INDUSTRIAL COURT OF MALAYSIA

CASE NO. : 6(22)(6)/4-2376/19

BETWEEN

SIVADAS A/L P E S KUMAR

AND

GREEN & SMART VENTURES SDN BHD

AWARD NO: 395 OF 2023

Before : Y.A. TUAN AMRIK SINGH - Chairman (Sitting

Alone)

Venue : Industrial Court Malaysia, Kuala Lumpur

Date of Reference : 04.12.2019

Dates of Mention : 16.01.2020, 21.02.2020, 09.09.2020, 23.09.2020,

15.03.2021, 21.06.2021 & 30.08.2021

Dates of Hearing : 13.01.2022, 14.01.2022, 24.02.2022, 25.02.2022,

11.03.2022, 25.04.2022, 15.06.2022, 29.07.2022 &
12.08.2022

Representation : Mr. Johan Taing (Counsel for Messrs Joshua &

Associates)
Messrs. Yi The & Taing
Counsel for the Claimant

Mr. Chandrasegaran A/L Rajandran

Messrs. Rahman Rohaida
Counsel for the Company
REFERENCE :

This is a reference made under section 20(3) of the Industrial Relations

Act 1967 (“the IRA”) arising out of the dismissal of Sivadas A/L P E S

Kumar (hereinafter referred to as “the Claimant”) by Green & Smart

Ventures Sdn. Bhd. (hereinafter referred to as “the Company”) on 16th

May 2019.

AWARD

[1] The parties in this dispute have filed their respective written

submissions, reply submissions and bundle of authorities in support of

their case which this Court has taken its time to read on every issues

raised therein and had examined and considered the oral and

documentary evidence presented in the trial. This Court would like to

extend its gratitude to the learned counsel for the Claimant for taking the

time to painstakingly prepare the lengthy notes of evidence in typed form

for the Court’s easy reference in handing this Award.

[2] During the trial, the Company called the following witnesses to give

evidence in support of its case:

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 i. Nur Syarela Erin - (COW 1)
ii. Syed Nazim Bin Syed Faisal (COW 2)

[3] For the Claimant’s case, the witnesses were:

i. the Claimant (CLWS 1)

ii. Navindran A/L Balakrishnan (CLW 2)

Background of The Claimant’s Employment History

[4] The Company in this case is part of the Group of Companies. It is

a wholly own subsidiary of Green & Smart Holding Plc (the holding

company) and in turn Green & Smart Sdn Bhd is its subsidiary. The

Company and its holding company do not operate any business and all

business activities of the Group are carried out by its subsidiary, Green

& Smart Sdn Bhd. The only employees of the Company were the

Claimant who was the Group Chief Financial Officer of the Company,

CLW 2 who was the Chief Operating Officer and Saravanan Rasaratnam

(Saravanan) who was the Chief Executive Officer. Prior to being in

employment with the Company in dispute in this matter, the Claimant

was formerly employed in Green & Smart Sdn Bhd the subsidiary

company as the Chief Executive Officer on 01.03.2015 and his

employment with Green & Smart Sdn Bhd ended on 01.05.2016 when

the Claimant accepted the appointment as the Group Chief Financial

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Officer of the Company vide a Service Agreement (hereinafter referred

to as the “SA”) dated 01.05.2016 with a given yearly salary of

RM240,000.00. In Green & Smart Holdings Plc, the holding company,

the Claimant was appointed as the Executive Director/Finance Director

on 06.05.2016 but later resigned sometime in October 2018.

The Claimant’s case

[5] Vide a Service Agreement (“SA”) dated 01.05.2016, the Claimant

was employed as the Group Chief Financial Officer of the Company with

a yearly salary of RM240,000.00. The Claimant’s principle role in the

Company was to raise funds for the Company by securing loans and

investments and to be in liaison with the London Stock Exchange

including finalizing the accounts to be published in the London Stock

Exchange.

[6] On 23.04.2019, one Navindran Balakrishnan who was the

Executive Director of the Company had verbally informed the Claimant

that the Group of companies were undertaking an internal restructuring

on the instructions of a new significant investor and as a result of the

restructuring exercise, the Claimant’s service was no longer required.

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[7] Based on what was conveyed to the Claimant, the Claimant

issued three emails to the Company urging the Company to issue a

formal written notification. Pursuant thereto, vide letter dated

16.05.2019, the Claimant’s service with the Company was terminated

with six (6) months’ prior notice. In the termination letter, the reason

given by the Company was that the Company was in a dire financial

situation and was forced to discontinue the Claimant’s service by giving

the Claimant a six (6) months’ notice and that the Claimant’s

employment with the Company was terminated with immediate effect

from the date of the said termination letter. It was also stated that the

Company undertake to settle all relevant and outstanding payment

which were due to the Claimant pertaining to his employment by end of

the six (6) months from the date of the termination letter.

[8] The Claimant contended that the Company had admitted that the

basis of the Claimant’s dismissal was due to the financial difficulties of

the Company and not because of any default and/or wrongdoings

committed by the Claimant during the course of the Claimant’s

employment.

[9] The Claimant claimed that although the reasons proffered for the

Claimant’s termination in the termination letter was that the Company

was in a dire financial situation, the Group’s Financial Results dated

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30.09.2019 for the financial six months period ended 30.06.2019 and the

sufficient funds received by the Company demonstrated that the

Company was not experiencing any form of financial difficulties but

instead a growth in its financial standing. The summary of the Financial

results dated 30.09.2019 for the financial six months period ended

30.06.2019 were as follows:

(i) revenue increased 5% to RM1.9million from RM1.8million.

(ii) gross loss reduced to RM0.12 million from RM0.72 million

(iii) loss before tax was reduced to RM4.4 million from RM5.7
million

(iv) cash and cash equivalents at 30.06.2019 were RM0.06 million

compared to the previous year results from RM0.01 million.

[10] The Claimant contended that sometime in July 2018, the Company

received a cash injection of RM 3.2 million from a new significant

shareholder via issuance of new shares in Green & Smart Holdings plc.

On top of that, on 04.12.2018, the two executive directors and principle

promoters CLW 2 and Saravanan, had received a payment of GBP

2,407 million arising from the sale of a portion of the shareholding in

Green & Smart Holdings plc to the same significant shareholder and the

Group had secured a further loan of GBP1.6 million on 24.05.2019.

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[11] The Claimant contended that based on the foregoing substantial

financial funding, the Company is not experiencing any form of financial

difficulties and the reason put forth by the Company for dismissing the

Claimant are unfounded and without any justification resulting in the

unlawful termination of the Claimant’s employment.

[12] At the time of his dismissal on 16.05.2019, the Claimant contended

that the Company did not pay his salaries for the month of April and May

2019 and it was not indicated by the Company as to when the

outstanding payment of salaries will be paid despite several reminders.

[13] On 23.05.2019, the Claimant wrote to the Board of Directors of the

Group claiming that the letter of termination has failed to state the

grounds for the Claimant’s immediate termination and the settlement of

the outstanding payments due to him in relation to the Claimant’s

employment with the Company and the Group.

[14] The Claimant stated that the Company did not response to his

23.05.2019 letter nor to his follow up email sent on 04.06.2019 and by

that, the Company had failed to provide a justification for the termination

of the Claimant’s service.

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[15] The Claimant then issued a Notice of Unfair Dismissal to the

Company through its solicitors on 10.06.2019 which the Company then

replied through their solicitors’ letter dated 26.06.2019 notifying the

Claimant that the Company agreed to settle the outstanding salaries for

the month of April and May 2019 and continue to pay to the Claimant up

to his last day of work that is till 16.11.2019, a period of six (6) months

from 16.05.2019.

[16] On 01.07.2019, the Claimant then filed a complaint with the

Industrial Relation Department in Kuala Lumpur pursuant to section 20

of the Act and the date of dismissal in the Ministerial reference is stated

as 16.05.2019. The parties in their submission are not in agreement on

the date of dismissal. It is a finding of fact by this Court on whether the

dismissal took place on 16.05.2019. The issue pertaining to the date of

dismissal will be dealt later.

[17] The Claimant contended that the Company in its email dated

05.08.2019 admitted that the Company has failed to pay the outstanding

salaries for the months of April and May 2019, the six (6) months’

salaries in lieu of notice pursuant to the said Service Agreement and

RM2,000.00 being the balance of an advancement due and owing to the

Claimant. The Company further proposed to pay the Claimant the

outstanding salaries on or before 09.08.2019 whilst the six (6) month’s

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salaries in lieu of notice together with the debt of RM2,000.00 be paid on

or before 09.12.2019.

[18] The Claimant averred that as none of the Claimant’s terms and

conditions which had been agreed by the Company in relation to the

outstanding payments were complied with, the Claimant through its

solicitors issued a notice of demand dated 03.09.2019 in which the

Claimant proposed for a settlement in its penultimate paragraph

reproduced herein below :

“8. Despite that our client has instructed us to issue the letter of
demand dated 03.09.2019 to you, our client wishes to
propose the following settlement proposal as full and final
settlement of all our client‟s claims against your company:-

8.1 Your company shall pay to our client his salaries for the
months of April, May, June, July and August 2019 for
the total amount of RM100,000.00 only on or before
17.09.2019;

8.2 Your company shall provide to our client three (3) post
dated cheques dated on the 30th day of each month for
the total sum of RM60,000.00 only being our client‟s
salaries for the months of September, October and
November 2019 on or before 17.09.2019;

8.3 Your company shall also provide to our client on or

before 17.09.2019 a post dated cheque for the sum of
RM2,000.00 only being the debt due and owing by your
9
 company to our client pursuant to an advancement
made by our client on 01.08.2017 to your company.”

[19] However, the Claimant pleaded that except for the balance of the

advancements of RM2,000.00, by 11.09.2019 both the outstanding

salaries for April and May 2019 in the sum of RM28,808.00 and the six

(6) months salaries in lieu of notice were duly paid to the Claimant in two

(2) tranches that is RM43,312.00 paid on 04.11.2019 and RM37, 141.72

paid on 04.12.2019.

[20] The Claimant contended that even though the Claimant had

received the payments due to him as aforesaid, he reserved his right to

further claim from the Company for the full compensation that the

Claimant is entitled to under the law and equity.

[21] Therefore, the Claimant claimed that the retrenchment/dismissal

was carried out without just cause or excuse, in bad faith and was an act

of victimisation and/or unfair labour practice, contrary to the rules of

natural justice and was utterly unconscionable and prays for an order as

follows:

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 I. the sum of RM2,000.00 being the balance of the
advancements made by the Claimant to the Company on
01.08.2017;
II. a total sum of RM480,000.00 being the back wages due to
the unfair dismissal by the Company;
III. compensation in lieu of reinstatement;
IV. payment for punitive or exemplary damages based on the
harsh and mean circumstances in which he was retrenched/
dismissed;
V. and the Board of Directors’ resolution absolving the Claimant
from any legal liability arising from his duties to the Company
when it arises.

The Company’s Case

[22] The Company contended that the Claimant was employed by the

Company pursuant to the SA dated 01.05.2016 effective 02.05.2016.

[23] Whilst the Company did serve a six (6) months’ notice of

termination dated 16.05.2019, the Claimant had tendered his resignation

which took effect from 04.06.2019.

[24] The Company claimed that the SA states that the Claimant’s

appointment was formerly as Chief Executive Officer, however, the

Claimant assumed the title of Chief Financial Officer of the Company.

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[25] The term of appointment of the Claimant pursuant to clause 3.1 of

the SA stipulates that the Claimant shall be deemed to commence his

employment based on the commencement date on 02.05.2016 and shall

continue until terminated by six (6) months prior written notice by the

Company or the Claimant provided that such notice shall not expire any

earlier than the date which is twenty four (24) months from the date of

admission and that the Company had the absolute discretion to

terminate the Claimant’s employment by making a payment in lieu of

notice of six (6) months salary or any unexpired part of such notice.

[26] Pursuant to the aforesaid clause 3.1 of the SA, the Company

contended that the Claimant was employed on a fixed term contract for

twenty four (24) months effective 02.05.2016 and after the completion of

the 24 months period, by virtue of clause 3.2 of the SA, the Claimant

was subjected to termination by either party with six (6) months’ prior

written notice or in lieu of the six (6) months’ notice, the Company pays

the six months’ salary which the Company in its absolute discretion

reserves its right to exercise.

[27] The Company contended that the Claimant had vide an email

dated 29.01.2019 admitted that his tenure of employment with the

Company was for a period of twenty-four (24) months and his

12
employment will continue until it is terminated by either party giving a six

(6) months prior notice.

[28] It was further contended that the Claimant’s resignation as Director

of Green & Smart Holdings plc has no relevance to the Claimant’s claim

in this present dispute.

[29] The Company contended that the Claimant had acknowledged in

his email dated 13.05.2019 that the Group of companies will embark on

a restructuring exercise and the Company will no longer need the

service of the Claimant and subsequently in his another email dated

15.05.2019, the Claimant had indicated his acceptance of termination of

his service to the members of Board of Green & Smart Holdings plc

provided that the Company formalizes the said termination by confirming

in writing.

[30] Due to the Company’s financial circumstances and restructuring

efforts, the Claimant’s continuing employment with the Company would

be untenable. For this reason, the Company terminated the Claimant’s

service and issued a termination letter on 16.05.2019 in accordance with

clause 3.1 of the SA by giving six (6) months prior notice to the

Claimant.

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[31] The Company then undertook to settle all relevant outstanding

payments in relation to the Claimant’s entitlement under the employment

contract with the Company by end of the six (6) months from the

issuance of the notice.

[32] According to the Company, the Claimant then issued an email

dated 11.06.2019 stating that he will utilize his purported annual leave of

30 days, surrender the office keys and tender his resignation effective

04.06.2019.

[33] The Company contended that in regard to the Claimant’s

termination, proper procedures had been followed including giving the

requisite notice in accordance to clause 3.1 of the SA and the Claimant

had been informed even much earlier of the restructuring exercise

through emails and meetings held between the Claimant and CLW 2.

[34] The Company also contended that it was not in dispute that the

Claimant whose position was at all the material time as the Chief

Financial Officer with the Company, knew about the financial difficulties

faced by the Company.

[35] The Company did not dispute the fact that the termination letter

was issued to the Claimant due to the financial difficulties faced by the

14
Company and not due to any misconduct committed by the Claimant

during the course of his employment with the Company.

[36] The Company asserted that the group’s financial result dated

30.09.2019 exhibited as SK-5 in the statement of case, had yet to be

audited as at 30.06.2019 and that is therefore only considered to be the

interim results of the Company’s financial for the six months ended on

30.06.2019, indicating that the consolidated financial information is

unaudited and does not constitute the Company’s statutory financial

statement and hence, cannot therefore be relied upon as the actual

result of the Company’s financial statement may differ for the months

ended 31.12.2019. As such, the financial summary of the interim report

does not reflect and constitute statutory financial statement of the

Company.

[37] In reply to the Claimant’s averment that the Company had received

a cash injection of RM3.2 million from a significant shareholder via an

issuance of new shares in Green & Smart Holdings plc, its holding

company, the Company contended that whilst it is not disputed that the

Group of Companies had received a cash injection of RM3.2 million from

Serba Dinamik International Ltd vide the issuance of new common

shares, the net proceeds of the said subscription of shares were used to

15
advance the development of the Company’s biogas power plant in the

pipeline and also for working capital purposes.

[38] The Company contended that the Company was notified that

Serba Dinamik Group Berhad, a wholly owned subsidiary of Serba

Dinamik Holdings Berhad, had purchased K2M Ventures Sdn Bhd, a

company wholly owned by Mr. Saravanan Rasaratnam and CLW 2 and

the purchase was for the beneficial interest of the abovementioned

shareholders solely.

[39] In reply to the issue on the loan of RM1.6 million received by the

Company, the Company admitted that the RM1.6 million amount of loan

from Mr. Syed Naim Bin Syed Faisal (COW-2) , the finance director of

Green & Smart Holdings plc was used by the Company as working

capital purposes with twelve months free interest.

[40] It is the Company’s contention that the fact that the Company’s

financial state was in critical condition, the Company needed to take out

a loan and obtain financial assistance from third parties to meet its

overheads, operational cost and repayment of their loans and liabilities.

[41] The Company contended that at the material time, the Company

was having financial problems, had poor cash flow and low revenue and

16
profits all of which combined to produce accumulated losses that grew

over time and negatively impacted the Company.

[42] Resorting to the restructuring exercise was essential to its survival

and having encounter the pressing situation, the Claimant’s service as

the Chief Financial Officer was no longer needed by the Company as

evident in the Annual Report of Green & Smart Holdings plc for the 15th

month financial period ended 31.12.2018 which would show that the

Company had recorded losses for the financial year end 31.12.2018.

[43] It was further contended that the financial constraints impacted the

ability of the Group of Companies to progress certain projects to

completion that would have otherwise generated anticipated revenues

and although this financial constraints were subsequently addressed

when the Serba Dinamik International Ltd had successfully raised RM

3.2 million, the Group companies was hindered from pursuing any

further engineering, procurement, construction and commissioning

contracts during the period. As a result, there was a marked decrease in

revenue and financial performance for the year ended 31.12.2018

compared with the year ended 30.09.2017.

[44] According to the Company, based on the Annual Report for the

financial year end 31.12.2018, the Company had recorded losses

17
wherein the comparison between financial year ended 31.12.2018 and

30.09.2017 shows that:

(i) the revenue has decreased from RM45,344 million to

RM1,924 million.

(ii) the gross (loss)/profit has decreased from RM11,671 million

to RM1,839 million.

(iii) the operating loss has increased from RM1,898 million to

RM11,647.00 million

(iv) the loss before taxation has increased from RM2,698 million
to RM13,653 million

(v) The loss for the period/year has increased from RM2,699
million to RM13,664 million

(v) The total comprehensive loss increased from RM3,029

million to RM13,176 million

[45] The Company then went on to show the comparison between the

financial position for year ended 31.12.2018 and 30.09.2017 from its

Annual Report which is reproduced below:

(i) The cash and cash equivalents held by the Company for
year ended 31.12.2018 was RM471,000.00

(ii) The cash and cash equivalents held by the Company for
year ended 30.09.2017 was RM95,000.00

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 (iii) The current liabilities for year ended 31.12.2018 was
RM40,175 million; and

(iv) The current liabilities for year ended 30.09.2017 was

RM59,301 million.

[46] Its contention is that the amount of cash equivalents compared to

the Company’s current liabilities showed a huge difference wherein the

amount of cash was lower than current liabilities.

[47] The Company’s decision to terminate the Claimant employment on

grounds of redundancy was because it was experiencing financial crisis

and relying on clause 3.1 of the SA and therefore was bona fide to

ensure survivability. The Company sought to justify the Claimant’s

termination on reason that the Claimant’s position had become

redundant in consequence of internal restructuring exercise due to its

financial difficulties.

[48] The Company further claimed that it need not conduct domestic

inquiry on the Claimant as it was irrelevant considering the Claimant’s

service was not terminated for misconduct.

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[49] The Company admitted that the Claimant’s salary for the month of

April and May 2019 was not paid at the material time by the Company

due to financial difficulties suffered by the Company.

[50] The Company denied the contention by the Claimant that it has

failed to respond to the Claimant’s letter dated 23.05.2019 and did not

state the grounds of his termination as the Company had in fact

responded to it on 05.08.2019.

[51] The Company contended that the Claimant’s position in the

Company has not been replaced by any other person and the finance

department of the Company has been under the supervision of Mr. Syed

Nazim (COW-2), the Finance Director of its holding company.

[52] Pertained to the issue of the Claimant’s notice of unfair dismissal

and demand for unpaid salaries, the Company contended that it had

replied to the Claimant’s notice and in the same notice, the Company

denied the Claimant’s claim that it received advance payment of

RM12,000.00 from the Claimant. In its reply, it stated that the alleged

payment of RM12,000.00 was transferred by the Claimant to the

Company’s director (COWS 2) and did not agree to pay the balance sum

of RM2,000.00 to the Claimant.

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[53] The Company’s email dated 05.08.2019 states that the

arrangement of payment was only pertaining to the delayed April and

May 2019 salaries and the six(6) months’ salary in lieu of notice. The

Company reiterates that it was having financial difficulties to pay the

outstanding salaries to the Claimant, hence the delay in making the

payments.

[54] The Company further contended as follows:

(i) the payment of April and May 2019 salaries was paid to the
Claimant on 11.09.2019

(ii) the payment of six(6) months salaries in lieu of notice was

paid in two tranches on 04.11.2019 and 04.12.2019

(iii) there is no outstanding salaries due or owing by the

Company to the Claimant and the Claimant is not entitled to
claim for prayer (a) –(d) in the statement of case

[55] The Company stated that since the Claimant had resigned from

the Company with effect from 04.06.2019, the Claimant’s dismissal was

with just cause or excuse.

[56] Before proceeding on the function of the Industrial Court, it interest

this Court to ascertain the date of dismissal after hearing all the evidence

presented before it.

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[57] In the case of Shafie Abd Rahman v Petroliam Nasional Berhad

& Anor [2010] 16 MLRH 591 it was held as follows:

“[8] It is the Ministerial reference and not the statement of case

that determines the Industrial Court‟s jurisdiction. In the

present case what is the disputed referred by the Minister to

the Industrial Court ? The subject matter of reference as

reflected in the Award is the dismissal of the Applicant by the

1st Respondent. That is the dispute referred to the Industrial

Court for adjudication and it is clearly within the scope of the

Industrial Court‟s jurisdiction. The date of dismissal is a matter

of determination by the Industrial Court.

[9] The Applicant herein claims constructive dismissal. Hence the

issues before the Industrial Court are amongst others:-

(a) whether there was constructive dismissal and

(b) if there was constructive dismissal, whether the date of

dismissal is 29.09.2005 as stated in the Ministerial reference

or 30.09.2005 as stated in the Statement of Case.

[10] A determination whether the Applicant was dismissed on

29.09.2005 or on 30.09.2005 can only be made through

hearing the parties and considering the evidence. This was

the course of action taken by the Industrial Court in the case

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 of Joey Kanniah v Poliklinik & Hospital Veterina Sdn Bhd &

Ors [1997] 3 MLRH 398; [1997] 5 CLJ 237 where in that case

after hearing evidence the court itself was uncertain when the

claimant was allegedly dismissed because in his pleadings he

stated he was dismissed on 1.6.1993 whereas in the

Ministerial reference it was stated as 3.6.1993.

[11] In the present case the Industrial Court ought to have heard

the case to its conclusion and in the process deal with the

issue of jurisdiction. This is the proper procedure as laid down

in the Supreme Court case of Kathiravelu Ganesan & Anor v

Kojasa Holdings Bhd [1997] 1 MELR 10; [1997] 1 MLRA 372;

[1997] 2 MLJ 685; [1997] 3 CLJ 777; [1997] 3 AMR 2848;

where his Lordship Gopal Sri Ram (as he then was) held inter

alia:

The Industrial Court must decide the dispute to conclusion,

and in the process deal with the jurisdictional question”.

[58] In Mat Saat Ahmad & Ors v Linfox Transport Sdn Bhd & Anor

[2019] 1 MELR 505; [2019] 2 MLRH 319; [2020] 8 MLJ 271; where Her

Ladyship Azizah Haji Nawawi J (as she then was) stated that :

“[25] I am therefore of the considered opinion that the Minister‟s

reference to the Industrial Court is on the issue of dismissal whether

23
the Claimants were dismissed by the company with just cause of

excuse. That is the substance of the Minister‟s reference.

[26] On the issue of the date of dismissal, the same does not go to

the issue jurisdiction as it is a finding of fact by the Industrial

Court as to whether the dismissal took place on 4 January

2007 or 8 January 2007. The claimants have asserted their

position that they have been dismissed on 4 January 2007.

Then they made their complaints to the Minister, and the

Minister referred their complaints to the Industrial Court for

adjudication. It is not for the Minister to ascertain the „correct‟

or „actual‟ date of dismissal in order to state the „correct‟ date

in his Ministerial reference”.

[27] Thereafter, it is for the Industrial Court to ascertain the date of

dismissal after hearing all the evidence. But once the

Industrial Court finds that the Claimants have been dismissed

on a different date, other than the date in the Minister‟s

reference; it does not mean that the Industrial Court no longer

has the jurisdiction because the Industrial Court has already

seize with the jurisdiction from the Minister‟s reference itself.

The reference is on claimant‟s complaints itself that is on their

dismissal. It is clearly irrational if the Industrial Court suddenly

24
 finds itself lacking in the jurisdiction after combing through the

evidence and makes a finding that the date of dismissal is

different from the date in the Ministerial reference”.

[59] The issue on the discrepant dates of dismissal was also considered

in the Industrial Court case of Pravanananthan V Ponambalam v MBF

Holdings Berhad [2019] MELRU 1506 where it was stated by the

Learned Chairlady Sarojini Kandasamy that :

“Although there is inadvertent error with regard to the dates of

dismissal in the Minister‟s reference, nonetheless based on the

above authorities this court is seized with the jurisdiction to hear

and determine the Claimant‟s case on merits”.

[60] Another relevant case that should be referred to in regard to the

issue of the discrepant dates of dismissal is the case of : Surendran

Thuraisingam v Mahkamah Perusahaan Malaysia & Anor [2019]

MLRHU 392; [2019] 3 AMR 615 where His Lordship Nordin Hassan J (as

he then was) in his judgment stated that:

25
“[12] Likewise in the case of Rheem (M) Bhd v Metal Industy

Employees’ Union [1990] 1 MELR 110; [1990] 1 ILR 550 where

the Learned Industrial Court Chairman said that :

When were the services of the three claimants terminated ? Was it

on the date on which wages in lieu were given or was it on the date

of expiry of the notice ? The EA is silent on this point. It appears

clear to us that when a contract is terminated by the giving of notice

(whether given by the employer or employee) the effective date of

termination is the date on which the notice expires. But when a

contract of employment is terminated without notice, the effective

date of termination means the date on which the termination takes

effect.

In British Building & Engineering Appliances Ltd v Dedman

[1974] ICR 53, the court of appeal held that when the employer

gave notice of his intention that the contract would be terminated

forthwith, then the effective date of termination would be the date of

receipt of the date of the employers‟ notice of termination. In Hill v

C.A. Parsons Ltd [1972] Ch. 305, Lord Denning MR has this to say:

Suppose, however, that the master insists on the employment

terminating on the named day, what is the consequence in

law ? In the ordinary course of things, the relationship of

master and servant thereupon comes to an end for it is

26
 inconsistent with the confidential nature of the relationship

that it should continue contrary to the will of one of the parties

thereto.

This means even if the employer‟s notice is short and in

breach of contract, it terminates the contract on the date given

by the employer as the date of expiry. If the employer pays

wages in lieu of notice, then the relevant date is the date the

notice is given(emphasis supplied).

[61] Coming back to the present case, the Company’s contention and

submission was that the Claimant had tendered its resignation which took

effect from 04.06.2019 as confirmed by the Claimant’s email dated

11.06.2019.

[62] It is crystal clear and unambiguous that what the Company has

stated in the termination letter was as follows:

“Under this circumstances, the Company is forced to discontinue

your service by giving you a six(6) months prior notice…... . As

such, this letter serves as a notice to inform you that your

employment with the Company has been terminated from the date

hereof”.

27
[63] The Company is bound by clause 3.1 of its agreement (SA) to give

six (6) months prior written notice to the Claimant, in which case the

effective date of termination is the date on which the notice expires.

However, it was not mentioned in the letter of termination that the

Company will make payment in lieu of the notice (the six(6) months notice

period). Notwithstanding that, the Company has further stressed that the

Claimant’s employment with the Company has been terminated from

16.05.2019 ( “from the date hereof”). Since the contract is terminated by

giving of notice, the effective date of termination is the date on which the

six(6) months notice expires. The above findings is further substantiated

by the contents of the other contemporaneous documents. Firstly, the

Claimant did not specifically reply to the Company’s solicitors’ letter dated

26.06.2019 in which it was explained to him that the last day of work to be

on 16.11.2019. Secondly, by notifying the Company in his email dated

11.06.2019 of his intention to utilise his 30 days annual leave and

resigning thereafter, the Claimant would have at that time been certain

that he was still in employment and entitled to take his annual leave to his

own benefits before tendering in his resignation. Thirdly, the Claimant

when cross examine on this issue admitted that his employment was up

to 16.11.2019 and he was paid salaries until 16.11.2019. Therefore, there

is no doubt that the effective date of termination is the date on which the

notice expired i.e 16.11.2019. Despite having concluded that the date of
28
dismissal is different than that referred to in the Minister’s reference, the

Court is not lacking in its jurisdiction to hear and determine the case on

merits.

The Role and Function Of The Industrial Court

[64] It is settled that the function of the Industrial Court in s 20(3) IRA

reference is two fold as explained by His Lordship Raja Azlan Shah, CJ

(Malaya) (as His Royal Highness then was) in the Federal Court case of

Goon Kwee Phoy v J & P Coats (M) Sdn Bhd [1981] 1 MLRA 415;

[1981] 2 MLJ 129 opined that:

“Where representation are made and are referred to the Industrial

Court for enquiry, it is the duty of that Court to determine whether

the termination or dismissal is with or without just cause or excuse.

If the employer chooses to give reason for the action taken by him

the duty of the Industrial Court will be to enquire whether that

excuse or reason has or has not been made out. If it finds as a fact

that it has not been proved, then the inevitable conclusion must be

that the termination or dismissal was without just cause or excuse.

The proper enquiry of the Court is the reason advanced by it and

29
 that Court or the High Court cannot go into another reason not

relied on by the employer or find one for it”.

[65] Reference is also made to the decision of the Federal Court in

Milan Auto Sdn Bhd v Wong Seh Yen [1995] 3 MLJ 537; [1995] 4 CLJ

449; [1996] 1 AMR 049, His Lordship Mohd Azmi bin Kamaruddin, FCJ

explained the role of the Industrial Court under s 20 of the IRA as follows:

“As pointed out by the Court recentlyin Wong Yuen Hock v

Syarikat Hong Leong Assurance Sdn Bhd & Another Appeal

[1995] 1 MLRA 412; [1995] 2MLJ 753; [1995] 3 CLJ 344; [1995] 2

AMR 2145, the function of the Industrial Court in dismissal cases on

a reference under s 20 is two-fold; firstly, to determine whether the

misconduct complained off by the employer has been established,

an secondly whether the proven misconduct constitutes just cause

or excuse for the dismissal. Failure to determine these issues on

the merits would be a jurisdictional error…”

[66] It is the Company’s case that the Claimant was employed on a fixed

term contract whilst the Claimant in his submission claimed that the

contract provides the Claimant with a continuous employment until he

30
attained the age of 65 of which the Claimant was 57 years of age at the

date of dismissal.

Issues

[67] This Court has to first determine the issue of whether or not the

contract in question was a genuine fixed term contract. If this Court finds

that the answer to the question is in the negative, but was in fact a

permanent contract of employment, then it follows that the next issue to

be determined is whether there was a dismissal. If there had been a

dismissal, whether the dismissal was with just cause or excuse.

[68] On the other hand, once it has been concluded that it is a fixed

term contract, it will bring the contract to its natural end and there should

be no issue of there being an unlawful dismissal. This was the principle

laid down in the case of M Vasagam Muthusamy v Kesatuan Pekerja-

Pekerja Resorts World Pahang & Anor [2002] 3 MLRH 886; [2003] 5

MLJ 262; [2003] 5 CLJ 448; where Faiza Tamby Chik J held:

“The applicant contended that the Industrial Court had not applied
the correct test in making its decision by first asking itself whether
there was a dismissal and secondly if there was a dismissal,

31
 whether the dismissal was with just cause or excuse. I am of the
opinion that the Industrial Court had correctly addressed the issue
in this case by determining first whether or not the contract in
question was a genuine fixed term contract (see pp3 and 4 of the
award)”.

Whether the Service Agreement is a fixed term contract or a permanent

contract.

[69] In its submission on the issue pertaining to the SA, the Company

proffered the reason that based on clause 3.1, the SA is a fixed term

contract for a duration of twenty four (24) months that entitles the

Company in its absolute discretion to terminate the Claimant’s

employment by making a payment in lieu of notice of six (6) months’

salary or any unexpired part of such notice.

[70] It was further submitted that Claimant was engaged on a fixed term

contract for a duration of twenty four (24) months effective 02.05.2016

after completion of which was subject to termination by either party with

six (6) months prior written notice or the Company making payment in lieu

of six (6) months’ salary. As stipulated in clause 3.2 of the SA, upon

issuance of the notice of termination by either party in accordance with

clause 3.1, the Company reserves its right exercisable in its absolute

32
discretion, to terminate the Claimant by making a payment in lieu of the

notice required by clause 3.1 or any unexpired part of such notice.

[71] Submitting further on the same issue, according to the Company,

the Claimant had admitted in his email dated 29.01.2019 that the tenure

of his employment with the Company was for a period of twenty four (24)

months and will continue until terminated by either party by six (6) months

prior written notice.

[72] The Claimant, on the other hand, submitted that he has been

working with the Group of Companies since 2014. There is no issue of

renewing the employment of the Claimant on month to month basis as the

Service Agreement will automatically continue until a six (6) months’ prior

notice is given by either the Company subject however to clause 18 of the

SA. The Claimant argued that the words “subject to clause 18” stipulated

in clause 3.1 should be taken into account and not be left out as it is

essential when terminating the SA in accordance with the terms of clause

18, which must be met for the agreement to be lawfully terminated. As

none of the circumstances stated in clause 18 applies, the termination of

Claimant’s services is unlawful and was in breach of the SA.

[73] It is further submitted by the learned counsel for the Claimant that

the Company’s discretion to terminate the Claimant’s employment by

33
making payment in lieu of notice of six (6) months’ salary was not an

absolute discretion by the Company as the termination by the Company is

subject to clause 18 and the Company has no discretion to provide such

notice period to the Claimant without invoking clause 18 and therefore,

giving notice of termination to the Claimant without any circumstances

stated in clause 18 amounted to unlawful termination.

[74] In this case, the Company denied that the Claimant had been

constructively and/or unlawfully dismissed for reason that the Claimant

was in fact employed on a fixed term contract for a duration of twenty four

(24) months and was lawfully terminated since the Claimant was no

longer required by the Company as a result of the restructuring of the

Group and that the Company was entitled to do so pursuant to clause 3.1

of the SA.

[75] In the Federal Court case of Ahmad Zahari Mirza Abdul Hamid v

AIMS Cyberjaya Sdn Bhd [2020] 2 MELR 421; [2020] 3 MLRA 475;

[2020] 5 MLJ 58; [2020] 6 CLJ 557; [2020] 5 AMR 1, it was held that:

“The use of fixed term contract employee had become a trend in

Malaysia, particularly in the employment of expatriates and also in

the construction industry where employees are commonly

engaged on a project basis. A fixed term contract is a contract of

34
 employment for a specific period of time, ie with a defined end (see

Wiltshire Country Council v National Association of Teachers In

Further And Higher Education And Guy [1980] 1 CR 455. As a

general rule such contract cannot be terminated before its expiry

date except for gross misconduct or by mutual agreement.

However, a contract can still be for a fixed term if it contains within

it a provision enabling either side to terminate it on giving notice

before the term expires (see Dixon And Another v British

Broadcasting Corporation [1997] 1 QB 546. In this connection the

main issue that presents itself is whether there is a genuine fixed

term contract or there is an employment on a permanent basis

dress up as several fixed term contracts”.

[76] The Federal Court in paragraph 55 page 257 held:

“The judicial treatment regarding the question of whether an

employer had a genuine need for the service of an employee for a
fixed duration may be divided into three consideration points:
i. The intention of the parties
ii. Employer‟s subsequent conduct during the course of the
employment
iii. Nature of the employer‟s business and nature of work which
an employee is engaged to perform”

35
[77] Similarly, this Court would now determine whether the SA is a fixed

term contract by applying the three consideration points set out in Ahmad

Zahari Mirza’s case (supra).

The Intention of The Parties

[78] The Claimant’ employment contract has been continued without any

renewal notice and neither was there any evidence to support the

Company’s case that it extended the SA on a month to month basis with

the knowledge and acceptance of the Claimant. It was never

communicated to the Claimant at any time in May 2018 after a duration of

twenty four (24) months or thereabout that his contract of service has

ended by effluxion of time. Neither did the Company brought to the

Claimant’s attention that his service was thereafter being extended on a

month to month basis from the date the Claimant’s tenure had purportedly

expired by virtue of clause 3.1 of the SA.

[79] In fact, although the Company claimed that it has extended the

Claimant’s SA on a monthly basis since May 2018, there is no provision in

the SA that gives the Company an absolute discretion or the rights to

unilaterally decide to extend the Claimant’s tenure on a monthly basis

until such time that it conveniently decides to terminate the SA.

36
[80] In his submission, learned counsel for the Claimant attempted to

convinced this Court that clause 3.1 of the SA is subjected to clause 18

taking effect. Clause 18 reads:

“18. Termination

18.1 The Company‟s normal retirement age is 65 years, and upon

the Executive reaching this age it is agreed and accepted that this

Agreement will automatically terminate unless it is mutually agreed

in writing otherwise…..”

[81] The effect of clause 18.1 is that it sets a ceiling on the retirement

age where the Claimant can no longer keep his employment with the

Company once he attained the age of 65 and the SA will automatically

comes to an end and terminates the employment relationship between

the Company and the Claimant.

[82] Evidently, it is clear that by virtue of clause 18 that the Claimant was

entitled to continue his employment with the Company until he attained

the age of 65 which at the date of dismissal, the Claimant has not yet

attained the age of 65 and this provides the Claimant with a security of

tenure beyond and above the twenty four months.

37
[83] It is the findings of this Court that the fact that there is a clause on

the retirement age in the SA, in the absence of any action taken by the

Company to dismiss the Claimant under any of the grounds listed in

clause 18.2 of the SA with just cause or excuse or for any other reasons

acceptable to the Claimant or by a mutual agreement, the Claimant’s

expectation of the Company on his security of tenure is guaranteed until

the Claimant attained the retirement age of 65 in accordance with clause

18.1. The purpose of including this clause would be, none other than, to

stipulate when will the SA comes to its natural end. It is evident that the

inclusion of this proviso 18.1 was done solely to specify the point at when

the SA will end on its own in situations where there is no serious

misconduct committed during his tenure of employment. It would be a

blatant disregard to construe clause 3.1 or to explain it without giving any

significance to the words “subjected to clause 18”.

[84] It is instructive to make reference to the Court Of Appeal case of

Datuk Yap Pak Leong v Sababumi (Sandakan) Sdn Bhd [1996]

2MLRA 1; [1997] 1 MLJ 587; [1997] 1 CLJ 23 in the following words:

“it is trite law that a primary duty of a court in construing a written

contract is to endeavour to discover the intention of the parties from

the words of the instrument in which the contract is embodied …. If

the words are unambiguous, the Court must give effect to them,
38
 notwithstanding that the result may appear capricious or

unreasonable and notwithstanding that it may be guessed or

suspected that the parties intended something different. The Court

has no power to remake or amend a contract for purpose of

avoiding a result which is considered inconvenient or unjust….”.

ii. subsequent conduct during the course of the

employment

[85] The employer’s subsequent conduct during the course of

employment and the total duration or length of service are factors to be

considered in determining whether the contract is a fixed term or

permanent employment.

[86] The nature of the Claimant’s job as the Group Chief Executive

Officer according to the facts of this case does not comport with an

employment with a fixed term duration as it is not project base or one

that the Company after completion of certain task would no longer

require his service. It cannot be said that the Claimant’s role is one that is

temporary in nature because that would mean that the operations of the

finance department of the Company no longer plays an integral part of the

Company or its business operations. If it was intended by the Company

to employ the Claimant for a specific duration, the Company would have

39
conveniently stipulated the duration of the service required of the

Claimant in the contract of employment and would not had subjected

clause 3.1 to clause 18.

[87] The Company’s reason in the termination letter was that it was in a

dire financial situation and had to resort to a restructuring exercise which

led to the Claimant’s position being redundant. Although in the same

letter, the Company relied on clause 3.1 of the SA for his termination and

as being indicative of a fixed term contract, this reason seemed to have

been applied to merely suit the Company’s interest to terminate the

Claimant’s services. In actual fact, the twenty four months duration would

have ended sometime in May 2018 but the Company had continued to

employ the Claimant till 15.05.2019 with the additional six(6) months

extending the contract to another one (1) year until the date of the

termination letter. It is the opinion of this Court that had the Contract been

a genuine fixed term contract, the Company need not justify to the

Claimant on why the Claimant’s position had been redundant as the

Company need only be required to show that the SA had come to its end.

This Court is not convinced that the Claimant’s tenure had actually

expired and the Company had been extending the contract on a month to

month basis on its own volition or goodwill. The Company did not notify

and put the Claimant on notice that the Company decided to extend the

40
Claimant’s contract on a month to month basis after its purported

expiration.

iii. Nature of the employer’s business and nature of work which

an employee is engaged to perform

[88] It is not in evidence that the Claimant’s position or job scope is

temporary in nature. On the contrary, it is a vital position in the

Company’s hierarchy and will be needed as long as the Company is in

operation.

[89] Based on the above reasoning, this Court finds that the Claimant’s

contract was not a fixed contract but one which was continuous in nature

i.e. permanent employment contract.

[90] In this dispute, the Claimant took the position that he was both

constructively dismissed and/or unlawfully dismissed and was forced to

resign. That he has been constructively dismissed and forced to resign

was only pleaded in his Rejoinder whereas in the Statement Of Case,

the Claimant had maintain that he was unlawfully dismissed and did not

plead constructive dismissal and forced resignation or either one of

them, the reason of which is best left to the finding of facts and

41
evaluation of the two species of dismissal raised by the Claimant in the

Rejoinder which will be dealt with hereinafter.

[91] Before that, on a separate issue, the Company has referred to an

impugned email dated 29.01.2019 by which the Company alleged that

the Claimant had admitted therein that he has a twenty four(24) months

tenure of employment with the Company which will continue until

terminated by either party by a six(6) months prior written notice. The

Claimant however claimed that he has no knowledge of the said email

and that it may have been forged on reason that at that time, the

Claimant’s emails were under the control of the Company.

[92] The evidence pertaining to the email was given by COW 1 and

CLW 2 during the trial in this Court where COW 1 testified that the email

was received by her from the Claimant. COW 1 testified that she went to

meet the Claimant to get the SA for the auditor. She disagreed that the

administrator would have access to all the emails of the employees.

According to COW 1 the email was sent to her by the Claimant after she

had meet him. COW 1 disagreed with the suggestion of the Claimant’s

learned counsel that the Claimant did not send the email to the

Company. The Court is more convinced with the evidence given by

COW 1 and CLW 2 and it is trite that the party who assert must prove.

42
[93] In the Court of Appeal case of Teng Tong Kee v Nikmat Jasa

Piling Sdn Bhd [2006] 1 MELR 1; [2006] 1 MLRA 70; [2006]1 CLJ 1199 it

was held that:

“[9] Section 101 Evidence Act 1950 provides that whoever desires
any court to give judgment as to any legal right or liability,
dependent on the existence of facts which he asserts, must prove
that those facts exist. It is said that the “burden of proof” lies on
that person.
[10] The phrase “burden of proof” has two distinct meanings,
namely the burden of establishing a case and the burden of
introducing evidence. Section 101 deals with the former while s
102 of the Act deals with latter”

[94] Here the onus is on the Claimant to prove that the impugned email

has been forged as alleged in his Rejoinder. It was not proven before

this Court that the email has been forged. The Court must reject such

allegation as being without cogent prove. In fact, the Court is convinced

that the email was sent by the Claimant as testified by COW 1 and CLW

2.

On Constructive Dismissal Claim

43
[95] It is imperative of this Court to evaluate and determine based on the

evidence available before this Court if the Claimant had been dismissed

by way of constructive dismissal as claimed.

The Law On Constructive Dismissal.

[96] The starting point of the law on constructive dismissal is the seminal

case of Western Excavating (EEC) Ltd v Sharp [1978] 1 ALL ER 713

where Lord Denning established the correct test for constructive dismissal

and explained lucidly as follows:

“…. If the employer is guilty of conduct which is significant breach

going to the root of the contract of employment, or which shows 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 any further performance. If he does so,

then he terminated the contract by reason of the employer‟s

conduct. He is constructively dismissed.

The employee is entitled in those circumstances to leave at the

instant without giving any notice at all or alternatively, he may give

notice and say he is leaving at the end of the notice. But the

conduct must in either case, be sufficiently serious to entitled him to

44
 leave at once. Moreover, he must make his mind soon after the

conduct of which he complains for if he continuous for any length of

time without leaving he will loose his right to treat himself as

discharged. He will be regarded as having elected to affirm the

contract”.

[97] In our Industrial jurisprudence, the concept of constructive dismissal

was adopted by the Supreme Court in the case of Wong Chee Hong v

Cathay Organisation (M) Sdn Bhd [1987] 1 MELR 32; [1987] 1 MLRA

346; [1988] 1 MLJ 98; [1988] 1 CLJ (Rep) 298 and accepted that the

correct test to be applied in a Constructive Dismissal case is the contract

test as opposed to the unreasonable test.

[98] When a Claimant claimed to have been constructively dismissed by

his employer, the burden to establish that he was constructively

dismissed lies on the Claimant and the burden is to be discharged on a

balance of probabilities. The Claimant must established the four (4)

conditions applicable in a constructive dismissal situation in order to

satisfy the burden of proof that such a serious situation had occurred that

led him to walk out of his employment. The four (4) conditions are:

(i) that the Company by its conduct has breached a term of the
contract
45
 (ii) that the breach is a fundamental one going to the root or
foundation of the contract
(iii) that the employee has terminated the contract by reason of
the Company’s conduct and the conduct is sufficiently serious
to entitle the employee to leave at once and
(iv) the employee did not delay in terminating the contract
following the breach.

[99] The above mentioned “conditions” must be present as facts and

proven by evidence for the Claimant to succeed in proving that he had

been constructively dismissed. Therefore, the Claimant have to show

that the following had taken place:

a) that the company had by its conduct breached the contract of

employment in respect of one of the obligations owed to the

Claimant; the obligations breached may be in respect of either

express or implied terms or both;

b) that the breach went to the foundation of the contract or which

shows that the employer no longer intends to be bound by

one or more of the essential terms of the contracts;

c) that the Claimant had informed the Company first by words or

conduct or both that she deemed herself as having been

constructively dismissed before she made the representation

46
 d) that the Claimant pursuant to and by reason of the breach had

left the employment of the Company, ie to show that that the

Claimant had elected to treat the contract as terminated and

e) that the Claimant left at an appropriate time soon after the

breach complained of ie, that he did not stay on in such

circumstances as to amount to an affirmation of the contract,

notwithstanding the breach of the same by the Company.

[100] Turning to the facts, the chronology of events leading to the

Claimant’s claim for Constructive dismissal in the present case can be

summarised as follows:

(1) On 23.04.2019 – The Claimant received verbal notification from

CLW 2 that due to internal restructuring the Claimant’s services

was no longer needed.

(2) On 29.04.2019 – The Claimant writes to the Company about the

verbal notification from CLW 2 and requested for a formal written

notification that indicates terms and conditions of the termination,

the effective date and the full settlement of all monies owed.

(3) On 13.05.2019 – Claimant writes again requesting a formal written

notification of his termination and to expedite the payment of his

March & April 2019 salaries;

47
(4) On 15.05.2019 – Claimant writes to the Company confirming his

his acceptance of the termination to COW 2 and again requesting

for a formal written notification that indicates full details of the

settlement arrangement of the payments, the last date of his

employment and informed of the suspension of his Company’s

email account and giving the Company seven (7) days to response

failing which he would resort to legal recourse.

(5) On 16.05.2019 - Company issued the Notice of Termination to

inform of its dire financial situation and to terminate the Claimant’s

services giving 6 months prior notice from the date thereof and

finally to settle all outstanding payments by end of 6 months from

the same date.

(6) On 23.05.2019 - Claimant questions the ground for his termination

and brings to the Company’s attention to clause 18.1 and 18.2 of

the SA. In the same letter, Claimant states that acceptance of the

termination is conditional on the Group complying to his demands

and he is prepared to vacate his position provided the Company

fulfil his demands. In the same letter, Claimant gives the Company

fourteen (14) days failing which he will commence the necessary

actions.

(7) On 10.06.2019 – Claimant sent a legal notice of demand to the

Company

48
 (8) On 11.06.2019 – Claimant wrote an email to state receiving no

reply to his letter 23.06.2019 & notice of demand had been served.

[101] During the Claimant’s cross examination, the Claimant has admitted

to the following:

i. That his employment was up to 16.11.2019 and he was paid

salaries until 16.11.2019

ii. That he was paid the six (6) months salaries as per the six(6)

months notice

iii. That he has tendered his resignation with effect on 04.06.2019

and paid for the six (6) months’ notice period

iv. That the Company did not ask for his resignation

v. That he did not ask for reinstatement but had only asked for

payment of money

vi. That his claim for a Board Resolution was for Bion PLC (known

as Green & Smart Holdings Plc) as he was not sitting in the

Board of Directors of the Company

vii. That he was notified by CLW 2 of the restructuring plan and

there was no letter in writing that shows that he was made

redundant by the Company

49
 viii. That he had asked for the formal written notification to terminate

him and to specify the terms and conditions of the settlement

arrangement

ix. That the director’s fees that he demanded was to the holding

company, Plc and there is no director’s fees owing by the

Company

x. That he wanted the Company to pay his outstanding salaries for

him to be able to look for employment elsewhere

xi. That based upon his request for a termination letter, the

Company has issued him the termination letter

xii. That he has demanded the six(6) months salary through his

solicitors

xiii. That he did not dispute the restructuring plan and the

redundancy

xiv. That he was urging the Company to issue the termination letter

xv. That he did seek the support of the good office of the Chairman

to help expedite the “matters and draw a clean closure”

xvi. That it was him who indicated to CLW 2 of the acceptance of his

termination and to issue a formal termination notice

xvii. That the termination letter was issued based on his request

xviii. That he begin to utilise his annual leave of 30 days from

05.06.2019

50
 xix. That he resigned on 04.6.2019 and the 30 days annual leave

that he utilised may expire sometime in middle of July 2019

xx. That after the 30 days annual leave was utilised, he did not

return to work until his last day in November 2019

xxi. That there is no letter from the Company requesting for the

Claimant’s resignation and the Company in its letter of

termination did not ask for the Claimant’s resignation

xxii. That paragraph 11 of the Rejoinder is not true

xxiii. That the Company had eventually paid the compensation to the

Claimant

xxiv. That paragraph 17(b) of the Rejoinder that states “ the Claimant

has stated that he will utilise his 30 days’ annual leave and he

will be considered as resigning from the Company upon expiry of

the 30 days annual leave period and not on 04.06.2019” is true.

xxv. That the payment of RM12,000 now being claimed was made to

CLW 2 and RM10,000 has been paid back by CLW 2

xxvi. That prior to receiving the email dated 05.08.2019, there was a

meeting between the Claimant and COW 1 on the payment that

was due to the Claimant and the salaries payments.

xxvii. That in his reply to the email from COW 1, he did not state his

disagreement to the arrangement of payments of the outstanding

salaries and the six(6) months payments compensation

51
 xxviii. That no where else had he stated that he disagreed with the

arrangement of payments stated in the email from COW 1

xxix. That he did not reject the payments received in accordance with

the terms stated in the email from COW 1

xxx. That he had ask for the first tranche of payments to be made

before the festive

xxxi. That he did not ask for a reinstatement and it was not his

intention to seek for a reinstatement

xxxii. That the reason he filed a representation under s20 of the Act

was to be paid whatever was due to him

xxxiii. That as at 23.05.2019, only the April salary was due to him

xxxiv. That there is no director’s fees due to him from the Company

xxxv. That all the statutory payments were settled subsequently

xxxvi. That his claim that he will not be held accountable was in

;relation to Plc

xxxvii. That he has a lien on the job on the employment and beyond the

twenty four (24) months the Company has a discretion to extend

the employment period or to terminate by giving a six(6) months’

notice

xxxviii. That by 31.12.2019, there were no employees in the Company

xxxix. That the Claimant’s contention in paragraph 11 of the Rejoinder

which states that “there isn’t any member from the Senior

52
 Management Team …were asked to resign due to the

restructuring exercise other than the Claimant” is not true.

[102] In Anwar Abdul Rahim v Bayer (M) Sdn Bhd [1997] 1 MELR 50;

[1997] 2 MLRA 327; [1998] 2 MLJ 599; [1998] 2 CLJ 197; [1998] 2

AMR 1801; the Court Of Appeal explained the proper approach in dealing

with constructive dismissal cases:

“It has been repeatedly held by our courts that the proper approach

in deciding whether constructive dismissal has taken place is not to

ask oneself whether the employer‟s conduct was unfair or

unreasonable (the unreasonableness test) but whether “ the

conduct of the employer was such that the employer was guilty of a

breach going to the root of the contract or whether he has evinced

an intention no longer to be bound by the contract”.

[103] The Claimant in this case must prove all the conditions to establish

his claim for constructive dismissal. The first being:

(i) That the Company by its conduct has breached a term of the
contract and the breach is a fundamental one going to the root
or foundation of the contract.

53
[104] It is not disputed that as at end of May 2019, the Company failed

to pay the Claimant his April and May 2019 salaries. Evidently, the

failure of the Company to pay the Claimant’s salary when its due,

tantamount to a fundamental breach of the express and integral term of

the contract of service. There is no doubt that such a breach goes to the

root of the contract. This entitles the Claimant to treat the contract as

terminated and himself as being dismissed.

[105] In the case of Noor Hazlina Kamarudin v Nusapetro Sdn Bhd

[2019] MELRU 2846 the learned Industrial Court Chairman held that:

“The issue regarding the said non-payment of salaries for the

said period was stated in evidence. It goes without saying that
payment of the claimant‟s salary is obviously an integral term of
a contract of employment and therefore it is the company‟s
obligation to pay the claimant her salaries for the said period as
well as the said statutory deductions to the relevant authorities”.

[106] In the case of Dr Rayanold Pereira v Menteri Sumber

Perusahaan & Anor [1997] 1 MLRH 360; [1997] 5 MLJ 366; [1997] 3

CLJ SUPP 116; [1997] 3 BLJ 116; the High Court held as follows:

“Reference may be made to the case quoted in the applicant‟s

statement of facts in the case of Hanlon v Allied Breweries (UK)
Ltd [1975] IRLR 321 quoted in “Unfair dismissal Handbook” by
54
 Malcolm Mead. 2nd Edn (at pp 66 and 69) which lay down the
proposition that it is a long recognised implied terms that there is
an obligation to pay agreed wages promptly…. where the
employee was not paid according to the contract, the Industrial
Tribunal held that this entitled the employee to resign and to have
her resignation treated as a constructive dismissal because the
employer had repudiated a term of the contract”.

(ii) that the Claimant had informed the Company first by words or

conduct or both that he deemed himself as having been

constructively dismissed before he made the representation

[107] On the facts, it was not brought to the Company’s attention by the

Claimant that he has deemed himself to be constructively dismissed and

his resignation was by reason of the breach. In his email dated

15.05.2019, a day before the Company issued the notice of termination

of his service, the Claimant indicated his acceptance of his termination

on condition that the Company provide him a formal written notification

with full details of the settlement arrangement in which it is to include

payments of director’s fees, reimbursement of advances made to the

Company and payments of statutory deductions. This claims were again

reminded to the Company in his subsequent letter issued on 23.05.2019,

the notice of demand from the Claimant’s solicitors dated 10.06.2019

and email dated 23.10.2019. In any of the above documents, nothing

55
was mentioned of him being deemed to have been constructively

dismissed by the Company. Instead, the conduct of the Claimant

strongly suggest that he had the intention not to continue his

employment and would willingly agree leave the employment if the

Claimant’s request is fulfilled.

[108] At para 1b of the Rejoinder, the Claimant stated as follows:

“b. Hence, the Claimant does not have any other options but to
resign from his position as there were no evidences nor any
assurances from the Company that the Company will pay the
Claimant his salary in April 2019. The Claimant hereby insists that
he has been constructively and/or unfairly dismissed from his
position as the Chief Financial Officer of the Company”.

[109] At paragraph 5d of the Rejoinder, the following was stated:

“d. Therefore, it is clear and evident, coupled with the

Company‟s own admission that they will not pay anything at any
time earlier than the expiration of the six (6) months period, that
the Company has constructively and/or unfairly dismiss the
Claimant and the Claimant has no other option but to resign….”

[110] At paragraph 8, referring to his email dated 13.05.2019, the

Claimant avers as follows:

56
 “However, the Board of Directors remain silent and did not reply to
my email. Evidently, the Company has the intention to
constructively and/or unfairly dismiss the Claimant at all material
times”.

[111] Whereas in para 9 of the Rejoinder, the following was stated:

“9. ….. Further, the Claimant verily states that the Company has
misquoted the email dated 15.05.2019 and the Claimant reiterates
that the Claimant has requested for a settlement arrangement with
the Company due to the constructive dismissal and/or unlawful
termination by the Company and requested for the said settlement
arrangement to be proposed by the Company in its formal written
notification to the Claimant of his termination”.……

[112] At paragraph 10 of the Rejoinder, the Claimant stated that:

“ The Claimant further state that the actions of the Company are
clearly an act of constructive dismissal and/or unlawful dismissal of
the Claimant as the Claimant is required to constantly follow up
with the Company for its formal written notification on his
termination and severance package….”

[113] In each of the aforementioned paragraphs reproduced in parts

above, the Claimant gave different reasons to his claim for constructive

dismissal. In the Rejoinder, the failure of the Company to pay the April
57
2019 salary was no longer therefore, the sole basis of his constructive

dismissal claim. Having noted that, nevertheless, the Claimant did not

give notice to the Company to remedy the breach of failing to pay his

April 2019 salary but instead had requested for a severance package

since the verbal notification from CLW 2.

[114] This is evident from the aforementioned paragraph 10 of his

Rejoinder and as stated in his submission at p 24 para 36.

iii) that the Claimant left at an appropriate time soon after the

breach complained of ie, that he did not stay on in such

circumstances as to amount to an affirmation of the contract,

notwithstanding the breach of the same by the Company.

Although the Company stance is that it has terminated the Claimant

service by letter dated 16.05.2019 and took the position to pay him

six (6) months in lieu of notice, the Claimant had whilst claiming to

have been constructively dismissed by the Company notified the

Company on 11.06.2019 of utilising his 30 days annual leave before

resigning from the Company. Therefore, the Claimant has not even

satisfy the fourth condition that he had left immediately after the

Company had failed to pay his April 2019 salary.

58
[115] Based on the above reasoning, the Claimant has failed to prove that

he was constructively dismissed and further failed to discharge the

burden of proof required of him. In deciding the competing arguments of

the parties, I find that the evidence elicited from the Claimant in his cross

examination and the documentary evidence consisting of the Claimant’s

letters and emails to have outweigh the Claimant’s testimony given in his

witness statement. There is no consistency of the Claimant’s letters and

emails with his own pleadings and evidence in chief. It is hard to see

how other conclusion can be reached in his claim for constructive

dismissal. I wish to add here that the Claimant’s claim of constructive

dismissal was in my opinion an afterthought and this is apparent when

he only raised the constructive dismissal claim for the first time in his

Rejoinder and not from the beginning in his Statement Of Case which is

after having the benefit of the averments in the Statement In Reply to

tailor his case accordingly.

On Force Resignation

[116] In this case, the Claimant in his Rejoinder, and in the written

submission assert that the Claimant was forced to resign due to the

actions of the Company. If this Court finds that the Claimant was forced to

59
resign as pleaded, the Court has to next determine whether the dismissal

was with just cause of excuse.

[117] In paragraph 1d. of his Rejoinder, the Claimant claimed that upon

receipt of the termination notice, the Claimant then wrote to the Company

a letter dated 23.05.2019 to inform the Company of his force resignation

due to the actions of the Company and demanded the conditions asked

for to be fulfilled. Letter dated 23.05.2019 has been perused and I find

that no where in the 23.05.2019 letter had he inform the Company that he

has resigned by forced due to the actions of the Company. What was

stated was that he was prepared to vacate his position only upon receipt

of what was owed to him by the Company which is simply to be

understood as the Claimant will resign voluntarily if his claims are fulfilled

thereby eliminating any element of compulsion or coercion.

[118] However, contrary to what is pleaded and submitted by the learned

counsel for the Company in regard to the Claimant’s resignation , I am in

agreement with the learned counsel for the Claimant that in his email

dated 11.06.2019, the Claimant stated that he will utilise his 30 days’

annual leave and consequently resign from the Company. It is not that he

resigned on 04.06.2019, surrendered his office keys to COW 1 on

04.06.2019 and commenced his 30 days’ annual leave thereafter.

Although the Claimant had admitted in his evidence that he had resigned
60
with effect on 04.06.2019, the Claimant had also admitted that what was

stated in paragraph 17.b of his Rejoinder that states “ the Claimant will

utilise his 30 days’ annual leave and he will be considered as resigning

from the Company upon expiry of the 30 days annual leave period and

not on 04.06.2019” as true. The Court finds that his admission in the latter

is supported by the contemporaneous documents of his email dated

11.06.2019.

[119] It has been consistently held by the Industrial Courts that forced

resignation is not a resignation but indeed a dismissal in fact. See Mok

Ship Moi v Hong Chiou Cargo & Packing Agency Sdn Bhd & Another

case [2019] 2 MELR 578. In Malayan Banking Berhad v Chan Hock

Low [2007] 2 MELR 513; [2007] 4 ILR 203; the Industrial Court held that:

“It is settled law that a forced resignation is no resignation at all but

a dismissal in fact.”

[120] In the book The Law of Redundancy (by Cyril Grunfield) at p 110,

the concept and how it is involves was explained.

“Indirect dismissal is not a special term of art. I am using the phrase

to distinguish cases of termination by the employer in which, while

he is not dismissed directly, he has also not broken the contract (or
61
 otherwise behaved) so as to justify constructive dismissal. Some

important kinds of dismissal for redundancy take this form and it is

useful to emphasise their character as dismissals by the employer.

The most obvious kind of indirect dismissal is where the employer

invites the employee to resign in circumstances in which it is clear

that, otherwise, the employee will in any case be dismissed. The

precise formulation by the employer is immaterial whether it be

invitation, request or dictation so long as the substance of it is that

the employer places his employee in a position in which the

employee really has no option to tender his notice. In such a

situation the reality is…. That the employee is dismissed”.

[121] On the burden of proof in forced resignation cases, it was held in

Weltex Knitwear Industries Sdn Bhd v Law Kar Toy & Anor [1998] 4

MLRH 774; [1998] 7 MLJ 359; by his Lordship Abdul Kadir Suleiman that

the onus is on the claimant. His Lordship had this to say in the aforesaid

case:

“Next is the burden of proof on the issue of forced resignation raised

by the first respondent. The law is clear that if the fact of dismissal is

not in dispute, the burden is on the company to satisfy the court that

such a dismissal was done with just cause or excuse. This is

62
 because by the 1967 Act, all dismissal is prima facie done without

just cause or excuse. Therefore, if an employer asserts otherwise,

the burden is on him to discharge. However, where the fact of

dismissal is in dispute, it is for the workman to establish that he was

dismissed by his employer, If he fails, there is no onus whatsoever

on the employer to establish anything for in such a situation no

dismissal has taken place and the question of it being without just

cause or excuse would not at all arise.”

[122] In the case of Philips Electonics Supplies (M) Sdn Bhd v Ahmad

Murad & Anor [2005] 3 MELR 341; [2005] 3 ILR 786 at p. 789, the

Industrial Court had this to say:

“Based on the foregoing and in view of the respective contentions of

the parties, the court‟s primary duty in this case is to determine

exactly what caused or motivated the claimants into resigning from

their employment, i.e. The actual causation factor. The burden of

proof undoubtedly is on the claimants to establish by cogent

evidence that their resignation was procured in such circumstances

as to tantamount to a dismissal by forced resignation. Mere

allegation, vague suggestions and insinuations are not enough. For

it is a rule of evidence that the burden of proof lies on the party who

63
 substantially asserts that affirmative of the issue and not the party

who denies it.”

[123] In the case of City Link Express (M) Sdn Bhd v Greenson Dauk

[2002] 2 MELR 625; [2002] 3 ILR 1219, the Learned Chairman held as

follows:

“It is a well-established principle of Industrial law that if it is proved

that an employer offered the employee the alternatives of “resign or

be sacked” and without anything more, the employee resigned, that

would constitute a dismissal. The principle is said to be one of

causation - the causation being the threat of the sack. It is the of the

threat of being sacked which causes the employee to be willing to

resign. But where the willingness is brought about by some other

considerations in the state of mind of the resigning employee, then

it has to be said that he resigned voluntarily, because it was

beneficial to him to do so, that then has therefore no dismissal”.

[124] In the case of Stanley Ng Peng Hon v AAF Pte Ltd [1978] 1

MLRH 301; [1979] 1 MLJ 57 Choor Singh held as follows:

“It will be clear that the underlying basis of the doctrine of “force
resignation” is the existence of facts showing that an employee
64
 was put under compulsion to resign and that if he decline to do so,
the employer would proceed to dismiss him in any event”.

[125] In the case of Ooi Boon Khim v Spottorder Sdn Bhd [2021]

MELRU 1223 the claimant had also requested the company to issue an

official termination letter in the event that his services were no longer

required and gave the company three(3) days to reply and at that time his

January and February 2019 had still not been paid. As no reply was met,

the claimant sent another email on 12.03.2019 to notify the company of

his resignation from his position and terminated his employment contract

with immediate effect as he was left with no choice after the company

failed to pay his January and February 2019 salaries. The claimant, had

on 13.03.2019, filed his dismissal case at the Industrial Relations

Department. That were the facts of that case and the Industrial Court held

as follows:

“[17] The evidence from the company to show that the dismissal

was done with just cause or excuse was the provision in cl. 12

above. It relied on that clause to show that the claimant knew of the

financial difficulties it was facing at that time and “hoped” that the

claimant understood, more so because there were some

terminations one in January 2019. The company also told the court

that all the funds it received in early March 2019 was to be paid to
65
those employees that were chosen to remain with it. Therefore, by

its own admission and the fact that it did not dispute the claimant‟s

dismissal, the court finds that there was a dismissal and the

company intended to dismiss the claimant. The court is inclined to

believe that there was no termination letter issued by the company,

because had it been so issued, the company would have been

required to adhere to the provision of cl. 12 by giving him three

months‟ notice of termination (or three months‟ salary in lieu of

notice).

The learned Chairlady went on further to state:

“[18] The Court does not doubt that the company intended to

satisfy its debt to the claimant, that is, the outstanding salaries

as well as the balance of the three months from the

Employment Contract. By its own admission that only the

chosen employees were to remain and paid, this fact proved

that the company no longer required his services. However,

the Company should have addressed this matter properly by

issuing a termination or retrenchment letter to the claimant

and worked out whatever was due to him and the mode of

payment rather than choosing to remain silent. By its inaction,

the court can only conclude that the company had waited to

see instead if the claimant on his own accord would resign

66
 from his employment and/or breach the terms of his

employment contract”.

[126] Back to our case, considering the evidence as a whole, the

Claimant had utilised his 30 days annual leave on the belief that he was

still in employment with the Company. This is evident from his email

dated 11.06.2019 sent to amongst others, COW 1, COW 2 and CLW 2.

[127] When cross examine, the Claimant admitted that paragraph 17(b) of

the Rejoinder that states “ the Claimant will utilise his 30 days’ annual

leave and he will be considered as resigning from the Company upon

expiry of the 30 days annual leave period and not on 04.06.2019” as true.

[128] Resigning after having gone on annual leave of 30 days cannot be

said to be a resignation executed by force or that the Claimant had been

under compulsion to resign. Without the evidence that there has been a

threat on him to resign by the Company, it cannot be said that the

Claimant was put under compulsion to resign. In such situation, his

resignation was but voluntarily or on his own volition. Again the

contemporaneous documents used in this proceeding outweigh all

evidence adduced by the Claimant in claiming forced resignation. On the

totality of the evidence, this is not a case of forced resignation and none

of the statements pleaded in the Rejoinder and his testimony given in his
67
witness statement in regard to force resignation was proven on the

balance of probabilities.

Restructuring And Redundancy

[129] COW 2 in his testimony said that the Company’s decision to

restructure its business was taken to ensure the survival of the Company

as the Company was facing financial difficulties and severe cash flow

problems which had resulted in accumulated losses that had increased

over time not excluding that the Company was also facing a serious lack

of revenue and/or profits which had adversely affected the Company.

His evidence on why the Company had to terminate the service of the

Claimant on grounds of redundancy was as similar to that given earlier

by COWS 1 and therefore need not be repeated here, suffice to say that

it was based on the same reason and explanation.

[130] During the acquisition process of K2MV shares where the majority

shareholders were Saravanan Rasaratnam and CLW 2, it is illogical to

think that the Claimant could not have been aware of the restructuring

exercise since he should have been aware that the other two Executive

Directors had their shares acquired by COW 2. According to COW 2, the

Claimant role in the Group of Companies was to look into the entire

financial matters such as fundraising exercise, accounting works and

68
financial regulatory reporting. In carrying his task with stakeholder’s

management in the holding company, the Claimant was required to

liaise with brokers and also the London Stock Exchange. In relation to

the Company, the Claimant is needed to liaise with the Malaysian Stock

Exchange and involved in regulatory requirements.

[131] The basis for the Claimant’s termination as stated by the Company

in its Statement In Reply is that the Company was suffering financial

difficulties at the material time and the restructuring exercise was required

to ensure the survival of the Company, the Company therefore no longer

needed the service of the Claimant as the Chief Financial Officer.

[132] It is settled law that the burden of proof lies on the employer to

prove the actual redundancy on which the dismissal was carried out. This

was illustrated by the Court of Appeal in the case of Bayer (M) Sdn Bhd

v Ng Hong Pau [1994] 1 MELR 7;[1999] 1MLRA 453; [1999]4 MLJ 361;

[1999] 4 AMR 3913 where it was held:

“On redundancy it cannot be gainsaid that the appellant must come

to the Court with concrete proof. The burden is on the appellant to

prove actual redundancy on which the dismissal was grounded…. It

is our view that merely to show evidence of a reorganisation in the

appellant is surely not sufficient”.

69
[133] The term “redundancy has been defined by Dunyston Ayudurai in

his esteem book entitled “industrial Relations in Malaysia, Law & Practice

“ at p 255-256 in the following terms:

“Redundancy refers to a surplus of labour and is normally the result

of a reorganisation of the business of an employer; an its usual

consequence is retrenchment, i.e. termination by the employer of

those employers found to be surplus to his requirements after the

reorganisation. Thus, there must first be redundancy or surplus of

labour before there can be retrenchment or termination of the

surplus.”

[134] In Stephen Bong v FCB (M) Sdn Bhd & Anor [1999] 5 MLRH

107; [1999] 3 MLJ 411 his Lordship Nik Hashim J had this to say:

“With respect, I agree with Mr. N Sivabalah‟s submission that it is

not the law that redundancy means the job or work no longer exists.

Redundancy situations arises where the business requires fewer

employees of whatever kind “(Harvey on Industrial Disputes)”. In the

case before me, it is the Company‟s case that there was reduced

work and reduced business which made the applicant‟s position as

an executive director in charge of one group redundant. The

70
 Industrial Court is right when it held that the applicant was

redundant.”

[135] On the burden of proof to prove redundancy, in Bayer (M) Sdn Bhd

v Ng Hong Pau [1999] 1MELR 7; [1999] 1 MLRA 453; [1999] 4 MLJ

361; [1999] 4 CLJ 155; [1999] 4 AMR 3913 his Lordship Shaik Daud

Ismail JCA in the Court of Appeal stated that:

“The burden is on the appellant to prove actual redundancy on

which the dismissal was grounded. (See Chapman & Others v

Goonvean & Rostawvack China Clay Co Ltd [1983] 2 ALL ER).

It is our view that merely to show evidence of a re-organisation in

the appellant is certainly not sufficient. There was evidence before

the court that although sales were reduced, the workload of the

respondent remained the same. After his dismissal, his workload

was taken over by two of his former collegues. Faced with these

evidence, is it any wonder that the court made a finding a fact that

there was no convincing evidence produced by the appellant that

the respondent‟s functions were reduced to such an extent that he

was redundant.”

71
[136] Based on the aforesaid cases, the issue for the Court to determine

is whether there is actual and bona fide redundancy as it is the

Company’s case that the Claimant’s position became redundant. It was

contended by the Company that there was a genuine redundancy and the

termination was carried out in good faith. The Claimant, however,

contended that he was absolutely unaware of the purported planned

restructuring as the details of the planned restructuring should have been

discussed beforehand with the lawyers, the UK reporting accountants or

auditors and with London authorities but nothing of that sort took place

because the restructuring was not genuine.

[137] It is the Company’s submission that the Company had informed the

Claimant that it will be having a restructuring exercise and the Company

will no longer need the service of the Claimant which led the Company to

terminate the service of the Claimant on grounds of redundancy.

[138] The Company further submitted that the Company’s decision to

restructure was taken to ensure its survival as it was facing financial

difficulties and severe cash flow problems which had then led to

accumulated losses that had increased over time. The Company was also

facing a serious lack of revenue and/or profits which had adversely

affected the Company.

72
[139] The Claimant knew of the planned restructuring exercise upon

being notified by COW 2 on the involvement of Serba Dinamik Bhd

investing as its investors. The Claimant must have considered of what

was told to him as true as he did not dispute or disagreed with the

Company that his position and role in the Company no longer exist and

had in fact demanded that his dues be paid by getting the Company to

formalise in writing.

[140] The Claimant in his submission stated that the Claimant had

questioned the two(2) principal directors on the utilisation of monies

raised by the Company for the past few years which were sufficient to

fund the operation and projects of the Company but they failed to answer

his queiries and the Claimant’s stance was that the Company and its

Group has generated sufficient income and/or cash flow to sustain the

operations of all its companies. It was further submitted that it is

undisputed that the Group of Companies received a substantial amount of

capital injection from Serba Dinamik Int. Ltd which had also raised

substantial funds to progress on projects, Serba Dinamik Holdings Bhd

had purchased shares of the Company from K2M Ventures Sdn Bhd

owned by CLW 2 and Saravanan Balakrishnan. The Company has also

received substantial amount of loan from COW 2 for its working capital

and therefore had generated sufficient income to sustain the operations of

its companies.
73
[141] It is further submitted that the Group’s Financial Results dated

30.09.2019 for the Financial six months period ended 30.06.2019 shows

that revenue and cash has increased while the gross loss and loss before

tax has shown a reduction.

[142] The Claimant also submitted that he did not have knowledge of the

restructuring exercise other than being notified by CLW 2 on 23.04.2019.

He further submitted that he has also not been given new work before the

issuance of the termination letter , his duties to correspond with the

representative from United Kingdom had been stopped and his email was

suspended.

[143] On the same issues of redundancy, the Company, on the other

hand submitted that based on the announcement made as shown at p.

145 to 146 of the Company’s bundle of documents, with the receipt of

capital injection from Serba Dinamik Int. Ltd vide the issuance of new

common shares, its net proceeds was used for working capital and to

advance the development of the Company’s biogas power plant which

was in the pipeline.

[144] About the purchase of K2M Ventures Sdn Bhd, it submitted that the

purchase was for the beneficial interest of the CLW 2 and Saravanan

74
Rasaratnam being the shareholders. CLW 2 when cross examined on

why the K2M shares were being traded replied that the they sold their

shares after six months of the subscription for him to return the monies

and loans borrowed from third parties and families.

[145] About the loan taken from COW 2, the loan was to be used for

working capital and was obtain for 12 months free interest. A perusal of

the loan agreement at p.151 of the Company’s bundle of documents

shows that the guarantors of the loan were the Saravanan Rasaratnam

and CLW 2.

[146] The Company submitted that due to its critical financial condition,

the Company needed to take loans and obtain financial assistance from

third parties to meet its overheads, operational expenses and repayment

of their loans and liabilities. Therefore, due to its financial difficulties and

the need to survive, the Company no longer needed the service of the

Claimant.

[147] The financial documents in the Company’s bundle was relied on to

prove that the Company was recording losses for the financial year end

31.12.2018. There is no doubt that the Company suffered losses as is

evident from the financial review in the Company’s bundle of documents

and based on the testimony of COW 2 (see p. 45 & 46 of the notes of

75
evidence). COW 2 explained that the total non current asset in 2019 was

about RM70 million which was not sufficient to support the activities that

the company was actually engaged with. The Company had to raise

additional fund to actually support its day to day operation.

[148] On the issue of redundancy of the Claimant, COW 2 testified that at

that point of time, the Company had already faced redundancy and did

not have the cash to pay for the salaries. As a consequence of that,

according to COW 2, many employees resigned because they were not

paid their salaries. In regard to a question from the learned counsel for

the Claimant on why despite the Group made improvement in the

Company’s financial standing in 2019, the Group of Companies were still

in dire financial situation, COW 2 answered that one should not only look

at the profit and loss of the financial statement but should also look at the

financial position of the Company where the Company’s liabilities had

also increased from RM40 million to about RM70 million by referring to

CLB 3 p.35. He further explained that the amount received by the

Company is not converted to cash due to the need to support the funding

based on liabilities and to pay the existing liabilities. He further said that

the Company had not finalised the audited accounts for year 2020

because the Company had no money to pay the auditors for their

services.

76
[149] When COW 2 was asked why he said that the financial position of

the Company was well within the Claimant’s knowledge, he replied that as

the Chief Financial Officer, the Claimant should know the financial

standing of the Company as is within his boundary of skill and knowledge

and that the Claimant himself had mentioned on the Company’s financial

difficulty in his emails. The Court finds it difficult to accept that the

Claimant with financial knowledge was unaware that the Company was

facing financial difficulties.

[150] The Claimant’s contention is that he did not have any knowledge of

the Company’s restructuring exercise other than being notified by CLW 2

and in his submission, disputed that the Company was facing financial

difficulties. Based on the evidence and the contemporaneous documents,

the Claimant did not dispute or at least seek clarification of the

Company’s financial situation at that time and no where did he claim that

he was in disbelief or doubtful of the Company’s restructuring exercise. In

fact, when cross examined, the Claimant admitted that he did not dispute

about the restructuring process and his position being made redundant.

[151] Much similar question was asked to CLW 2 about the profit made

by the Company in 2019. CLW 2 had this to say:

77
 “When you say profit means you want to know how much money is
in the bank account. You must see what is the cash balance in the
bank statement, it is in the balance sheet. In your P & L statement,
revenue minus estimated cost is the profit you are making. That
doesn‟t mean Petronas makes RM30 billion sales, their profit is RM
2 billion, the RM 2 billion is not sitting as cash balance. We must
look at the balance sheet - bank balance as of 31st December, how
much money is in the credit account. This is what I‟m telling you,
look at the bank statement, you know there is no reason to go
through. You don‟t have to waste time going through all this
documents, you are not an accountant”.

[152] It is in evidence that the Company consisted of only the three

employees and the rest of the employees are employed by its subsidiary,

Green & Smart Sdn Bhd which was set up to run the operations.

Saravanan Rasaratnam and CLW 2 had resigned from the Company by

31.12.2019.

[153] During the trial, save for the Claimant’s testimony that his position

was taken over by one Ghazali, COW 2, on the contrary testified that after

the Claimant’s termination, the Company did not employ any other person

to take over the Claimant’s position and neither was anyone appointed to

take over as the Group Chief Financial Officer. In explaining how the

redundancy came about, COW 2 explained in his cross examination as

follows:
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 JT : Alright so my question to you Mr. Nazim, if there is redundancy
issue with the group and the company why would you be
appointed to execute the same function as the Claimant ?
CW2: He was the ex finance director of bion plc and he was also
assumed the role of CFO of the group. So when he was being
discharged from his finance director responsibility, he just
become the CFO. So, when the group appointed me as the
Finance or executive director of the Company so technically, I
assumed the role Sivadas had assumed before. So that‟s why
when we talked about redundancy, that‟s where the redundancy
came about.

[154] In fact, COW 2 gave evidence that he supervised the finance

department of the Company and COW 2 role was later replaced by Mr.

Fakrizzaki Ghazali. There is no evidence that could show that Mr.

Fakrizaki Ghazali was appointed to replace the Claimant. He merely took

over the role of COW 2 who supervised the finance department after the

Claimant was made redundant. Of pertinence to note is that Claimant’s

statement in cross examination in which it was admitted that by

31.12.2019 there were no employees left at the Company after the

resignation of the other two principal directors is consistent with COW 2’s

testimony that the Claimant’s position was not filled after his termination.

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[155] On the facts, both parties tendered evidence of financial statements

and announcements made by the Group to support their line of

arguments. However, this financial statements and announcements must

be considered in light of the oral evidence given by the witnesses in order

to gain a fair understanding of the exact financial situation of the

Company at that time.

[156] Internal restructuring was being carried out by the Company’s

business and the restructuring exercise the Company took upon was on

the facts, genuinely carried out by the Company in order to keep it afloat

and sustainable as evidenced by the various ways in which it raised its

working capital in order to generate more business and to pay up all its

liabilities to be sustainable.

[157] As has been accepted in the Industrial jurisprudence, it is well

settled that an employer has a managerial prerogative to reorganise a

business structure. In William Jacks & Co (M) Sdn Bhd v S.

Balasingam [1996] 1 MELR 312; [1996] 2 MLRA 678; [1997] 3 CLJ

235; [1997] 3 AMR 2585 [2000] 7 MLJ 1; where the Court of Appeal held

that:

“Whether the retrenchment exercise in a particular case is bona fide or

otherwise, is a question of fact and of degree depending for its
resolution upon the peculiar facts and cicumstances of each case. It is

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 well-settled that an employer is entitled to organise his business in the
manner he considers best. So long as that managerial power is
exercised bona fide, the decision is immune from examination even by
the Industrial Court. However, the Industrial Court is empowered and
indeed duty bound to investigate the facts and circumstances of a
particular case to determine that exercise of power was in fact bona
fide”.
“the discharge of surplus labour or staff by the employer for any
reason whatsoever otherwise than as a punishment inflicted by way of
disciplinary action”.

[158] It is in the evidence of COW 1 that it was not only the Claimant’s

salaries that were not paid at that time, but also of the directors of the

Company and employees of its subsidiary company.

[159] With due respect, this Court disagrees with the learned counsel for

the Claimant’s submission that the Claimant’s constructive dismissal may

have been caused by the appointment of COW 2 as the Executive and

Finance director of the Company whose annual director fees is way

higher than the Claimant’s. COW 2 role and duties towards the Company

would by far different from that of the Claimant and its illogical to equate a

director’s fees to an employee’s income given the responsibilities that

they shoulder are not the same.

[160] On the Claimant’s contention that the Company did not comply with

the LIFO principle when terminating the Claimant due to being redundant,
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it should be borne in mind that that there were no else with the same

position as the Claimant in the Finance Department at that material time

and the Company had only three of them (the Claimant, CLW 2 and

Saravanan Rasaratnam) as the employees. CLW 2 and Saravanan

resigned on 31.12.2019. Hence, LIFO was not applicable in such a

situation.

[161] The Claimant also contended that no domestic inquiry was held in

this case which the Company had correctly responded that it did not

require one as it did not involve any issue of misconduct on the part of the

Claimant.

[162] On the balance of probabilities, the Company had duly discharge its

burden of prove in establishing the fact that the Claimant’s position has

become redundant. The Court finds that the Company has proven its

case of financial difficulties which required restructuring and that was

carried out in good faith. The Company had successfully proven on a

balance of probabilities that the Claimant’s job became redundant when

the Claimant was verbally informed at that time.

[163] On the facts, no cogent evidence has been presented to show mala

fide by the Company through its restructuring exercise. There is no shred

of evidence that can be calculated to be taken as bad faith on the part of

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the Company in its restructuring exercise when the Company was faced

with a lots of debts with no income. The Company had duly paid off the

Claimant for what was due to him based on the SA and during the trial the

Claimant had in fact admitted that there was no outstanding of back

wages and compensation of the six(6) months notice salaries which the

Company undertook to settle.

[164] Based on the totality of the evidence and bearing in mind s30(5) of

the Act to act according to the principle of equity, good conscience and

substantial merits of the case without regard to technicalities and legal

reform, the Court concludes that the Company has proven on the balance

of probabilities that the Claimant’s job has become redundant and hence,

the Claimant’s termination was with just cause or excuse.

[165] The Claimant’s claim against the Company is hereby dismissed.

HANDED DOWN AND DATED THIS 23rd DAY OF FEBRUARY 2023

-signed-

(AMRIK SINGH)
CHAIRMAN
INDUSTRIAL COURT, MALAYSIA
KUALA LUMPUR

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