Ex-manager wins RM1mil from family-run company after stepmum reduces salary

October 24, 2023

Ex-manager wins RM1mil from family-run company after stepmum reduces salary

KUALA LUMPUR: The Industrial Court has awarded the manager of a family-run business more than RM1 million in compensation after holding he was entitled to treat himself as constructively dismissed following a legal dispute with his stepmother over the validity of his late father’s will.

Court chairman D Paramalingam found that company director Sim Foo Yoke had wrongfully reduced stepson Wong Jun Kit’s salary beginning October 2018, seven months after the death of his father.

“The salary reduction was first imposed commencing October 2018. It is certainly no coincidence that the Shah Alam High Court suit, wherein the claimant (Jun Kit) challenged the will of the late Wong Kok Wan was also filed in October 2018.

“As pleaded by the claimant, the salary reduction was a retaliation by (Sim) against the claimant for having filed the suit,” the award read.

The court found that Wong Forklift Hire & Services Sdn Bhd had unilaterally reduced Jun Kit’s salary from approximately RM27,500 to RM9,000, and later RM6,000 per month, which it said was a “fundamental breach” of his employment contract.

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“No evidence was put forward before this court that the company had consulted the claimant (Jun Kit) before imposing the said reduction in his salary,” Paramalingam said in a 33-page award released today.

He said following the non-receipt of salary for the months of February and March 2019, Jun Kit had acted “reasonably” and in a “timely manner” by demanding the restoration of his full salary the following month, which the company had failed to do.

The claimant was, therefore, justified in walking away from his employment on grounds of constructive dismissal, Paramalingam said.

In its defence, the company, represented by Tan Shao Jia and Brandon Chee, claimed it had reduced Jun Kit’s salary due to a downturn in business. It also alleged that his work performance was unsatisfactory.

However, Paramalingam said, he found that the claimant’s dismissal was not bona fide and made without just cause or excuse.

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“The company had not produced any evidence whatsoever of the claimant’s (Jun Kit) purported unsatisfactory performance. The very first time the issue was raised was after the claimant had issued (his) notice of constructive dismissal,” he said in the award.

Paramalingam also found that the company had failed to prove that other employees were also handed a salary reduction.

He said an order for reinstatement to employment was inappropriate due to a total breakdown of trust, confidence and familial relationship between Sim and Jun Kit.

“The company director, who is the claimant’s stepmother, could not see eye-to-eye after he initiated a suit questioning the last will of (his late father),” Paramalingam said.

The court awarded Jun Kit compensation in lieu of reinstatement for RM550,000 and another RM660,000 in back wages, subject to a deduction of RM198,000 on account of post-dismissal earnings.

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Noting that there is no written contract of employment, Paramalingam computed the compensation based on an average sum of RM27,500 after taking into account evidence that Jun Kit had drawn between RM26,300 and RM32,500 per month.

Jun Kit’s late father had started the company’s business of selling, purchasing, renting, repairing and maintaining forklifts in Klang in 1969.

Jun Kit, who was represented by Justin Chin, joined the business as a technician in 1998 when he was 18 years old.

In 2004, he was tasked with managing the company’s branch office in Shah Alam.

Ex-manager wins RM1mil from family-run company after stepmum reduces salary