Constructive dismissal claims must demonstrate fundamental breaches by the employer; civil courts maintain jurisdiction over contractual disputes while the burden of proof lies on the employee.

Introduction

[1] This case concerns a contractual dispute between the Plaintiffs, Affirm Plus Properties Sdn Bhd and Appilliate Sdn Bhd, and the Defendant, Jerome Lim Ming Chieh, regarding the enforcement of cl 3(b) of the Employment Agreement and a claim for damages to company property. The Plaintiffs allege that the Defendant failed to serve the required notice period before ceasing employment, thereby breaching his contractual obligations. Additionally, the Plaintiffs claim RM1,250.00 for alleged damage to a company-issued laptop. The Defendant disputes both claims, asserting that he was constructively dismissed and that he did not cause the alleged laptop damage.

[2] During the trial, two witnesses were called to testify. The Plaintiffs called SP-1 (Mr Lee Peng Hong), who provided evidence regarding the Defendant's employment, his failure to serve notice, and the alleged laptop damage. The Defendant testified as SD1, where he disputed the claims made against him and asserted constructive dismissal.

Jurisdiction Of The Magistrates' Court

[3] A fundamental issue raised by the Defendant is whether this Honourable Court has jurisdiction to adjudicate the Plaintiff's claim. The Defendant contends that his cessation of employment was due to constructive dismissal and that such disputes fall under the exclusive jurisdiction of the Industrial Court under s 20 of the Industrial Relations Act 1967. He argues that the Plaintiffs' claim for RM12,000.00 in lieu of notice circumvents the Industrial Court's authority.

[4] The distinction between contractual enforcement and industrial relations disputes was clearly articulated in Holiday Inn Kuching v. Lee Chai Siok Elizabeth 1991 MarsdenLR 626 ; 1991 MarsdenLR 334 ; 1992 MarsdenLR 952 ; [1991] 2 ILR 1239; [1992] 2 CLJ (Rep) 521, where the High Court held that:

"Claims for constructive dismissal fall squarely within the Industrial Court's purview, and it is not for civil courts to determine whether a dismissal was justified."

[5] However, the Court in Holiday Inn, Kuching went further to affirm the jurisdiction of civil courts in contractual disputes, ruling that claims for salary in lieu of notice arise purely from contractual obligations and do not require an assessment of fairness or reasonableness under employment law.

[6] This principle was reinforced in Teoh Kung Yu v. Menteri Sumber Manusia & Anor [2023] MLRHU 1277, where the High Court ruled that the Industrial Court's jurisdiction is confined to cases where reinstatement is sought. The Court stated:

"If a workman does not require reinstatement, there would not be reference to the Industrial Court under s 20(3) of IRA ."

[7] Further strengthening this distinction, the Court of Appeal in 7 Eleven Malaysia Sdn Bhd v. Ashvine Hari Krishnan 2023 MarsdenLR 388 ; ; [2023] 2 ILR 209 ; ruled that:

"Having regard to the purpose for which the Act was enacted, it was wholly incumbent upon the Plaintiff, who complains that she had been constructively dismissed, to invoke the statutory remedy under the Act, instead of filing a civil action."

[8] Accordingly, the Plaintiff's claim is purely contractual, as it does not seek a determination on dismissal but rather enforces cl 3(b) of the Employment Agreement. This Honourable Court retains jurisdiction over contractual disputes, including claims for salary in lieu of notice.

Enforceability Of Clause 3(b) And The Defendant's Breach

[9] Clause 3(b) of th