5 Things About Condonation

1. Relates to an employer’s excuse/forgiveness of an employee’s wrongful act

In Public Services Commission Malaysia & Anor v Vickneswary a/p RM Santhivelu (substituting M Senthivelu a/l R Marimuthu, deceased) [2008] 6 MLJ 1 (“Vickneswary”), the Federal Court held that:

“Condonation in the context of employment contract is an act by the employer to excuse or forgive him for the wrongful act committed by the employee.”[1]

2. Can be in an active form or passive form

Zaki Azmi PCA (later CJ) held the following in Vickneswary:

“Condonation can be in the active form ie by the act of telling the person that he has been forgiven for the wrongful act done or by a passive act of not taking any action.”[2]

3. Operates as a waiver of an employer’s right to punish for misconduct

The Court of Appeal in National Union of Plantation Workers v Kumpulan Jerai Sdn Bhd, Rengam [2000] 2 MLJ 144 “agree[d] to the principle of condonation as a waiver of the employer’s right to punish for misconduct.”[3]

 Further, the learned contributors in Halsbury’s Laws of England (4th Ed) Vol 16 state the following:

“An employer who with full knowledge of his employee’s misconduct elects to continue him in service cannot subsequently dismiss him for the offence which he has condoned.”[4]

The above extract was cited approvingly by the Federal Court in Vickneswary.[5]

4. Only applies where the employer has full knowledge of the wrongful act

This was the position taken by the Federal Court in Ranjit Kaur a/p S Gopal Singh v Hotel Excelsior (M) Sdn Bhd [2010] 6 MLJ 1.[6]

Must be pleaded though the word ‘condonation’ need not necessarily be used

In Noor Bhayzura bt Dali v Suruhanjaya Perkhidmatan Awam Malaysia & Anor [2021] 6 MLJ 479, the Respondents took the position that the Appellant did not plead condonation and this argument was accepted by the High Court.[7]

On appeal, the Court of Appeal was of the view that “although the term ‘condonation’ or ‘kemaafan’ is not found in the statutory statement and the affidavit in support, ample facts have been pleaded in detail and in plain language to raise this as a ground for judicial review.”[8] Thus, condonation was actually pleaded.


Non-Payment of Remuneration as a Ground for Constructive Dismissal

In a claim of constructive dismissal, the employee ends the contract of employment and bears the burden of proving that he/she was constructively dismissed.[1]

In order to succeed, the employee “must establish that there has been some conduct on the part of the employer which breach an express or implied term of the contract of employment going to its very root.”[2]

The Federal Court in Ngeow Voon Yean v. Sungei Wang Plaza Sdn Bhd / Landmarks Holding Bhd [2006] MLJU 219 recognised that the payment of remuneration is the “basic consideration of [an] employer.”[3]

Thus, the non-payment of remuneration would undoubtedly amount to a breach of an express term of the contract of employment which goes to the very root of the same.

In Cekal Teguh Sdn Bhd v Mahkamah Perusahaan Malaysia & Ors [2019] MLJU 1402, Nordin bin Hassan J (now JCA) held:

“This non payment of salaries is a fundamental breach of the contract of employment which entitled the 2nd to 7th respondents to claim for constructive dismissal and was rightly decided by the 1st respondent that 2nd to 7th respondents were constructively dismissed without just cause and excuse by the applicant.”[4]

Mohamad Ariff JC (later JCA) echoed similar sentiments in Parimaladevi a/p P Ponnusamy v Mahkamah Perusahaan Malaysia & Anor [2009] MLJU 1692:

“Most of all, there was a non-payment of salary when it was due, and the law is clear that failure to pay salary is a fundamental breach of contract entitling the employee to consider himself or herself to be constructively dismissed. See Equitylink Consultants (M) Sdn Berhad v Doctor Jayaprakash Mohan Rao [1992] 1 ILR 492”[5]

The courts have, in the past, allowed constructive dismissal claims based on non-payment of remuneration.

Both Kejuruteraan Samudera Timur Sdn Bhd v Seli A/K Mandoh & Anor [2004] 5 MLJ 179 and North Malaysia Distributors Sdn Bhd v Ang Cheng Poh [2001] 3 ILR 387 concern cases of non-payment of remuneration as a result of unilateral deduction by the employer.[6] The Industrial Court in both cases, allowed the employee’s claim of constructive dismissal.

In Dr. Rayanold Pereira v. Menteri Sumber Manusia & Anor [1997] 3 CLJ Supp 116, the Minister of Human Resources refused to refer to the Industrial Court a claim of constructive dismissal due to non-payment of remuneration.[7]

Nik Hashim JC (later FCJ) allowed the judicial review application[8] and held that, “The allegation of breach of contract of employment through the salary cut and non-payment of March 1993 salary are not without basis. There is no provision for loan in the contract enabling the salary cut.”[9]

An employee claiming constructive dismissal due to the non-payment of remuneration has to terminate the contract of employment within a reasonable time after the non-payment.[10] Failing which, this could amount to a waiver of the employer’s actions and would defeat a claim of constructive dismissal.[11]