Non-payment of salary constitutes a fundamental breach of contract, justifying a claim for constructive dismissal under the Industrial Relations Act.

AWARD

Paramalingam J Doraisamy:

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 Ismail Bin Mat Petah (hereinafter referred to as "the Claimant") by Rez Capital Sdn Bhd (hereinafter referred to as "the Company") on 15 September 2022.

[2] The reference by the Director General of Industrial Relations ("DGIR") in this case required the Court to hear and determine the Claimant's complaint of dismissal by the Company on 15 September 2022.

I. Procedural History

[3] The Court received the letter pertaining to the DGIR's reference under s 20(3) of the Industrial Relations Act 1967 on 1 June 2023.

[4] The matter cane up for mention on 28 June 2023, 24 August 2023, 25 September 2023, 9 October 2023 and 30 October 2023. The Claimant was present in Court on all of these mention dates. The Company's representatives however was absent on all the said mention dates.

[5] On the day of the hearing, ie 23 January 2024, the Company was absent and no Statement In Reply had been filed by them into Court. The Court was satisfied that all the relevant Notices had been served on the Company and accordingly exercised its powers under s 29(d) of the Industrial Relations Act 1967 and declared this proceeding to be heard in the absence of the Company. Section 29 (d) of the provides that the Court may, in any proceedings before it, "hear and determine the matter before it notwithstanding the failure of any party to submit any written statement whether of case or reply to the Court within such time as may be prescribed by the President or in the absence of any party to the proceedings who has been served with a notice or summons to appear".

[6] The trial proceeded in the absence of the Company on 23 January 2024 with only the Claimant ("CLW-1") being the sole witness.

II. Factual Background

[7] The Claimant commenced employment with the Company on 1 June 2022 as a Financial Controller vide Letter of Appointment dated 27 May 2022 (at p 1-7 of CLB- 1) with a monthly salary of RM8,800.00. The Claimant was placed on probation for a period of 3 months. No letter of confirmation was issued to the Claimant by the Company thereafter.

[8] On 1 August 2022, the Company had issued a Notice of Late Salary Payment for the month of July 2022 wherein the Company informed all of its staff that the salary for the month of July 2022 will be delayed due to "some business matter", and that the same "will be credited not later than 15th of Aug" (at p 15 of CLB-1).

[9] On 18 August 2022 at 3.14pm, the Claimant had sent an email (at p 16 of CLB- 1) to the Company's Human Resources Director, ie Pn Nurul Balqis Dato' Khairil Anuar ("Pn Balqis"), enquiring about the arrears of salary and why it had not been credited into his account when it ought to have been done by 15 August 2022 as promised. Pn Balqis responded on the same day at 5.51pm vide email (at p 16 of CLB-1) apologising for the delay and that the "unexpected delay is unplanned".

[10] Instead of settling the arrears of salary to the Claimant, the Company issued a letter entitled "Termination of Probationary Period" dated 1 September 2022 (at p 18 of CLB-1) citing the Claimant's unsatisfactory performance and attitude as a reason for his non-confirmation. The Claimant's last day of work was to be 30 September 2022.

[11] The Claimant issued a letter entitled "Notice Of Immediate Payment For Unpaid Salary Balance Of RM21,107.92" dated 14 September 2022 (at p 19 of CLB-1) wherein the Claimant demanded the following from the Company:

[12] When the Company failed to respond to the Claimant's letter of 14 September 2022, the Claimant issued a Constructive Dismissal notice dated 15 September 2022 (at p 20 of CLB-1) due to the non-payment of his salaries for the months of July 2022 and August 2022. The effective date of the constructive dismissal was on 14 September 2022.

[13] The Claimant contends that the Company's conduct in failing to pay him his salaries