"You're fired!" is an exclamation popularly associated to a situation whereby an employer informs his or her employee of the employee's dismissal or termination from the company. Of course, knowing that you have been dismissed is never a good feeling and you may feel lost. However, your employer may feel the same way too as they will be put in an unpleasant situation when breaking such news to you. Hence, it is not uncommon for an employer to persuade someone into resigning rather than having to utter the words "you're fired".

Hypothetically, in what ways can your employer force you to quit? The most common answer is by making your life at your work place so miserable that you feel compelled to quit; for example, shifting your location of employment, changing your job scope, demoting you or reducing your monthly salary.

Therefore, not all "resignations" are made free willed, hence the question, was your resignation voluntary or was it forced?

The law in this aspect is clear: it is not the form or manner but whether or not there had been "just cause" or "excuse". It is crucial to bear in mind that if your employment contract is terminated without just cause or excuse, a legal cause of action may arise in your favour.

The law governing unfair or unjust termination of employment is known as the doctrine of constructive dismissal. The doctrine of constructive dismissal deals with situations whereby the unjust conduct of the employer has caused the employee to initiate the termination of their own contract of employment as opposed to the employer expressly terminating the contract of employment.

So, in what situation can your resignation from employment be considered a constructive dismissal? Before venturing an answer, know that fundamentally, your relationship with your employer is a contractual one. Therefore, it is the employment contract that will govern both your conducts at work.

Hence, your resignation from employment may amount to a constructive dismissal if your employer breaches a condition in your employment contract.

The English Court of Appeal in the case of Western Excavating (ECC) Ltd v Sharp [1978] 1 ALL ER 713, CA [ENG] laid down the test in a situation whereby a voluntary resignation may amount to a constructive dismissal. Based on the judgment in Sharp's case, the main factors in establishing constructive dismissal are as follows:

a) The employer no longer intends to be bound by one or more of the essential term(s) of the contract of employment;

b) The employer's conduct must be a sufficiently serious or significant to entitle the employee to leave at once; and

c) The employee must leave the employment because of the breach of the term of the contract of employment by the employer.

The Malaysian Courts have adopted the principles laid down by the English Court Sharp's case and it is clear that the test to determine constructive dismissal is a factual one and it differs from case to case. Whether or not constructive dismissal occurred depends on whether your employer had breached the fundamental terms in your contract of employment.

Apart from that, the Court in Sharp's case also emphasized that the employee claiming constructive dismissal must leave the employment and give notice of such intention immediately after the breach of the contract of employment. If the employee fails to do so, the employee will be regarded as having elected to affirm the termination.

An example where there was a breach of a fundamental term in the contract of employment would be the case of Kumpulan SF Powertech Sdn Bhd v Marnokarrun D Maruthamuthu [2013] 2 ILR 237. In that case, the Court in allowing the employee's claim for constructive dismissal held that the act of the company in deducting their employee's salary without informing the reason for such deduction amounts to a repudiation and breach of a fundamental term of the employee's contract of employment.

Furthermore, it is also important for you to be aware that the terms of your contract of employment do not solely consist of express terms, e.g. the amount of your salary and your position in the company. Your contract of employment also consists implied terms.

In the English case of Woods v W.M. Car Services [Peterborough] Ltd [1981] ICR 666, the court acknowledged that there is an implied term in a contract of employment saying that employers shall not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employers and employees.

Following the above decision, the law imposes a duty on your employer to treat you fairly and reasonably. However, whether or not your employer breached an implied term is a question of fact that the court will have to determine on a case to case basis. Some of the situations whereby the Courts may find your employer to have breached an implied term would be, e.g. when your employer failed to provide you with a safe place to work, harassed you or accused you without reasonable ground, amongst others.

Doubtless, an employer has every right to reorganise company or restructure the business in any manner the employer desires, provided the reorganisation or restructuring is made with bona fide intent. That being said, a case for constructive dismissal may fail if the Court finds the employer to have acted reasonably by giving due consideration to its employee's view and that it was a bona fide act made in the interest of the company.

In conclusion, a resignation an employee may not necessarily mean that the resignation was made voluntarily and an employee is entitled to treat himself as having been constructively dismissed if his employer had breached a fundamental term in the employment contract. It is therefore important to know and be fully aware of the terms of your employment contract and observe the conduct and reasons of your employer in his actions regarding your employment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.