Abdul Nasir bin Ahmad v 7-Eleven Malaysia Sdn Bhd
[Federal Court Motion No.: 08(i)-102-03/2025(W)]
This dispute arose from a claim for constructive dismissal brought by a Financial Controller against the Company.
The Company had held a discussion with the Employee regarding a proposed restructuring exercise of the finance team, which would affect his reporting lines and the portfolios under his purview. The very next day, the Employee resigned by giving three months’ notice, despite the fact that the proposed exercise had neither been finalised nor implemented. He continued to serve his full notice period and was paid his salary in full
Subsequently, the Employee filed a claim in the High Court seeking damages in excess of RM4.7 million, despite still being within time to file a claim for constructive dismissal at the Industrial Court under Section 20 of the Industrial Relations Act 1967 (“IRA”).
The Company applied to strike out the Employee’s claim. The High Court allowed the Company’s application, finding that the Employee’s claim was plainly and obviously unsustainable. The Court held that even if the Employee succeeded in establishing constructive dismissal, his entitlement to damages would be limited to salary or wages in lieu of notice under his contract, which had already been paid to the Employee. The High Court emphasised that it would be an abuse of process for an employee to bypass the statutory framework of the IRA in favour of pursuing exorbitant relief through the civil courts.
The Employee appealed to the Court of Appeal, which upheld the decision of the High Court.
The Employee then filed a motion for leave to appeal to the Federal Court. The primary question posed was whether an employee who claims constructive dismissal in the civil courts is limited to contractual damages equivalent to the notice period, or whether he may also pursue wider damages, including those under Section 74 of the Contracts Act 1950.
At the Federal Court, the Company argued that the Employee was attempting to circumvent the statutory regime established under the IRA. It contended that granting leave would not be of public advantage, as it would erode the legislative framework and policy intent behind the IRA, promote forum shopping by employees seeking excessive compensation, and potentially flood the civil courts with claims better suited to the Industrial Court. It was further submitted that such a development would risk rendering the Industrial Court redundant.
The Federal Court dismissed the Employee’s motion for leave, holding that the legal questions raised were fact-specific and had already been dealt with by both the High Court and the Court of Appeal.
This decision underscores the principle that employees who allege constructive dismissal should pursue redress through the statutory mechanism provided under the Industrial Relations Act 1967. Resorting to the civil courts risks limiting recovery to contractual entitlements under the notice period, which may fall far short of the relief available under the Industrial Court’s jurisdiction.
The Company was represented by Partners, Hoi Jack S’ng and Amardeep Singh Toor and Associate, Roseveen Kaur Tyndall, of Lee Hishammuddin Allen & Gledhill.
If you have any queries, please contact Partner Amardeep Singh Toor (ast@lh-ag.com) or Associate Roseveen Kaur Tyndall (rkt@lh-ag.com)
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