{"id":5873,"date":"2025-11-15T17:25:36","date_gmt":"2025-11-15T09:25:36","guid":{"rendered":"https:\/\/yhalaw.com.my\/?p=5873"},"modified":"2025-11-15T17:25:41","modified_gmt":"2025-11-15T09:25:41","slug":"employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line","status":"publish","type":"post","link":"https:\/\/yhalaw.com.my\/zh\/employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line\/","title":{"rendered":"EMPLOYMENT &#8211; CONSTRUCTIVE DISMISSAL VIA TRANSFER: WHEN MANAGEMENT PREROGATIVE CROSSES THE LINE"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><strong>1. Summary and Facts<\/strong><\/h3>\n\n\n\n<p>In Sahurunzaman bin Barun v Perodua Sales Sdn Bhd &amp; Anor [2025] 2 MLJ 17, three long-serving Perodua employees \u2013 Saharunzaman (OKU), Noramidah, and Mohd Razif \u2013 refused to resign from their permanent roles to accept a two-year contract with Perodua\u2019s associate company, Nagoya Automobile Malaysia (NAM). In retaliation, Perodua abruptly transferred them to faraway branches (Kota Kinabalu, Kuching, Kuala Terengganu) with only three days&#8217; notice, disregarding their personal circumstances, including medical issues and dependent family members.<\/p>\n\n\n\n<p>They challenged the move as constructive dismissal. The Industrial Court ruled in their favour, but the High Court overturned the decision. The matter reached the Court of Appeal.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Legal issues<\/strong><\/h3>\n\n\n\n<p>\u2022 Whether Perodua\u2019s transfer orders were unreasonable and issued in mala fide to force the appellants out of employment?<br>\u2022 Whether the Industrial Court applied the correct test in finding constructive dismissal \u2013 i.e. the \u201ccontract test\u201d versus the \u201creasonableness test\u201d?<br>\u2022 Whether Perodua\u2019s failure to secure work permits for Sabah and Sarawak postings breached the employment contracts?<br>\u2022 Whether the transfer orders constituted a fundamental breach of the employment contracts?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Court\u2019s Findings<\/strong><\/h3>\n\n\n\n<p>\u2022 The Industrial Court correctly applied the contract test, not the reasonableness test. Because the contract expressly required transfers to be \u201creasonably directed\u201d, reasonableness was part of the contract term and therefore reviewable.<br>\u2022 The transfer orders were mala fide, intended to pressure the appellants into resignation without payment of lay-off or termination benefits. This constituted a fundamental breach of the employment contract.<br>\u2022 Perodua failed to apply for necessary work permits for postings to Sabah and Sarawak. Requiring employees to report for duty without permits was illegal and a breach going to the root of the contract.<br>\u2022 Perodua could not show genuine operational need for the transfers, nor did it provide evidence of alternative branches being full. Transfers appeared punitive rather than business-driven.<br>\u2022 The Industrial Court\u2019s decision was reinstated. Each claimant was awarded compensation in lieu of reinstatement and backwages, with costs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Practical Implications<\/strong><\/h3>\n\n\n\n<p>Employers must exercise contractual transfer powers reasonably and in good faith. Where transfers are used as a tool to compel resignation or as retaliation, courts may find constructive dismissal and award compensation accordingly.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In Saharunzaman bin Barun v Perodua Sales Sdn Bhd &#038; Anor [2025] 2 MLJ 17, the Court of Appeal reinstated the Industrial Court\u2019s decision that three long-serving employees were constructively dismissed after being ordered to report for duty at distant branches within three days, following their refusal to resign and accept a fixed-term contract with an associated company. The Court found that Perodua&#8217;s actions were unreasonable, mala fide, and amounted to a fundamental breach of the employment contract, especially as no valid work permits were arranged for postings in Sabah and Sarawak. The ruling affirms that \u201creasonableness\u201d clauses in transfer provisions carry enforceable weight and cannot be used as tools for disguised terminations.<\/p>\n","protected":false},"author":1,"featured_media":5874,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1573,1572],"tags":[3490,1600,3671,3670,3669],"class_list":["post-5873","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment","category-labor-law","tag-constructive-dismissal","tag-salary-mco","tag-employment-contract","tag-industrial-court","tag-labor-law"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>EMPLOYMENT - CONSTRUCTIVE DISMISSAL VIA TRANSFER: WHEN MANAGEMENT PREROGATIVE CROSSES THE LINE | Yew Huoi, How &amp; Associates | Leading Malaysia Law Firm<\/title>\n<meta name=\"description\" content=\"In Saharunzaman bin Barun v Perodua Sales Sdn Bhd &amp; Anor [2025] 2 MLJ 17, the Court of Appeal reinstated the Industrial Court\u2019s decision that three long-serving employees were constructively dismissed after being ordered to report for duty at distant branches within three days, following their refusal to resign and accept a fixed-term contract with an associated company. The Court found that Perodua&#039;s actions were unreasonable, mala fide, and amounted to a fundamental breach of the employment contract, especially as no valid work permits were arranged for postings in Sabah and Sarawak. The ruling affirms that \u201creasonableness\u201d clauses in transfer provisions carry enforceable weight and cannot be used as tools for disguised terminations.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/yhalaw.com.my\/zh\/employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line\/\" \/>\n<meta property=\"og:locale\" content=\"zh_TW\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"EMPLOYMENT - CONSTRUCTIVE DISMISSAL VIA TRANSFER: WHEN MANAGEMENT PREROGATIVE CROSSES THE LINE | Yew Huoi, How &amp; Associates | Leading Malaysia Law Firm\" \/>\n<meta property=\"og:description\" content=\"In Saharunzaman bin Barun v Perodua Sales Sdn Bhd &amp; Anor [2025] 2 MLJ 17, the Court of Appeal reinstated the Industrial Court\u2019s decision that three long-serving employees were constructively dismissed after being ordered to report for duty at distant branches within three days, following their refusal to resign and accept a fixed-term contract with an associated company. The Court found that Perodua&#039;s actions were unreasonable, mala fide, and amounted to a fundamental breach of the employment contract, especially as no valid work permits were arranged for postings in Sabah and Sarawak. The ruling affirms that \u201creasonableness\u201d clauses in transfer provisions carry enforceable weight and cannot be used as tools for disguised terminations.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/yhalaw.com.my\/zh\/employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line\/\" \/>\n<meta property=\"og:site_name\" content=\"Yew Huoi, How &amp; Associates | Leading Malaysia Law Firm\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/yhalaw\" \/>\n<meta property=\"article:published_time\" content=\"2025-11-15T09:25:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-11-15T09:25:41+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/yhalaw.com.my\/wp-content\/uploads\/2025\/11\/contsds.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"YHA Admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"\u4f5c\u8005:\" \/>\n\t<meta name=\"twitter:data1\" content=\"YHA Admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"\u9810\u4f30\u95b1\u8b80\u6642\u9593\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line\\\/\"},\"author\":{\"name\":\"YHA Admin\",\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/#\\\/schema\\\/person\\\/f778c60834a29c5ec215ab62d3207bef\"},\"headline\":\"EMPLOYMENT &#8211; CONSTRUCTIVE DISMISSAL VIA TRANSFER: WHEN MANAGEMENT PREROGATIVE CROSSES THE LINE\",\"datePublished\":\"2025-11-15T09:25:36+00:00\",\"dateModified\":\"2025-11-15T09:25:41+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line\\\/\"},\"wordCount\":366,\"publisher\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/yhalaw.com.my\\\/wp-content\\\/uploads\\\/2025\\\/11\\\/contsds.jpg\",\"keywords\":[\"Constructive dismissal\",\"Employment\",\"Employment Contract\",\"Industrial Court\",\"Labor Law\"],\"articleSection\":[\"Employment\",\"Labor Law\"],\"inLanguage\":\"zh-TW\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line\\\/\",\"url\":\"https:\\\/\\\/yhalaw.com.my\\\/employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line\\\/\",\"name\":\"EMPLOYMENT - CONSTRUCTIVE DISMISSAL VIA TRANSFER: WHEN MANAGEMENT PREROGATIVE CROSSES THE LINE | Yew Huoi, How &amp; Associates | Leading Malaysia Law Firm\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/yhalaw.com.my\\\/employment-constructive-dismissal-via-transfer-when-management-prerogative-crosses-the-line\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/yhalaw.com.my\\\/wp-content\\\/uploads\\\/2025\\\/11\\\/contsds.jpg\",\"datePublished\":\"2025-11-15T09:25:36+00:00\",\"dateModified\":\"2025-11-15T09:25:41+00:00\",\"description\":\"In Saharunzaman bin Barun v Perodua Sales Sdn Bhd & Anor [2025] 2 MLJ 17, the Court of Appeal reinstated the Industrial Court\u2019s decision that three long-serving employees were constructively dismissed after being ordered to report for duty at distant branches within three days, following their refusal to resign and accept a fixed-term contract with an associated company. 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