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Case Update: Employees cannot pursue claims for damages for wrongful dismissal via the Civil Courts

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14 April 2023

EMPLOYMENT LAW
Employee – Inconsistent Performance – Bullied and Harassed – Damages – Alleged Depression – Constructive Dismissal – Industrial Relations Act 1967 – Civil Courts

7-Eleven Malaysia Sdn Bhd v Ashvine A/P Hari Krishnan
Civil Appeal No. W-02(IM)(NCVC)-629-04/2022 | Court of Appeal
- see the grounds of judgment here

Facts Ashvine A/P Hari Krishnan (the ‘Respondent’) was employed by 7-Eleven Malaysia Sdn Bhd (the ‘Appellant’) as its Senior Manager of Human Resources in 2019. In February 2021, the Respondent began reporting to Liew Kian Meng (‘Liew’), the General Manager of Human Resources. As the Respondent’s supervisor, Liew had some concerns about her performance and had raised this with the Respondent on several occasions. The Respondent alleged that the appraisal that was carried out with Liew was inherently unfair and that the Respondent was being bullied and harassed by Liew. Eventually, the Respondent resigned and in the resignation letter, the Respondent made reference to certain allegations which were directed at Liew. The Appellant did not address the allegations in its reply to the Respondent’s resignation letter but by way of a subsequent letter, the Defendant responded to the allegations. This led to an exchange of correspondences between the Appellant’s solicitors and Respondent’s solicitors. The dispute remained unresolved. Unsatisfied, the Respondent filled a suit in the High Court against the Appellants for reliefs amounting to RM96,032,956.40. The Appellant applied to strike out the claim and in doing so argued that the High Court lacked the requisite jurisdiction to hear and determine the Respondent’s claim which was essentially a claim for constructive dismissal which ought to have been pursued via s. 20 of the Industrial Relations Act 1967 (‘IRA 1967’). The learned High Court Judge disagreed with the Appellant’s arguments and opined that whilst the Respondent was entitled to pursue a claim for dismissal without just cause or excuse in the Industrial Court, the High Court nevertheless had jurisdiction to deal with and determine this claim. Unsatisfied with the decision, the Appellant filed an appeal to the Court of Appeal. Hence, this appeal.

Issue 1. Whether it is an abuse of the Court for an employee who claims that he/she has been dismissed without just cause or excuse,  to file a common law action to claim damages for breach of employment contract, constructive dismissal, tort of intentionally causing emotional distress, tort of harassment and bullying, negligence in appointing, retaining and monitoring the recruitment of employees, general and exemplary damages, instead of pursuing the statutory dispute resolution mechanism/process to obtain remedies as provided under the IRA 1967.

Held In allowing the appeal, Court of Appeal Judge, YA Datuk Nantha Balan held that the Respondent’s claim was for constructive dismissal and regardless of whether an employee has been dismissed by the employer (direct dismissal), or whether the employee left the employment or walked out of the workplace, or was forced or compelled, or put in a situation where he/she had to resign (indirect dismissal/constructive dismissal), the position under Malaysian industrial jurisprudence is that an employee who finds himself in such a situation is legally entitled to have recourse to the statutory dispute resolution mechanism as per s.20 of the IRA 1967 and may seek reinstatement and monetary compensation as a result of having been dismissed without just cause or excuse. In addition to that, the Court of Appeal stated that as a result of the Court of Appeal’s decision in Sanbos (Malaysia) Sdn Bhd v Gan Soon Huat[1] the position now is that the Industrial Court does not cease to have jurisdiction merely because the remedy of reinstatement was not pleaded or asked for by the claimant at the hearing before the Industrial Court. The Court of Appeal went on to state that the so-called tort of emotional distress was unmaintainable and that the Court of Appeal did not see how the allegation of negligence in regard to the Defendant’s decision to appoint Liew as General Manager of Human Resources can translate into a cause of action in favour of the Plaintiff in circumstances where it has not been demonstrated that the Defendant owed a duty of care to the Plaintiff in the appointment of their employees. Further, the Court of Appeal held that the so called tort of harassment and bullying referred to in the Statement of Claim and the Pre Action Document are at best, “building blocks” for a complaint of constructive dismissal. Therefore, in the present case, there is nothing which is due by the Appellant to the Respondent under the employment contract. Hence, even if the case proceeds to trial and the Respondent succeeds in proving that she was constructively dismissed, she will not even be entitled to salary in lieu of notice, as that has already been paid. In conclusion, the remedy for a dismissed employee like the Respondent, lies in the statutory dispute resolution process as envisaged by s.20(1) of the IRA 1967 and thereafter to allow the statutory mechanism to take its course. The Court of Appeal allowed the appeal and allowed for the Writ and Statement of Claim filed by the Respondent to be struck out and dismissed.

Zul Rafique & Partners
{14 April 2023}
[1] [2021] 4 MLJ 924

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