Malaysia | Deed of Settlement, Termination and Release Upheld as Cessation of Employment by Mutual Agreement

In the recent case of Christopher Dass a/l Muniandy @ Mathew v Clasquin (Malaysia) Sdn Bhd dated 3 August 2021 (Award No. 1393 of 2021), the Court upheld that notwithstanding the Deed of Settlement, Termination & Release, the essence and substance of the Deed reflected that it was an instance of a separation by way of agreement on mutually agreed terms. 

The claimant (“Christopher Dass”) was the Country Manager of the company (“Clasquin”) and held the highest management position based in Malaysia. Christopher Dass contended that pursuant to a disagreement with another employee Clasquin no longer wanted him in its employment, and he was forced to enter into a Deed of Settlement, Termination and Release (“the Deed”) to end the employment relationship.  

Conversely, Clasquin’s contention was that Christopher Dass in his role was responsible for the financial growth of the business under his leadership and governance but was unwilling to adhere to his superior’s instructions who is the Regional Managing Director (Southeast Asia) of Clasquin, failed to react diligently to queries, failed to achieve optimal growth and results given the weak performance of Clasquin over successive years. As such, Clasquin took the view that the relationship between Clasquin and Christopher Dass was not working. 

Clasquin thereafter initiated discussions with Christopher Dass inviting him to attend these discussions in France to ascertain the possibility of ending the employment relationship. Pursuant to several discussions this resulted in the execution of the Deed of Settlement on 18 June 2018, where Christopher Dass was paid a sum close to a year’s salary in consideration for the cessation of the employment relationship. As such Clasquin’s case was that there was no dismissal but instead a separation achieved on mutually agreed terms. 

Integral to the dispute before the Court was whether there was a dismissal at the first instance. Since the fact of dismissal was in dispute, the burden of proof was on Christopher Dass to establish that he had in fact been dismissed by Clasquin. The Court found that the version of the final Deed agreed upon by both parties was pursuant to revisions by Christopher Dass sent via email to Clasquin. The negotiations and revisions itself took place over a period of more than a month, commencing from the time Christopher Dass was invited to France in early May 2018 until its conclusion in June 2018. 

In holding in favour of Clasquin, the Industrial Court found that Christopher Dass failed to produce any evidence of the existence of any coercion, threat, duress or inducement by Clasquin that should he refuse to sign the Deed, it would result in his termination of employment. Accordingly, the issue of whether the dismissal was done with or without just cause or excuse did not materialise as there was no dismissal at the first instance.