FAVOURTISM A HEFTY PRICE PAID

FAVOURTISM A HEFTY PRICE PAID

TENGKU MOHD HASMADI TENGKU HASHIM V KONSORTIUM TRANSNASIONAL BERHAD(KTM)

AWARD NO. 1509 OF 2019

FACTS

  • The Claimant was the Chief Operating Officer/ Executive Director before considering himself constructively dismissed due to the appointment of the son of the Company’s Chairman/Managing Director as the Company’s Head of Group Support Services.
  • The “restructuring” was, in fact, the rearrangement of only the Claimant’s roles and responsibilities and no one else done without any notice, consultation, approval or even “by your leave” of the Claimant; and was in clear breach of the delegation of the “Limits of Authority” issued by the Board of Directors. This exercise removed a considerable amount of the Claimant’s responsibilities which was handed over to the Company Chairman’s son which at that point of time was a 27 years old student who had not even completed his studies.
  • The following conduct was in clear breach of the root of the Claimant contract of employment and/or evinced an intention no longer to be bound by the said contract.

ISSUES

  • Was there a dismissal -de facto & de jure?
  • Was the said constructive dismissal with just cause or excuse?

COURT REASONING AND FINDING 

  • The Claimant has succeeded in establishing the breach of the following implied essential term of the contract of employment by the Company, and that is of preserving the relationship of mutual trust and confidence between employer and employee. 
  • This overriding obligation has effectually been breached by the Company in this case thereby placing the Claimant into a position of reasonably perceiving that he was being “squeezed out” of employment. 
  • The Claimant had put in his resignation when he did solely by reason of the repudiatory conduct of the Company. He had therefore rightly exercised his option to bring the contract of employment to an end. The Claimant by tendering his resignation when he did, acted decisively and had not failed or delayed in acting firmly in refusing to accept, and indeed by this very action protested against the Company’s breach of a fundamental term of his contract of employment.
  • This whole case revolved around the Claimant’s grievance against the restructuring of his duties and responsibilities almost by way of ambush. The Company abdicated its responsibility to adequately address the issue in order to right the situation in a fair and rational manner. The Organizational Chart was readjusted for the 3rd time to seemingly but not actually return the Claimant back to his original position. In the whole scheme of things, in this case, it certainly comes across as a colourable exercise of managerial authority and is clearly tainted by unfair labour practice. 

KEY TAKEAWAYS

  • The Court ordered the Company to pay the Claimant the sum of RM 2,455,515.00 as total compensation before statutory deduction.
  • Although the company attempted to remedy the situation, the fact remains clear that the root of the employment contract has been breached by the Company. 
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