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2024 MarsdenLR 3372
INDUSTRIAL COURT MALAYSIA
Rama Shankar A/L Thiyaga Rajan – Appellant
Versus
Dhaya Maju Infrastructure (Asia) Sdn. Berhad – Respondent
3(9)/4-604/20
Constructive dismissal is established when an employer's conduct, assessed via the contract test, constitutes a fundamental or repudiatory breach of the employment agreement, evidenced by a failure to act, respond to grievances, or maintain a professional working environment.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Constructive dismissal - Employment status - Fixed-term contract - Principles of natural justice and equity in labor disputes.
(B) Burden of Proof - In a claim for constructive dismissal, the burden lies on the employee to prove on the balance of probabilities that the employer’s conduct amounted to a fundamental breach of the employment contract (Paras 18, 19, 31).
(C) Conduct of Employer - The failure of an employer to address legitimate employee grievances, coupled with silence on the nature of employment terms and the resignation letter, may establish an environment that fundamentally invalidates the employment relationship (Paras 44, 46, 47).
Facts of the case:
The individual, employed under a fixed-term contract, sought resolution for unpaid claims and requested adjustments to contract terms. Negotiations remained unresolved as the employer failed to provide clear responses. Following a transfer to a different department with inadequate working accommodations and a deteriorating professional environment, the individual claimed constructive dismissal. The employer did not formally challenge the allegations provided in the departure notice.
Findings of Court:
The court determined that while the contract was indeed fixed-term, the employer’s pattern of unresponsiveness to grievances and the creation of an environment lacking proper support systems constituted a repudiatory breach of the employment contract. The employer’s failure to challenge the dismissal letter further corroborated the finding of constructive dismissal.
Issues: The main issues were determining whether the employment status was permanent or fixed-term and whether the employer's conduct and silence constituted a repudiatory breach leading to constructive dismissal.
Ratio Decidendi: The court applied the 'contract test,' confirming that an employer's conduct must be repudiatory to the employment contract. By failing to communicate, leaving claims unresolved, and creating an ambiguous working environment, the employer satisfied the criteria for constructive dismissal based on the balance of probabilities.
Result: Claim allowed. Employer ordered to pay compensation equivalent to the remaining term of the contract.
| Table of Content |
|---|
| 1. factual history of employment status and constructive dismissal claims. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12) |
| 2. jurisdiction and procedural role of the industrial court. (Para 13 , 14 , 15 , 16) |
| 3. determination of fixed-term contract versus permanent employment status. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30) |
| 4. assessment of conduct constituting repudiatory breach in constructive dismissal. (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49) |
| 5. assessment of appropriate remedies and backwages for constructive dismissal. (Para 50 , 51 , 52 , 53 , 54 , 55 , 56) |
3(9)/4-604/20
THE REFERENCE:
This is a reference dated 21 February 2020 made by the Minister of Human Resources pursuant to subsection 20(3) of the Industrial Relations Act 1967 [Act 177] arising out of the dismissal of Rama Shankar A/L Thiyaga Rajan (“the Claimant”) by Dhaya Maju Infrastructure (Asia) Sdn Berhad (“the Company”) on 31 July 2019.
Award
Brief Facts
[1] The Company is involved in the construction industry in areas such as railway, highway properties and infrastructure. The Company is a registered “PKK Class A” Bumiputera and CIDB G7 Contractor.
[2] The Claimant was appointed on a fixed term contract as a Plant Admin & Yard Manager with the Company via a Contract of Service dated 4 May 2016. The Contract was valid from 16 June 2016 to 15 June 2018 and the Claimant’s tenure was still probationer. On 25 July 2017, the Claimant was confirmed in the post.
[3] The Parties were in the midst of negotiating terms for a new contract before the expiry of the said Contract. The negotiating process was tedious with several back and forth between the Parties. The first draft was rejected by the Claimant who submitted a counter proposal to the Company. The Company then changed some of the provisions as requested by the Claimant, but not that was requested by the Claimant. The Claimant also rejected this draft and made another counter proposal.
[4] The Company remained silent, giving the Claimant no reply whatsoever. There were several issues that were up for discussion, but the Parties continued the work arrangements on status quo. The Claimant contends this act is proof that he was a permanent employee although the Company rejects this contention. These issues will be discussed later in the Award.
3(9)/4-604/20
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[5] According to the Claimant, on 1 December 2018, he received a Whatsapp Message to report to the Headquarters on 3 December 2018. The Claimant complained that he could not comply due to receiving threats after making an earlier police report. The Company advised him to make a further police report due to the threats, which the Claimant complied with.
[6] The Claimant pleaded that Mr. Fisol and another person from the Company approached him on 3 December 2018 and informed him to report to the Company’s Headquarters on 4 December 2018, which the Claimant complied. A letter to that effect dated 4 December 2018 has been submitted by the Company. The effective date of the letter was 3 December 2018. The Claimant did not acknowledge the letter in the signing page but did not object to this evidence.
[7] On 5 December 2018, the Claimant was issued another letter but this time entitled Change in Duties and Reporting Line effective the same date. The Claimant was transferred to the Procurement Department. These transfers confirmed that the Claimant is no longer the Plant Admin & Yard Manager as of 4 December 2018.
[8] Since the Contract of Service had lapsed, the Claimant had been sending reminders regarding his request for unpaid claims and the inclusion of certain terms he wanted to be included into the new Contract of Service. The Company claims that they had given their final reply on 1 August 2018. However, the Claimant kept on writing to seek the Company to reconsider its decision. This issue will also be discussed later in the Award.
[9] After whi
