By:
Bryan Lui (Co-Managing Partner) [bryan_lui@luibhullar.com]
Harneshpal Karamjit Singh (Co-Managing Partner) [harnesh_bhullar@luibhullar.com]
Understanding Constructive Dismissal in Malaysia: Claiming Your Rights with Lui & Bhullar
Constructive dismissal can be a complex area of labour law in Malaysia. At Lui & Bhullar, a leading employment law firm in Kuala Lumpur, we provide expert guidance on this crucial aspect of employment law. If you feel you've been forced to resign due to your employer's actions, or if you're an employer facing such a claim, understanding constructive dismissal is essential.
What is Constructive Dismissal?
Constructive dismissal occurs when an employee resigns because their employer has fundamentally breached their employment contract. This breach must be so severe that it leaves the employee with no reasonable alternative but to resign. Essentially, the employer's actions effectively terminate the employment relationship, even without a formal dismissal.
The Legal Foundation: Wong Chee Hong v Cathay Organisation (M) Sdn Bhd
The landmark case of Wong Chee Hong v Cathay Organisation (M) Sdn Bhd established the common law principle of constructive dismissal. It clarifies that an employee can terminate their contract if the employer breaches a fundamental term or demonstrates an intention to no longer be bound by it. For detailed employment law advice in Malaysia, consult our experienced team.
Proving Constructive Dismissal: The Employee's Burden
As per Yew Mun Khean v Kumpulan Liziz Sdn Bhd, the burden of proof rests with the employee. They must demonstrate that the employer's actions constituted a fundamental breach of contract. The "contract test," not the "unreasonableness test," is applied.
The Anwar Abdul Rahim v Bayer (M) Sdn Bhd Test
The Anwar Abdul Rahim v Bayer (M) Sdn Bhd case outlines the key elements for a successful constructive dismissal claim:
The employer breached a fundamental contract term or indicated an intention to abandon the contract.
The breach was significant enough to justify resignation.
The employee resigned in response to the breach, not for unrelated reasons.
The employee acted promptly after the breach. If you are looking for an Employment lawyer in Malaysia to help you with this, we can help.
Examples of Fundamental Contract Breaches:
Non-payment of salary: Tan Kok Chai v Mega 9 Housing Sdn Bhd confirms this as a fundamental breach.
Unilateral pay cuts: As seen in North Malaysia Distributors Sdn Bhd v Ang Cheng Poh, this is a clear breach.
Baseless demotions: Ang Beng Teik v Pan Global Textile Bhd Penang treats demotion as potential dismissal.
Mala fide transfers or job scope changes: Govindasamy Munusamy v Industrial Court Malaysia & Anor highlights the importance of bona fide transfers.
Prompt Action is Crucial
Employees must act promptly after a breach. Delay can be interpreted as acceptance of the breach, as illustrated in CCM Fertilizers v Peter Shanta Arthur Sukumar.
Proving Constructive Dismissal Doesn't Guarantee Liability
Even if constructive dismissal is proven, the employer can still argue that there was "just cause or excuse" for dismissal, as per Wong Chee Hong. However, in many cases, proving constructive dismissal also indicates an unfair dismissal. If you need a wrongful termination lawyer Malaysia, we can help.
Taking Action: Industrial Court Claims
Employees believing they've been constructively dismissed must file a complaint with the Director General of Human Resource within 60 days, as per Section 20 of the Industrial Relations Act 1967. This leads to a claim in the Industrial Court.
Remedies and Conclusion
Remedies for successful constructive dismissal claims are similar to unfair dismissal claims.
Employers and employees should adhere to their employment contract terms. Employers should seek legal advice before actions like demotions or pay cuts, and if facing a constructive dismissal claim, should seek immediate legal representation.
Why Choose Lui & Bhullar?
As your employment contract lawyer Malaysia and employee rights lawyer Malaysia, we understand the complexities of constructive dismissal. If you need employment lawyers near me or require assistance with workplace discrimination lawyer Malaysia cases, our team is ready to provide expert legal support. We also provide industrial relations lawyer Malaysia services.
Contact Lui & Bhullar today for expert legal guidance.
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