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2023 MarsdenLR 2345

INDUSTRIAL COURT KUALA LUMPUR
P B ASHOK P B KRISHNAN PILLAI – Appellant
Versus
CYBERLYNX INTERNATIONAL SDN BHD – Respondent
Award No: 2229 of 2023 [Case No: 14/4-2125/20]



Petitioner Advocates:Anthony Gomez ,Respondent Advocate: R M Murali

A mere delay in salary payment for a few days does not constitute constructive dismissal, especially when the employer faces financial difficulties and the employee fails to provide notice to remedy the breach.

Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Constructive dismissal - The Claimant, a former Managing Director, claimed constructive dismissal due to non-payment of salary for March 2020, asserting a breach of contract - The Company contended financial difficulties due to COVID-19 pandemic and claimed no intention to deny payment - The Court found no fundamental breach as the Claimant failed to provide notice to remedy the situation, thus dismissing the claim. (Paras 1, 13, 37)

(B) Burden of proof - The Claimant must prove constructive dismissal and that the Company had evinced an intention to breach the contract - The Company must then prove the dismissal was with just cause if the Claimant establishes constructive dismissal. (Paras 5, 8)

Facts of the case:
The Claimant commenced employment in 2003, was re-designated as Executive Director in December 2019, and alleged constructive dismissal on 10 April 2020 after not receiving his salary for March 2020. The Company faced financial difficulties exacerbated by the COVID-19 pandemic. (Paras 3, 4)

Findings of Court:
The Court found that the Claimant's claim of constructive dismissal was unsubstantiated as there was no fundamental breach and he failed to provide notice for the Company to remedy the salary delay. (Paras 36, 38)

Issues: The main issues were whether the Claimant was constructively dismissed and if the Company had committed a fundamental breach of contract by delaying salary payment. (Paras 12, 19)

Ratio Decidendi: The Court ruled that a mere three-day delay in salary payment, especially under financial duress, does not constitute a fundamental breach justifying constructive dismissal. Furthermore, the Claimant's failure to provide notice to remedy the situation was critical. (Paras 36, 37)

Result: Claim dismissed.

Table of Content
1. judicial reference under industrial relations act. (Para 1 , 2)
2. claimant's employment history and salary details. (Para 3)
3. company's financial difficulties and salary payment issues. (Para 4)
4. legal standards for constructive dismissal. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11)
5. court's analysis of the claimant's dismissal claim. (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20)
6. claimant's fiduciary duty and delay in salary payment. (Para 21 , 22 , 23 , 24 , 25 , 26 , 27)
7. comparison of claimant's conduct in prior roles. (Para 28 , 29 , 30 , 31)
8. court's conclusion on constructive dismissal standards. (Para 32 , 33 , 34 , 35 , 36)
Eswary Maree:

Reference

[1] This is a reference under s 20(3) of the Industrial Relations Act 1967 (the Act) by the Honourable Minister of Human Resources, emanates from the dismissal of PB Ashok a/l PB Krishnan Pillai ("the Claimant") by Cyberlynx International Sdn Bhd ("the Company") on 10 April 2020.

[2] This Court will determine the issues before it and make its findings based on the pleadings, notes of proceedings, the relevant oral and documentary evidences, the cause papers and submissions. The following documents were filed before this Court:

(i) Statement of Case dated 19 October 2020;

(ii) Statement in Reply dated 23 February 2021;

(iii) Company's Bundle of Documents: COB-1;

(iv) Company's Additional Bundle of Documents: COB-2;

(v) Company's Bundle of Documents: COB-3;

(vi) Claimant's Bundle of Documents: CLB-1;

(vii) Claimant's Additional Bundle of Documents: CLB-2;

(viii) Witness Statement of Azrin Fazrina binti Jamri: COWS-1;

(ix) Witness Statement of Lee Wilhall: COWS-2;

(x) Witness Statement of Dato' Swaminathan Mahalingam: COWS- 3;

(xi) Witness Statement of the Claimant, P.B. Ashok a/l P.B. Krishnan Pillai: CLWS;

(xii) The Claimant's Written Submissions dated 27 March 2022;

(xiii) The Company's Written Submissions dated 4 April 2023;

(xiv) The Claimant's Reply to the Company's Written Submissions dated 17 April 2023; and

(xv) The Company's Reply to the Claimant's Written Submissions dated 10 April 2023.

The Claimant's Case

[3] The Claimant's case can be summarized as follows:

(i) The Claimant commenced employment with the Company on 1 March 2003 as its Managing Director at all-inclusive monthly salary of RM12,000.00.

(ii) Sometime during 2019 there was a change in management arising from the purchase of majority shares in the Company by an entity know as Mission Equities Sdn Bhd. Arising from it, the Claimant's nomenclature was changed from being the Managing Director to Executive Director, Corporate Projects, with effect from 2 December 2019 at an all-inclusive monthly salary of RM18,000.00 together with a personal driver paid by the Company.

(iii) When the Claimant was re-designated as Executive Director, he had already reached the statutory retirement age of sixty (60) years. The said re-designation did not stipulate any retirement age. Thereafter the Claimant continued his new role as Executive Director on a permanent basis with the Company.

(iv) Sometime during April 2020, the Human Resources issued a Memorandum on Retirement and Public Holidays. Under the revised retirement clause, it was stipulated that all staff will retire upon reaching the age of sixty (60) years.

(v) The Claimant for clarity sent an e-mail to HR on 7 April 2020 as follows:

"I like to draw your attention to your revised HR Policy. I was formally appointed ED after I reached the age of sixty (60) years. Therefore, I believe that this policy is applicable to those below sixty (60).

(vi) The HR immediately responded as follows to the query raised by the Claimant:

"That is correct Dato, this memo would not apply to your scenario. It is merely for your information only."

(vii) The dispute arose when the Claimant's salary was not paid by the Company for the month of March 2020.

(viii) The Company for reasons not known to him, failed to pay the Claimant's salary for the month of March 2020. When the Claimant raised the issu

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