What are the implications when an employee embarks on a new job with a different employer without formally resigning from their existing position?

Does this action imply the abandonment of the initial employment and therefore nullifying the employee’s ability to file a complaint of unfair dismissal against their former employer? 

The recent pronouncement by the Court of Appeal in Prabaharan Malayalam v Heiwa Auto Galerry (Larkin) Sdn Bhd & Anor & Another Appeal [2023] 1 LNS 1427 provides insights into this multifaceted issue, particularly when considering the concept of abandonment of employment in unfair dismissal claims.


Brief Facts

  • The Employee was an employee of the Company. In March 2018, the Employee was suspended with a full salary and benefits pending an investigation into allegation of misconduct. 
  • In May 2018 (while the Employee was still an employee of the Company), the Employee commenced full-time employment with another company named TC Truck After Sales Sdn Bhd (“TC Trucks”). The Company was unaware of this. 
  • Following the investigation, the Employee was eventually dismissed from his employment with the Company effective 14 June 2018.
  • The Employee lodged a complaint of unfair dismissal against the Company.
  • The Company later discovered the Employee’s employment with TC Trucks, when the Company’s HR Manager was going through some SOCSO records of the Employee.
  • At the Industrial Court, the Employee’s claim was dismissed because he had abandoned his employment with the Company at the time of termination (as he was already in employment with TC Trucks at that material time). 
  • The High Court affirmed the Industrial Court’s award as a person cannot hold two full-time employments at the same time. 
  • The Employee appealed to the Court of Appeal.

Court’s Findings

The Employee’s appeal was dismissed by the Court of Appeal, upholding the Industrial Court’s conclusion that the Employee was no longer an employee of the Company when he was dismissed in June 2018. 

The Court of Appeal found that the Employee had transitioned into a full-time role at TC Trucks before his termination, rendering his pursuit of the claim before the Industrial Court dishonest.

The Employee argued that since the Company only discovered about his employment with TC Trucks after he had been terminated, this amounted to a “post dismissal” event which cannot be used to justify his dismissal.  However, the Court of Appeal asserted that the Company’s actions did not contravene this principle. The Company was presenting evidence to establish that the Employee ceased to be an employee since May 2018, and not to support their decision to terminate based on misconduct.

Key Takeaways

The Court of Appeal’s decision means that employees cannot hold two full-time jobs otherwise employees may be deemed to have abandoned their earlier employment. However, this decision was predicated on the employer being unaware of the employee’s second job at the time of termination. 

This decision may not apply to a situation where an employer dismisses an employee specifically for holding a second job or being engaged in another business. In such a situation, employers should treat it as a case of misconduct and conduct all necessary due inquiries before termination. Otherwise, there is a risk this may amount to adducing new post-dismissal reasons to justify the termination, which was prohibited in Maritime Intelligence Sdn Bhd v Tan Ah Gek [2021] 4 ILR 417.

***

This article was written by Leow Ho Eng (Associate) from Donovan & Ho’s employment law practice. 

Donovan & Ho is a law firm in Malaysia, and our employment practice group has built a reputation for providing strategic employment advice to local and global organisations.  Our team of employment lawyers provide advice on employment law and industrial relations including review of employment contracts, policies and handbooks, advising on workforce reductions, and managing dismissals of employees for poor performance or misconduct. We also represent clients in unfair dismissal claims and employment-related litigation. Have a question? Please contact us.

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