Akademik Minda Dinamik Sdn. Bhd. v Phoebe Lu En Hui

Case Significance

Confirms that wilful disobedience of a lawful and reasonable order strikes at a condition essential to the contract of service and can justify summary dismissal without notice, so that an employee dismissed for such conduct is not entitled to salary in lieu of notice.

This High Court decision at Shah Alam concerns an employer's appeal against a decision of the Director-General of Labour ordering it to pay a former employee RM10,466.67. The respondent had worked for the appellant as an autism therapist and special-education teacher from December 2023, and had been appointed a shadow aide for a child with special needs studying at an international school, an appointment that involved various vetting processes and during which the respondent's leave was, with her agreement, frozen. The respondent said that she had been dismissed by a telephone call followed by an immediate letter of termination by email a few days later, and she claimed several months' salary in lieu of notice as provided in her service agreement. The employer denied the claim, contending that she had been dismissed for cause — including direct insubordination, refusing a work assignment, deliberately not following instructions, incomplete work, absence without leave on a particular day and unprofessional behaviour — conduct said to have damaged the employer's standing with parents and third parties. The Court examined the employee's fundamental duty of obedience, drawing on the classic statement in Laws v London Chronicle (Indicator Newspapers) Ltd that wilful disobedience of a lawful and reasonable order shows a disregard of a condition essential to the contract of service and can justify summary dismissal, working as instructed being the employee's basic consideration under the contract just as remuneration is the employer's. Satisfied on the facts that the respondent's conduct amounted to a wilful disregard of lawful instructions justifying summary dismissal without notice, the Court held that the Director-General had erred in ordering payment of salary in lieu of notice. It allowed the appeal with costs and set aside the order below. The decision confirms that where an employee's dismissal is justified by her own serious misconduct, no compensation in lieu of notice is payable, and a labour authority that orders such payment without properly weighing the misconduct falls into error.