EMPLOYMENT LAW

Whether Employer shall pay full salary to the Employees during Movement Control Order (“MCO”)?

It depends.
Throughout the MCO period, the Employer shall pay full salary to the Employees if the Employer can sustain its financial situation.
However, if there is a business downturn due to unprecedented events such as Covid 19 pandemic and MCO imposed by our Government, the Employer may seek for consent from the Employees to opt for pay cut during the MCO period.

Does pay cut lead to constructive dismissal?

(i) No

If the Employer has obtained consent from the Employee; and/or
If the Employment Contract provides for pay cut.

(ii) Yes

If the Employer does not obtain consent from the Employee and has unilaterally imposed pay cut on the Employee; and/or
If pay cut is not provided under the Employment Contract.

Note:

The courts have previously held that unilateral reduction of salary when the Employment Contract does not say so and without consent of the employee is a fundamental breach and tantamount to repudiation of contract of employment.

(Murugesan a/l Subramaniam v Professional Services Sdn. Bhd [2015] 2 LNS 0466 and Dr. Rayanold Pereira v Menteri Sumber Manusia & Anor [1997] 3 CLJ Supp 116)

Can Employer compel the Employee to take annual leave/unpaid leave?

Generally, the Employer shall continue to pay the salary to the Employee.
However, if the Employer suffered from financial situation and can justify it, the Employer can ask the Employee to take annual leave/unpaid leave, provided consent has been obtained.
Failing which, it may lead to constructive dismissal as it is a fundamental breach of contract.
The Employer must always act in good faith and be transparent to the Employee.

Sorotan Terkini

JURISDICTION – CHOOSING THE RIGHT COURT: THE SEA JUSTICE CASE HIGHLIGHTS WHERE MARITIME DISPUTES SHOULD BE HEARD

In The Sea Justice cases [2024] 2 Lloyd’s Rep 383 and [2024] 2 Lloyd’s Rep 429, the Singapore courts tackled a key question: which country should handle a maritime dispute when incidents span international waters? After examining the location of the collision, existing limitation funds in China, and witness availability, the courts concluded that China was the more appropriate forum. This ruling highlights that courts will often defer to the jurisdiction with the closest ties to the incident, ensuring efficient and fair handling of cross-border maritime disputes. This approach is also relevant in Malaysia, where similar principles apply.

17 November ,2024 Tiada Ulasan

BREACH OF CONTRACT – FORCE MAJEURE – FORCE MAJEURE UNPACKED: WHEN ‘REASONABLE ENDEAVOURS’ DON’T BEND CONTRACT TERMS

The UK Supreme Court clarified the limits of force majeure clauses, ruling that “reasonable endeavours” do not require a party to accept alternative performance outside the agreed contract terms. This decision emphasizes that force majeure clauses are meant to uphold, not alter, original obligations – even in unexpected circumstances. The case serves as a reminder for businesses to define alternative options explicitly within their contracts if flexibility is desired.

17 November ,2024 Tiada Ulasan

NEGLIGENCE – MEDICAL NEGLIGENCE – HOSPITAL ACCOUNTABILITY REINFORCED: COURT UPHOLDS NON-DELEGABLE DUTY IN MEDICAL NEGLIGENCE

In a landmark ruling, the court reinforced the hospital’s non-delegable duty of care, holding that even when services are outsourced to independent contractors, the hospital remains accountable for patient welfare. This decision emphasizes that vulnerable patients, reliant on medical institutions, must be safeguarded against harm caused by third-party providers. The ruling ultimately rejected the hospital’s defense of independence for contracted consultants, underscoring a high standard of duty owed to patients.

17 November ,2024 Tiada Ulasan

CONTRACTS – CONTRACT FOR THE SALE OF GOODS FOB – REMOTENESS OF DAMAGES IN BACK-TO-BACK CONTRACTS – COURT DEFINES LIMITS ON LIABILITY

In a complex dispute involving back-to-back contracts, the court clarified the boundaries for assessing damages, emphasizing that a chain of contracts does not automatically ensure liability passes through. Although substantial losses resulted from delays and disruption, the court highlighted the importance of the remoteness of damages, noting that each contract’s unique terms ultimately limited liability. This decision emphasise the need for parties in chain contracts to carefully define indemnity and liability provisions, as damages are assessed based on foreseeability rather than simply the structure of linked agreements.

17 November ,2024 Tiada Ulasan

TORT – BREAKING CONFIDENTIALITY – COURT CRACKS DOWN ON INSIDER LEAKS AND CORPORATE CONSPIRACY

In a recent ruling on corporate confidentiality, the court held two former employees liable for disclosing sensitive business information to a competitor, deeming it a breach of both employment contracts and fiduciary duties. This case highlights the serious consequences of unauthorized sharing of proprietary data and reinforces that such disclosures can lead to substantial legal and financial repercussions, even for the receiving parties if they knowingly benefit from confidential information.

17 November ,2024 Tiada Ulasan

PROPERTY LAW – CLAIMING OWNERSHIP: COURT UPHOLDS LEGAL TITLE AND DISMISSES CONSTRUCTIVE TRUST IN PROPERTY DISPUTE

In a recent property dispute, the court dismissed a claim for a constructive trust over property, underscoring that such a trust requires solid evidence of unfair conduct or fraud. Without sufficient proof of ownership.

17 November ,2024 Tiada Ulasan

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