Constructive Dismissal: Do You Need To Say It?

When an employee claims constructive dismissal (ie: where the employee is resigning due to the employer’s breach of contract) what must be said in the resignation letter? Does the employee have to use the words “constructive dismissal” or give detailed reasons? What happens if the resignation letter is silent about the reasons the employee is claiming constructive dismissal?

In this article, we examine two decisions of the Industrial Court that may shed some light.

Masitah bt Mohamad v University College Bestari [2020] ILJU 311

The Claimant was not paid her full salary from December 2018 onwards. When she sought for an explanation from the Company regarding the late payment of her salary, the Company explained that it was undergoing financial difficulties. 

The Claimant tendered her notice of resignation in March 2019. In her notice, the Claimant claimed that she had to resign due to her incurring traveling expenses for 3 months, but was only partially paid her December 2018 salary. The notice also stated that she will try to complete her tasks until April 2019, as her classes under the diploma programme were still on-going. 

After her resignation, the Claimant filed a complaint at the Industrial Relations Department in May 2019. In her complaint, the Claimant claimed that she was constructively dismissed by the Company in April 2019, due to the Company’s failure to pay her salary from December 2018 onwards. 

The Industrial Court dismissed her claim because the Claimant had condoned the Company’s actions. The Industrial Court relied on her notice of resignation, which did not state that the Claimant considered the Company’s actions as constructively dismissing her. The Claimant’s resignation letter thanked the Company for its trust in her, and that she hoped the experiences gained while working there could be used. 

Tan Kwee v Mahkamah Perusahaan Malaysia & Anor [2009] MLJU 1701 

The Claimant claimed that the Company had asked her to carry out acts and duties which breached the Companies Act. The Claimant tendered her resignation and in her resignation letter, she did not mention she deemed herself to be constructively dismissed, nor did she explain the circumstances surrounding her claim.

The Company argued that the Claimant had voluntarily resigned. It was also highlighted that the Claimant served her one month’s notice period, making no complaint of being constructively dismissed. 

The Industrial Court dismissed the Claimant’s claim, and this decision was upheld by the High Court. The High Court noted that the Claimant had produced no document or letter to show that viewed herself as constructively dismissed before the action was initiated against the company. 

Key Takeaways

Both cases demonstrate that:

  • Employees claiming constructive dismissal must prove so;
  • These employees should clearly state their position and the reasons they are claiming constructive dismissal in their letter of resignation; and
  • Delay in claiming constructive dismissal and/or post-resignation conduct are factors to be considered by the Court in determining whether the claim for constructive dismissal is an afterthought, or if there is condonation by the employee.

Whilst it is not strictly necessary to use the words “constructively dismissed” in the letter of resignation, there is a minimum requirement for employees to accurately describe the reasons for constructive dismissal. Conversely, employers should also be able to pick up when a resignation may turn contentious, and swiftly deal with any allegations or complaints in resignation letters.

***

This article was written by Leow Ho Eng, Associate from Donovan & Ho’s employment law practice. 

Donovan & Ho is a law firm in Malaysia, and our employment practice group has built a reputation for providing strategic employment advice to local and global organisations.  Our team of employment lawyers provide advice on employment law and industrial relations including review of employment contracts, policies and handbooks, advising on workforce reductions, and managing dismissals of employees for poor performance or misconduct. We also represent clients in unfair dismissal claims and employment-related litigation. Have a question? Please contact us.

ESOS: Frequently Asked Questions (FAQs)
CASE SPOTLIGHT: International Organizations Immune from Unfair Dismissal Claims
Share This