IN THE INDUSTRIAL COURT OF MALAYSIA

CASE NO: 4/4-2114/20

BETWEEN

CHEW CHEE SIONG

AND

CHEMPRO TECHNOLOGY SDN. BHD.

AWARD NO: 418 OF 2024

BEFORE : Y.A. TUAN AUGUSTINE ANTHONY

CHAIRMAN

VENUE : Industrial Court of Malaysia, Kuala

Lumpur.

DATE OF REFERENCE : 08.09.2022.

DATE OF RECEIPT OF
REFERENCE : 17.09.2020.

DATES OF MENTION : 20.10.2020, 23.03.2021, 23.08.2021,

20.04.2022, 13.07.2022, 17.10.2023,
04.12.2023 & 08.01.2024.

DATES OF HEARING : 10.05.2021, 02.08.2021, 28.03.2022 ,

& 27.07.2023.

REPRESENTATION : Mr. VK Raj and Miss S.P Devi of Messrs

A. Rajadurai P. Kuppusamy & Co –
Counsel for the Claimant

1
 : Miss Selvi Kanagasabai and Miss Daya
TVK Nair of Messrs. Adha Selvi &
Associates - Counsel for the Company.

THE REFERENCE:

This is a reference dated 08.09.2020 by the Honourable Minister of

Human Resources pursuant to section 20(3) of the Industiral Relations

Act 1967 (“The Act”) arising out of the alleged dismissal of CHEW CHEE

SIONG (Claimant) by CHEMPRO TECHNOLOGY SDN. BHD.

(Company) on the 15.05.2020.

AWARD

[1] Pursuant to the directions of this Court, the parties in this matter

filed their respective submissions dated 29.11.2023 (Claimant’s written

submissions), 03.12.2023 (Company’s written submissions), 27.12.2023

(Claimant’s written submissions in reply) and 05.01.2024 (Company’s

written submissions in reply)

[2] This Court considered all the notes of proceedings in this matter,

documents and cause papers in handing down this Award namely:

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(i) The Claimant’s Statement of Case dated 02.11.2020;

(ii) The Company’s Statement in Reply dated 18.11.2020;

(iii) The Claimant’s Rejoinder dated 07.12.2020;

(iv) The Claimant’s Bundles of Documents – CLB 1, CLB 2, CL 3 &

CL 4 ;

(v) The Company’s Bundles of Documents – COB1, COB 2, COB 3 &

COB 4;

(vi) Claimant’s Witness Statement – CLW – WS ( Mr. Chew Chee

Siong);

(vii) Company’s Witness Statement – COW1-WS (Miss Chiew Yuen

Chow);

(viii) Company’s Witness Statement – COW2 – WS (Mr. Wong Kay

Loon );

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(ix) Company’s Witness Statement – COW3 – WS(1) & WS(2) (Mr.

Cheok Viping);

INTRODUCTION

[3] The dispute before this Court relates to the claim by Chew Chee

Siong (“Claimant”) that he was constructively dismissed from his

employment without just cause or excuse by Chempro Technology Sdn.

Bhd. (“the Company”) on the 15.05.2020.

[4] The Company is involved in the business of amongst other the

sales of cleaning chemicals, antitack chemicals and polymer coating

chemical products. The Claimant commenced employment with the

Company as its Division Manager on the 01.12.2011. There is no

dispute that the Claimant was a confirmed employee of the Company.

The Claimant’s last drawn salary a month was RM5350.00. However the

Claimant contends that his average monthly income including his

commission was RM18,350.00 prior to the Claimant claiming

constructive dismissal. The Claimant was tasked to be in charge of the

promotion, marketing and sales of the Company’s products to various

customers (companies) under his account.

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[5] The Claimant alleged that sometime around the period of

December 2012 due to the resignation of another division manager, the

Claimant was tasked to handle one of the key customers from the

resigning division manager’s account namely an entity known as

Hartalega Sdn. Bhd. and on account of the sales from this entity, the

Claimant has been receiving sales commission. However without any

prior discussion and by an email dated 06.02.2020, the Company’s

General Manager directed the Claimant to transfer all Hartalega

associated companies to other sales personnel of the Company thereby

depriving the Claimant approximately 70% of the monthly commission

earned as part of his wages. The Claimant states that despite his protest

on this unjust act of the Company depriving him of his substantial

earnings after all his effort in expanding the business and sales with

Hartalega associated companies, the Company was adamant that it has

the right to do so without any discussion with the Claimant. The Claimant

alleged that the conduct of the Company has reduced his monthly

income drastically and urged the Company to restore the Hartalega

associated companies into his account.

[6] The Claimant then sent an email to the Company on the

06.05.2020 stating that his monthly income for April was drastically

5
reduced on account of the Company’s act in removing the Hartalega

associated companies and put the Company on notice to restore these

companies back to the Claimant’s customer account failing which he will

treat himself as constructively dismissed. As there was no response from

the Company, the Claimant by a letter dated 15.05.2020 treated himself

constructively dismissed. The Claimant states that the Company by its

action has treated him unfairly, unjustly and evinced an intention no

longer to be bound by the essential terms of the contract of employment

and has also breached the implied term of mutual trust and confidence.

The Claimant now states that he was dismissed from his employment

with the Company without just cause or excuse and prays that he be

reinstated to his former position in the Company without any loss of

wages and other benefits.

[7] The Company however states that it is the right and absolute

discretion of the Company to allocate customers to the Claimant as

practiced in the Company including from time to time reallocate to other

sales personnel in the Company customers previously allocated to the

Claimant. Further the Company also contends that the Company did not

dismiss the Claimant instead the Claimant has tendered his resignation

to the Company by his letter dated 15.05.2020. The Company denies all

6
the allegations of the Claimant that it had acted unjustly or unfairly

towards the Claimant and now prays that the Claimant’s case be

dismissed.

[8] The Claimant gave evidence under oath and remained the sole

witness for his case. Three witnesses gave evidence on behalf of the

Company and they are COW1 (Miss Chiew Yuen Chow, the finance

director of the Company who is tasked with the responsibilities of

preparing the statistics and sales figures of the Company, keeping

records of the Company’s sales personnel’s sales and revenue earned

from Company’s customers and calculating the commissions payable to

the sales personnel for their sales achievement), COW2 (Mr. Wong Kay

Loon, an Accounts Manager in the Sales Division whose job scope

involves matters such as to co-ordinate and organise institutional

division business, keep track of market changes and to evaluate the

quality of monthly sales. This witness also gave evidence that the

Company from time to time makes changes to the terms and condition of

employment which included changes to commissions earned and the

allocation/assignment of customers (companies) from whom the sales

personnel earned commissions) and COW3 ((Mr. Cheok Viping, the

General Manager in charge of sales and who is responsible for

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allocating and reallocating customers (companies) to sales personnel.

This witness also gave evidence on the duties of the Claimant, his

employment background including with the Company and the right of the

Company to allocate or reallocate the Company’s customers to other

sales personnel).

THE CLAIMANT’S CASE

[9] The Claimant’s case can be summarised as follows:-

(i) The Claimant commenced employment with the Company as

its Division Manager on the 01.12.2011 with a monthly basic

salary of RM4,500.00 and a fixed commission of RM2,500.00

per month;

(ii) The Claimant was confirmed in his employment on the

01.02.2012;

(iii) The Claimant’s last drawn salary a month was RM5,350.00

and his monthly average income including the commission

was RM18,350.00;

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(iv) By a letter dated 01.02.2012 the Company provided the

Claimant an attached list of customers that was allocated to

him together with the commission entitlement scheme which

was part of his contractual term;

(v) The Claimant’s job function as a Division Manager of the

Company included amongst other the task of managing the

sales under the Claimant’s account which included amongst

other the companies known as Hartalega Sdn. Bhd. and

Hartalega NGC Sdn. Bhd.;

(vi) Sometime around the period of December 2012 due to the

resignation of another division manager one Mr. Peter Soong

(Peter), the Claimant was tasked to handle one of the key

customers of Peter namely Hartalega Sdn. Bhd. and on

account of the sales from this entity, the Claimant has been

receiving sales commission;

(vii) However without any prior discussion and by an email dated

06.02.2020, the COW3 (Company’s General Manager)

directed the Claimant to transfer Hartalega NGC Sdn. Bhd.

9
 and Hartalega Sdn. Bhd. to other sales personnel of the

Company namely one Mr. Wong Hoong Seng and Adrian

Chew respectively;

(viii) The direction for the Claimant to transfer the above two

customers to other sales personnel in the Company without

any prior discussion or agreement deprived the Claimant

approximately 70% of the monthly commission that formed

part of his wages;

(ix) The Claimant states that by an email dated 07.02.2020 he

protested this unjust act of the Company depriving him of his

substantial earnings after all his effort in expanding the

business and sales with Hartalega associated companies

and enquired whether the Company will compensate him for

his loss of commission;

(x) The Company through COW3 informed the Claimant on the

07.02.2020 that it has the right to reallocate customers to

other sales personnel without any discussion with the

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 Claimant as both the Hartalega Snd. Bhd. and Hartalega

NGC Sdn. Bhd. were the Company’s existing accounts and

as such the Claimant will not be compensated;

(xi) Despite further reminders and enquiries from the Claimant on

the 10.02.2020 and 17.02.2020 seeking the Company to

offer reasons for the reallocation of the above entities to

other sales personnel, the Company did not provide any

answers to the queries made by the Claimant. Even a

meeting held on the 19.02.2020 between the Claimant and

COW3 did not resolve the Claimant’s concerns;

(xii) On the 16.03.2020, the Claimant notified the Company that

the removal of the Hartalega customers from his account will

drastically reduce his monthly income and urged the

Company to restore the Hartalega customers into his

account;

(xiii) As the Government has announced a movement control

order (MCO) on the 18.03.2020, the Claimant was working

on alternate basis between home and office;

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(xiv) The Claimant then sent an email to the Company on the

06.05.2020 stating that his monthly income for April was

drastically reduced on account of the Company’s act in

removing the Hartalega associated companies and put the

Company on notice to restore these companies back to the

Claimant’s customer account failing which he will treat

himself as constructively dismissed;

(xv) As there was no response from the Company, the Claimant

by a letter dated 15.05.2020 treated himself constructively

dismissed;

(xvi) The Claimant states that the Company by its action has

treated him unfairly, unjustly as the commissions earned

forms a substantial part of the Claimant’s wages;

(xvii) The Company by its action has also breached the implied

term of mutual trust and confidence;

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(xviii) The Claimant now states that the series of acts or conduct of

the Company amounted either individually or cumulatively to

repudiatory breaches of his contract of employment with the

Company;

(xix) The Company’s conduct was motivated by bad faith with

intention to victimise the Claimant;

(xx) The Company’s conduct has also breached the fundamental

terms and conditions of the contract of employment and the

Company has evinced an intention not to be bound by one or

any of the essential terms of the Claimant’s contract of

employment thus entitling the Claimant to treat himself as

constructively dismissed;

(xxi) The Claimant now states that he was dismissed from his

employment with the Company without just cause or excuse

and prays that he be reinstated to his former position in the

Company without any loss of wages and other benefits.

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THE COMPANY’S CASE

[10] The Company’s case can be summarised as follows:-

(i) The Company does not dispute the Claimant’s employment

status as a confirmed employee of the Company who

commenced employment on the 01.12.2011;

(ii) The Company does not dispute that the Claimant was

employed as a Division Manager with a starting salary of

RM4,500.00 and that he was also paid a commission of a

minimum of RM2,500.00;

(iii) The Company states that though the Claimant was entitled to

commissions for sales in the rubber division, the Company

had the right and discretion to allocate customers for the

Claimant from time to time and also had the same right and

discretion to reallocate the Claimant’s existing customers to

other sales personnel;

(iv) The Company does not deny the Claimant’s last drawn

salary being RM5,350.00 per month but states that the

14
 Claimant’s monthly average commission for the year 2019

was only RM11,636.03;

(v) The Company does not dispute all the customers allocated

to the Claimant as stated in paragraph 8 of the Claimant’s

statement of case except Hartalega Sdn. Bhd. and Hartalega

NGC Sdn. Bhd.;

(vi) The Company states that Peter Soong resigned on the

30.09.2012 and it was not until 01.03.2013, some 5 months

later Hartalega Sdn. Bhd. was allocated to the Claimant;

(vii) The Claimant did not take over Peter Soong’s functions as

the Claimant had been given his job by the Company’s letter

dated 01.02.2012;

(viii) The Company states that since December 2012, the

Company has reviewed the Claimant’s customers allocated

wherein some customers were added whilst others were

removed from the list of customers, the last of such exercise

was carried out in February 2020;

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(ix) On 06.02.2020, the Company in using its discretion and

through COW3 reallocated the Claimant’s customers namely

Hartalega NGC Sdn. Bhd. and Hartalega Sdn. Bhd. to its

other sales personnel namely one Wong Hoong Seng and

Adrian Chew respectively;

(x) The reallocation of the Claimant’s customers to other sales

personnel in the Company was at the discretion of the

Company which the Company deems fit and is consistent

with the Claimant’s confirmation letter dated 01.02.2012;

(xi) The Company states that no individual sales personnel in the

Company has any proprietary rights to any of the Company’s

customers and it is the duty of all sales personnel to service,

increase and expand the sales from the customers allocated;

(xii) The Company admits that the Claimant met with COW3 on

the 19.02.2020 and states that the Company need not have

to provide any justification to its sales personnel for the

reallocation of its customers;

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(xiii) The Company admits receiving the Claimant’s email dated

06.05.2020 but states that the Company did not have to

justify or explain its actions for the reallocation of the

Claimant’s customers as it is wholly within the Company’s

discretion to reallocate the Claimant’s customers to other

sales personnel;

(xiv) The Company had at all time acted in a proper manner within

the terms of the contract of employment of the Claimant and

was not the cause for the Claimant’s exit from the Company;

(xv) The Company states that the Claimant on his own volition

tendered his resignation;

(xvi) The Company denies the Claimant’s allegations of breaches

of express or implied terms of his employment contract with

the Company including the implied term of mutual trust and

confidence;

(xvii) The Company denies all of the Claimant’s allegations of

repudiatory breaches, victimisation and that the Company

17
 was motivated by bad faith in its series of conducts and

actions against the Claimant;

(xviii) The Company denies the Claimant’s allegation that it has

committed any breaches of the fundamental terms and

conditions of the Claimant’s contract of employment and has

evinced an intention no longer to be bound by the essential

terms of his contract of employment;

(xix) The Company denies dismissing the Claimant and prays that

the Claimant’s case anchored on constructive dismissal be

dismissed.

THE LAW

Role and function of the Industrial Court

[11] The role of the Industrial Court under section 20 of the Industrial

Relations Act 1967 is succinctly explained in the case Milan Auto Sdn.

Bhd. v. Wong Seh Yen [1995] 4 CLJ 449. His lordship Justice Mohd

Azmi bin Kamaruddin FCJ delivering the judgment of the Federal Court

had the occasion to state the following:-

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 “As pointed out by this Court recently in Wong Yuen Hock v. Syarikat

Hong Leong Assurance Sdn. Bhd. & Another Appeal [1995] 3 CLJ

344; [1995] 2 MLJ 753, 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 of by the employer has been established,

and 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 ...”

[12] The above principle was further reiterated by the Court of Appeal

in the case of K A Sanduran Nehru Ratnam v. I-Berhad [2007] 1 CLJ

347 where his lordship Justice Mohd Ghazali Yusoff, JCA outlined the

function of the Industrial Court:-

“[21] The learned judge of the High Court held that the Industrial Court had

adopted and applied a wrong standard of proof in holding that the respondent

has failed to prove dishonest intention and further stating that the respondent

has not been able to discharge their evidential burden in failing to prove every

element of the charge. He went on to say that the function of the Industrial

Court is best described by the Federal Court in Wong Yuen Hock v. Syarikat

Hong Leong Assurance Sdn Bhdand Another Appeal [1995] 3 CLJ 344 where

in delivering the judgment of the court Mohd Azmi FCJ said (at p. 352):

On the authorities, we were of the view that the main and only function of the

Industrial Court in dealing with a reference under s. 20 of the Act (unless

otherwise lawfully provided by the terms of the reference), is to determine

19
 whether the misconduct or irregularities complained of by the management as

the grounds of dismissal were in fact committed by the workman, and if so,

whether such grounds constitute just cause or excuse for the dismissal”

[13] It will not be complete this far if this Court fails to make reference

to the decision of the Federal Court in the case of Goon Kwee Phoy v.

J & P Coats (M) Bhd [1981] 1 LNS 30 where His Lordship Raja Azlan

Shah, CJ (Malaya) (as HRH then was) opined:

“Where representations 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 a 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 that

Court or the High Court cannot go into another reason not relied on by the

employer or find one for it.”

Burden Of Proof

[14] Whenever a Company has caused the dismissal of the workman, it

is then incumbent on part of the Company to discharge the burden of

20
proof that the dismissal was with just cause or excuse. This Court will

now refer to the case of Ireka Construction Berhad v. Chantiravathan

a/l Subramaniam James [1995] 2 ILR 11 in which case it was stated

that:-

“It is a basic principle of industrial jurisprudence that in a dismissal case

the employer must produce convincing evidence that the workman

committed the offence or offences the workman is alleged to have

committed for which he has been dismissed. The burden of proof lies on

the employer to prove that he has just cause and excuse for taking the

decision to impose the disciplinary measure of dismissal upon the

employee. The just cause must be, either a misconduct, negligence or

poor performance based on the facts of the case.

Burden of proof in cases of constructive dismissal.

[15] The case of Weltex Knitwear Industries Sdn. Bhd. v Law Kar

Toy & Anor (1998) 1 LNS 258/ 91998) 7 MLJ 359 is relevant on the

role of this Court when the dismissal itself is disputed by the Company.

In this case his lordship Haji Abdul Kadir Bin Sulaiman J opined :-

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 dismissal was

done with 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

21
 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: (emphasis is this Court’s).

[16] In view of the above case and anchored on a claim of constructive

dismissal where the Company denies dismissing the Claimant from his

employment, it is now incumbent upon the Claimant to prove his case

that he was dismissed in line with the claim of constructive dismissal.

The burden of proof thus had now shifted to the Claimant to prove that

he was dismissed by the Company from his employment before this

Court can proceed to determine whether that dismissal if proven

amounts to a dismissal without just cause or excuse.

Standard Of Proof

[17] In the case of Telekom Malaysia Kawasan Utara v. Krishnan

Kutty Sanguni Nair & Anor [2002] 3 CLJ 314 the Court of Appeal had

laid down the principle that the standard of proof that is required to prove

22
a case in the Industrial Court is one that is on the balance of probabilities

wherein his lordship Justice Abdul Hamid Mohamad, JCA opined:-

“Thus, we can see that the preponderant view is that the Industrial Court,

when hearing a claim of unjust dismissal, even where the ground is one of

dishonest act, including "theft", is not required to be satisfied beyond

reasonable doubt that the employee has "committed the offence", as in a

criminal prosecution. On the other hand, we see that the courts and learned

authors have used such terms as "solid and sensible grounds", "sufficient to

measure up to a preponderance of the evidence," "whether a case... has been

made out", "on the balance of probabilities" and "evidence of probative value".

In our view the passage quoted from Administrative Law by H.W.R.

Wade & C.F. Forsyth offers the clearest statement on the standard of

proof required, that is the civil standard based on the balance of

probabilities, which is flexible, so that the degree of probability required is

proportionate to the nature of gravity of the issue. But, again, if we may add,

these are not "passwords" that the failure to use them or if some other words

are used, the decision is automatically rendered bad in law.”

Law on Constructive Dismissal

[18] In Wong Chee Hong v Cathay Organization Malaysia Sdn. Bhd.

[1988] 1 CLJ Rep 298/ [1988] 1 CLJ 45 his lordship Salleh Abas LP,

delivering the judgment of the Court had this to say:-

23
 “The common law has always recognized the right of an employee to

terminate his contract of service and therefore to consider himself as

discharged from further obligations if the employer is guilty of such

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

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

………….When the Industrial Court is dealing with a reference under s.

20, the first thing that the Court will have to do is to ask itself a question

whether there was a dismissal, and if so, whether it was with or without

just cause or excuse.”

[19] In a constructive dismissal case it must be shown by the employee

that the employer:-

(i) by his conduct had significantly breached the very essence

or root of the contract of employment or,

(ii) that the employer no longer intends to be bound by one or

more of the essential terms of the contract,

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[20] And if the employer demonstrates the above, then the employee is

entitled to treat himself as discharged from further performance of the

contract. The termination of the contract is then for reason of the

employer’s conduct thereby allowing the employee to claim constructive

dismissal.

[21] In the case of Anwar Abdul Rahim v. Bayer (M) Sdn. Bhd.

[1998] 2 CLJ 197, the Court of Appeal expounded the requirements to

prove constructive dismissal wherein his lordship Justice Mahadev

Shanker JCA delivering the judgment of the Court had the occasion to

state the following:-

“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. Elizabeh Lee Chai Siok

[1992] 1 CLJ 141 (cit) and Wong Chee Hong V. Cathay Organisation (m)

Sdn. Bhd. [1988] 1 CLJ 298 at p. 94.”

25
[22] It must be further stated here that the Claimant’s case being one of

constructive dismissal, the Claimant must give sufficient notice to his

employer of his complaints that the conduct of the employer was such

that the employer was guilty of a breach going to the root of the contract

or whether the employer has evinced an intention no longer to be bound

by the contract as stated in the case of Anwar Abdul Rahim (supra).

The notice to the employer will be necessary in order for the employer to

the remedy the breach (if any) before the Claimant can treat himself as

constructively dismissed if there was failure on part of the Company to

remedy the breaches complained of.

[23] In the case of Govindasamy Munusamy v. Industrial Court

Malaysia & Anor [2007] 10 CLJ 266, his lordship Justice Hamid Sultan

Abu Backer JC (as he then was) had succinctly stated what a Claimant

has to prove in order to succeed in a case of constructive dismissal:-

“[5] To succeed in a case of constructive dismissal, it is sufficient for the

claimant to establish that:

(i) the company has by its conduct breached the contract of

employment in respect of one or more of the essential terms

of the contract;

26
 (ii) the breach is a fundamental one going to the root or

foundation of the contract;

(iii) the claimant had placed the company on sufficient notice

period giving time for the company to remedy the defect;

(iv) if the company, despite being given sufficient notice period,

does not remedy the defect then the claimant is entitled to

terminate the contract by reason of the company's conduct

and the conduct is sufficiently serious to entitle the claimant

to leave at once; and

(v) the claimant, in order to assert his right to treat himself as

discharged, left soon after the breach.”

[24] Having stated the law as above, this Court will now move to the

facts and evidence of this case for its consideration. In doing so, this

Court will now take into account the conduct of the Claimant, the

Company and the series of events that led to the Claimant now claiming

constructive dismissal.

EVALUATION OF EVIDENCE AND THE FINDINGS OF THIS COURT

[25] The Claimant claimed that he treated himself as constructively

dismissed due to the Company’s conduct which he states was a breach

27
of the fundamental terms and conditions of his contract of employment

and that the Company has evinced an intention no longer to be bound

by the essential terms of the Claimant’s contract of employment with the

Company. The Claimant has also given evidence that the Company’s

conduct was a breach of the implied term of mutual trust and confidence

between the Claimant and the Company.

[26] Amongst the acts of the Company which the Claimant complained

of as giving rise to the Claimant treating himself as constructively

dismissed can be summarized herein and which are :-

(i) the Company’s conduct in the removal of the Claimant’s key

customers from the Claimant’s sales portfolio without giving the

Claimant any reason whatsoever;

(ii) The removal of the Claimant’s key customers had affected the

Claimant’s monthly remuneration as the commissions earned

from these key customers formed a substantial part of the

Claimant’s wages.

[27] The Company through its witnesses has categorically denied that

the Claimant is entitled to treat himself as constructive dismissed. The

28
Company through its witnesses maintained that it had not breached any

of the fundamental terms of the Claimant’s contract of employment

neither did the Company has evinced any intention not to be bound by

essential terms of the Claimant’s contract of employment with the

Company. It is the Company position throughout the case that the

Company has complied with all the terms of the Claimant’s contract of

employment including on those matters complained of by the Claimant.

The Company maintains that in the event the Company removed the

Claimant’s purported key customers, it was the right and absolute

discretion of the Company to do so as it was the Company’s accepted

practice that the sales personnel were from time to time allocated

customers with the same practice of the sales personnel’s customers

were from time to time removed and reallocated to other sales personnel

within the Company and such practice was an accepted norm that the

Claimant is not entitled to complain of or question.

[28] In understanding the two conflicting position of the parties, it will be

useful for this Court to delve further into the facts and evidence of this

case including the documentary evidence presented before this Court.

[29] The Claimant gave evidence that he was working for the Company

since 2011. The Claimant also testified that at the time he commenced

29
employment with the Company he was allocated a set of companies

(customers) for him to generate sales for the Company wherein he was

entitled to a certain percentage of sales commissions which was a part

of his contractual term of employment as reflected in his letter of

appointment dated 18.10.2011.

[30] The Claimant was confirmed on the 01.02.2012 and this Court

having perused the confirmation letter and the Claimant’s commission

entitlement scheme has taken notice of certain salient terms and

condition of employment. The salient part of the Claimant’s terms and

condition of employment as stated in the Company’s letter dated

01.02.2012 is reproduced here for convenience : -

“However as agreed , Payment of monthly commission will be base on

whichever is higher than minimum of RM2,500.00 per month compare with

your commission entitlement scheme after your confirmation of employment.

I would expect you to service, maintain and sell new lines into your designated

customers. You are also expected to call on prospects and sell new

accounts/products.

You will appreciate we allocate customers to you in order for you to enjoy

commission. To increase income, you therefore must expand your territory.

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 The Company reserves the right to reallocate customers and adjust budget

base line whenever the circumstances warrant it.”

[31] This Court also further notice the penultimate paragraph of the

same letter that flashes a sales rhetoric directed at the Claimant that if

the Claimant works hard enough to increase his sales for the Company

then the years of service of the Claimant with the Company will be filled

with fulfillment and contentment not to mention the ever increasing

monetary prize. The burst of that rhetoric must be reproduced here for

clarity of what the Company has promised and convinced the Claimant

at that time and it goes like this :-

“I wish you every success and many rewarding years to come….”

[32] Now the Claimant’s evidence in this Court is an impassioned plea

that the conduct of the Company has reversed those promised

rewarding years despite the Claimant’s hard work and has turned it into

one of rapid regressing state of the Claimant’s employment and

substantial loss of monetary entitlement in the form of wages and to

hold that that conduct of the Company must necessarily be a breach of

the fundamental terms of the contract of employment of the Claimant

with the Company.

31
[33] The Claimant gave evidence that he has worked for the Company

for almost 9 years. Due to the departure of one of the Claimant’s

colleague from the Company, the Claimant was allocated a key

customer namely an entity known as Hartalega Sdn. Bhd. and the

Claimant had developed a strong relationship with the Directors of the

this Company leading to the Claimant securing additional customers and

had increased the sales of the Company by securing another entity

known as Hartalega NGC Sdn. Bhd. Although the Company has

maintained that Hartalega Sdn. Bhd. was the Company’s existing

customer, the fact that Hartalega Sdn. Bhd, was satisfactorily serviced

by the Claimant leading to the Claimant securing Hartalega NGC Sdn.

Bhd thus establishing a strong business relationship by the Claimant

leading to increased sales and revenue from these two entities was not

seriously challenged by the Company.

[34] This Court is of the view that the sales generated from these two

customers as mentioned above would certainly benefit the Company

and as a form of reciprocity, rewarding the Claimant for his efforts will

only breathe life to the very words and sales rhetoric of the Company

which was directed to the Claimant in the Company’s letter dated

01.02.2012 and the penultimate paragraph as mentioned above by this

Court. Alas the Claimant now complains that that was not the case.

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Instead the Company has snatched away from him not only the

customers that he has serviced and developed into a key sales or

revenue provider for the Company but by the very conduct has deprived

the Claimant of his sales commission which was his wages. The

Claimant’s disapproval of the Company’s conduct is not without any

merit. Certainly the consistent sales commissions earned by the

Claimant would allow him to plan his monthly expenditures and

commitment including his family’s needs but taking away of his

substantial sales commission which was agreed as part of his

contractual terms of employment would now place the Claimant in

financial disarray.

[35] On the other hand, the Company refers to the very employment

contract of the Claimant with the Company and exclaims that the

Claimant was fully aware that the Company has a right to allocate

customers to the Claimant and also has the same right and discretion

take away the allocated customers and reallocate the same to other

sales personnel. And in view of that the Company will not compensate

the Claimant for the substantial reduction of his sales commission.

[36] It is the pleaded case of the Company at paragraph 8 (iv) and (x)

that it was the Company’s discretion to allocate and reallocate the

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customers of the Company to its sales personnel when deems fit and

that no individual sales personnel have any proprietary rights to any of

the Company’s customers. It is also the Company’s stance that the

Company does not have to justify or explain its action to any of its sales

personnel on the reallocation as it is wholly the Company’s discretion to

do so.

[37] The Company in support of its pleaded case gave evidence

through COW2 and COW3. In essence COW2’s evidence was that the

Company has allocated customers to him and has also reallocated his

customers to other sales personnel. By looking at the evidence of this

witness this Court will be bemused if there were any complaints from

COW2 as this witness seems to enjoy many customers being allocated

to him which necessarily will translate into increased sales commission

for this witness. Though this witness claims that there was initial drop in

his commissions but looking at the manner in which he was allocated

customers after customers, somehow the impression that this Court gets

from this witness is that he seems to enjoy privileges of increased sales

commissions from the conduct of the Company which will be consistent

with the Company’s sales rhetoric in the penultimate paragraph of its

letter dated 01.02.2012 which was earlier dealt with but the same cannot

be said of the sad predicament of the Claimant where the evidence

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before this Court clearly shows that there was a drastic reduction of his

take home wages as a result of the Company taking away the Claimant’s

key customers.

[38] COW3’s gave evidence that the taking away of the Claimant’s key

customers is in the absolute discretion of the Company and this

according to this witness is a fact which is clearly stated not only in the

Claimant’s letter of appointment but also includes in the letter of

appointment of other sales personnel and as such the Company can at

anytime take away the Claimant’s customers and reallocate it to other

sales personnel including new sales personnel to motivate them. It is the

Company’s stance that in doing so the Company need not justify its

action.

[39] This Court having regard to all the evidence and the facts of this

case holds the view that despite the Company’s strong stance that it can

take away the Claimant’s customers and reallocate it to other sales

personnel and it does not need to justify such action, the opposite may

be correct based on the Claimant’s evidence and compared the same

with the documentary evidence before this Court.

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[40] The letter dated 01.02.2012 on the commission scheme addressed

to the Claimant is explicitly clear on the course of action that must be

taken by the Company if and in the event the Company exercises its

right to reallocate customers of the Claimant and adjust the budget base

line. The letter clearly says :-

“The Company reserves the right to reallocate customers and adjust budget

base line whenever the circumstances warrant it” (emphasis is this

Court’s)

[41] This essential term of the contract of employment of the Claimant

with the Company, upon the proper evaluation of the evidence before

this Court can only import the meaning that the Company reserves the

right only in the event the circumstances warrant it meaning there must

be justification for the Company’s conduct of reallocating the Claimant’s

customers to other sales personnel especially when the Company is fully

aware that any arbitrary removal of the Claimant’s existing customers

will deprive the Claimant the commissions earned and this will disrupt

the Claimant’s personal financial planning especially when the

remuneration earned through sales according to the Claimant has

dropped by more than 70% and which the Company’s witness COW1

seem to agree when this witness stated that the drop according to her

36
calculation amounted to slightly more than 69%. The drop in the

Claimant’s earning due to the removal of these customers from his

account was indeed substantial.

[42] The Company cannot come to this Court which emphasizes on the

principle of equity and good conscience and say nonchalantly that it has

discretion to treat an employee in a certain manner and it does not need

to justify how it uses or applies its discretion especially upon the true

construction of the words in the letter dated 01.02.2012. Every person

or entity will invariably have discretion to deal with certain given issue or

matter but it must be at the back of every such person’s or entity’s mind

that all such discretion must be judicious in its nature for without such

approach tyranny will prevail. Needless to say the byproduct of tyranny

or despotism is oppression, cruelty and victimization.

[43] Indeed the conduct of the Company in promising so much financial

reward for the Claimant’s hard work but only to snatch it away after the

Claimant having put all his effort to increase the sales of the Company is

not only inconsistent with the essential terms of the Claimant’s contract

of employment but more seriously an affront to the very promise made

to the Claimant which promise means nothing looking at the conduct of

the Company in taking away the Claimant’s key customers and depriving

37
him of the deserving substantial financial reward for all his hard work.

COW3’s evidence in this regard that the Claimant has many more

customers (companies) which he can develop to generate more sales

commission does not instill any sense of confidence in the way in which

the Company manages the affairs of the sales personnel. There is

absolutely no guarantee that if the Claimant developed and bring more

revenue from other customers/companies, such companies will then not

be taken away from the Claimant by the Company by insisting it has the

absolute discretion to do so without having to justify its action. If the

Company is allowed to do this without having to justify its act by claiming

that it had the discretion to do so and that discretion cannot be

questioned at all then there is no incentive for any employee to work

hard to increase revenue for the Company as at anytime the Company

can take away the product of the employee’s hard work. This kind of

conduct can also lead to favouritism where some employees may enjoy

better incentive for something that is not a result of their own hard work

and diligence. An employee who does not perform can be made to shine

like a fantastic and outstanding performer just by taking away a revenue

generating customer from one of the performing employee and given to

this non performing employee and likewise a diligent and hard working

employee who is a consistent performer can suddenly be made to look

like a non performer by taking away his revenue generating customers.

38
And perhaps in time to come he can also be “kicked out” of the

Company for being a “poor performer”. Such unjust and arbitrary act

must be struck down by this Court.

[44] This Court is more incline to believe and accept the Claimant’s

consistent and credible evidence as to the manner in which new

employees/sales personnel are given customers to handle and develop.

The evidence of Claimant in this Court explains this well in this way

below:-

“Chairman: What is this?

VKR : The right to reallocate.

Chairman : What is this ? You said that , no, warrants it when the

circumstances arise. What warrants it for the circumstances to

arise?

Claimant: For example if a new sales person join a company then naturally

company need to give them some accounts to handle or else the

new sales person got no account and he cannot learn

experience. So its normal for us to give them some small

account to handle. Just like when I joined that time, they also

give me small account to handle. But of course with my

39
 experience I can catch up pretty fast with my degree in

chemistry”

[45] This Court has also considered the evidence of COW1 and finds

that the evidence of this witness does not in any way help this Court in

answering the arbitrary and unexplained conduct of the Company in

taking away the Claimant’s key customers without any explanation or

justification.

[46] Having considered all the evidence before this Court, this Court

finds that the payment of commission to the Claimant is an express and

essential terms of the Claimant’s contract of employment with the

Company. This Court also finds that it is a fundamental term of the

Claimant’s contract of employment that the Claimant’s allocated

customers will only be reallocated to other sales personnel only in the

event the circumstances warrants it, meaning the Company must explain

the circumstances that warrants it to the Claimant which the Company

failed to do. Further the removal of the key customers of the Claimant

that resulted in the Claimant suffering reduction in the Claimant’s

remuneration arising from the unwarranted conduct of the Company is

necessarily a breach of the fundamental terms of the Claimant’s contract

of employment and demonstrates that the Company has evinced an

40
intention no longer to be bound by the essential terms of the Claimant’s

contract of employment. The Company has also conducted itself in

manner that can only be construed as a breach of mutual trust and

confidence between the Claimant and the Company.

[47] This Court has also considered the Company’s submissions and

the reliance of the Company on the Court of Appeal judgments of

Sanbos (Malaysia) Sdn. Bhd. v Gan Soon Huat (2021) 5 MLRA 133

and Ladang Holyrood V Ayasamy A/L Manikam & 16 Ors (2004) 1

MLRA 341 and must say here that after analyzing the facts of these two

cases with the case before this Court, must agree with the submissions

of the Claimant that the facts in both the Court of Appeal judgments can

be distinguished from the present case and the different sets of facts

yield a different finding and conclusion.

[48] The Claimant gave evidence that he wrote to the Company on the

06.05.2020 giving notice to the Company to remedy the breaches

complained of but the Company chose not to respond to the Claimant’s

email dated 06.05.2020 leaving the Claimant no other option but to treat

himself as constructively dismissed on the 15.05.2020. This Court finds

that the Claimant having given the Company notice of the breaches

committed promptly exercised his rights by claiming constructive

41
dismissal upon the Company’s failure to respond and remedy the

breaches complained of.

[49] Based on the above, this Court finds that the Claimant due to the

conduct of the Company is entitled to claim constructive dismissal. The

Company’s conduct which amounted to a fundamental breach going to

the root of the contract of employment with the Claimant resulted in a

successful claim of constructive dismissal and as such the Claimant has

succeeded in proving that he was dismissed by the Company from his

employment by way of constructive dismissal.

[50] This Court further holds that the Company’s pleaded case that the

Claimant tendered his resignation letter voluntarily or the assertion of the

Company that the Claimant abandoned his employment must

necessarily fail.

[51] This Court now finds that the Claimant was dismissed from his

employment with the Company.

[52] It is now upon this Court to make a further finding as to whether

the dismissal of the Claimant from his employment amounted one

without just cause or excuse. This Court finds that the Company’s

42
conducts in not adhering to terms of the contract of employment

especially the commission entitlement scheme as reflected in the

Company’s letter dated 01.02.2012, the removal of the Claimant’s key

customers without any explanation or justification that resulted in a

significant drop in the Claimant sales commission and the refusal of the

Company to respond to the Claimant satisfactorily were all breaches of

fundamental terms which were calculated to seriously damage the

relationship of confidence and trust between the Claimant and the

Company. The Company’s conduct that resulted in the Claimant

suffering reduction in sales commission which forms part of his wages

was arbitrary and unjust. The Company’s conduct also reveals unfair

labour practice. In view of all the findings of this Court herein, the

Company’s conduct has resulted in the dismissal of the Claimant from

his employment with the Company in an unjust, unfair manner and there

is no justification for the Company to have treated the Claimant in such a

way.

[53] Pursuant to Section 30(5) of “The Act” and guided by the principles

of equity, good conscience and substantial merits of the case without

regard to technicalities and legal forms and after having considered the

totality of the facts of the case, the evidence adduced and by reasons of

43
the established principles of industrial relations and disputes as stated

above, this Court finds that the Company has failed to prove on the

balance of probabilities that the dismissal of the Claimant was with just

cause or excuse. This Court now finds that the Claimant has been

dismissed without just cause or excuse.

REMEDY

[54] This Court having ruled that the Claimant was dismissed without

just cause or excuse, will now consider the appropriate remedy for the

Claimant.

[55] According to the letter of appointment dated 18.10.2011, the

Claimant’s effective date of employment with the Company started on

the 01.12.2011. The Claimant was dismissed from his employment with

the Company on the 15.05.2020. Thus the Claimant has served the

Company for a period of 8 full years of service. There is no dispute that

the Claimant was a confirmed employee of the Company.

[56] The Claimant, in stating that his dismissal from employment with

the Company was without just cause or excuse, prays to this Court for

44
reinstatement to his former position in the Company without any loss of

wages and other benefits. Considering the factual matrix of this case

amongst other where the Claimant has treated himself constructively

dismissed due to the Company’s arbitrary conduct, it is this Court’s view

that reinstatement of the Claimant to his former position in the Company

not a suitable remedy in the circumstances of this case.

[57] As such the appropriate remedy in the circumstances of this case

must be compensation in lieu of reinstatement. The Claimant is also

entitled for back wages in line with Section 30(6A) of “The Act” and the

factors specified in the Second Schedule therein which states:-

“1. In the event that backwages are to be given, such backwages

shall not exceed twenty-four months' backwages from the date of

dismissal based on the last-drawn salary of the person who has

been dismissed without just cause or excuse;”

[58] The Claimant’s last drawn basic salary was RM5,350.00 per

month. The Claimant’s average last drawn commission that was agreed

by the Claimant’s counsel through the Claimant’s submissions and the

Company through its pleaded case was RM11,636.03 which this Court

will now round it up to RM11,636.00. This Court is of the view that both

the Claimant’s basic salary and his commission will be his wages as the
45
consistent commission earned is a part of the contractual term between

the Claimant and the Company. Thus the Claimant’s total wages per

month will be computed by this Court to be RM16,986.00 per month.

[59] Equity, good conscience and substantial merits of the case without

regard to technicalities and legal forms remains the central feature and

focal point of this Court in arriving at its decision and these principles will

be adhered to by this Court at all times leading to the final order of this

Court.

[60] This Court is further bound by the principle laid down in the case of

Dr James Alfred (Sabah) v. Koperasi Serbaguna Sanya Bhd (Sabah)

& Anor [2001] 3 CLJ 541 where his lordship Justice Steve Shim CJ

(Sabah & Sarawak) in delivering the judgment of the Federal Court

opined:-

“In our view, it is in line with equity and good conscience that the Industrial

Court, in assessing quantum of backwages, should take into account the

fact, if established by evidence or admitted, that the workman has been

gainfully employed elsewhere after his dismissal. Failure to do so

constitutes a jurisdictional error of law. Certiorari will therefore lie to rectify

it. Of course, taking into account of such employment after dismissal

does not necessarily mean that the Industrial Court has to conduct a

mathematical exercise in deduction. What is important is that the

46
 Industrial Court, in the exercise of its discretion in assessing the quantum

of backwages, should take into account all relevant matters including the

fact, where it exists, that the workman has been gainfully employed

elsewhere after his dismissal. This discretion is in the nature of a decision-

making process”.

(emphasis is this Court’s)

[61] This Court must take into account the post dismissal earnings of

the Claimant in order to make an appropriate deduction from the back

wages to be awarded. The Claimant has given evidence which was not

challenged that after his dismissal from employment, he was doing some

freelance work and received no real income apart from some travelling

disbursements. The evidence before this Court shows that the Claimant

had no post dismissal income or earnings which this Court can take into

account for deduction purposes. Thus there will be no deduction on

account of this fact.

[62] Having considered all the facts of case on the appropriate sum to

be awarded and after taking into account that there is no post dismissal

earnings or income of the Claimant, this Court hereby orders that the

Claimant be paid 1 month wages of the last drawn wages of

RM16,986.00 for every year of service completed totalling 8 years and

47
back wages of the last drawn wages of RM 16,986.00.00 for 24

months. This will amount to:-

(i) Backwages ordered:

RM16,986.00 x 24 months = RM 407,664.00

(ii) Compensation in lieu of Reinstatement:

RM16,986.00 x 8 months = RM135,888.00

[63] Total amount ordered by this Court: RM543,552 .00

FINAL ORDER OF THIS COURT

[64] It is this Court’s order that the Company pays the Claimant a sum

of Ringgit Malaysia Five Hundred Forty Three Thousand Five

Hundred Fifty Two (RM543,552.00) only less statutory deduction (if

any) within 30 days from the date of this Award.

HANDED DOWN AND DATED THIS 18th DAY OF MARCH 2024

-Signed-

(AUGUSTINE ANTHONY)
CHAIRMAN
INDUSTRIAL COURT OF MALAYSIA
KUALA LUMPUR

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