Agnes Ann was a secretary at one of the top advertising agencies in Kuala Lumpur.  One day in late February, she walked out of her job.

The grounds for Agnes’ grievance with her company was that she did not receive any increment, bonus or “ang pow” for two years. (“Ang Pow”, or “hongbao” is a monetary gift in a red envelope, customarily given during Chinese New Year or other special occasions).

Agnes later sued her company for constructive dismissal, claiming that the non-payment of her increment, bonus and ang pow amounted to a fundamental breach of her contract of employment. In her claim, Agnes alleged that she was being discriminated against since other employees received increment, bonus and ang pow.

The Industrial Court dismissed her claim and made the following findings:

  1. Employees do not have a “right” to discretionary entitlements. Neither the staff handbook nor Agnes’ letter of employment guaranteed that there would be an annual bonus, increment or ang pow. In fact, the staff handbook specifically states that annual bonus is discretionary, and the quantum is based on the company’s financial performance and the employee’s individual contribution. As such, Agnes had no contractual right to expect a bonus, increment or ang pow every year.This is even though she had, for the four previous years, received such entitlements.
  1. The employer can take into account work performance when deciding whether to give discretionary entitlements. The Company’s chairman and executive director further testified that ang pow is given based on performance, not based on seniority or other factors. The Court found that there were legitimate issues with Agnes’ work performance, in particular her tardiness. Since Agnes’ work performance was unsatisfactory, it cannot be said that the Company was guilty of a breach that affects the foundation of the contract of employment. Agnes cannot expect to be paid annual bonus, increment and ang pow when she had not performed her work according to the expectations and standards of her employer.
  1. Discrimination must be proven. There was no discrimination since Agnes was not the only employee who did not receive bonus, increment or ang pow. Agnes was not able to show concrete evidence that the Company had deliberately subjected her to discriminatory treatment or had attempted to drive her out of her job by refusing to give her those payments. The Court also found that it was highly improbable that the Company had adopted double standards and discriminated against Agnes, as there was evidence that other employees in a similar situation as Agnes were treated equally.

The decision above demonstrates that the Court will uphold the contractual terms and conditions of an employment relationship, and will generally not impose additional obligations on employers if it is inconsistent with the written contract. Customary traditions such as the giving of ang pow are not on the same footing as legal obligations and cannot be converted into a legitimate expectation if it is not stated in the contract.

Employees who are considering “walking out” based on alleged discriminatory practices should be mindful that such allegations must be proven by evidence if it is challenged in a court of law. Mere feelings of hurt and humiliation may be insufficient.

The citation for the above case is Leo Burnett Advertising Sdn Bhd v Agnes Ann Rodriquez [2003] 1 MELR 456.


ABOUT THE AUTHOR. Donovan Cheah is a partner at Donovan & Ho where he heads the firm’s employment law and dispute resolution practice. Donovan has been named as a recommended lawyer for labour and employment law by the Legal 500 Asia Pacific in 2017, 2018 and 2019. He has also been recognised by Chambers Asia Pacific as an up-and-coming practitioner in employment law and industrial relations.


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