AMINI RAMLI & CO v FARAH DIYANAH BINTI MUSTAFFA

Case Significance

Illustrates how an employer's failure to clarify an employee's status can result in a finding of termination without notice entitling the employee to salary in lieu of notice, and the limited grounds on which a court will disturb a decision of the Director General of Labour.

This High Court decision at Shah Alam is an appeal by an employer, a firm, against a decision of the Director General of Labour ordering it to pay a former employee RM2,753.55 as salary in lieu of notice. The respondent had been employed under a contract dated December 2023 and confirmed in the post in May 2024, and in August 2024 tendered a letter of resignation giving two months' notice. The employer rejected the resignation. On the advice of the labour office the respondent then sought written confirmation of employment status, giving the employer until a stated date to reply. The employer did not reply, and the respondent, treating this as a termination without notice, stopped attending work, while the employer regarded the respondent as having abandoned employment. The Director General of Labour found that the respondent had been terminated without notice and was therefore entitled to salary in lieu of notice. On appeal the employer argued, among other things, about the nature of the fixed-term contract and whether the respondent could resign under it. The court held these arguments irrelevant and found no error in the Director General's approach: the employer had offered no reason why the respondent's employment status was left unconfirmed for a period, and that delay had compounded the respondent's confusion about the position. Finding the Director General had not erred in deciding that the respondent was entitled to salary in lieu of notice, the court dismissed the appeal. The court's approach shows that where an employer leaves an employee in doubt about whether the employment continues, and does not respond to a reasonable request for clarification, the employee may properly treat the silence as bringing the employment to an end without notice, entitling the employee to payment in lieu. The judgment is a useful illustration of how a failure to clarify an employee's status can result in a finding of termination without notice, and of the limited grounds for disturbing a decision of the Director General of Labour.