For constructive dismissal cases, it would amount to a waiver of the purported breach if an employee does not leave his/her employment within a reasonable time (or appropriate point in time[1]) after an employer’s purported breach of the employment contract.
Support for this can be found in the following Court of Appeal decisions:
(a) Anwar bin Abdul Rahim v Bayer (M) Sdn Bhd [1998] 2 MLJ 599, at p. 607:
“The doctrine of waiver or condonation applies equally to employees.”[2] (Emphasis ours)
(b) Southern Investment Bank Bhd/Southern Bank & Anor v Yap Fat & Anor [2017] 3 MLJ 327:
“[30] It is trite that in a claim for constructive dismissal, it is imperative for the employee to take immediate steps in walking out of his employment within a reasonable time after the alleged breach of contract. Failing with, the employer will be deemed to have waived the breach and agreed to vary the contract.”[3] (Emphasis ours)
(c) Sanbos (M) Sdn Bhd v Gan Soon Huat [2021] 4 MLJ 924 (CA):
“[44] In the Western Excavation case, Lord Denning emphasised the importance of the employee leaving employment immediately lest he is regarded as affirming the contract of employment.
…
[45] … In the instant case, as we said, apart from expressing dissatisfaction with the revised sales commission rate and the removal of Negeri Sembilan from the sales coverage area, no indication about leaving employment was given for nine months. In the premises, the respondent had waived the breach, if any, on the part of the appellant.”[4] (Emphasis ours)
What would amount to a ‘reasonable time’ or the ‘appropriate point in time’ would be determined on a case by case basis.
In the following cases, the courts found that the delay amounted to a waiver:
(a) Kontena National Bhd v Hashim Abd Razak [2000] 8 CLJ 274 – delay of 2 weeks;[5]
(b) Southern Investment Bank Bhd/Southern Bank & Anor v Yap Fat & Anor [2017] 3 MLJ 327 – delay of 5 months;[6]
(c) Sanbos (M) Sdn Bhd v Gan Soon Huat [2021] 4 MLJ 924 – delay of 9 months;[7] and
(d) Yang Mee Eng v Malaysia Digital Economy Corporation Sdn Bhd & Anor [2023] MLJU 658 – delay of 9 months[8]
Notwithstanding the above, there was a delay of 22 days in Abdul Rahim Jemali v Merlin Management Corp Sdn Bhd & Anor [1997] 4 MLJ 422 (“Abdul Rahim Jemali”) and the High Court was of the view that it did not amount to a waiver:
“Putting aside how the ‘total sum’ should be viewed in this case, applying it objectively to the facts of this case, the learned chairman should have asked himself the question: Was 22 days (that is from 27 September 1989 to 18 October 1989) ‘too long’ within the context of the very authority he relied on? The answer should have been in the negative. I am supported by the case of Chahaya Pemborong Sdn Bhd Sabah v Lee See Khong [1990] 1 ILR 202.”[9]
The High Court in Abdul Rahim Jemali relied upon the case of Chahaya Pemborong Sdn Bhd Sabah v Lee See Khong [1990] 1 ILR 202 which involved a delay of 31 days.[10]
What could be deduced from the cases above is that delays of less than a month are open to dispute, while delays of more than a month are more likely to amount to a waiver of a purported breach of the employment contract.
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[1] This was the test applied by the Industrial Court, which was affirmed by the Supreme Court in Wong Chee Hong v Cathay Organisation (M) Sdn Bhd [1988] 1 MLJ 92, at pp. 96-97
[2] Anwar bin Abdul Rahim v Bayer (M) Sdn Bhd [1998] 2 MLJ 599 (CA), at p. 607
[3] Southern Investment Bank Bhd/Southern Bank & Anor v Yap Fat & Anor [2017] 3 MLJ 327 (CA), at para 30
[4] Sanbos (M) Sdn Bhd v Gan Soon Huat [2021] 4 MLJ 924 (CA), at paras 44-45
[5] Kontena National Bhd v Hashim Abd Razak [2000] 8 CLJ 274 (HC), at p 290
[6] Southern Investment Bank Bhd/Southern Bank & Anor v Yap Fat & Anor [2017] 3 MLJ 327 (CA), at para 29
[7] Sanbos (M) Sdn Bhd v Gan Soon Huat [2021] 4 MLJ 924 (CA), at para 45
[8] Yang Mee Eng v Malaysia Digital Economy Corporation Sdn Bhd & Anor [2023] MLJU 658 (HC), at paras 24-25
[9] Abdul Rahim Jemali v Merlin Management Corp Sdn Bhd & Anor [1997] 4 MLJ 422 (HC), at p. 438
[10] Abdul Rahim Jemali v Merlin Management Corp Sdn Bhd & Anor [1997] 4 MLJ 422 (HC), at pp. 438-439