The applicable test for constructive dismissal is the contract test, not the reasonableness test, which must be applied to determine if a fundamental breach of the employment contract occurred.

Nordin Hassan FCJ:

Introduction

[1] This appeal mainly concerns the applicable test concerning constructive dismissal which was claimed by one Tan Leong Huat, ("Mr Tan") an employee of RHB Bank Berhad (the respondent, and hereinafter referred to as "the Bank"). After the demise of Mr Tan on 15 March 2022, the deceased was represented by Tan Lay Peng ("the appellant") as the administrator of the estate of the deceased.

[2] On 25 March 2019, the Industrial Court allowed Mr Tan's claim for constructive dismissal and awarded the sum of RM216,840.00. An application for judicial review by the Bank at the High Court for certiorari to quash the decision was dismissed on 26 June 2020. However, on appeal, the Court of Appeal, on 21 October 2021, allowed the appeal by the Bank, set aside the decision of the High Court and granted the certiorari to quash the decision of the Industrial Court.

[3] Thereafter, on 21 March 2023, this Court allowed leave for the appellant to appeal on the following question of law:

"Is there a difference in the contract test or reasonable test in light of major developments in industrial jurisprudence?"

The Background Facts

[4] On 13 June 2011, Mr Tan was employed by the Bank as its Operations Head, Thailand Operations in Bangkok, the sole branch of the Bank at the material time. The terms of the employment were spelled out in the Offer of Employment letter dated 20 May 2011. He was required to report to the Head of Thailand Operations, Mr Thiti Musawan, and subsequently to the Thailand Country Head, Mr Wong Kee Poh.

[5] In November 2013, the Bank opened its second branch in Sri Racha which was placed under the supervision of Mr Tan. In June 2014, the Bank appointed Ms Marina Chin Yoke Fong as the Head of Thailand Operations to oversee the operations of the Bangkok, Sri Racha, and the intended Ayutthaya branches.

[6] By a letter dated 14 October 2014, the Bank issued a transfer order for Mr Tan to assume the role of Branch Manager of the Ayutthaya branch with effect from 20 October 2014. As stipulated in the transfer order, the assignment as the Ayutthaya Branch Manager is for a period not exceeding 9 months. Mr Tan complied with the transfer order and the Ayutthaya branch was opened in November 2014.

[7] Subsequently, the Bank appointed Ms Irin Chanonthiensink, a Thai national, as the Ayutthaya Branch Manager which commenced on 16 March 2015. In the circumstances, the Bank issued a transfer order by letter dated 13 February 2015 for the transfer of Mr Tan to the International Infrastructure, PMO and Operation Support, Group International Business in Malaysia with effect from 1 March 2015. In the transfer order, Mr Tan was required to report to the Head of International Infrastructure, PMO, and Operations Support who will outline his duties and responsibilities, set his objectives, and manage his performance. His grade and terms and conditions of employment remain the same.

[8] Mr Tan objected to his repatriation to Malaysia as indicated in his letter dated 25 February 2015 to the Bank. In the said letter, it was said, amongst others, that his transfer to the International Infrastructure, PMO, and Operation Supports Division would 'kill his career' and was without reasonable justification.

[9] Mr Tan did not comply with the transfer order and instead by letter to the Bank dated 2 March 2015, he pleaded constructive dismissal by the Bank. The Bank refuted his allegation in a letter dated 6 March 2015 and directed Mr Tan to report to work immediately, failing which, the Bank would assume that Mr Tan had abandoned his employment. However, Mr Tan maintained that he was constructively dismissed in his letter of response dated 9 March 2015 to the Bank. Unable to resolve the dispute, Mr Tan filed a representation under s 20 of the Industrial Relations Act 1967 ("the IRA ") which was then referred to the Industrial Court for adjudication.

[10] The Industrial Court gave an award in favour of Mr Tan where it was decided t