Application

This is an application by the applicant for an order of certiorari to quash the Industrial Court Award No. 240 of 2003 handed down on 24 March 2003. In the award, the applicant's claim for constructive dismissal was dismissed by the Industrial Court.

Facts

The relevant facts leading to this application are these. The applicant commenced employment with The New Straits Times Press (M) Bhd (the first respondent) on 1 September 1977 as an Assistant to the Group Secretary vide a letter dated 22 July 1977. She was subsequently transferred to the position of Registrar of the Share Registration Section (SRS) with effect from 1 April 1994.

In November 1997, the applicant was informed by the first respondent that as a result of the closure of the SRS she would be transferred to a subsidiary known as Amal Assurance Berhad (AMAL). The applicant proposed a secondment instead of a transfer but this was rejected as it was contended by the first respondent that the policy at that time was to transfer and not to second employee.

On 8 January 1998, the applicant was informed by the first respondent that the transfer would take effect on 15 January 1998 and that her service with AMAL would be regarded as being continuous, without deprivation of any benefits that the applicant enjoyed with the first respondent.

By a letter dated 9 January 1998, the applicant sought further clarification on the terms and conditions of her redeployment to AMAL.

AMAL, by a letter dated 13 January 1998 assured her of the continuity of service. However, on the following day, the applicant by way of a letter informed the first respondent that she was unable to accept the offer of employment from AMAL because the terms of employment with AMAL were unfavorable. In the same letter, the applicant also sought clarification on the following terms and services which the applicant was entitled at the material time:

(i) continuity of service;

(ii) retirement benefits;

(iii) medical benefits; and

(iv) other benefits.

The first respondent did not reply. Instead reference was made to the previous letters and requested that the applicant to report for duty on 3 February 1998. She was also asked to utilize all outstanding leave with the first respondent.

On 3 February 1998, the applicant pleaded constructive dismissal on the ground that the first respondent had no right in law to transfer her to the subsidiary and that she was being transferred on terms and conditions less favorable which amounted to a fundamental breach of her contract of employment with the first respondent.

The Industrial Court rejected the applicant's claim for constructive dismissal. Hence, this application for judicial review by the applicant.

Issues

The main issue before this court is whether the first respondent had breached a fundamental term of the contract of employment with the applicant when it made the decision to transfer the applicant to its subsidiary company, AMAL.

Findings

Essentially the applicant's contention is that the first respondent had no right to transfer her to AMAL and that she was being transferred on terms and conditions less favorable which amounted to a fundamental breach of her contract with the first respondent.

The first respondent contended otherwise. It was the contention of the first respondent that it has the right to transfer the applicant to any associate or subsidiary companies within the first respondent group of companies. Reference was made to the applicant's letter of appointment dated 27 July 1997 which expressly provides as follows:

It was pointed by the first respondent that, at the time of the applicant's transfer, AMAL was not only a subsidiary of the first respondent, but the first respondent was one of AMAL's shareholders and AMAL was within the first respondent group of companies. Hence, AMAL came under the definition of an "associate companies" as stated in the applicant's letter of appointment, giving the first respondent's right to transfer the applicant to AMAL.

It is an acceptable principle that the right to transfer an employee from one department to another and from one post of an establishment to another or from one branch to another or from one company to another within the organization is the prerogative of the management. In fact this right of transfer is embodied in the Industrial Relation Act 1967, where s. 13 provides that a company has the right to transfer its employees within the organization so long as such transfer does not entail a change to the detrimental of an employee in regard to the terms of employment.

Clearly, the right to transfer is not without restriction. In Ladang Holyrood v. Ayasamy a/l Manikam & 16 Ors [2004] 2 CLJ 697, Arifin Zakaria, JCA (now Federal Court Judge) endorsed the right of the company to transfer its employees from one company to another within its organization but subject to well recognized restrictions as set out in Ghaiye's Misconduct in Employment which are as follows:

(i) there is nothing to the contrary in the terms of employment;

(ii) the management has acted bona fide and in the interest of its business;

(iii) the management is not actuated by any indirect motive or any kind of mala fide;

(iv) the transfer is not made for the purpose of harassing and victimizing the workmen; and

(v) the transfer does not involve a change in the conditions of service.

His lordship further went on to state that whether a transfer entails a change to the detriment of an employee in regard to the terms of employment; or whether the transfer was bona fide is a question of fact for the court to determine.

The Industrial Court concluded at p. 10 of the award that the transfer of the applicant to AMAL "was merely a transfer within the group". With respect I am unable to agree in light of the evidence adduced before the Industrial Court. To me, if it was indeed a transfer as contended by the first respondent there would be no need for a fresh letter of employment. If it was indeed a transfer one does not need to utilize one outstanding leave. Further, if it was indeed a transfer, one does not sign a new contract with new terms and conditions.

The doctrine of constructive dismissal has been expounded in the case of Wong Chee Hong v. Cathay Organization [1988] 1 CLJ 45; [1988] 1 CLJ (Rep) 298 where it was held:

Thus, in order to determine whether the first respondent is guilty of any breach that affect the foundation of the contract, it is necessary to compare the applicant's terms and conditions of service in the two organizations which are as follows: