caselaw 2006 - constructive dismissal

8/3/2019 Caselaw 2006 - Constructive Dismissal

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INDUSTRIAL COURT MALAYSIA

CASE NO : 24/4-302/06

BETWEEN

ENCIK ADAM BIN CHIK

AND

SILVERSTONE MARKETING SDN. BHD.

AWARD NO : 1485 OF 2009

BEFORE : Y. A PUAN YAMUNA MENON CHAIRMAN - ( Sitting Alone )

VENUE : Industrial Court, Kuala Lumpur

DATE OF REFERENCE : 16.01.2006.

DATES OF MENTION : 06.03.2006, 10.04.2006, 25.05.2006,12.06.2006, 10.07.2006, 08.09.2006,

11.10.2006, 14.11.2006, 30.01.2007,09.02.2007, 28.02.2007, 02.03.2007,24.04.2007, 17.05.2007, 14.06.2007,16.07.2007, 27.07.2007, 04.09.2007,18.02.2008, 26.10.2007, 26.02.2008,19.03.2008, 18.04.2008, 26.05.2008,02.09.2008.

DATE OF HEARING : 09.06.2008, 10.06.2008, 11.06.2008

REPRESENTATION : Mr. Devan Mahalingam from Messrs Mallika &Lim representing the Claimant.

Ms. Shamini from Messrs Shamini Manikam &Associates representing the Company.

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REFERENCE :

This is a reference made under Section 20(3) of the Industrial Relations Act,

1967 pertaining to the dismissal of Encik Adam bin Chik (the Claimant) by

Silverstone Marketing Sdn. Bhd. (the Respondent).

AWARD

This is a claim of constructive dismissal.

The Law on Constructive Dismissal

In Quah Swee Khoon v. Sime Darby Bhd [2001] 1 CLJ 9, Justice Gopal Sri

Ram JCAaptly described Constructive Dismissal in the following passage:

An employer does not like a workman. He does not want to dismiss him

and face the consequences. He wants to ease the workman out of his

organisation. He wants to make the process as painless as possible for

himself. He usually employs the subtlest of means. He may, under the

guise of exercising the management power of transfer, demote the

workman. That is what happened in Wong Chee Hong [1988] 1 CLJ

298 (Rep), [1988] 1 CLJ 45. Alternatively, he may take steps to reduce

the workman in rank by giving him fewer or less prestigious

responsibilities than previously held. Generally speaking, he will make life

so unbearable for the workman so as to drive the latter out of

employment.

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In the case of Wong Chee Hong v. Cathay Organisation (M) Sdn. Bhd.

[1988] 1 CLJ 45 at page 48 the Supreme Court of Malaysia (at that time)

stated the basic principles pertaining to Constructive Dismissal as follows:

The common law has always recognized the right of an employee to

terminate his contract of service and therefore to consider himself as

discharged from further obligations if the employer is guilty of such

breach as affects the foundation of the contract or if the employer has

evinced or shown an intention not to be bound by it any longer.

In the case ofWestern Excavating (ECC) Ltd. v. Sharp [1978] IRLR 27

Lord Denning observed:

If 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, then the employee is entitled to treat himself as discharged

from further performance. If he does so, then he terminates the contract

by reason of the employers conduct. He is constructively dismissed.

In Woods v W.M. Car Services Ltd. (1981) ICR 666, Justice Brown

Wilkinson stated the following:

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In our view it is clearly established that there is implied in a contract of

employment a term that the employers will not, without reasonable and

proper cause, conduct themselves in a manner calculated or likely to

destroy or seriously damage the relationship of confidence and trust

between employer and employee: Courtaulds Northern Textile Ltd. v.

Andrew (1979) IRLR 84. To constitute a breach of this implied term it is

not necessary to show that the employer intended any repudiation of the

contract: the tribunal's function is to look at the employer's conduct as a

whole and determine whether it is such that its effect, judged reasonably

and sensibly, is such that the employee cannot be expected to put up with

it; see British Aircraft Corporation Ltd v. Austin (1978) IRLR 347. The

conduct of the parties has to be looked at as a whole and its cumulative

impact assessed.

Four conditions to be met in a constructive dismissal claim are:

(1) There must be a breach of contract by employer. Breach of contract by

an employer may involve breach of an expressed or implied term;

(2) The breach of contract must be serious enough to warrant resignation of

the employee or it must be the last incident in a series of events that led

to the employee leaving his employment at that instance.

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(3) The reason for the employee to leave his employment must be solely due

to the breach of contract by the employer and not for some unconnected

reasons.

(4) The employee did not delay in terminating the contract following the

breach of contract by the employer. Otherwise, he may be considered

as having affirmed the breach and agreed to alter the contract.

Background facts

1. The Claimant commenced employment with the Respondent Company

(the Company) on 3/6/1996 as a Sales Executive, based in the Melaka

Branch of the Company.

2. His employment contract provided that he was transferable.

It provided:-

Depending on the contingencies of service and/or employment, you maybe transferred to serve anywhere in Malaysia or outside Malaysia eitherwithin the Company or its related or subsidiary Companies or within anyother companies associated with the Lion Group.

(The Claimant had in fact been transferred before (twice), prior to the

transfer order dated 10th May 2004 after which the Claimant claimed CD.

He had been transferred from Melaka to Johor Bahru, and later from

Johor Bahru to Shah Alam).

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3. By letter dated 26/10/99 the Claimant was upgraded from grade D1

to C3, Executive Group, and redesignated as Manager OE, Government

& Fleet Accounts.

The letter dated 26-10-99 stated:

Other than the above, all your other terms and conditions of employmentand services will remain unchanged for the time being in force.

Background to the Transfer

1. In 2004, by letter dated 10/5/2004 entitled Job Transfer, (See page 20

of Company's Bundle or COB) the Claimant was informed that he would

be transferred to Taiping as Manager, Sales Training, effective 17/5/04,

on the same grade as his current grade at that time. i.e Grade C. The

letter stated that he was to report on 17/5/2004 to the Senior HR

manager (COW1) to discuss his new job functions. The Claimant was

given short notice (7 days notice) of transfer as the letter of transfer was

dated 10/5/04 but the effective date of the transfer was 17/5/04.

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The said letter is reproduced:-

10 May 2004

En. Adam bin ChikPresent

En. Adam,

JOB TRANSFER

This serves to confirm that you will be redesignated as Manager-Sales Trainingwithin Grade C3 of the Executive Group with effect from 17 May 2004.

You will report to Mr. Chew Kee Guan, Sr. Manager-Human Resource and/orsuch other persons as may be designated by him. You are required to report tohim at 11 am on Monday, 17 May 2004 where you will receive separatecommunication with regards to your job functions.

On behalf of the Company and the Management, we wish to express ourgratitude for your past performance and support. We are confident that youshare the need of the Company for continuous progress in order to provide theopportunities for your career development.

Thank you and regards.

Your sincerely,SILVERSTONE BERHAD

CHEW KEE GUANSenior Manager-Human Resource

The Claimant testified that on 17/5/04 after he had reported in Taiping to COW1

and after discussions with him in which he (the Claimant) raised his grievances

pertaining to the transfer, his lack of background or experience in sales training

or suitability for the new job, he was served with another letter (also dated

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10/5/04) concerning his transfer (page 19 of COB). This second letter stated

that the effective date of transfer to Taiping was 14/6/04.

Claimant testified:

A : I would like to refer to COB page 20. The letter dated 10/5/04,

the transfer takes effective on 17/5/04. After the discussion on

17/5/04 with Mr Chew and Mr. Tan Song Chye, then I received a

letter referring to COB p 19 dated the same day i.e 10/5/04 and

this had created suspicions with me.

2. It is the Claimant's case that the transfer order of 10/5/04 was not a bona

fide transfer but actuated by improper motive.

He asserts in his letter of resignation dated 18-5-04 I believe that the

transfer was aimed at securing my resignation from Silverstone Berhad

and hence he is claiming CD

The Claimant asserted that the transfer order of 10/5/04 was issued after

the Executive Director of the Company became displeased with him over

the loss of a major customer of the Company (Transnational), of which

account he (the Claimant) was in charge.

3. Three (3) days prior to the transfer order, there had been a Company

Sales meeting in Taiping at which meeting the Executive Director was

present. The Claimant, other sales employees, together with Heads of

Department were present at this Company Sales Meeting of 7/5/04.

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At the said meeting, the Claimant was singled out by the Executive

Director as being responsible for the loss of Transnational. This fact

was acknowledged by Company Witness COW1, Senior Manager HR when

he answered under cross-examination as follows:-

Q : I put it to you that Mr. Phang singled out the Claimant for

the loss of the Transnational account?

A : Yes.

The Claimant in his witness statement also testified that the Executive

Director mentioned do something about him (meaning the Claimant).

It is also the Claimant's testimony that the minutes of the said Sales

Meeting (found in COB) do not fully reflect what transpired i.e in respect

of the fact that he was singled out at the said meeting for the loss of the

major customer. The Executive Director upon hearing that Transnational

had been lost to a rival Company, blamed the Claimant who was in charge

of the account for said loss of customer. The Claimant asserted that this

was the cause of his sudden transfer to Taiping . He pointed out that this

transfer, unlike his earlier 2 transfer orders, was made at short notice (7

days) and without any consultation. Furthermore the transfer and

redesignation as Manager Sales Training meant that he would no longer

be earning sales commissions which meant that he would earn less.

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Prior to the transfer order of May 2004 the Claimant was doing sales in

Shah Alam and he had been earning sales commissions. In addition to

this he had no background experience or training for the new job. He

asserted that this transfer was aimed at securing his resignation from the

Company.

4. According to the Claimant, the loss of Transnational was due to

external factors and he should not have been blamed for it. He testified

that the Transnational boss had informed him that Transnational had

bought a substantial stake in another Company i.e Bridgestone Tyres. He

was informed that in view of this, Transnational would be turning to

Bridgestone for the supply of tyres rather than to the Respondent

Company. According to the Claimant this was the real reason for the

loss of Transnational as a customer.

The Court notes that what is material here is the fact that the Claimant is

asserting that the loss of this major customer became an issue and the

Executive Director was displeased with him concerning this matter and

this was the cause of the transfer order at short notice after the said Sales

Meeting.

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5. The Claimant testified that he did not have the background or experience

to be Manager Sales Training and hence he had requested the Company

to consider this fact when he met COW1 on 17/5/04 but the Company

refused to do so.

The Claimant's former General Manager, Sales & Marketing (CLW2) gave

evidence that in his view, the Claimant was not suitable for the position of Sales

Training for the following reasons:-

a) Having sales experience does not mean one can be a trainer.

b) Sales training requires knowledge of all areas of the Company's sales. In

this case the Claimant does not have any knowledge of export sales.

c) Sales training requires a very broad scope and knowledge in all aspects of

sales which includes but not limited to management, planning and

strategizing.

d) The Claimant needs to be trained in order to be a competent trainer.

In this respect, Company witness, COW1, was also questioned under cross-

examination as follows:-

Q : Do you agree that the export department and the sports

Department form Part of the Sales Managers?

A : Yes.

Q : Do you agree that the Claimant was never in those departments?

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A : Agree.

Q : So I put it to you that you are effectively asking the Claimant to

train people in departments he has no experience of?

A : Disagree.

And further,

Q : Do you agree that he had absolutely no experience in conducting

sales training?

A : Agree.

Letter dated 18/5/04

The Claimant on 18/5/04 wrote a letter of resignation to the Senior Manager HR.

In this letter he stated inter alia that the transfer to Taiping was aimed at

securing his resignation.

The said letter is reproduced:-

Re: Notice of Resignation

1. I refer to your letter dated 10th May 2004 informing me of my unexectedtransfer to Taiping, Perak as the Manager (Sales training). The meetingat your good-office in the presence of Mr. Tan Song Shye on the 17 th May2004 also refers.

2. After much thought and discussion with my family and in particular,having regard to several incidents/events that took place during my eight(8) years tenure of service with Silverstone Berhad, I hereby tender myresignation of service with effect from the date of this letter. As requiredin your letter of Employment, I am giving three (3) months written noticetoo.

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3. I am resigning because I am dissatisfied with the treatment accorded tome. Moreover, the manner in which I was transferred was uncalled forand humiliating.

4. Amongst others, my main reasons for resigning are as follows:-

4.1. No prior notice

No advance notice of the transfer was given orcommunicated to me. Hence, I had insufficient time tomake the necessary preparation.

In addition to having been caught by surprise, I was given anextremely short period to relocate to Taiping.

4.2 Unfair treatment

The transfer would result in a reduction in income, as it woulddeprive me of potential sale commissions.

The inconvenience and hardship caused to my loved ones and me.

I believe that the transfer was aimed at securing my resignationfrom Silverstone Berhad.

4.3 No due consideration was given to my reasons forobjection to the transfer

Despite my indicating that I did not have the background orexperience for the proposed assignment. I was nevertheless stillassigned.

Not only is it unfair to me, I believe that the failure to give such

due consideration was also unfair to Silverstone Berhad.

4.4 Hostile treatment

For instance, in a meeting on 7th May 2004 (SIP meeting), I wasunreasonably an unfairly singled out as the person responsible forthe loss of a major customer.

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5. In order to avoid further humiliation, stress and uncertainty, I herebyformally resign from Silverstone Berhad. Accordingly, I would alsoappreciate it if you could let me know the last day of my service.

Yours faithfully,

Adam bin ChikEmployee No. 3446

It is to be noted that among the reasons stated in his letter dated 18-5-04 are:-

a) I am resigning because I am dissatisfied with the treatment

accorded to me. Moreover, the manner in which I was transferred

was uncalled for and humiliating. (Para 3 of his letter)

b) No advance notice of the transfer was given or communicated to

me. Hence, I had insufficient time to make the necessarily

preparation.

In addition to having been caught by surprise, I was given an

extremely short period to relocate to Taiping. (Para 4.1 of letter)

c) The transfer would result in a reduction in income, as it would

deprive me of potential sale commissions.

The inconvenience and hardship caused to my loved ones and me.

I believe that the transfer was aimed at securing my resignation

from Silverstone Berhad. (Para 4.2 of letter)

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d) Despite my indicating that I did not have the background or

experience for the proposed assignment. I was nevertheless still

assigned.

Not only is it unfair to me, I believe that the failure to give such

due consideration was also unfair to Silverstone Berhad. (Para

4.3)

e) For instance, in a meeting on 7th May 2004 (SIP meeting), I was

unreasonably and unfairly singled out as the person responsible for

the loss of a major customer. (Para 4.4)

f) In order to avoid further humiliation, stress and uncertainty, I

hereby formally resign from Silverstone Berhad. Accordingly, I

would also appreciate it if you could let me know the last day of my

service. (Para 5)

The Right To Transfer : The Legal Principles

It is pertinent at this juncture to consider the legal principles pertaining to the

transfer of employees.

It is trite law that the right to transfer an employee within a Company is the

prerogative of Company's management.

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The Court of Appeal in Ladang Holyrood v Ayasamy a/l Manikam & 16 Ors

[2004] 3 MLJ 339 stated the basic principles as follows:

It is well established in Industrial Law that the right to transfer an

employee from one department to another or from one post of an

establishment to another or from one branch to another or from one

Company to another within the organisation is the prerogative of the

management and the Industrial Court will ordinarily not interfere. But if

the transfer is actuated with improper motive, it will attract the jurisdiction

of the Court. The power to transfer is, therefore, subject to, according to

Ghaiye's Misconduct in Employment (at pages 254 and 255), the following

well recognised restrictions:

(a) there is nothing to the contrary in the terms of employment;

(b) the management has acted bona fide and in the interests of its

business;

(c) the management is not actuated by any indirect motive or any kind

of mala fide;

(d) the transfer is not made for the purpose of harassing and

victimising the workmen; and

(e) the transfer does not involve a change in the conditions of service.

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Halsbury, Laws of Malaysia Vol. 17 (Industrial Relations) MLJ 2005

para 290.127, at p141 states that:

a bona fide transfer which would result in the employee receiving less or no

commission would not constitute CD (see Chua Yeow Cher v Tele Dynamics

Sdn. Bhd. [2000] 1 MLJ 168). Similarly a transfer to a new position effected

without consultation would not amount to CD (See Funai Electric (M) Sdn. Bhd v.

Saliah Ahmad [2000] 2 CLJ 655.

The High Court in Funai Electric (M) Sdn. Bhd v. Saliah Ahmad [2000] 2

CLJ p 655 (to be referred to as Funai Electric case), held that the Company had

the prerogative to transfer the Claimant and this was reflected in the Claimant's

letter of appointment and subsequent letters of promotion. Hence the need for

the Company to consult her before effecting the transfer was superfluous.

The High Court ruled that the Industrial Court was wrong in deciding that the

Company should have consulted the Claimant before transferring her.

Furthermore the proper test to be applied in constructive dismissal cases (Funai

Electric case was a CD case) is the contract test, and the question of the

reasonableness of the employer's actions does not arise in such circumstances.

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The Claimant's Case

Manner of Transfer

1. The Claimant asserted that this transfer was not a bona fide transfer but

actuated by improper motive. To support this assertion he pointed to

several facts. He compared this transfer of 2004 with his 2 earlier

transfers. Unlike his 2 previous transfers, where there had been prior

discussion or consultation, this time there was no such discussion or

consultation. It was a sudden transfer.

The transfer order was issued within days (3 days) of the Sales Meeting of

7/5/04 attended by Heads of Department at which meeting the issue of

the loss of Transnational had cropped up.

2. The Court notes that it is trite law, as stated earlier, that a Company is not

bound to consult an employee before a transfer order is issued. In other

words failure to consult the employee prior to a transfer by itself would

not be sufficient ground to claim CD. However the Claimant's case here is

that the transfer was not bona fide. He states inter alia that the manner

in which I was transferred was uncalled for and humiliating. In this

respect, the suddenness of the transfer order soon after the Sales

Meeting of 7/5/04 at which meeting he had been singled out as being

responsible for the loss of Transnational, the lack of consultation (unlike

previous transfers) and short notice given, may all be looked at

cumulatively in this CD claim.

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Loss of Sales Commissions

1. The Claimant also pointed out that he would be earning less in the new

place. He would not be able to earn sales commissions.

The law is clear however that the loss of sales commissions upon transfer by

itself would not be a sufficient ground for CD. The pertinent point to consider in

our case however is that the Claimant is asserting that the transfer was not

bona fide but aimed at a securing his resignation.

In Chua Yeow Cher v Teledynamics Sdn. Bhd. 2000 1 MLJ 168, it was

held that the loss of earning sales commission was not a valid reason to reject a

transfer because the employer has the absolute discretion in transferring its

employees, the exception being if the transfer was not bona fide. The High

Court observed that it was for the workman to adduce sufficient evidence on a

balance of probabilities that his transfer was not bona fide.

Azmel J stated:-

An employee has the power to transfer its employees at its absolute

discretion. An employee can be transferred even though not on a

promotion. And the employee has no right to question the right of the

employer unless, as has been stated above, the transfer was not

bona fide. Sufficient evidence has to be adduced by the employee on a

balance of probabilities that his transfer by the employer was not bona

fide.

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Position not filled

The Claimant also pointed to the fact that the position of Manager Sales

Training had not been filled since he left the Company. (This was acknowledged

by COW1 Mr. Chew under cross-examination). The Claimant asserted that this

shows that there had been no urgent need to transfer him there in the first

place, as there had been no Manager Sales Training prior to his transfer and

none since he left the Company. (The function of sales training had earlier been

outsourced to consultants prior to his transfer).

The Claimant pointed to these facts to show that his transfer was not a bona fide

one.

The Company's Case

1. The Company asserted that it had plans to appoint a Sales Training

Manager since 2003. In 2003, in its original Profit Improvement

Project towards Value Added Human Capital, prepared on 16 June 2003,

it had set out as part of its objectives and action plans to appoint a

Manager Sales Training to develop Sales Personnel.

In the meantime the function of Sales Training in Taiping had been

outsourced to consultants. (See Witness Statement of COW1, COWS1, at

Q and A 12).

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2. COW1, the Senior Manager HR, testified that even before the meeting

on 7th May 2004, the Claimant had been considered as a candidate.

However this was never communicated to the Claimant until 10th May

2004. According to COW1, the Claimant was selected due to his ability to

speak and motivate others well.

The Court however is not convinced of the truth of COW1's testimony. If

what COW1 is saying is really true, this matter could easily have been

earlier communicated to the Claimant. Why was the transfer order issued

at such short notice on 10/5/04, 3 days after the Sales Meeting, notifying

him that he has to report in Taiping to COW1 on 17/5/04?

The irrefutable facts before this Court point to something else.

3. COW1 conceded that the position of Manager Sales Training was not filled

up after the Claimant left. He was quick to point out that this did not

mean that the function did not exist. He testified that if existing sales

personnel other than the Claimant do not measure up to expectations

it is the Company's prerogative not to appoint them for the position and

source it out to third party consultants. Again, COW1's evidence is not at

all convincing. The Company seems to be saying that the Claimant was

chosen because he was good and other sales personnel did not measure

up. Then why was the transfer order issued in such a hurry?

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Furthermore the Claimant had no experience or background in sales

training.

4. It was also submitted that the Claimant had never referred to the alleged

words by the Executive Director Do something about him. In his

Statement of Case. The Company submitted that these words were

neither mentioned in the Claimant's letter nor even pleaded by him, and

hence it was an afterthought.

The Court notes that the Claimant's letter dated 18/5/04 indeed does not

specifically state these words. Neither is it pleaded in the Statement

of Case. Hence the specific reference to these words will be disregarded

by this Court.

5. As regards the Claimant's assertion that the transfer was sudden, the

Company argued that the Claimant had been given one month's notice.

According to the Company the transfer order was dated 10/5/04 but

effective 14/6/04. However the Court notes that the letter dated 10-5-04

entitled Job Transfer was effective 17/5/04. The second letter at p19 of

COB was only given after he had reported in Taiping on 17-5-04.

6. The Claimant was asked to meet COW1 on 17/5/2004 for COW1 to

explain about the duties of the new position. According to the Company

the Claimant rejected the transfer from the onset at that meeting,

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because of the loss of sales commissions, as his main ground for the

rejection of the transfer. (The Court notes however that these

submissions are not consistent with para 11 of the Statement In Reply

that the only matters raised by the Claimant during the meeting on

17/5/2004 were that he needed more time to go on the transfer to which

he was given the assurance that the Company was prepared to

accommodate his need for more time. The other matter raised was that

he was concerned about the experience required for the position he was

transferred to which the Claimant was also assured that he would be

given sufficient assistance).

7. According to COW1, pursuant to his meeting with the Claimant on

17/5/2004, he (COW1) sought to consult the management with view to

obtain an additional monthly allowance in addition to the relocation

reimbursement and the transfer allowance for the Claimant payable

pursuant to the transfer. However this was not finalised.

It is to be noted that this is being asserted by the Company after the

Claimant has claimed CD. In any case, even if this is true, it was

uncertain whether COW1 could have convinced management in the first

place. (Counsel for Claimant submitted that COW1's evidence that his

suggestion to management to pay a temporary relief allowance of

RM1,000.00 per month rings hollow when this, together with the

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Claimant's job functions, suitability and agreement to the same was not

discussed first (as previously done by the Company in the Claimant's two

other transfers) before the issuance of the letter of transfer CL-6).

8. As regards the loss of sales commissions, the Company referred to an

earlier case in the Industrial Court i.e SILVERSTONE MARKETING

SDN. BHD. v TAN EE TOH [2005] 776 1 ILR, a case involving the

same Respondent Company and another Claimant. This was also a CD

claim and it was dismissed by the Industrial Court. A perusal of the facts

of that case however show that the facts of that case are very different

from the facts of the present case.

The facts of that case

On or about early August 1998, the Company informed the Claimant of the

employer's plans to transfer him to the export department. The Claimant was

advised by the employer that the Company also planned to given the Claimant to

be the head of the export department in the future as the Company found him

to be the most suitable candidate for the said position.

According to the Company a remuneration package of RM2,400 per month was

drawn up for the Claimant on 5 August 1998 and the Claimant was informed of

the said remuneration package and the Claimant was agreeable to the transfer.

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The Industrial Court in that case held inter alia:

(1) The Company did not transfer the Claimant to another department with

mala fide as it had indicated to the Claimant that he would be given better

pay package.

The Industrial Court held if the employer's action of transferring the

Claimant to another department was with mala fide, how could the

employer indicate to the Claimant that he would be given better pay

package, which was claimed by the Claimant as an inducement, otherwise

the Claimant would have to tender his resignation.

(2) The Claimant had delayed in forwarding his claim of the alleged breach

i.e CD claim. He was transferred to the export department in August

1998. If there was a breach, the Claimant should have tendered his

resignation then and claimed constructive dismissal as early as September

or October 1998. However, he did not do so. He waited until January

1999 to tender his resignation and claim constructive dismissal. Thus,

he was deemed to have waived the breach and agreed to vary the

employment contract.

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(3) There were elements of condonation by the Claimant. If he was not happy

with his transfer, he should have tendered his resignation forthwith. If he

was not happy with his pay, he should have resigned forthwith also.

(4) The Claimant's conduct, viewed as whole, allowed a conclusion that he

chose to resign or abandon his employment with the employer.

(5) The Company asserted that it did not face any problems from the

Claimant at the material time. The employer was in fact pleased with the

Claimant's performance and ability and considered him to have the

potential of doing well in the export department and decided that the

Claimant was the best candidate for the position of sales executive in the

export department.

6. As regards the reduction in sales commission the Industrial Court held:

On the loss of commission, again in my considered opinion is not a

breach. Commission is an incentive for those in sales, which has to be

earned. Once an employee is not doing sales anymore, he is not entitled

to commission at all. Since commission is not contractual, as in this case,

the Claimant cannot rely on this ground to fortify his claim.

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The decision of the Industrial Court in the above case has been given in

length, to show that although that case touched on the issue of loss of

sales commissions, this was only one aspect of the case. There were

many other facts in that case which are very different from ours, and on

the totality of the facts of that case, the Industrial Court had

rejected the CD claim.

Decision

The Court has evaluated the totality of the evidence carefully on a balance of

probabilities, applying the contract test and is satisfied that the Claimant has

proven constructive dismissal. Looking at the totality of the facts cumulatively,

it is clear that this was not a bona fide transfer, but rather the Claimant was

being constructively dismissed. The Company has failed to prove that the

dismissal is with just cause and excuse. Hence the claim of CD is allowed.

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Remedy

As regards the remedy, having carefully considered all the relevant factors this

Court is of the view that reinstatement is not the appropriate remedy in this

case.

1. Backwages :

RM4,050 x 24 months - RM97,200.00

2. 10% deductions for post dismissal earnings - RM 9,720.00----------------RM87,480.00----------------

3. Compensation in lieu of reinstatement

RM4050 x 8 - RM32,400.00

TOTAL:

The total sum to be paid is RM87,480 + RM32,400 = RM119,880.00

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The total sum of$119,880.00 less any statutory deductions is to be paid to the

Claimant through his solicitors Messrs Mallika & Lim within 30 days from the date

of service of this award.

HANDED DOWN AND DATED THIS DAY 28TH OF DISEMBER 2009

( YAMUNA MENON )CHAIRMAN

INDUSTRIAL COURT, MALAYSIAKUALA LUMPUR

caselaw 2006 - constructive dismissal

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