PUNCAK TEKNOLOGI (M) SDN BHD v 1. ) AHMAD SOLIHIN BIN MAHBIB 2. ) KHAIRUL AZZUAN BIN ABDUL HADI 3. ) MOHD HARITH BIN MOHD TAHIR

Case Significance

Illustrates the rule against unilateral withdrawal of a notice of termination and the limited grounds for disturbing a Director-General of Labour's award of termination benefits where the evidence shows an employer-initiated dismissal rather than a voluntary resignation.

This High Court decision at Shah Alam is an employer's appeal against a decision of the Director-General of Labour (Ketua Pengarah Tenaga Kerja) ordering the employer to pay termination benefits to three former employees. The Director-General had directed the appellant employer to pay RM58,781.58 in termination benefits, and the appellant challenged that order. The employees, who had all begun work with the employer in October 2014, said their services had been terminated when the employer lost a service contract and issued them a letter of termination dated 1 March 2023; the employer contended that the termination had in truth been voluntary, relying on an email from a team manager which it said amounted to a request by the employees to be terminated, and asserting a right to withdraw the termination letter it had issued. The court rejected the employer's case. It found on the evidence that the employees had been terminated by the employer and had not resigned voluntarily, the manager's email being, at most, a request that the formal notice of termination be issued sooner rather than an election to resign. Crucially, the court held that once a party to a contract of employment gives notice determining the contract, it cannot thereafter unilaterally withdraw that notice without the other party's agreement, applying Govindasamy v Highlands & Lowlands and the English decision in Harris & Russell Ltd v Slingsby, so that the employer's purported withdrawal of the termination letter was ineffective, particularly as the employees had by then accepted employment with a replacement company. Finding the Director-General's decision correct in principle and supported by the evidence, the court dismissed the appeal with costs fixed at RM8,000 and affirmed the order, the employer agreeing to pay the awarded compensation within 21 days. The judgment is a useful illustration of the rule against unilateral withdrawal of a notice of termination and of the limited grounds for disturbing a Director-General of Labour's award of termination benefits.