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2023 MarsdenLR 2376
INDUSTRIAL COURT KUALA LUMPUR
WONG JUN KIT – Appellant
Versus
WONG FORKLIFT HIRE & SERVICES SDN BHD – Respondent
Award No: 2131 of 2023 [Case No: 22(6)/4-2335/19]
Unilateral salary reduction constitutes a fundamental breach of the employment contract, justifying a claim for constructive dismissal without just cause.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Constructive dismissal - Claimant alleged fundamental breaches by the Company, including unilateral salary reduction, non-payment of salaries, and failure to make statutory contributions - The Court found that the Claimant was constructively dismissed without just cause or excuse. (Paras 32, 74, 79, 84)
(B) Employment Contract - The Court emphasized that a unilateral reduction in salary constitutes a fundamental breach of the employment contract, justifying constructive dismissal. (Paras 55, 72)
(C) Burden of Proof - In constructive dismissal cases, the burden shifts to the employer to prove just cause once the employee establishes the fundamental breach. (Paras 36, 74)
Facts of the case:
The Claimant, employed by the Company since 1998, claimed constructive dismissal following a series of salary reductions and non-payments after his father's death. He alleged that the Company retaliated against him for contesting a will. (Paras 6, 10, 11, 15, 16, 19)
Findings of Court:
The Court determined that the Claimant's dismissal was not bona fide and awarded him RM1,012,000.00 as compensation. (Paras 79, 84)
Issues: The Court addressed whether there was a constructive dismissal and if it was with just cause. (Paras 32)
Ratio Decidendi: The Court ruled that the Company had fundamentally breached the employment contract by unilaterally reducing the Claimant's salary and failing to provide work, which justified the Claimant's claim of constructive dismissal. (Paras 55, 72)
Result: The Company was ordered to pay RM1,012,000.00 to the Claimant.
| Table of Content |
|---|
| 1. reference to dismissal under industrial relations act. (Para 1 , 2 , 3 , 4 , 5) |
| 2. claimant's employment history and salary issues. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17) |
| 3. claimant's notice of constructive dismissal. (Para 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25) |
| 4. company's position and claims against the claimant. (Para 26 , 27 , 28 , 29) |
| 5. role of the industrial court in dismissal cases. (Para 30 , 31 , 32 , 33 , 34 , 35 , 36) |
| 6. constructive dismissal criteria and legal tests. (Para 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46) |
| 7. company's failure to provide employment contract. (Para 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55) |
| 8. non-payment of salaries as breach of contract. (Para 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66) |
| 9. company's obligations and breaches leading to dismissal. (Para 67 , 68 , 69 , 70 , 71 , 72 , 73 , 74 , 75 , 76 , 77 , 78) |
| 10. court's findings and compensation awarded. (Para 79 , 80 , 81 , 82 , 83 , 84) |
Reference
[1] This is a reference made under s 20(3) of the Industrial Relations Act 1967 (Act 177), arising out of the dismissal of Wong Jun Kit (hereinafter referred to as "the Claimant") by Wong Forklift Hire & Services Sdn Bhd (hereinafter referred to as "the Company") on 15 April 2019.
[2] The Ministerial reference in this case required the Court to hear and determine the Claimant's complaint of dismissal by the Company on 15 April 2019.
I. Procedural History
[3] The Court received the letter pertaining to the Ministerial reference under s 20(3) of the Industrial Relations Act 1967 on 13 December 2019.
[4] The matter was fixed for mention on 30 January 2020, 20 February 2020, 6 March 2020, 12 August 2020, 25 August 2020 before Court No 6. The file was thereafter transferred to this Court, i.e. Court No 22, and the matter was fixed for further mentions on 6 November 2020, 4 March 2021, 15 April 2021 and 14 October 2021.
[5] The hearing proceeded on 19 May 2022, 20 May 2022, 29 September 2022, 13 December 2022, 14 February 2023 and concluded on 6 March 2023.
II. The Parties' Position On The Merits
a. The Claimant
[6] The Claimant's father, the late Mr Wong Kok Wan, had started a business to, inter alia, sell, purchase, rent, repair and maintain forklifts since 1969. At the behest of the Claimant's father, the Claimant joined the business in 1998 as a technician in order to learn from his father. At the material time, the Claimant was only 18 years old.
[7] After ascending the ranks within the Company, the Claimant was then tasked with managing the Company's branch office in Shah Alam in or around 2004. The Company's headquarters was situated in Klang.
[8] The Claimant's scope of works were, amongst others, to:
i. manage and run the Branch Office;
ii. deal with customers regarding the repair and maintenance of forklifts;
iii. supervise the works for the repair and maintenance of forklifts; and
iv. coordinate and manage the moving of heavy machinery for clients.
[9] At the material time, the Claimant was paid a salary of between RM26,300.00 and RM32,500.00 every month, whereby the Claimant would usually be issued a cheque at the beginning of the month, and another cheque towards the end of the month.
[10] The Claimant's father passed away on 16 March 2018 due to an accident while at work.
[11] Mdm Sim Foo Yoke (COW-1) informed the Claimant that as the Claimant's father was a co-signatory of the Company's bank account, the Company could not issue cheques for the payment of the Claimant's salary for the time being, and that the Claimant would be paid in cash instead, and as a result, the payments to the Claimant would be reduced for the time being. The Claimant was then paid a sum of between RM6,000.00 and RM9,000.00 per month from April 2018 onwards. The Claimant did not receive the second payment for his salary from the end of March 2018 onwards, as he normally would previously.
[12] As the Claimant's father did not leave a will,
