There has always been an unresolved question of whether a dismissed employee could bring a civil claim against his or her former employer, instead of or even in addition to a wrongful dismissal claim at the Industrial Court.
The courts have never previously expressly ruled out the possibility of such claims — theoretically this could be a claim for damages, breach of contract, or loss of potential earnings — and the threat of such claims have also sometimes been used by high-ranking or C-suite employees as a bargaining chip when negotiating lucrative severance packages.
More confusion arose as a result several High Court decisions, and the 2020 Court of Appeal decision in Ng Kim Fong v Menang Corporation (M) Berhad [2020] MLJU 644, where the court granted the employee damages for breach of contract in the form of payment of her contractual retirement benefits.
However, the recent Court of Appeal decision in 7-Eleven Malaysia Sdn Bhd v AH Krishnan [Civil Appeal No. W-02(IM)(NCVC)-629-04/2022] has finally provided much-needed clarity on this situation. In short, the Court of Appeal ruled that a wrongful dismissal (loss of employment) claim should be brought via the Industrial Court, and that a civil suit where the employee seeks monetary compensation via a common law action ought to be struck out as being an abuse of process of the court.
