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2026 MarsdenLR 83
INDUSTRIAL COURT KUALA LUMPUR
MOHD TAUFIK MOHD @ MOHD YUSOFF, CHAIRMAN
THIAU YAN KONG – Appellant
Versus
INDADI UTAMA (M) SDN BHD – Respondent
Award No: 1026 Of 2026 [Case No: 13/4-1529/22]
To establish constructive dismissal, an employee must prove a fundamental breach of an essential contract term, provide the employer notice to remedy the breach, and resign promptly. The test is based on contractual breach rather than unreasonableness.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Constructive dismissal - Burden of proof lies with the employee to establish on a balance of probabilities that the employer committed a fundamental breach of the employment contract (Paras 5, 12).
(B) Test for constructive dismissal - It is a "contract test" and not a "reasonable test" (Para 6). To succeed, the claimant must prove: (i) breach of a fundamental term or intention not to be bound by the contract; (ii) the breach undermined the foundation of the contract; (iii) sufficient notice was given to rectify the breach; (iv) failure to rectify justified immediate termination; and (v) the claimant quit soon after the breach (Paras 10, 12).
(C) Evidence - Contemporaneous documents are to be preferred over oral evidence when there is a conflict between the two (Paras 46, 47).
Facts of the case:
An employee serving as an Assistant General Manager of Sales was assigned a priority task of debt collection upon returning from suspension. The employee alleged that this assignment was a non bona fide reduction of responsibilities and a demotion to a lowly administrative role, constituting a fundamental breach of contract. The employee also claimed he was denied access to sales software. The employee resigned and claimed constructive dismissal.
Findings of Court:
The court found that the debt collection task was part of the written job scope signed by the employee and was a temporary priority. The court further found that the employee had access to the sales software, as evidenced by contemporaneous emails, and that he had not been denied the assistance of subordinates.
Issues: Whether the assignment of debt collection and the alleged denial of software access constituted a fundamental breach of the employment contract sufficient to justify a claim of constructive dismissal.
Ratio Decidendi: The court ruled that the claimant failed to prove a breach of any essential term of the contract. As the assigned tasks were within the agreed job scope and no fundamental breach was established, the resignation was deemed voluntary.
Result: The claimant's case is therefore dismissed.
AWARD
Reference
This is an order of reference dated 7 November 2022 by the Director General of Industrial Relations pursuant to s 20(3) of the Industrial Relations Act 1967 arising out of the alleged dismissal of THIAU YAN KONG (the claimant) by INDADI UTAMA (M) SDN BHD (the Respondent) on 1 June 2022.
Preliminary
[1] Upon the termination of contract by Y.A. Tuan Arun Kumar a/l S Kanesin, as the learned Chairman of Industrial Court who heard the case in open Court, this Court was instructed by the President of Industrial Court to hand down the award. Based on the established law that a new Chairman may hand down the award (see Bax Global (Malaysia) Sdn Bhd v. Sukhdev Singh Pritam Singh & Anor 2010 MarsdenLR 1998; [2011] 2 CLJ 534; Chong Jee Fatt v. Tee & C (malaysia) Sdn Bhd 2023 MarsdenLR 441; [2023] 3 ILR 204).
Pleadings, Bundle Of Documents And Witnesses' Statements
[2] The documents that were referred to by this Court to arrive to its decision are as follows:
a) Statement of Case dated 6 January 2023 by the claimant;
b) Statement in Reply dated 23 January 2023 by the Company;
c) Rejoinder dated 28 August 2023 by the claimant;
d) Claimant's Bundle of Document CLB1;
e) Claimants' Bundle of Document (Additional (1)) CLB2;
f) Claimants' Bundle of Document (Additional (2)) CLB3;
g) Ikatan Dokumen Syarikat - COB1;
h) Ikatan Dokumen Tambahan Syarikat - COB2;
i) Ikatan Dokumen (2) Syarikat - COB3;
j) Ikatan Dokumen (3) Syarikat - COB4;
k) Ikatan Dokumen (4) Syarikat - COB5;
l) A witness statement by Thiau Yang Kong (CLW1) marked as CLWS1;
m) A witness statement by Frankie Ridzal (CLW2) marked as CLWS2;
n) A witness statement by Nur Nazirah binti Mohamad Hashim (COW1) marked as COWS1;
o) A witness statement by Mak Kok Hay (COW2) marked as COWS2(a);
p) A Supplementary witness statement by Mak Kok Hay (COW2) marked as COWS2(b);
Constructive Dismissal
[3] A constructive dismissal happens when "the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract,..." (per Lord Denning in Western Excavating (ECC) Ltd v. Sharp [1978] 1 All ER 713).
[4] (See also Wong Chee Hong v. Cathay Organisation Malaysia Sdn Bhd 1987 MarsdenLR 532; [1988] 1 MLJ 92; [1988] 1 CLJ (Rep) 298).
[5] Under the law, the burden of proving constructive dismissal lies with the employee as decided in Southern Bank Bhd v. Ng Keng Lian & Anor 2001 MarsdenLR 1110; [2002] 5 MLJ 553; [2002] 2 CLJ 514; [2002] 2 AMR 1747; Phandian Arumugam v. Kudrat Maritime Malaysia Sdn Bhd 2020 MarsdenLR 1527; Suechi Industries Sdn Bhd v. Umah Jeralene Louis Adaikalasami 2004 MarsdenLR 1848; [2005] 1 ILR 54 (Award No: 1319 of 2004)). The burden to prove his case is on a balance of probabilities (see Syed Othman Abu Bakar v. Cekal Teguh Sdn Bhd/ Kazakhstan Methanol Limited [2017] MELRU 666).
[6] The test in a constructive dismissal case is a "contract test" and not a "reasonable test" (see Bayer (M) Sdn Bhd v. Anwar Abd Rahim 1995 MarsdenLR 69; [1996] 2 CLJ 49).
[7] Previously, to succeed in a constructive dismissal case, there are four (4) conditions that must be fulfilled as decided in the case of Bayer (M) Sdn Bhd (supra), where the High Court decided as follows:
"To claim constructive dismissal, four conditions must be fulfilled. These conditions are:
(1) There must be a breach of contract by the employer;
(2) The breach must be sufficiently important to justify the employee resigning;
(3) The employee must leave in response to the breach and not for any other unconnected reasons; and
(4) He must not occasion any undue delay in terminating the contract, otherwise he will be deemed to have waived the breach and agreed to vary the contract."
[8] (See also Yew Mun Khean v. Kumpulan Liziz Sdn Bhd 2018 MarsdenLR 773; [2018] 9 MLJ 729; [2018] 10 CLJ 684; [2018] 4 AMR 98; [2018] 4 ILR 401). This case was upheld during the a
