Constructive dismissal claims hinge on proving a fundamental breach by the employer; mere transfer does not equate to dismissal without just cause when contractual rights are upheld.

[1] This is a reference by the Honourable Minister of Human Resources made under s 20(3) of the Industrial Relations Act 1967 regarding the alleged constructive dismissal of Mawlud Mustain ("the Claimant") by Sapura Brake Technologies Sdn Bhd ("the Company") on 2 May 2006.

Brief Facts Of The Case

[2] The Claimant commenced employment in the Company with effect from 19 June 1996 in the position of Assistant Manager (Marketing), Grade MM3.

[3] The Claimant was promoted to the post of Manager -Marketing with effect from 1 January 2000 vide a letter dated 31 December 1999. He was later confirmed in the said position on 1 July 2000.

[4] On 1 January 2003, the Claimant was transferred to Automotive Specialist Centre Sdn Bhd and was next re-designated to the post of Sales and Operation Manager with effect from 1 January 2004. Vide a letter dated 1 January 2005, the Claimant was transferred back to Group Business Development, Sapura Industrial Berhad as Marketing Manager, Grade MM2.

[5]Vide a letter dated 7 March 2006, the Claimant was informed that with effect from 1 April 2006, he would be transferred to Group Human Resource and Administration, Sapura Industrial Berhad holding the position of Manager, Grade MM2. He would be reporting to Puan Adilah Omar, General Manager, Group Human Resource and Administration, Sapura Industrial Berhad. The transfer did not entail any change to the Claimant's terms and conditions of employment. Vide a letter dated 20 March 2006, the Claimant wrote to the Managing Director of the Company pertaining to the transfer stating that his knowledge and experience will be more beneficial to the Company in Marketing as opposed to Human Resource. The letter is reproduced as follows:

[6] There were few discussions held between the Claimant and Pn. Adilah Omar pertaining to the issue of transfer. The Company aver that the Claimant was advised to carry out his duties as Manager, Group Human Resource and Administration as he will be afforded assistance via trainings which he will be attending in order to gain knowledge and experience.

[7] The Claimant vide a letter dated 24 April 2006 once again requested that he be reinstated to the post of Marketing Manager and further requested the Management to reply within one week of the said letter. The letter reads as follows:

[8] The Company replied vide a letter dated 27 April 2006 stating that they feel the Claimant is the best person for the position and it has always been the Sapura Industrial Berhad Group's practice to transfer staff among the Group of Companies where there were vacancies and where the Management felt that the employee fits best. The letter also stated that the said practice was the Company's right as reflected both in the Claimant's Letter of Appointment and also in paragraph 20.1 of the Terms and Conditions of Employment for Executives 2006. The letter further states that the Management remained confident that the Claimant would fit well into the post.

[9] The Claimant vide a letter dated 2 May 2006 claimed, inter alia, that the transfer was contrary to the terms and conditions of his employment, and thereby considered himself constructively dismissed effective 2 May 2006. The letter is reproduced as follows:

[10] The Company replied to the Claimant vide a letter dated 6 May 2006 inter alia, denying that there being any fundamental breach in the Claimant's contract of employment caused by the transfer. The Company in the said letter