tan & Co within thirty (30) days from the date of the Award; and

(h) Any or other orders this Honourable Court deems fit and pr

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