Andrew Chuah Khim Peik (W-02(A)-2146-10/2017)

1 DALAM MAHKAMAH RAYUAN MALAYSIA Dl PUTRAJAYA (DALAM BIDANG KUASA RAYUAN) RAYUAN SIVIL NO: W-02(A)-2146-10/2017 ANTARA ANDREW CHUAH KHIM PEIK ... PERAYU DAN HLG CAPITAL BERHAD (kini dikenali sebagai Hong Leong Capital Berhad) ... RESPONDEN [Dalam Mahkamah Tinggi Malaya di Kuala Lumpur (Bahagian Rayuan dan Kuasa-Kuasa Khas) Permohonan Semakan Kehakiman No: WA-25-175-10/2016 Dalam perkara permohonan oleh HLG Capital Berhad (kini dikenali sebagai Hong Leong Capital Berhad) memohon satu perintah Certiorari Dan Dalam perkara keputusan kes Mahkamah Perusahaan No.19/4-72/11, Award No. 805 tahun 2016 bertarikh 14.7.2016 2 Dan Dalam perkara Seksyen 20(3) Akta Perhubungan Perusahaan, 1967 Dan Dalam perkara Aturan 53, Kaedah-Kaedah Mahkamah 2012 Antara HLG Capital Berhad … Pemohon (kini dikenali sebagai Hong Leong Capital Berhad) Dan Andrew Chuah Khim Peik Responden] Coram: Hamid Sultan bin Abu Backer, JCA Mary Lim Thiam Suan, JCA Hanipah binti Farikullah, JCA Hamid Sultan Bin Abu Backer, JCA (Delivering Judgment of the Court) 3 GROUNDS OF JUDGMENT [1] The appellant, a high ranking employee of the respondent, appeals against the decision of the High Court judge which quashed the decision of the Industrial Court which had ruled that the appellant was dismissed without just cause and excuse. [2] The appellant and the respondent relied on the following cases: (i) Robert John Reeves v Menteri Sumber Manusia, Malaysia & Anor [2007] 1 MELR 13 (CA); (ii) Lee Kwan Woh v Public Prosecutor [2009] 5 CLJ 631 (FC); (iii) Hong Leong Equipment Sdn Bhd v Liew Fook Chuan & Other Appeals [1996] 1 MELR 142; (iv) Menara Panglobal Sdn Bhd v Arokianathan Sivapiragasam [2006] 2 CLJ 501; (v) R Rama Chandran v Industrial Court of Malaysia & Anor [1997] 1 CLJ 147; (vi) Ranjit Kaur S Gopal Singh v Hotel Excelsior (M) Sdn Bhd [2010] 8 CLJ 629; (vii) Razali Husain v Sapura Research Sdn Bhd & Anor [2016] MLRHU 1465; (viii) Petroliam Nasional Bhd v Nik Ramli Nik Hassan [2003] 4 CLJ 625; (ix) Robert John Reeves v Menteri Sumber Manusia & Anor [2000] 1 CLJ 180; (x) James v Waltham Holy Cross UDC [1973] ICR 398; (xi) Ireka Construction Bhd v Chantiravathan Subramaniam James [1995] 2 ILR 11; (xii) Wong Chee Hong v Cathay Organisation Malaysia Sdn Bhd [1988] 1 CLJ 45; (xiii) Cox v Philips Industries Ltd [1976] 1 WLR 638; (xiv) Calvin v Carr & Ors [1979] 2 ALL ER 440; (xv) Bayer (M) Sdn Bhd v Ng Hong Pau [1999] 4 CLJ 155; (xvi) Chapman & Others v Goonvean & Rostawvack China Clay Co. Ltd [1983] 2 ALL ER; (xvii) Pearce v Foster [1886-90] ALL ER Rep. Ext 1752; (xviii) Premkumar Vijayakumaran v UMW Toyota Motor Sdn Bhd [2018] 2 LNS 2124; (xix) Noor Azarina Alias v Serasi Medik Sdn Bhd [2018] 2 LNS 1776; 4

(xx) Shanmugam Maramuthu v A. Hartodt Ocean Services (M) Sdn Bhd [2018] 4 ILR 106; (xxi) K. Kanagam Kannoo v Sime Darby Plantation Bhd/Ladang Bukit Pilah [2018] 2 LNS 1567; (xxii) Peter David Jackson v AON Insurance Brokers (M) Sdn Bhd [2015] 2 LNS 1567; (xxiii) Waite v Government Communications Headquarters [1983] IRLR 341; (xxiv) Waite v Government Communications Headquarters [1983] ICR 653; (xxv) Peter David Jackson v AON Insurance Brokers B(M) Sdn [R2-25-77-05/2015];

(xxvi) Peter David Jackson v AON Insurance Brokers (M) Sdn Bhd [08-225- 05/2017 (FC)]; (xxvii) Hewlett Packard (M) Sdn Bhd v Loh Choon Aim [1993] 1 ILR 308B; (xxviii) United Plantations Bhd v Ahmad Zaini B. Mohamed Tahir [1996] 1 ILR 632; (xxix) Alidar Ltd v Taylor [1978] ICR 445;

(xxx) Choong Poh Ling v CIMB Aviva Insurance Berhad [2016] 2 LNS 1032;

(xxxi) Tan Cheng Leng v Tropicana Medical Centre (M) Sdn Bhd [2017] 1 ILR 383; (xxxii) MCI WorldCom Malaysia Sdn Bhd v Sultan Askin Mydin Meera [2007] 2 LNS 2267; (xxxiii) Burswood Resort (Management) Limited v Yeap Peng Huat [2007] 2 LNS 2222; (xxxiv) Lam Yue Choong v F&N Dairies (M) Sdn Bhd [2005] 2 LNS 1832; (xxxv) Roslan Baba v Puncak Niaga (M) Sdn Bhd [2013] 3 ILR 216; (xxxvi) Omni Precision Sdn Bhd v Tan Boon Leong [2006] 2 LNS 0922; (xxxvii) Robert John Reaves v Menteri Sumber Manusia & Anor [2000] 1 CLJ 180; (xxxviii) Telekom Malaysia Kawasan Utara v Krishnan Kutty Sanguni Nair & Anor [2002] 3 CLJ 314; (xxxix) Swedish Motor Assemblies Sdn Bhd v Hj. Md Ison Baba [1998] 3 CLJ 288; (xl) Harpers Trading (M) Sdn Bhd v National Union of Commercial Workers [1991] 2 CLJ 881; (xli) Malayan Banking Bhd v Association of Bank Officers, Peninsular Malaysia & Anor [1988] 3 MLJ 204; (xlii) Wong Yuen Hock v Syarikat Hong Leong Assurance Sdn Bhd [1995] 2 MLJ 753; (xliii) Hong Kian Ngan v Mahkamah Perusahaan Malaysia & Anor [1996] 4 CLJ 687. 5 Brief Facts and Grounds of Decision [3] The brief facts of the case and the grounds of decision placed in a rudimentary manner is repeated to save court’s time and it reads as follows: “Brief facts:

1. The defendant/appellant/D1 was the Group Financial Controller of the plaintiff/respondent/P1. D1's employment with P1 was confirmed on 31.7.2006.

2. P1 claimed that: D1's performance deteriorated over the subsequent years. D1 has poor leadership skills and lack of competency and integrity. In 2009, P1 no longer repose the necessary trust to D1 and terminated D1 via letter dated 17.6.2009 for immediate termination.

3. D1 then filed an action against P1 in the Industrial Court/IC. IC held that D1's termination was without just cause or excuse and ordered P1 to pay D1 RM314,145.52. Dissatisfied, P1 filed this Judicial Review for an order for Certiorari to quash IC's decision. No warning was given to D1. No opportunity was given for D1 to improve. No formal assessment of employee was conducted.

4. IC had erred in law or acted outside its jurisdiction by applying the wrong test/legal principles, by failing to take relevant matters into consideration, by taking into account irrelevant matters and by arriving at unreasonable/perverse decision. Since D1 was employed by P1, D1 had not been subjected to any appraisal except those carried out for purpose of D1's confirmation. D1 has been counseled several times by the Human Resources. No bonus given to D1 in 2007 should reflect P1's dissatisfaction with D1's performance. 6

5. P1 prayed for an order of Certiorari to quash IC's award. Costs and other suitable relief.

6. D1 stated that: the increment and bonuses were not given despite no appraisal being conducted. No complaint received that D1 had bad leadership skills and lack of competency and integrity. This claim was not proven before IC. D1 had a problem with his 2 superiors because D1 refused to heed to their request for certain payments which were not in compliance with P1's Financial Instruction. IC even found that there was absolutely no evidence of D1's poor performance. P1 as a bank should have complied with the procedures issued by the Securities Commission and Bank Negara Malaysia.

7. The letter of termination was the first notice given to D1 on the dissatisfaction of D1's performance without any show cause letter or warning or reprimand of any sort or even a counselling session. The letter of termination came as a huge surprise to D1. D1 was not given any opportunity to answer the charges as there was no domestic inquiry done at all. IC had not erred in coming to its decision. This Judicial Review is an appeal in disguise. All these issues have been canvassed before IC.

8. High Court: P1's OS for Judicial Review is allowed with costs of RM5000. Grounds of Decision of High Court (YA DATUK HAJJAH AZIZAH BINTI HJ NAWAWI)

1. The HCJ found that the Industrial Court had applied the wrong test in this case. The Industrial Court had applied the general test to prove poor performance of the employees.

2. The HCJ found that the Industrial Court has made an error in law in applying the general test to a senior management employee. The test to be 7 applied is that it is sufficient for the Company to establish that the upper management of the company, in the absence of bad faith, was dissatisfied with employee in question and that the same had been brought to his attention.

3. The HCJ found that the Industrial Court has failed to take into consideration the evidence of the Company's witnesses, that the company's top management had lost confidence in the Respondent to continue to lead the financial aspect of the group.

4. The HCJ held that the Industrial Court's finding is against the evidence before the Industrial Court that the Company's dissatisfaction with the Respondent is bona fide.

5. The HCJ found that the Industrial Court had failed to take relevant considerations and had reached a decision that is perverse, which justifies the quashing of the Award.” [3] The Memorandum of Appeal of the appellant reads as follows: “1. Hakim yang bijaksana telah khilaf dari segi undang-undang dan fakta apabila membuat keputusan untuk membenarkan rayuan Pemohon dengan kos;

2. Hakim yang bijaksana telah khilaf dari segi undang-undang dan fakta apabila gagal untuk membuat penilaian yang terperinci secara sepenuhnya terhadap afidavit-afidavit dan keterangan yang difailkan oleh Responden.

3. Hakim yang bijaksana telah khilaf dari segi undang-undang dan fakta apabila gagal mengambil kira keterangan yang relevan. 8

4. Hakim yang bijaksana telah khilaf dari segi undang-undang dan fakta apabila mengambil kira keterangan yang tidak relevan.

5. Hakim yang bijaksana telah khilaf dari segi undang-undang dan fakta apabila gagal mengambil kira bahawa terdapat prosedur dalaman yang tertentu yang patut diikuti bagi penilaian ('appraisal') Perayu yang tidak dipatuhi oleh Responden.

6. Hakim yang bijaksana telah khilaf dari segi undang-undang dan fakta apabila gagal mengambil kira bahawa Perayu tidak diberi apa-apa amaran secara bertulis dan/atau lisan berkenaan dengan prestasinya.

7. Hakim yang bijaksana telah khilaf dari segi undang-undang dan fakta apabila gagal mengambil kira bahawa kegagalan Responden untuk memberi bonus dan/atau kenaikan gaji tidak mencukupi untuk menunjukkan bahawa Perayu tidak berpuas hati dengan prestasi Perayu dalam keadaan (‘in the circumstances').

8. Hakim yang bijaksana telah khilaf dari segi undang-undang dan fakta apabila memutuskan bahawa Presiden Mahkamah Perusahaan telah khilaf dalam keputusannya.” [4] The appellant’s executive summary reads as follows: “1. The Appellant is appealing against the decision of the learned High Court judge, Yang Arif Datin Hajjah Azizah binti Nawawi, in allowing the Respondent's application for judicial review against the Award of the Industrial Court Award No: 805 Tahun 2016.

2. In brief, the Appellant was appointed as Group Financial Controller of the Respondent. However, on 18.06.2009 by way of a letter dated 17.06.2009, 9 the Appellant was summarily dismissed on the ground of his alleged poor performance. This was despite the fact that no written warnings or reasonable indication was given to the Appellant of his alleged shortcomings.

3. Further, despite being awarded an opportunity to produce emails as evidence of the Appellant's poor performance, the Respondent's main witness and the Appellant's superior, Chew Seong Aun, could not produce those emails.

4. The Appellant contends that the application for judicial review should not have been allowed on the grounds that the learned Chairman's decision was not grounded on illegality or plain irrationality and thus the finding of the Industrial Court should not have been quashed.

5. The Respondent had contended that in view that the Appellant was a high ranking employee, the Appellant, despite not being issued written warnings, should have known that the Respondent was not satisfied with his performance. However, the Appellant contends that the dissatisfaction with his performance must be obvious and/or clear enough that the Appellant would be aware of the same. This was clearly not the case as the Appellant was caught completely off guard.

6. The Respondent had merely given evidence of misunderstandings on work-related matters raised by one David Lim, Muhammad Awi Goo and Mohamed Azlan bin Alias, all of who were from the Securities Division of the Respondent and had grouses with the Appellant. Evidence was produced by the Appellant that his strictness in carrying out his job was necessary in light of the action taken against David Lim, Muhammad Awi Goo and Mohamed Azlan bin Alias by the public supervisory bodies. It must be noted that there were no official complaints filed against the Appellant. 10

7. The Appellant's superior, Chew Seong Aun, had also failed to carry out an appraisal as per the procedure and policy of the Respondent (as confirmed by Chin Jeck Leng - the Respondent's HR Manager). On the contrary, he had argued that he carried out the appraisal in his own way. The Appellant submits that in light of policies determined by the Respondent, Chew Seong Aun's evidence that he had carried out the appraisal in his own way, cannot be justified.

8. If at all there was dissatisfaction by the Respondent, the Appellant would have had at the very least been made aware through the appraisal. However, this was clearly not done and the Respondent cannot be allowed to contend that sufficient notice was given to the Appellant of his alleged poor performance or that the Appellant should have known of the dissatisfaction of the Respondent with his performance.

9. On the contrary, the Appellant had received good bonuses, increments and comments for his appraisals during his probation and the final appraisal for confirmation.

10. Based on the Appellant's submission, the Appellant submits that the learned Chairman of the Industrial Court had not acted illegally or was plainly irrational and had considered all relevant evidence and principles when she decided in favour of the Appellant. As such the learned High Court judge erred in law and in fact when Her Ladyship allowed the application for judicial review.

11. Therefore, the Appellant prays that the appeal be allowed with costs.” [5] The respondent’s Memorandum of Appeal in the High Court reads as follows: 11 “3. Alasan-alasan yang mana relief tersebut dipohon telah dinyatakan sepenuhnya dalam Afidavit Lim Man Hou yang diikrarkan pada 5.10.2016 untuk menyokong Permohonan Untuk Semakan Kehakiman berhubung dengannya yang mana Pernyataan ini difailkan tetapi alasan-alasan itu dengan ringkasnya adalah bahawa:-

3.1. Mahkamah Perusahaan telah melakukan kesilapan undang-undang yang material berikut dan/atau bertindak di luar bidang kuasanya apabila memutuskan yang penamatan perkhidmatan Responden atas sebab prestasi yang lemah, adalah tanpa sebab atau alasan yang munasabah, kerana Mahkamah Perusahaan telah,

3.2. Mahkamah Perusahaan terkhilaf dari awal lagi ("from the outset") apabila Mahkamah Perusahaan gagal menerapkan pertimbangan relevan berikut apabila menentukan sama ada penamatan perkhidmatan atas alasan prestasi yang lemah adalah dengan sebab atau alasan yang munasabah,

3.3. Mahkamah Perusahaan terkhilaf dari segi undang-undang apabila terlalu menitikberatkan tentang sama ada penilaian rasmi telah dijalankan.

3.4. Mahkamah Perusahaan terkhilaf di sisi undang-undang apabila bergantung kepada ketiadaan penilaian prestasi untuk memutuskan bahawa penamatan perkhidmatan Responden adalah tidak adil, dan dengan berbuat demikian, telah gagal mengambil kira faktor-faktor relevan berikut,

3.5. Mahkamah Perusahaan melakukan kesilapan undang-undang apabila mencapai kesimpulan bahawa penilaian dikatakan perlu untuk menilai prestasi Responden, apabila,

3.6. Mahkamah Perusahaan melakukan kesilapan undang-undang apabila mencapai kesimpulan di muka surat 14 dan 15 Award tersebut, bahawa, "... the idea that the Claimant was a poor performer was not one seen and experienced by COW1 on a first hand basis. Instead he had also listened to rumours, i.e. what the Claimant's peers and subordinates said to him about the Claimant, and what a few senior managers had complained to him. At most the charges against the Claimant were made as an afterthought because of such complaints by a few senior management people (mentioned in detail hereafter) and their obvious dislike of the Claimant for the manner in which he carried out his tasks as the Group Financial Controller. ...COW 1 relied on what was told to him by others...", dan di muka surat 19 Award tersebut, bahawa, “Even if 15 we looked at the letter of termination... the reasons given for the Claimant's dismissal, do not bear out to be substantive reasons at all. There were worded in such general and vague terms that no reasonable employee placed in the same position as the Claimant could have understood and replied to them”, kerana gagal,

3.7. Mahkamah Perusahaan terkhilaf dari segi undang-undang apabila menyimpang daripada prinsip yang sudah mantap bahawa amaran bertulis tidak perlu bagi kakitangan berjawatan tinggi, apabila membuat kesimpulan di muka surat 17, 18 dan 19 Award tersebut, bahawa, "The law with regard to proof that proper procedures must be followed in cases of poor performance, and where there must be 17 sufficient written communications to the claimant on it established and very clear in its requirements".

3.8. Mahkamah Perusahaan terkhilaf disisi undang-undang apabila membuat kesimpulan yang kelemahan Responden tidak dimaklumkan kepadanya kerana Mahkamah Perusahaan gagal mengambil kira faktor-faktor relevan bcrikut,

4. Pada pendengaran Permohonan untuk Semakan Kehakiman, Pemohon akan bergantung kepada alasan-alasan yang dinyatakan dengan panjang lebar dalam Afidavit LIM MUN HOU yang diikrarkan pada 5.10.2016 dan difailkan di sini untuk menyokongnya.” [6] We have read the appeal records and the able submissions of the parties. We have taken some time to consider the authorities by the parties. After much consideration, we take the view that the appeal must be allowed. Our reasons inter alia are as follows:

(ii) It is also well established in cases of dishonesty of employee at senior management level, the threshold is low.

(iii) In case of dishonesty, it is quite straight forward when it comes to dismissal. In case of poor performance, it may become very technical and many issues may have to be considered and generally may also relate to market force and economic situation, etc.

(iv) In cases of poor performance by employee, holding Senior Management level, the threshold is hybrid in nature and depends on the facts and circumstances of the case and falls within the realm of the Industrial Court itself to decide, taking into consideration just and equitable consideration as envisaged in the Act.