Professional Documents
Culture Documents
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BALAKRISHNAN MUNIAPAN1
School of Business & Design
Swinburne University of Technology (Sarawak Campus)
Abstract
This paper specifically analyses some of the constructive dismissal awards
and its implication to human resource management in Malaysia. The
methodology employed in this paper is the analysis of case laws using
criterion-based sampling from the Industrial and Superior Court awards
on constructive dismissal. With a good understanding of the constructive
dismissal awards, it is expected that organisations will manage and treat
their human resources as their greatest assets and prevent constructive
dismissal claims from taking place. This will eventually help to improve
and maintain harmonious employment relations.
Key words: human resource management in Malaysia, dismissal,
constructive dismissal, employment law, employment relations and
comparative industrial relations.
INTRODUCTION
Constructive dismissal is creating a new challenge to human resource
management in Malaysia. This is due to the increasing number of
awards on constructive dismissal made by the Malaysian Industrial
Court over the last nine years. From the years 2001 to 2009, the
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The right to life includes the right to livelihood. The right to livelihood
therefore cannot hang on the fancies of individuals in authority.
Employment is not a bounty from them nor can its survival be at their
mercy. Income is the foundation of many fundamental rights and when
work is the sole source of income the rights to work becomes as much
fundamental. Fundamental rights can ill afford to be consigned to the
limbo of undefined premises and uncertain applications. That will be a
mockery of them.
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misconduct constitutes a just cause or excuse for the dismissal Thus the
two questions, which the court had to ask itself, are: (i) was there a
dismissal; and (ii) if the answer to (i) is in the affirmative, was the dismissal
with or without just cause or excuse.
The concept of natural justice has two basic components: (1) the rules
of audi alteram partem and (2) the rule against bias. The of audi
alteram partem rule, or the rule requiring a fair hearing is of
importance and can be used to construe a whole code of administrative
procedural rights. The rule against bias is also of equal importance for a
man should not be judged in his own cause and justice must not be
done but seen to be done. An adjudicator should not be a party to the
dispute if he has some interest therein and it is not necessary to prove
that a particular decision made by the adjudicator was in fact influenced
by biasness. It is sufficient if there is a reasonable suspicion about his
fairness. He must not only be free from biasness, but there must not
even be an appearance of biasness. Source: Eastern Plantation Agency
(Johore) Sdn Bhd v Association of West Malaysian Plantation
Executives, Seremban (1985).
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2001
2002
2003
2004
2005
2006
2007
2008
2009
Constructive
26
35
40
34
22
42
97
126
140
Misconduct
726
810
763
1638
2144
2051
1200
878
613
Retrenchment
41
52
61
61
16
32
422
155
114
Others
402
573
328
Total
793
897
864
1733
2182
2125
2121
1732
1195
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could not unilaterally withdraw the said fixed annual bonus without
the employees consent. The companys action amounted to a serious
breach of the claimants contract of employment.
Payment of wages
In the case of ATI Technologies (M) Sdn Bhd & Anor v Jamilah Abu
Bakar [2002] 1 ILR 385 (IC), the claimant constructively dismissed
herself when she was not paid monthly salary. The court held this as
unjust dismissal and ordered the claimant to be paid back wages and
compensation in lieu of reinstatement. In TKS Kitcheneering Studio
(SA) Sdn Bhd v Chia Mooi Keng [2002] 1 ILR 124 (IC), the company
had constructively dismissed the claimant via her demotion and the
drastic salary reduction without providing her with any reasons. In
Broadway Typesetting Sdn Bhd v Puan Ho Nyet Khoon [1987] 2 ILR
350 (IC), the claimant was dismissed because she was 4 1/2 months
pregnant. The court held that the company had avoided paying her
maternity leave and had therefore found that there was no just cause
or excuse to dismiss the claimant.
In Sama World Asia Sdn Bhd v Teo Soo Seng [2008] 1 ILR 112
(IC), cited in Thavarajah (2008), the employee claimed constructive
dismissal when the company did not pay his salary, income tax and
EPF (Employee Provident Fund) for three months as well as his
reimbursements for travelling and medical expenses. The Industrial
Court however dismissed the employees claim, holding that the
employee had failed to prove that the company had evinced an
intention not to be bound by the contract.
Repudiation of contract
In Plastic Tecnic Sdn Bhd v Saraswathy d/o Manickam & Ors [1991]
1 ILR 643 (IC), the company relocated itself from Petaling Jaya to
Bangi promising its employees that a free transport service would be
continuously provided. However, the bus service ceased operations
after two months. The conduct of the company in ceasing operations
was held to be a repudiation of a fundamental term of the contract,
and the employees were therefore, entitled to regard themselves as
having been constructively dismissed.
Breach of implied term
The terms and conditions of employment are both expressed
(written) and implied (not written or psychological contact). There
were several cases of breach of implied contact in the 1990s which
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(6) Ang Beng Teik v Pan Global Textile Bhd, Penang [1996] 3 MLJ
137.
(7) ATI Technologies (M) Sdn Bhd & Anor v Jamilah Abu Bakar
[2002] 1 ILR 385.
(8) Ayadurai, D (1996) Industrial Relations in Malaysia Law and
Practice, Butterworths, Kuala Lumpur.
(9) Bowman, J and Lord Hailsham (2005) Halsbury's Laws of
England (4th Ed), Butterworths Law, UK.
(10) Broadway Typesetting Sdn Bhd v Puan Ho Nyet Khoon [1987]
2 ILR 350.
(11) Chong Lee Fah v The New Straits Times Press (M) Bhd [2006] 1
MLJ 289; [2005] 4 CLJ 605.
(12) Cosdel (Singapore) Pte Ltd v Ching Chooi Ham [2002] 1 ILR 562.
(13) DCruz, MN (2007) A Handbook of Malaysian Labour Laws,
Leeds Publications, Kuala Lumpur.
(14) DCruz, MN (1999) A Practical Guide to Grievance Procedure,
Misconduct and Domestic Inquiry, Leeds Publications, Kuala
Lumpur.
(15) Delhi Transport Corporation v DTC Mazdoor Congress & Ors
AIR 1991 SC 101.
(16) Dicklin Sdn Bhd v Bathma Subramaniam [1991] 2 ILR 750,
(1991) No 216 of 1991, Industrial Law Report.
(17) Eastern Plantation Agency (Johore) Sdn Bhd v Association of
West Malaysian Plantation Executives, Seremban (1985)
Industrial Court Award 93 of 1985.
(18) Employment Act 1955 (Malaysia).
(19) Farber v Royal Trust Co (1997) 1 Supreme Court Report 846,
Canada.
(20) Funai Electric (Malaysia) Sdn Bhd Johore v Salliah Ahmad
[1997] 2 ILR 1002.
(21) Gomez, AB (1997) Malaysian Industrial Court Precedent, AB
Gomez Publication, Petaling Jaya, Malaysia.
(22) Harta Maintenance Sdn Bhd v Vanaja Chelliah & Ors [1999] 1
ILR 639.
(23) Holiday Inn Kuching v Lee Chai Siok Elizabeth [1992] 1 MLJ
230.
(24) Hotel Malaya Sdn Bhd v Say Lip Nyen [1994] 1 ILR 464.
(25) Idid, SA (1997) The Law of Domestic Inquiries & Dismissals,
Pelanduk Publications, Petaling Jaya.
(26) Industrial Court (Malaysia) Award 20/1997.
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