Case:

Brief Facts:

• On 13 June 2011, the Appellant, Mr Tan was employed by RHB Bank Berhad (“the Bank”) as its Operations Head, Thailand Operations in Bangkok.
  
  
• The terms of the employment were spelled out in the Offer of Employment letter dated 20 May 2011. He was required to report to the Head of Thailand Operations, Mr Thiti Musawan, and subsequently to the Thailand Country Head, Mr Wong Kee Poh.
  
  
• In November 2013, the Bank opened its second branch in Sri Racha which was placed under the supervision of Mr Tan. In June 2014, the Bank appointed Ms Marina Chin Yoke Fong as the Head of Thailand Operations to oversee the operations of the Bangkok, Sri Racha, and the intended Ayutthaya branches.
  
  
• By a letter dated 14 October 2014, the Bank issued a transfer order for Mr Tan to assume the role of Branch Manager of the Ayutthaya branch with effect from 20 October 2014. As stipulated in the transfer order, the assignment as the Ayutthaya Branch Manager is for a period not exceeding 9 months.
  
  
• Mr Tan complied with the transfer order and the Ayutthaya branch was opened in November 2014.
  
  
• Subsequently, the Bank appointed Ms Irin Chanonthiensink, a Thai national, as the Ayutthaya Branch Manager which commenced on 16 March 2015.
  
  
• In the circumstances, the Bank issued a transfer order by letter dated 13 February 2015 for the transfer of Mr Tan to the International Infrastructure, PMO and Operation Support, Group International Business in Malaysia with effect from 1 March 2015.
  
  
• In the transfer order, Mr Tan was required to report to the Head of International Infrastructure, PMO, and Operations Support who will outline his duties and responsibilities, set his objectives, and manage his performance. His grade and terms and conditions of employment remain the same.
  
  
• Mr Tan objected to his repatriation to Malaysia as indicated in his letter dated 25 February 2015 to the Bank. In the said letter, it was said, amongst others, that his transfer to the International Infrastructure, PMO, and Operation Supports Division would ‘kill his career’ and was without reasonable justification.
  
  
• Mr Tan did not comply with the transfer order and instead by letter to the Bank dated 2 March 2015, he pleaded constructive dismissal by the Bank.
  
  
• The Bank refuted his allegation in a letter dated 6 March 2015 and directed Mr Tan to report to work immediately, failing which, the Bank would assume that Mr Tan had abandoned his employment.
  
  
• However, Mr Tan maintained that he was constructively dismissed in his letter of response dated 9 March 2015 to the Bank. Unable to resolve the dispute, Mr Tan filed a complaint to the Industrial Relations Dept which was then referred to the Industrial Court for adjudication.

THE DECISION OF INDUSTRIAL COURT (IC)

• The IC gave an award in favour of Mr Tan where it was decided that he was constructively dismissed and the dismissal was without just cause or excuse and awarded the sum of RM216,840.00 as compensation to be paid by the Bank.

THE DECISION OF HIGH COURT (HC)

• At the HC, the Bank’s challenge against the decision of the IC was dismissed.
  
  
• The Bank then appealed to the Court of Appeal.

THE DECISION OF COURT OF APPEAL (CA)

• However, on appeal to the CA, the CA decided that the IC had applied the wrong test of reasonableness rather than the contract test in determining Mr Tan’s constructive dismissal. This pertinent issue was also not addressed by the HC.
  
  
• As such, the Bank’s appeal was allowed, and the decision of the HC was set aside.
  
  
• Mr. Tan then appealed to the Federal Court.

THE DECISION OF FEDERAL COURT (FC)

• Thereafter, the FC allowed leave for Mr. Tan to appeal on the following question of law: “Is there a difference in the contract test or reasonable test in light of major developments in industrial jurisprudence?”
  
  
• The FC, in dismissing the appeal, answered the question of law as follows:-

1. There was a difference between the contract test and the reasonableness test. The appropriate test for determining a constructive dismissal case was the contract test;
   
   
2. The question that needs to be determined is whether the employer had committed a fundamental breach of the contract of employment which showed an intention to no longer be bound by the contract; and
   
   
3. The reasonableness of the employer’s conduct was a factor that might be taken into consideration in determining whether there was any fundamental breach of the contract of employment or an intention no longer to be bound by the contract.