INDUSTRIAL COURT OF MALAYSIA

CASE NO: 19/4-2321/20

BETWEEN

INTAN SURAIYA BINTI HASHIM

AND

CONCRETE ENGINEERING PRODUCTS BERHAD

AWARD NO: 1315 OF 2022

Before : Y. A. PUAN SUMATHI MURUGIAH

(sitting alone)

Venue : Industrial Court of Malaysia

Kuala Lumpur

Date of Reference : 07.10.2020.

Dates of Mention : 09.11.2020, 04.06.2021, 19.01.2022.

Dates of Hearing : 16.11.2021, 17.11.2021.

Representation : Mr. Marwan Abdullah

from Messrs Mu’az Aiman Halem Auzan &
Associates
(Counsel for the Claimant)

Mr. Moses Susayan

from Messrs Raja Badrol, Ramli & Azizi
(Counsel for the Company)

Reference:

The reference under Section 20(3) of the Industrial Relations Act 1967 by the

Honourable Minister of Human Resources Malaysia, is regarding the dismissal of

Intan Suraiya binti Hashim (“the Claimant”) by Concrete Engineering Products

Berhad (“the Company”) on 23.06.2020.

 AWARD

Brief Facts

1. The Claimant commenced her employment with the Company on 22.12.2003

as an Accounts Clerk and was confirmed with effect on 05.04.2004.

2. The Claimant had served the Company continuously for 16 years five (5)

months and 1 days being promoted three (3) times as an Accounts Assistant,

Accounts Executive and Senior Accounts Executive. The Claimant’s last position

held was as a Senior Accounts Executive.

3. The Claimant was transferred to the Company’s Nilai Factory in Negeri

Sembilan ( “the Nilai Factory”) although the Claimant had already been working in

the Company’s Headquarters in Kuala Lumpur (“the HQ”) since the commencement

of her employment 16 years ago.

4. The Claimant was officially instructed to be transferred with effective

15.06.2020 via a letter dated 03.06.2020.

5. The Claimant had written a second email objecting to the transfer, however,

the instruction to transfer was maintained by the Company. The Claimant had in her

letter dated 09.06.2020 objected to her transfer again but the Company had

maintained the instruction to transfer via its letter dated 12.06.2020.

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6. The Claimant had reported for work at the Nilai Factory on 16.06.2020

although she was instructed to report on 15.06.2020 because she was on medical

leave on 15.06.2020.

7. On 16.06.2020 when she reported to work at the Nilai Factory, the Claimant

had served her Notice of Breach of Contract of Employment & Constructive

Dismissal (“the Notice of Breach of Contract”) on 16.06.2020 to the Company.

8. The Claimant had given the Company six (6) days from the date of the Notice

of Breach of Contract to rectify all the breaches raised therein.

9. However, the Company still maintained its position in transferring the Claimant

to the Nilai Factory claiming that the instruction was made in good faith and no

breaches had been made via its letter dated 19.06.2020.

10. The Claimant had via her letter dated 23.06.2020 to the Company had

claimed that she was constructively dismissed by the Company and left her

employment with immediately effect.

11. The Company had rejected the Claimant’s Notice of Constructive Dismissal

and requested the Claimant to report for duty at the Nilai Factory on 24.06.2020

failing which the Claimant will be assumed to have abandoned her employment.

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12. The Claimant had not reported for duty on 24.06.2020 since the Claimant had

already claimed for constructive dismissal and left the Company with immediate

effective on 23.06.2020.

13. The Company issued a letter dated 26.06.2020 terminating the Claimant’s

employment with effect on 22.06.2020 on the ground that the Claimant was deemed

to have abandoned her employment with the Company.

The Claimant’s Case

14. During the Claimant’s appraisal meeting with the Company’s Financial

Controller, Lilian Au Yong (COW-2) and Sarimah binti Ngah Mahmud, Accounts

Assistant, COW-2 had suddenly informed the Claimant that she will be transferred to

the Nilai Factory in Negeri Sembilan.

15. The Claimant being unsatisfied with the result of the Appraisal Meeting had

recorded her objection in her email to COW-2 dated 02.06.2020 entitled ‘SALIENT

POINT OF DISCUSSION AND GRIEVANCE COMPLAIN’.

16. In the same email, the Claimant had officially lodged a complaint giving the

reasons and pressure which had placed the Claimant under constructive dismissal of

her employment:

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17. The Claimant was still given an official instruction by the Company to be

transferred to the Nilai Factory via its email dated 03.06.2020 effective 15.06.2020.

18. The Claimant replied the Company’s instruction letter to transfer via her email

dated 05.06.2020 wherein she had responded to the email sent by COW-2.

19. COW-2 had ignored the issues raised by the Claimant via her email dated

05.06.2020 and maintained the instruction for the Claimant to be transferred to the

Nilai Factory.

20. The Claimant had again objected to the instruction to transfer her to the Nilai

Factory via her email dated 09.06.2020 providing her justification and her defence

against the transfer and in the same letter the Claimant had provided the Company

her counter proposal in relation to resolve the issues that needed to be addressed at

the Nilai Factory. The Company had however maintained its decision on the transfer.

21. On 16.06.2020, the Claimant had reported for work in accordance to the

transfer letter, though she could not report on 15.06.2020 as she was on Medical

Leave.

22. On 16.06.2020 upon reporting to work at the Nilai Factory, the Claimant had

sent a Notice of Breach of Contract of Employment & Constructive Dismissal to the

Company. Through the said notice, the Claimant had given the Company six (6) days

to rectify all the breaches alleged by her.

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23. Since the Company had maintained its position once again, the Claimant had

via her letter dated 23.06.2020 claimed that she had been constructively dismissed

by the Company and left her employment with immediate effect.

The Company’s Case

24. The Company is a public company, manufacturing concrete products such as

concrete piles for building construction and concrete poles. It has few factories

located in Malaysia and one of them is located in Nilai, Negeri Sembilan.

25. Sometime in late 2019 to early 2020, the Company’s factory in Nilai was

having persistent accounting problems with the implementation of additional module

in the Enterprise Resource Planning System (“ERP system”). Upon implementation

of this ERP system, there were issues encountered by the Company’s factories

across the country which were eventually resolved except at the Nilai Factory.

26. The Company in suspecting that the issue at the Nilai Factory might be due to

inaccurate reporting and/or other operational mistakes by the staffs at the Nilai

Factory, decided to transfer the Claimant there temporarily for 2 months in order to

observe the workflow of accounting and production, procurement and delivery

personnels at the Nilai Factory .

27. The Claimant was to ensure that the entry process and the relevant

operations are correctly done and to further report the findings made at the Nilai

Factory to the Company’s headquarters.

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28. The Company denies the allegations made by the Claimant that she had been

constructively dismissed as it denies the alleged breaches and maintained that the

transfer of the Claimant to its Nilai Factory was done genuinely and with good faith.

29. The Company had called two (2) witnesses to give evidence on its behalf.

They are:

i. Fadhlina binti Muhammad Fasri (COW-1) –Head of Procurement

Department at the Company.

ii. Lilian Au Yong (COW-2) – Financial Controller of the Company.

Issues to be Determined

30. The issues for the court's determination in this case are as follows:

i. Whether the Claimant had been constructively

dismissed by the Company; and

ii. If the Claimant had been so dismissed, whether the dismissal

was with just cause or excuse.

31. The burden is on the workman to prove the dismissal where the dismissal is

being disputed. The Industrial Court in the case of North South Development Sdn

Bhd v. Aloysies Fathianathan [2012] 2 ILR 267 (Award No. 446 of 2012) at p. 272

referred to the case of Weltex Knitwear Industries Sdn. Bhd. v. Law Kar Toy &

Anor [1998] 1 LNS 258 where the High Court decided as follows:

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 “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 dismissal was done without just

cause or excuse. This is 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 with just cause or excuse would not at all

arise (see: Wong Chee Hong v. Cathay Organisation (M) Sdn Bhd [1988] 1

CLJ 298 (Rep); [1988] 1 CLJ 45; [1988] 1 MLJ 92).”

32. Here since the Claimant is claiming that she has been constructively

dismissed, the onus is on her to prove her claim. Once the Claimant had proved that

she was indeed constructively dismissed, the burden of proof then shifts to the

Company to prove that the dismissal was with just cause or excuse.

The Law

33. The law relating to constructive dismissal has been clearly set out by the

Supreme Court in the case of Wong Chee Hong v Cathay Organisation (M) Sdn

Bhd [1988] 1 CLJ 45; [1988] 1 CLJ (Rep) 298 where Salleh Abas, L.P, has stated:

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 “The common Law has always recognized the right of an employee

to terminate his contract of service and therefore to consider himself

as discharged from further obligation if the employer is guilty of such

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

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

It is an attempt to enlarge the right of the employee of unilateral

termination of his contract beyond the perimeter of the common law

by an unreasonable conduct of his employer that the expression

“constructive dismissal” was used.”

34. Based on the above principles, if the employer is guilty of conduct which is a

significant breach going to the root of the contract of employment, or which shows

that the employer no longer intends to be bound by one or more of the essential term

of the contract, then the employee is entitled to treat himself as discharged from any

further performance. If he does so, then he terminates his contract by reason of the

employer's conduct. He is constructively dismissed. The employee is entitled in

those circumstances, at the instant without giving notice at all or, alternatively, may

give notice. But the conduct must, in either case, be sufficiently serious to entitle him

to leave at once. Moreover, he must make up his mind soon after the conduct of

which he complains; for if he continues for any length of time, without leaving, he will

lose his right to treat himself as discharged. He will be regarded as having elected to

affirm the contract. See Western Excavating (ECC) Ltd v. Sharp [1978] QB 761.

35. Hence, whether there was constructive dismissal under s. 20 of the

Industrial Relations Act 1967, the test to be applied is the 'contract test' and no

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longer the 'unreasonableness test'. In Anwar Abdul Rahim v. Bayer (M) Sdn Bhd

[1998] 2 CLJ 197 (the Anwar’s case) the Court of Appeal restated the above test

as follows:

“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. (See Holiday Inn

Kuching v. Elizabeth Lee Chai Siok [1992] 1 CLJ 141 and Wong

Chee Hong v. Cathay Organisation (M) Sdn Bhd [1988] 1 CLJ

(Rep) 298).”

36. In this case, it is the contention of the Claimant that the Claimant had listed

down the wrongdoings of the Company which she claimed to be breaches of the

terms of the employment contract made between them which she had deemed

herself to be constructively dismissed.

37. However, based on the facts, it is apparent that the Claimant’s main protest

was against her transfer to the Nilai Factory which she claims was tainted with ill

intentions as among others the job functions which she was to perform at the Nilai

Factory was inferior to her actual position.

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38. The court takes cognisance to the fact that the Company has the prerogative

to transfer its employees when need arises, however, such transfer should not be

coated by ill intentions. In this case, it is the evidence of COW-2 that the Claimant

had been chosen to be transferred to the Nilai Factory to resolve the ERP issues due

to several reasons:

i. The Claimant was a senior, 15 years;

ii. The Claimant would be able to determine the errors and
mistakes;
iii. The accounting knowledge that the Claimant possessed;
iv. The Claimant was the best person to handle the said task; and
v. The Claimant can work independently.

39. However, COW-2 had also in the same breath given evidence on the

Claimant’s incompetency in performing her functions. This contradicting evidence by

COW-2 with regards to the Claimant’s capability in performing her job functions

raises doubts as to the truth of COW-2’s reasons in recommending the Claimant’s

transfer to the Nilai Factory.

40. It was also brought to the court’s attention that the person-in-charge of the

entries at the Nilai Factory was in fact COW-1, but instead of the Assistant

Accountant, Sarimah being sent to resolve the issue, the Company had insisted to

transfer the Claimant. This action by the Company again raises doubts as to the true

intention of the Company in insisting for the Claimant to be transferred to the Nilai

Factory.

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41. Furthermore, although the Claimant had made several suggestions as

alternative measures to resolve the issue at the Nilai Factory without effecting the

transfer, one of which was being able to doing the work remotely from the

headquarters at Kuala Lumpur, the Company had not made any attempt to even

consider or discuss the workability of the said suggestion made by the Claimant.

42. The court cannot ignore the fact that the Claimant had also suggested an

alternative to the transfer by way of business trips made to the Nilai Factory in order

to monitor but this suggestion was also not considered. Seems like the Company

had been steadfast in effecting the transfer on the Claimant despite her protest and

despite the alternatives suggested by her.

43. Although COW-2 had also given evidence that the Claimant’s functions at the

Nilai Factory would not tantamount to a demotion but when looking at the line of

reporting in June 2020 as seen in the Company’s Bundle of Documents marked as

COB 5 i.e the organisational chart of the Finance Department, it suggest otherwise.

As displayed in the June 2020 chart, the Claimant who was holding the position as

Senior Accounts Executive was required to report to the Company’s Accounts

Executive (AP), Susilawati instead of reporting to the Company’s Assistant

Accountant, Sarimah as she did in February 2020.

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44. Based on these charts and the line of reporting that they display, it is apparent

that in February 2020, the Claimant and the Accounts Executive were reporting to

the Assistant Accountant but in June 2020, the Claimant was required to report to the

Accounts Executive who was reporting to the Assistant Accountant instead.

45. As such, it is clear that the Claimant had indeed been demoted by the

Company not only by her job functions but also by her line of reporting.

46. As held by the Supreme Court in the case of Wong Chee Hong (supra):

“Thus in our judgment the transfer, which relegated the applicant to a position
of lesser responsibilities, albeit on the same terms and conditions of service,
which transfer the appellant refused to accept is a dismissal. It clearly shows
that not only the respondent company was displeased with the appellant but it
also exhibited the respondent company’s intention not to be bound by the
contract any longer. Such relegation of responsibility with its consequent
humiliation and frustration and loss of estimation amongst his fellow
employees made it impossible for the appellant to carry on being employed
under the respondent company’s organisation. In other words, he had been
driven out of his employment. This is therefore a dismissal.”

47. It was also evidenced that although the Claimant was unhappy with the

Company’s decision to transfer her to the Nilai Factory despite her objection to the

same, she had nevertheless reported at the Nilai Factory but had with immediate

effect produced her notice of being constructively dismissed should the Company fail

to rectify the breaches which had compelled her to deem herself to be constructively

dismissed.

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48. Since the Company had not made such rectification and neither was there

any evidence produced to show that the Company had made any attempts to

discuss this issue with the Claimant in view of an amicable resolution, the Claimant

had on 23.06.2020 deemed herself to be constructively dismissed. Hence the

Claimant did not delay in leaving her employment as soon as she had deemed

herself to be dismissed by the Company.

49. As such, based on the foregoing, it is the view of the court that the Claimant

had proven on balance of probabilities that she had been constructively dismissed.

50. Since the Claimant had been constructively dismissed, the reason for her

dismissal will now be looked into and assessed as to whether the dismissal was with

just cause or excuse.

Was the dismissal with just cause or excuse

51. Based on the facts, the Company had transferred the Claimant to the Nilai

Factory for the purpose of resolving the issue with the ERP System there. However,

there was also evidence given that the Claimant had in February 2020 committed an

error when she keyed-in the pile code in the ERP System which had led her to be

given different duties. After this incident, the Claimant had been removed from stock

transaction, ledger and financial statement duties by COW-2 and was given duties to

“Account Payable”.

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52. If the Claimant’s job performance had caused her to be removed from the job

functions suited to her post as a Senior Accounts Executive, the Company had not

produced any evidence in court with regards to her poor performance or any

evidence to show her suitability to the job functions which she was to perform at the

Nilai Factory other than the fact that she was at that time doing the duties in

“Account Payable”.

53. As to the duration of the transfer of the Claimant to the Nilai Factory, the

Company had stated that the duration would be only for two (2) months but that

period was not conclusive as it was also stated that her transfer would be till the

issue at the Nilai Factory was resolved. With this, it would only mean that there was

only a minimum period of two (2) months that the Claimant was expected to be at the

Nilai Factory but no certainly as to when she will be returned to the headquarters at

Kuala Lumpur to resume her original position.

54. The Company had failed to provide any evidence to the court to show that the

Claimant was the only person who could be transferred to the Nilai Factory to carry

out the functions there although there were at the time so many other staffs in the

same reporting line.

Decision

55. Based on the foregoing, in making a decision, bearing in mind S30 (5) of the

IRA, 1967 to act according to equity, good conscience and the substantial merits of

the case without regard to technicalities and legal form, the court finds that the

Claimant's dismissal by the Company was without just cause or excuse.

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Remedy

56. As the court finds that the dismissal of the Claimant was without just cause or

excuse, the next issue to be determined the type of remedies to be granted to the

Claimant. Although the remedy in this court is reinstatement, however weighing the

matrix of this case, it is apparent that the relationship of mutual trust and confidence

between a workman and employer no longer exist due to the reasons for which the

Claimant had been dismissed. That being the situation, the relief of reinstatement will

not be beneficial to both parties and as such, the court finds that a monetary award

would be more appropriate in the circumstances of this case.

57. In the case of Koperasi Serbaguna Sanya Bhd (Sabah) v. Dr James Alfred

(Sabah) & Anor [2000] 3 CLJ 758, the Court of Appeal held at p. 766 as follows ;

“In industrial law, the usual remedy for unjustified dismissal is an

order or reinstatement. It is only in rare cases that reinstatement is
refused. For example, as here, where the relationship between the
parties had broken down so badly that it would not be conducive to
industrial harmony to return the workman to his place of work. In
such a case, the Industrial Court may award monetary
compensation. Such and award is usually in two parts. First, there is
usual award for the arrears of wages, or back wages, as it is
sometimes called. It is to compensate the workman for the period
that he has been unemployed because of the unjustified act of
dismissal. Second, there is an award of compensation in lieu of
reinstatement.

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 However in the instant case, the court is of the view that such
order of reinstatement is not conducive to industrial harmony and in
any event the Claimant is currently gainfully employed elsewhere.”

58. The Claimant commenced employment with the Company on 22.12.2003 and

was constructively dismissed on 23.06.2020. She had worked with the Company for

a period of 16 years, five (5) months and 1 day. Her last drawn salary was

RM3,500.00 per month.

59. In view of the pandemic and the movement control orders which were

imposed nationwide, the disposal of this case has been delayed due to no fault of

either party. As such, in calculating the backwages, the court in using its discretion

reduce the number of months from a total of 24 months to 18 months only.

60. A deduction for post dismissal earnings of 30% of the backwages of 18

months is applied in the calculation of total backwages awarded.

61. Taking into consideration all factors in this case as stated above, the court

hereby makes the following orders;

(a) Backwages;

RM3,500.00 x 18 months = RM63,000.00

Less 30% = RM44,100.00

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 (b) Compensation in lieu of reinstatement i.e. one (1) month
salary for every completed year of service.

RM3,500.00 X 16 months = RM56,000.00

Final Order

62. The Company is hereby ordered to pay the sum of RM100,100.00

(RM44,100.00 + RM56,000.00) less any statutory deduction, if any, to the Claimant’s

Counsel Messrs Muáz Aiman Halem Auzan & Associates as stakeholders within 30

days from the date of this Award.

HANDED DOWN AND DATED THIS 29TH DAY OF JUNE, 2022

-signed-

( SUMATHI MURUGIAH )
CHAIRMAN
INDUSTRIAL COURT OF MALAYSIA

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