Constructive dismissal claims must be substantiated; negotiating departure terms undermines claims of being forced to resign.

Lee Swee Seng JCA:

[1] This is a case of an alleged constructive dismissal before the Industrial Court where the employee/claimant, a legally-qualified Chief Executive Officer ("CEO") of the company, asserted that he had been dismissed without just cause and excuse by being forced to resign. The Industrial Court believed him and made an award of back wages and compensation in lieu of reinstatement ("Award"). The High Court affirmed the Award.

[2] The employee/claimant was the 1st respondent in the High Court and the 2nd respondent was the Industrial Court with the company being the applicant in the judicial review proceedings. Before us in the Court of Appeal the company is the appellant and the employee/claimant the only respondent. For ease and consistency of reference the company shall be referred to as the appellant company and the claimant as the respondent.

[3] Before us it was argued that there was no forced resignation and that the termination of employment had been on terms mutually agreed by both parties as evidenced from the final letter from the employer to the claimant setting out the terms mutually agreed which letter was acknowledged by the claimant with no reservation of rights. We shall now examine whether the Award of the Industrial Court should be upheld or whether it should be quashed on ground of being irrational in that any tribunal faced with the facts as adduced would have come to the conclusion that this was ultimately a case of mutual separation on terms

[4] The respondent before us was employed as the CEO of the appellant under a fixed term employment contract dated 1 August 2014. He was based at the Matrix Global Schools ("MGS") in Sendayan, Negeri Sembilan. As is not uncommon, the respondent was subject to being transferred within the Matrix group of companies in accordance with the business requirements of the appellant.

[5] His scope of duties and responsibilities as the CEO, would encompass his proper management of the MGS which included Matrix International School ("MIS") and Matrix Private School ("MPS") so as to achieve continued growth and ensure long term profitability.

[6] Alas, since 2016, the appellant had received numerous complaints from parents in respect of the declining academic standards and drop in quality of MIS and MPS. The parents complained of the decline in syllabus quality as well as the quality of the teachers. In response to the numerous complaints, the founder of MGS and the Group Managing Director, Dato' Lee Tian Hock, decided to refund the school tuition fees and security deposit for all Year 10 and 11 students for the academic year 2016. The sum refunded was in the excess of RM 1 million.

[7] The appellant suffered a decrease in student admission and student retention in the years 2016 and 2017 which the appellant attributed to MGS's drop in quality of education provided under the tenure of the respondent as CEO. The appellant believed that the respondent, as its CEO, must take responsibility for the continuing decline in standards of MPS and MIS.

[8] The appellant was concerned about the respondent's continued ability to manage the MGS. The appellant decided that it was in its best interest to relieve the respondent from his role as the CEO and in his stead to appoint one Tuan Haji Mohamad Nor as the interim CEO with effect from October 2017.

[9] What should the appellant do with the respondent? Exercising its managerial prerogative, it reassigned the respondent to the appellant's headquarters to assist the Deputy Managing Director (Mr Ho) with the Group's marketing from January 2018.

[10] Despite what was perceived by the appellant company as the respondent's less than satisfactory performance in his previous role, the appellant offered the respondent an alternative position to serve within the group through a letter dated 6 February 2018 (inadvertently stated as 2017), where the respondent was offered the position of Head, Group Corporate Affairs & Communications on a