Sudhir A/l A K Kumaren v 1. ) MAHKAMAH PERUSAHAAN MALAYSIA 2. ) Layang-layang Helicopter Academy Sdn. Bhd.

Case Significance

Confirms that the contract test for constructive dismissal under section 20 of the Industrial Relations Act 1967 requires the employer's conduct to be assessed cumulatively, so a fundamental breach may arise from the collective effect of a series of actions, and that back wages and compensation may replace reinstatement.

This Court of Appeal decision at Kota Kinabalu concerns a claim of constructive dismissal in the highly regulated aviation sector and the correct application of the contract test. The appellant had brought a representation under section 20 of the Industrial Relations Act 1967 claiming he had been constructively dismissed by the second respondent, a company in the aviation industry that provides commercial flight services and trains helicopter pilots. The Industrial Court had rejected the claim, and the appellant's judicial review in the High Court of Sabah and Sarawak at Kota Kinabalu was dismissed with costs. He appealed to the Court of Appeal. A central complaint was that the courts below had misapplied the constructive-dismissal contract test, in particular by failing to consider the collective effect of the employer's actions, including a directive that the appellant go on leave, against the backdrop of Regulation 72(4) of the Civil Aviation Regulations 2016.

The Court of Appeal reaffirmed that a court exercising judicial review over an Industrial Court award performs a supervisory rather than an appellate function, but it examined whether the correct legal test had been applied to the facts. Assessing the employer's conduct as a whole, it considered the second respondent's conduct to be unreasonable and held that the appellant's complaint of constructive dismissal had merit.

The Court of Appeal unanimously allowed the appeal and set aside the High Court's order affirming the Industrial Court. Considering the circumstances of the appellant's employment, it held that reinstatement was not suitable and instead ordered the payment of back wages and compensation, to be assessed by the Industrial Court, and remitted the matter to that court for assessment. It awarded costs of RM20,000 here and below to the appellant, subject to allocatur. The judgment illustrates that the contract test for constructive dismissal requires the employer's conduct to be viewed cumulatively, and that a fundamental breach may be made out from the collective effect of a series of actions.