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Filing of Claim for Compensation Under Wrongful Dismissal (Loss of Employment) in Civil Court is Abuse of Process

Precedential Decision by Judiciary or Regulatory Agency

Authors: Selvamalar Alagaratnam, Partner and Head of Employment, and Teng Wei Hun, Associate – Skrine

The Court of Appeal recently struck out a claim filed by an employee in the civil court for damages in breach of employment contract, constructive dismissal, tort of intentionally causing emotional distress, tort of harassment and bullying, and negligence for being an abuse of process. The Court of Appeal held that, as a matter of principle, if a claim is one for compensation for wrongful dismissal (loss of employment), then it is a claim which ought to be ventilated via the statutory dispute mechanism provided under the Industrial Relations Act 1967, i.e., in the Industrial Court and not the civil court. Accordingly, if the claim were to be allowed to go to trial, the civil court would be usurping the jurisdiction of the Industrial Court and consequently, amounts to an abuse of process of the civil court.

The Court of Appeal also affirmed the established principle that, while an employee may file a common law claim for loss of employment in the civil court, such a claim is confined, as a matter of law, to “meagre” damages in the form of salary in lieu of notice.

Industrial Court has Jurisdiction to Hear Claims from Employee Even if it is a Pure Monetary Claim without Seeking Reinstatement

Precedential Decision by Judiciary or Regulatory Agency

Authors: Selvamalar Alagaratnam, Partner and Head of Employment, and Teng Wei Hun, Associate – Skrine

The Court of Appeal, in the case of Ace Holding Bhd v Norahayu Rahmad & Anor [2023] 6 CLJ 159, held that the Industrial Court does not cease to have jurisdiction to hear an employee’s claim merely because he had not sought for the remedy of reinstatement to his former employment as specifically provided for in section 20(1) of the Industrial Relations Act 1967 (IRA). In this case, the employee in his pleadings only claimed for “full wages and benefits” and the employer had raised a preliminary objection on the ground that the employee had failed to plead for reinstatement.

The Court of Appeal reasoned that, if the Industrial Court is allowed to decide itself that it ceases to have jurisdiction to hear an employee’s claim solely because the employee has abandoned a reinstatement remedy in his claim, this would render redundant the Minister’s reference. The Court of Appeal went on to hold that the Industrial Court has been specifically established by the legislature to be a specialized tribunal to decide on, amongst others, an employee’s claim for unlawful dismissal and therefore, even if the employee abandoned his reinstatement remedy, the employee is allowed to proceed with his pure monetary claim against the employer at the Industrial Court.

Employee Who Suffered Injury while Travelling on Off-Day in Order to Arrive at Work the Next Day Entitled to Disability Benefit

Precedential Decision by Judiciary or Regulatory Agency

Authors: Selvamalar Alagaratnam, Partner and Head of Employment, and Teng Wei Hun, Associate – Skrine

The case of Sathiaseelan Nagappan v Ketua Pengarah, Pertubuhan Keselamatan Sosial [2023] 5 CLJ 416 involved a claim by an employee for temporary disability benefits under a compulsory fault-free insurance scheme for injuries suffered in an accident while making his journey back to work (from his place of residence in another state which is some 150km away) on his off-day on Sunday in order to arrive to work at the factory on Monday morning (the said journey). The Social Security Organization rejected the claim on the basis that the accident did not arise out of or in the course of his employment.

The Court of Appeal held that the said journey was clearly a journey which is “directly connected” to the employee’s employment and thus, falling within the deeming provision. In other words, had it not been for his employment, the employee would not have made the said journey. The said journey was therefore held to be a necessity. On the second issue, the Court of Appeal held that any interruption or deviation from the said journey must mean a substantial one arising out of some other economic or enjoyment pursuit which was not the case here; and that the approach should be how best to allow the insured employee to claim and not how best he could be excluded from claiming under the social security scheme.

Reassigning Employee Back to Original Position from Temporary Position is not Constructive Dismissal

Precedential Decision by Judiciary or Regulatory Agency

Authors: Selvamalar Alagaratnam, Partner and Head of Employment, and Teng Wei Hun, Associate – Skrine

In the Court of Appeal decision of Keretapi Tanah Melayu Bhd v Mohan Vythialingam & Anor And Another Appeal [2023] 4 CLJ 532, it was held that the act of reassigning the employee back to his original position (and thus cease receiving his “acting allowance”) after he was reassigned to two different acting positions which the employee claims to be a demotion, did not amount to constructive dismissal. The Court held that the acting position was merely a temporary assignment and not a permanent one. Nor was there evidence to show that it would become permanent. As such, the employer need not provide any justification for reassigning the employee back to his original position from his acting position.

Taking away the acting position would have been considered a demotion if it was not bona fide and resulted in significant decrease in the employee’s responsibilities, pay or status, and if such demotion was found to be significant, could be considered a constructive dismissal. However, if the change in position was only temporary, properly communicated to the employee, and with the understanding that the employee would return to his original position, it may not be considered constructive dismissal.