Case Update: Employee That Enters Into Negotiations For Severance And Agrees To The Terms Cannot Then Claim For Wrongful Dismissal

Published date17 February 2023
Subject MatterEmployment and HR, Litigation, Mediation & Arbitration, Contract of Employment, Unfair/ Wrongful Dismissal, Trials & Appeals & Compensation
Law FirmZul Rafique & Partners
AuthorZul Rafique & Partners

Matrix Global Education Sdn Bhd v Felix Lee Eng Boon

[2023] 2 CLJ 34 | Court of Appeal
- see the grounds of judgment here

Facts Felix Lee (the 'Respondent') was employed as the Chief Executive Officer ('CEO') of Matrix Global Education Sdn Bhd (the 'Appellant'). The Respondent's duties and responsibilities was to manage the Matrix Global Schools ('MGS'), which included Matrix International School ('MIS') and Matrix Private School ('MPS'). However, there was a decline in academic standards and the drop in the quality of MIS and MPS which led to complaints from the parents. The Appellant decided to relieve the Respondent from his role as the CEO and appointed an interim CEO. The Respondent was re-assigned to the Appellant's headquarters to assist with marketing and was offered via an offer letter, an alternative position of Head, Group Corporate Affairs & Communications on a contract basis. The Appellant received information that the Respondent was involved in certain irregularities when he was the CEO and the Appellant took the decision to notify the Respondent of the withdrawal of the offer letter and advised the respondent to resign. Negotiations took place between the parties to discuss the severance package and the Respondent tendered his resignation as the CEO. The Appellant accepted the Respondent's resignation. The Respondent however took the position that he was forced to resign and commenced a claim in the Industrial Court, alleging that he had been constructively dismissed. At the Industrial Court, it was ruled that the Respondent was dismissed without just cause and excuse. The Appellant failed in its application for judicial review. Hence, the present appeal.

Issue 1. Whether the Appellant had committed any fundamental breach of the contract of employment to justify the Respondent treating himself as being constructively dismissed?
2. Whether employee could enter into severance package agreement with employer and later claim for constructive dismissal at Industrial Court?

Held In allowing the appeal, Court of Appeal Judge Lee Swee Seng held that the conduct of the Respondent in entertaining and entering into negotiations for settlement on terms does not fit snugly and...

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