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2017 MarsdenLR 3081

COURT OF APPEAL PUTRAJAYA
SOUTHERN INVESTMENT BANK BHD & ANOR – Appellant
Versus
YAP FAT & ANOR – Respondent
[Civil Appeal No: W-01(A)-96-04-2016]



The court defined constructive dismissal, emphasizing employer conduct's impact on the employee's ability to continue working, reaffirming that failure to act promptly after a breach negates claims of constructive dismissal.

Headnote:In this judgment, the Court analyzed the principles surrounding constructive dismissal and the conditions required for establishing such a claim. The appellants contended that their High Court review was improperly dismissed, claiming that the 1st respondent voluntarily resigned. The Court reaffirmed that dismissal must be through employer misconduct impacting trust and confidence. Ultimately, the appeal was allowed, overturning the High Court's ruling.

Table of Content
1. issue of voluntary resignation vs. constructive dismissal. (Para 3)
2. high court's findings on duties and salary issues. (Para 4 , 5)
3. arguments and assessments by both parties' counsels. (Para 6 , 7 , 8 , 9)
4. definition of constructive dismissal and importance of employer conduct. (Para 10)
5. legal definition and criteria for constructive dismissal. (Para 11 , 12 , 13 , 14 , 15)
6. conditions required for establishing constructive dismissal. (Para 18)
7. employer prerogatives and their implications. (Para 20 , 21 , 22)
8. employer's management rights and discretion in employment matters. (Para 24)
9. employee's delay impacting constructive dismissal claims. (Para 27 , 28)
Issue

[3] Before us, the sole issue for determination is whether the 1st respondent had resigned voluntarily from this employment or he was constructively dismissed.

Findings Of The High Court

[4] The learned High Court Judge's reasoning in deciding that the 1st respondent was constructively dismissed can be summarised as follows:-

(a) No salary increment or bonus was given to the 1st respondent; and

(b) Some of the 1st respondent's duties and responsibilities were removed from him;

[5] Concerning the issue of salary increment and bonus, the learned High Court Judge stated at pp 22-23 of the Supplementary Record of Appeal:-

"In his evidence before the 2nd respondent, the 1st respondent unequivocally stated that the new CEO implemented his threat where the 1st respondent was not given salary increment or bonus payment respectively, for the years 2004 and 2005 ... This evidence was unchallenged by the applicants

...

The 2nd respondent in its finding concluded that the applicants committed a breach of a fundamental term which goes to the root of the 1st respondent's contract of employment.

...

Having heard the case for twelve days, the 2nd respondent rightly concluded that the applicants had breached a fundamental term of the 1st respondent's contract of employment."

[6] Concerning the removal of the 1st respondent's duties and responsibilities, the learned High Court Judge held that the "agency" function was removed from the 1st respondent's portfolio i.e. from the Capital Market Department to the Credit Administrative Department and such removal can be construed as demotion and/or victimisation.

The Appeal

[7] Before us, learned counsel for the appellants submitted that the learned High Court Judge erred in law and in fact when Her Ladyship failed to judicially appreciate that:

(a) the 1st respondent had resigned on his own volition and provided three months' prior notice to the appellants of his resignation as required by the terms of his employment;

(b) although the 1st respondent claims that he had considered himself constructively dismissed, he delayed in leaving employment and continued to enjoy his monthly salary and other employment benefits for a period of three months; and

(c) There was no protest from the 1st respondent when he was informed by the appellants of his last day of employment. Parties' Competing Submission

[8] The learned counsel for the appellants submitted that the 2nd respondent had erred in law and in fact and had arrived at a decision which no reasonable tribunal similarly circumstanced would have come to and the High Court had similarly erred when it failed to exercise its jurisdiction to amend the errors of law and fact which had been committed.

[9] The learned counsel for the appellants vehemently argued that the 1st respondent had resigned voluntarily from his employment by giving the appellants three months' notice of his resignation. It was the contention of learned counsel that the 1st respondent had failed to establish that he was dismissed on 12 July 2005 as alleged.

[10] In reply, the learned counsel for the 1st respondent submitted that the 1st respondent did not voluntarily resign but considered himself to be constructively dismissed by the appellants. The resignation of the 1st respondent was caused by the sequence of event

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