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2024 MarsdenLR 1592
INDUSTRIAL COURT MALAYSIA
Muhammad Abdul Aziz – Appellant
Versus
Mestika Megan Sdn. Bhd. – Respondent
19/4-2142/21
Failure by an employer to pay agreed salary constitutes a repudiatory breach of the employment contract, justifying a claim of constructive dismissal. The employer bears the burden of proving that any dismissal was for just cause or excuse, and failure to provide evidence results in a finding of unfair dismissal.
Headnote:(A) Industrial Relations Act 1967 - Sections 20(3), 29(d), 29(g), 30(6), 30(6A) - Constructive dismissal - Non-payment of salary - Burden of proof - Ex-parte hearing - In unfair dismissal proceedings, the burden rests upon the employer to prove on a balance of probabilities that the dismissal was with just cause or excuse (Paras 15, 25). The failure to pay contractual salary amounts to a repudiatory breach of the employment contract, entitling the employee to treat the contract as terminated (Para 5.11). Where a party fails to attend the hearing despite due notice, the court is empowered to proceed with an ex-parte determination (Paras 3, 19, 23).
(B) Remedy in lieu of reinstatement - Compensation for loss of employment and backwages are appropriate where the relationship has deteriorated beyond repair (Paras 30, 38, 43).
Facts of the case:
A claim was brought by an employee for constructive dismissal following the employer's persistent failure to remit due salary payments. The employer did not participate in the legal proceedings despite receiving notifications, leading the court to conduct an ex-parte hearing.
Findings of Court:
The court found that the evidence supported the claim of constructive dismissal due to the employer's fundamental breach of contract. By failing to appear, the employer failed to discharge the burden of proving just cause or excuse for the termination of employment.
Issues: The issues were whether a constructive dismissal occurred and whether such dismissal was executed with just cause or excuse.
Ratio Decidendi: The court reasoned that an employer's breach of the implied term of mutual trust and confidence, specifically through the non-payment of salary, justifies a claim of constructive dismissal. In the absence of defense, the employee’s evidence establishing the breach is accepted.
Result: Claim allowed; compensation in lieu of reinstatement and backwages awarded.
| Table of Content |
|---|
| 1. court oversight for ex-parte hearing procedures. (Para 1 , 2 , 3 , 4 , 5 , 18 , 19 , 22 , 23) |
| 2. standard of proof in unfair dismissal. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 20 , 21 , 24 , 25) |
| 3. employer burden to rebut claims on evidence. (Para 26 , 27 , 28) |
| 4. principles for calculating backwages and remedies. (Para 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43) |
Reference
This is a reference dated 23.06.2021 by the Honourable Minister of Human Resources under Section 20(3) of the Industrial Relations Act 1967 pertaining to the dismissal of MUHAMMAD ABDUL AZIZ (referred to as “the Claimant”) by MESTIKA MEGAN SDN. BHD. (referred to as “the Company”) on 10.11.2020.
Procedural History
[1] Pursuant to the Court’s directive on a date fixed for case management on 13.10.2021, 27.01.2022 and 31.10.2022 held before Assistant Register and the Chairman, the parties were ordered to file the relevant pleadings on specified dates and fixed for e-hearing on 28.11.2023. It must be noted that the Claimant was present while the Company was not present.
[2] Hence, this case was ordered to proceed with the hearing ex-parte because the Company was absent and file Statement in Reply as ordered by this Honourable Court, this Court had only considered the Claimant’s Statement of Case, the Claimant’s Bundle of Documents marked as CLB1, the Claimant’s Witness Statement marked as CLWS1 Claimant’s Bundle of Authorities the Claimant’s Written Submission and the Claimant’s Bundle of Authorities.
[3] The hearing proceeded by through an ex-parte hearing due to the absence of the Company’s representative or the Company Counsel as under Section 29 (d) and (g) of the Industrial Relations Act 1967.
[4] The Court informed the Company of proceeding the case through email on 30.10.2023, the A.R Registered when was posted on 11.02.2022 unclaimed by the Company.
Facts
[5] After the mentioned date was fixed for administrative purposes and file management purposes, this Court commenced and completed the trial of this case on 19.02.2024, where evidence was duly recorded from one (1) witnesses for the Claimant :
(a) CLW-1 : the Claimant
5.1 The cause papers and documents filed in this matter are as follows:-
(i) The Claimant's Statement of Case dated 01.11.2021.
(ii) The Company's Statement in Reply 03.11.2022;
(iii) The Claimant's Rejoinder dated 06.11.2022.
(iv) The Claimant's Bundle of Documents - CLB 1; and
(v) The Claimant's Witness Statement CLWS1
5.2 On 28.11.2023 on the scheduled date for a full hearing despite notice being issued to the Company no representative of the Company was present and so this Honourable Court proceeded to hear the matter ex-parte pursuant to section 29(d) and (g) of the Industrial Relations Act 1967.
5.3 The Claimant gave evidence under oath through e-hearing and adopted his witness statements as examination in chief.
5.4 The Claimant was a former employee of the Company.
5.5 The Claimant commenced his employment with the Company as a teacher on 01.07.2017.
5.6 The Claimant was offered a salary of RM3,000 per month.
5.7 The Claimant under the instruction of the Company in settling his VISA issue, went back to Indonesia on 06.02.2020.
5.8 The Claimant was refrained from coming back to Malaysia due to the MCO (Malaysian Movement Control Order).
5.9 However, the Claimant was still able to perform work and teach online.
5.10 The Claimant has worked for three (3) years four (4) months and nine (9) days which is from 1/11/2017 to 10/11/2020 when he was constructively dismissed.
5.11 The Claimant was contructively dismissed due to the actions of the Company of not paying the Claimant’s salary from 2018-2019 in the sum of RM15,000 and he was not being paid from January to October 2020 in the sum of RM29,000.
5.12 At all material times, the Claimant did not compromise his rights to obtain a full monthly salary as he repeatedly requested his full salary to the treasurer of the
