Kesatuan Pekerja-Pekerja Perusahaan Logam v George Kent (Malaysia) Berhad (W-01(A)-49-01/2022)

MAHKAMAH PERUSAHAAN MALAYSIA ... RESPONDENTS [In the High Court of Malaya in Kuala Lumpur Judicial Review No.: WA-25-78-02/2020

George Kent (Malaysia) Berhad

Mahkamah Perusahaan Malaysia ... Respondents] CORAM: RAVINTHRAN A/L PARAMAGURU, JCA WONG KIAN KHEONG, JCA FAIZAH BINTI JAMALUDIN, JCA

The appellant (Appellant) is a trade union which is registered under the Trade Union Act 1959.

There was a trade dispute (Trade Dispute) between the Appellant and the first respondent company （ $ 1^{st} $ Respondent) regarding certain terms and conditions of employment of the $ 1^{st} $ Respondent's employees to be incorporated into the $ 13^{th} $ Collective Agreement （ $ 13^{th} $ CA). The $ 13^{th} $ CA was supposed to take effect from 1.4.2017 to 31.3.2020.

The Trade Dispute was referred by the Minister of Human Resources to a three-member panel of the Industrial Court (IC) pursuant to s 26(1) of the Industrial Relations Act 1967 (IRA). The three-member panel of the IC consisted of a Chairman of the IC (Chairman), one representative from the Employees' Panel (Employees' Representative) and one representative from the Employers' Panel (Employers' Representative).

The IC's award (Award) was made after the IC had conducted a hearing and received evidence from witnesses called by both the Appellant and $ 1^{\mathrm{st}} $ Respondent [Evidence (IC)].

The Appellant took exception to the following four matters decided in the Award (4 Matters):

according to the unanimous decision of the three-member panel of the IC [Unanimous IC's Decision (No Increase in Maximum Rates)] , there would be no "automatic" increase of RM300.00 in all the maximum rates in the salary scale of the $ 1^{\mathrm{st}} $ Respondent's employees (Maximum Rates);

a majority of the IC, namely, the Chairman and the Employer's Representative [Majority IC's Decision (Annual Salary Increment)] , accepted the following proposal by the $ 1^{\mathrm{st}} $ Respondent regarding annual salary increment $ [1^{\mathrm{st}} $ Respondent's Proposal (Annual Salary Increment)] -

3% annual salary increment for the first three years of employment [ $ 1^{\mathrm{st}} $ Three Years (Employment)]; and

after the $ 1^{\mathrm{st}} $ Three Years (Employment), the employee will only receive a "monthly incentive" which will depend on -

if the employee is an "office worker", the amount of monthly incentive depends on the employee's performance; and

(ii) if the employee is a "production worker", the amount of monthly incentive depends on the employee's performance and the $ 1^{\mathrm{st}} $ Respondent's "Production Level". The Employees' Representative offered a dissenting decision [Dissenting Opinion of Employees' Representative (Annual Salary Increment)] which accepted the Appellant's proposal of a 6% annual salary increment [Appellant's Proposed 6% Increase (Annual Salary Increment)];

a unanimous decision of the three-member panel of the IC decided that there should be a 6% salary adjustment for the $ 1^{\mathrm{st}} $ Respondent's employees [Unanimous IC's Decision of 6% Increase (Salary Adjustment)]; and

a majority of the IC, namely, the Chairman and the Employer's Representative decided as follows regarding bonus [Majority IC's Decision (Bonus)]-

there would be a fixed bonus of one month (One-Month Fixed Bonus); and

any other bonus exceeding the One-Month Fixed Bonus, should be earned through the "Performance Linked Wage System" (PLWS). C. Proceedings in the High Court

The Appellant filed a Judicial review application (JRA) in the High Court for the following orders, among others:

an order of certiorari to quash the 4 Matters in the Award; and

a mandamus order to direct the IC to decide on the 4 Matters.

The High Court dismissed the JRA with costs of RM3,000.00 (High Court's Decision).

The Appellant lodged an appeal to the Court of Appeal against the High Court's Decision (This Appeal). D. Issues

The following questions arise in This Appeal:

whether This Appeal has been overtaken by the following two events (after the Award) -

the Appellant and $ 1^{\mathrm{st}} $ Respondent had entered into $ 14^{\mathrm{th}} $ Collective Agreement （ $ 14^{\mathrm{th}} $ CA). The $ 14^{\mathrm{th}} $ CA was effective from 1.4.2020 to 31.3.2023; and

the $ 1 5^{th} $ Collective Agreement （ $ 1 5^{th} $ CA） was concluded by the Appellant and $ 1^{st} $ Respondent. The $ 1 5^{th} $ CA has effect from 1.4.2023 to 31.3.2026; and

whether there should be any appellate intervention regarding the High Court's refusal to allow the JRA in respect of the 4 Matters. OUR DECISION E. Grounds for Judicial Review

It is not disputed that there are three grounds for Judicial Review, namely-

if-

a provision of written law;

an executive policy, action and decision; and

an administrative policy, action and decision; and

a decision in disciplinary proceedings, including a decision to dismiss a public officer (referred collectively in this judgment as the "Impugned Matter") - is illegal;

if there is procedural impropriety regarding an Impugned Matter; and

if an Impugned Matter is "irrational". In the Federal Court case of Ranjit Kaur S. Gopal Singh v Hotel Excelsior (M) Sdn Bhd [2010] 8 CLJ 629, at [15], Raus Sharif FCJ (as he then was) had decided as follows: [15] ... Historically, judicial review was only concerned with the decision-making process where the impugned decision is flawed on the ground of procedural impropriety. However, over the years, our courts have made inroad into this field of administrative law. Rama Chandran is the mother of all those cases. The Federal Court in a landmark decision has held that the decision of inferior tribunal may be reviewed on the grounds of "illegality", "irrationality" and possibly "proportionality" which permits the courts to scrutinise the decision not only for process but also for substance. It allowed the courts to go into the merit of the matter. Thus, the distinction between review and appeal no longer holds." (emphasis added). Ranjit Kaur had recognised the possibility of "disproportionality" as the fourth ground for Judicial Review.

In a JRA, even if there is evidence to support any one or more of the four grounds for Judicial Review [4 Grounds (JR)], the court nonetheless has a discretion to grant or refuse to issue a prerogative order. This is clear from O 53 r 2(3) of the Rules of Court 2012 (RC) and the following Federal Court case:

a permissive term "may" is employed in O 53 r 2(3) RC. Reproduced below is O 53 r 2(3) RC- "Upon the hearing of an application for judicial review, the Court shall not be confined to the relief claimed by the applicant but may dismiss the application or make any orders, including an order of injunction or monetary compensation: Provided that the power to grant an injunction shall be exercised in accordance with the provisions of section 29 of the Government Proceedings Act 1956 and section 54 of the Specific Relief Act 1950." (emphasis added); and

in Hoh Kiang Ngan v Mahkamah Perusahaan Malaysia & Anor [1995] 3 MLJ 369, at 393 to 394, Gopal Sri Ram JCA (as he then was) delivered the following judgment of the Federal Court- "In any event, assuming for a moment that the Industrial Court had given wrong reasons for holding that the appellant is a workman within the Act - and we hasten to repeat that this is not the case here - its ultimate decision being correct, prerogative relief whether in the form of certiorari or prohibition ought to have been withheld from the respondent. For, it must not be forgotten that these remedies are discretionary and are not available ex debito justitiae to an applicant who is able to demonstrate an error of law on the part of a public decision-taker. The true principle governing the grant of prerogative relief appears in the following passage in the judgment of Bose J That, however, is not to say that the jurisdiction will be exercised whenever there is an error of law. The High Courts do not, and should not, act as courts of appeal under Art 226. Their powers are purely discretionary and though no limits can be placed upon that discretion it must be exercised along recognized lines and not arbitrarily; and one of the limitations imposed by the courts on themselves is that they will not exercise jurisdiction in this class of case unless substantial injustice has ensued, or is likely to ensue. They will not allow themselves to be turned into courts of appeal or revision to set right mere errors of law which do not occasion injustice in a broad and general sense, for, though no legislature can impose limitations on these constitutional powers it is a sound exercise of discretion to bear in mind the policy of the legislature to have disputes about these special rights decided as speedily as may be. Therefore, writ petitions should not be lightly entertained in this class of case. In Kewal Krishnan v Minister for Local Bodies & Ors AIR 1959 J & K 17, the order of the Minister was challenged on the ground, inter alia, that the reasons contained in the order made by him contained wrong reasons for his decision. Wazir CJ, in refusing relief said (at p 19): Although the reasons given in the order of the Minister may be erroneous yet if the order can be supported on other valid grounds, writ of certiorari to quash that order cannot be granted. Suffice to say that in the circumstances of this case, the ultimate decision being correct, no injustice of any sort, whether substantial or inconsequential, has been occasioned because of the alleged wrong reasons." (emphasis added).

With regard to an award of IC on a CA, the court may invoke the doctrine of severability and issue a prerogative order in respect of only a part of the award which can be successfully challenged pursuant to any one or more of the 4 Grounds (Judicial Review). This is clear from the following judgment of Wan Suleiman FJ in the Federal Court in Non-Metallic Mineral Products Manufacturing Employees Union v Malaya Glass Factory Bhd [1985] 1 MLJ 129, at 130 and 131 to 132: "It is also common ground that only 5 items or articles in the collective agreement before the Industrial Court are in dispute. Fourteen other items are not in dispute, and Encik Gangadharan, for appellant says that even if there had been excess or lack of jurisdiction as regards the five, the learned Judge should not have quashed the whole award. We shall in due course consider the doctrine of severability. Jurisdiction to adjudicate on fourteen of the provisions of the Collective Agreement is conceded. We have held that three out of the five disputed ones are within jurisdiction. Encik Gangadharan says that the doctrine of severability may be invoked. That this Court can sever the good from the bad there is no doubt - (see pages 105/106 of the same edition of de Smith earlier mentioned). This principle was for instance applied in Bowman v State and Stace Services Commission [1972]] NZLR 78 and Regina v Arundel Justices Ex parte Jackson [1959] 2 WLR 798. After careful consideration we are satisfied that this is an instance where we can properly interfere with the exercise of that discretion. The severance of the two articles - Article 6 - "Check off" and Article 15 - Accident leave" do not in our considered view, make what remains of the Collective Agreement unworkable. We would therefore allow the appeal to the extent that the order of the High Court quashing the whole award of the Industrial Court handed down on June 30, 1978 be set aside, and instead, severing good from bad, we order that only the award in respect of Articles 6 and 15 be squashed." (emphasis added). F. Has This Appeal been overtaken by the conclusion of the $ 1 4^{th} $ CA and $ 1 5^{th} $ CA?

Notwithstanding the Trade Dispute regarding the $ 13^{\mathrm{th}} $ CA and This Appeal, the Appellant and $ 1^{\mathrm{st}} $ Respondent had subsequently entered into the $ 14^{\mathrm{th}} $ CA and $ 15^{\mathrm{th}} $ CA. The $ 14^{\mathrm{th}} $ CA and $ 15^{\mathrm{th}} $ CA had included all the 4 Matters raised by the Appellant with regard to the $ 13^{\mathrm{th}} $ CA in This Appeal.

we have allowed This Appeal and remitted these 4 Matters to be re-heard in the IC [Remitted Hearing (IC)]; and

these 4 Matters are decided in the Remitted Hearing (IC), either for or against the Appellant (or the $ 1^{\mathrm{st}} $ Respondent) (IC's $ 2^{\mathrm{nd}} $ Award), the IC's $ 2^{\mathrm{nd}} $ Award could only have limited effect from 1.4.2017 to 31.3.2020. As from 1.4.2020 to 31.3.2026, the $ 14^{\mathrm{th}} $ CA and $ 15^{\mathrm{th}} $ CA would apply. It is therefore clear that This Appeal has been overtaken by the conclusion of the $ 14^{\mathrm{th}} $ CA and $ 15^{\mathrm{th}} $ CA. On this ground alone, we will decline to exercise our discretion under O 53 r 2(3) RC to grant the orders of certiorari and mandamus in this case. In this regard, we refer to the following judgment of Sullivan J (as he then was) in the United Kingdom's High Court case of R (on the application of Meritgold Ltd) v London Borough of Barnet [2004] EWHC 248 (Admin), at [13] and [14]: [13] It is plain that the refusal to determine the 1999 application has long ago become academic. Whatever modifications were proposed to the fourth floor flat at that stage, they have been overtaken by the modifications that were proposed in 2001 and 2003. In 2001, for example, it was said that the various modifications were put forward to address the criticisms made by the Inspector in 1998. The Inspector in 2002 accepted that there were some differences but concluded that they did not address the underlying concerns of the Inspector in 1998. [14] Thus, the claimants have had the opportunity, in simple language, to put their best foot forward, so far as making changes to the additional flat on the fourth floor is concerned, on at least two occasions since 1999. It would therefore be quite pointless to allow this challenge to proceed." (emphasis added).

Despite our decision in the above paragraph 13, we will express our view on whether there should be any appellate intervention in respect of the High Court's refusal to allow the JRA with regard to the 4 Matters. G. What are the considerations to be considered by the IC in deciding a trade dispute regarding a CA?

We reproduce below ss 13(2A)(a) to (c), 17(2), 30(4), (5), (5A) and (6) IRA: "s 13(2A) A proposal for a collective agreement may provide for one or more of the following:

provision for training to enhance skills and knowledge of the workmen;

provision for an annual review of the wage system; and

provision for a performance-based remuneration system. s 17(2) As from such date and for such period as may be specified in the collective agreement it shall be an implied term of the contract between the workmen and employers bound by the agreement that the rates of wages to be paid and the conditions of employment to be observed under the contract shall be in accordance with the agreement unless varied by a subsequent agreement or a decision of the Court. s 30(4) In making its award in respect of a trade dispute, the Court shall have regard to the public interest, the financial implications and the effect of the award on the economy of the country, and on the industry concerned, and also to the probable effect in related or similar industries. s 30(5) The Court shall act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal form. s 30(5A) In making its award, the Court may take into consideration any agreement or code relating to employment practices between organizations representative of employers and workmen respectively where such agreement or code has been approved by the Minister. s 30(6) In making its award, the Court shall not be restricted to the specific relief claimed by the parties or to the demands made by the parties in the course of the trade dispute or in the matter of the reference to it under subsection 20(3) but may include in the award any matter or thing which it thinks necessary or expedient for the purpose of settling the trade dispute or the reference to it under subsection 20(3).” (emphasis added).

In deciding a trade dispute regarding a CA-

the IC may take into account the following considerations-

the matters enumerated in ss 13(2A)(a) to (c), 30(4) and (5A) IRA;

any relevant matter which has been adduced as evidence by the parties in the IC; and

as provided in s 30(6) IRA, even if a matter has not been tendered as evidence in the IC by the parties, the IC may nevertheless consider such matter if the IC is of the view that such matter is "necessary or expedient for the purpose of settling the trade dispute or the reference to it under subsection 20(3)" IRA (Relevant Considerations);

a Relevant Consideration is not a mandatory rule of law which has binding legal effect. The IC is only duty bound to take into account the Relevant Considerations;

the IC has a discretion to -

to accept or reject any Relevant Consideration; and

attach any weight to any Relevant Consideration. Needless to say, the IC should give reasons for the exercise of the above discretion;

in deciding a trade dispute in respect of a CA, by virtue of s 30(5) IRA, the IC "shall act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal form". Consequently, an award of IC-

may be based on "equity, good conscience and the substantial merits of the case without regard to technicalities and legal form" within the meaning of s 30(5) IRA; and

does not constitute a binding legal precedent as understood in the doctrine of stare decisis (with regard to judgments of the superior courts);

the IC's power under s 17(2) IRA (to vary a CA) should be read together with ss 13(2A)(a) to (c), 30(4), (5), (5A) and (6) IRA. In other words, the power of the IC pursuant to s 17(2) IRA is not absolute but is subject to ss 13(2A)(a) to (c), 30(4), (5) and (6) IRA. Consequently, we cannot accept the contention by the Appellant's learned counsel in This Appeal that the IC has "wide powers" under s 17(2) IRA; and

the IC should bear in mind that IRA a piece of beneficent social legislation - please refer to the Federal Court's judgment in Hoh Kiang Ngan, at p.387 to 388. H. Whether there should be appellate intervention regarding the Maximum Rates

The Appellant proposed an automatic RM300.00 increase in the Maximum Rates [Appellant's Automatic RM300 Increase (Maximum Rates)] on the following grounds, among others:

Maximum Rate does not mean "maximum value for the job" as adopted by the IC and High Court. The IC in this case had erroneously relied on a passage purportedly [Purported Passage (Palm Beach Hotel)] decided in a previous award of the IC in Palm Beach Hotel (Penang) Bhd v National Union of Hotel, Bar & Restaurant Workers [1988] 1 ILR 122 (Palm Beach Hotel). The Purported Passage (Palm Beach Hotel) could not be found in the IC's award in Palm Beach Hotel;

the IC and High Court had erroneously imposed the burden on the Appellant to justify the Appellant's Automatic RM300 Increase (Maximum Rates) by proving an increase in the value of the job done [Added Value (Employment)]. Before this case, Added Value (Employment) was "unheard of";

both the IC and High Court had failed to consider the three factors [3 Factors (Penfibre)] which had been laid down by the IC in Penfibre Sdn Bhd Penang v Penang & S. Prai Textile and Garment Industries Employees Union [1986] 1 ILR 323 (Penfibre) as follows -

the wages prevailing in comparable establishments in the same region;

any rise in the cost of living since the last revision of the wages; and

the financial capacity of the employer to pay higher wages (Employer's Financial Capacity). Of the 3 Factors (Penfibre), the Employer's Financial Capacity is the "limiting factor" because any increase in salary can only be awarded within the Employer's Financial Capacity;

in compliance with the first of the 3 Factors (Penfibre), the Appellant had adduced as Evidence (IC), three CAs (3 Comparable CAs) between the Appellant and three employers (who are in industries which are comparable to that of the $ 1^{\mathrm{st}} $ Respondent). The 3 Comparable CAs supported the Appellant's Automatic RM300 Increase (Maximum Rates);

there had been an automatic increase of RM300.00 [Automatic RM300.00 Increase (Minimum Rates)] in all the minimum rates in the salary scale of the $ 1^{\mathrm{st}} $ Respondent's employees (Minimum Rates) pursuant to the Minimum Wage Order 2012 (MWO). In view of the Automatic RM300.00 Increase (Minimum Rates), all the $ 1^{\mathrm{st}} $ Respondent's employees had a "legitimate expectation" that there would be an automatic RM300.00 increase in the Maximum Rates;

the Maximum Rates had not been increased for the past eight years and for this period of eight years, the Consumer Price Index (CPI) had risen by 15.20 points. Furthermore, the $ 1^{\mathrm{st}} $ Respondent's factory is situated in the Klang Valley where the cost of living is higher; and

there were certain categories of the $ 1^{\mathrm{st}} $ Respondent's employees who had enjoyed an automatic RM300.00 increase in their Maximum Rates. Consequently, the other categories of the $ 1^{\mathrm{st}} $ Respondent's employees who did not enjoy an automatic RM300.00 increase in their Maximum Rates, would feel "under appreciated" and discriminated against.

According to the Unanimous IC's Decision (No Increase in Maximum Rates) -

the Minimum Rate represents the "minimum value for the job", namely, the entry level into the $ 1^{\mathrm{st}} $ Respondent's employment [Entry Point (Employment)];

the Maximum Rate represents the "maximum value for the job". If there is an automatic increase in the Maximum Rate, this means an automatic extension of the annual salary increment of the $ 1^{\mathrm{st}} $ Respondent's employees;

there cannot be an increase in the Maximum Rates without any evidence of Added Value (Employment). Reliance was placed by the IC on -

a previous award of the IC in Palm Beach Hotel;

the High Court's decision in Tri-Wall (Malaysia) Sdn Bhd v Paper Products Manufacturing Employees' Union & Anor; and

the IC's award in Kuala Lumpur Glass Manufacturers Co Sdn Bhd v Non-Metallic Mineral Products Manufacturing Employees' Union [1988] 3 MELR 58, at 62;

the Minimum Rate concerns the Entry Point (Employment) and cannot be equated with the Maximum Rate which is based on the Added Value (Employment);

the Appellant had failed to discharge the burden to prove any added value to the job of the $ 1^{\mathrm{st}} $ Respondent's employees so as to justify an increase in the Maximum Rates;

the MWO was made under the National Wages Consultative Council Act 2022 (NWCCA) after the National Wages Consultative Council (NWCC) had conducted a study under s 21(b) NWCCA regarding a RM300.00 increase in the Minimum Rates. The NWCC did not conduct a study in respect of any increase in the Maximum Rates;

the 3 Comparable CAs did not support an automatic increase of RM300.00 in the Maximum Rates; and

the $ 1^{\mathrm{st}} $ Respondent's proposed salary scale for the $ 13^{\mathrm{th}} $ CA (which included the Maximum Rate and Minimum Rate), was "fair and reasonable".

In paragraphs 15 to 35 of the written judgment of the High Court (High Court's Written Judgment), the learned High Court Judge had explained in detail why there was no ground for a Judicial Review of the Unanimous IC's Decision (No Increase in Maximum Rates).

We are of the following view regarding the Unanimous IC's Decision (No Increase in Maximum Rates):

Added Value (Employment) is in consonance with s 13(2A)(c) IRA (performance-based remuneration system). It is therefore clear that Added Value (Employment) is a Relevant Consideration which had been correctly taken into account by the IC in this case. Subsection (2A) had been inserted into s 13 IRA by way of the Industrial Relations (Amendment) Act 2007 (Act A1322). Act A1322 came into effect on 28.2.2008. Cases decided before the enforcement of s 13(2A) IRA, including Penfibre, should be read with caution;

Added Value (Employment) cannot be confined to additional experience of the $ 1^{\mathrm{st}} $ Respondent's employees in performing the same job over the years (Job Familiarisation). If Added Value (Employment) is only limited to Job Familiarisation, this will not only be contrary to s 13(2A)(c) IRA but will also render nugatory that statutory provision which had been introduced by Act A1322;

an Automatic RM300.00 Increase (Minimum Rates) (by reason of the application of the MWO) does not, ipso facto, support the Appellant's Automatic RM300 Increase (Maximum Rates). This is because the Minimum Rate concerns the Entry Point (Employment) whereas the Maximum Rate is premised on Added Value (Employment). If the IC had relied on the Automatic RM300.00 Increase (Minimum Rates) and/or the MWO to justify the Appellant's Automatic RM300 Increase (Maximum Rates), the IC would have committed an error law by taking into account irrelevant matters, ie., the Automatic RM300.00 Increase (Minimum Rates) and/or the MWO;

the Evidence (IC) did not support Added Value (Employment) which could justify the Appellant's Automatic RM300 Increase (Maximum Rates);

if the Appellant's Automatic RM300 Increase (Maximum Rates) was accepted, as a corollary, there would be an increase in the annual salary increment across the board for all the employees of the 1 $ ^{st} $ Respondent. The 1 $ ^{st} $ Respondent's financial capacity, to pay for the automatic RM300.00 increase in the Maximum Rates as well as to bear the corresponding increase in the annual salary increments, was certainly a Relevant Consideration which would justify a rejection of the Appellant's Automatic RM300 Increase (Maximum Rates); and

in view of the above reasons supporting the Unanimous IC's Decision (No Increase in Maximum Rates), the IC's erroneous citation of the Purported Passage (Palm Beach Hotel) in the Award, in itself-

was of no consequence in this case; and

did not invalidate the Unanimous IC's Decision (No Increase in Maximum Rates).

In view of the reasons and evidence stated in the above paragraph 20, there was no ground for Judicial Review of the Unanimous IC's Decision (No Increase in Maximum Rates) by the learned High Court Judge on the following grounds:

the IC did not commit any error of law in arriving at the Unanimous IC's Decision (No Increase in Maximum Rates); and

the Unanimous IC's Decision (No Increase in Maximum Rates) was not an "irrational" decision which no reasonable IC would have made. In any event, we are not persuaded that there was any error in the exercise of the High Court's discretion to refuse to grant the orders of certiorari and mandamus with regard to the Unanimous IC's Decision (No Increase in Maximum Rates). We have no hesitation to dismiss This Appeal in respect of the Unanimous IC's Decision (No Increase in Maximum Rates). I. Should there should be appellate intervention regarding annual salary increment?

The following contentions had been advanced in support of the Appellant's Proposed 6% Increase (Annual Salary Increment):

the Appellant's Proposed 6% Increase (Annual Salary Increment) was in line with the time tested "step based system" (Step Based System). When the IC adopted the Added Value (Employment) and not the Step Based System, there was an "automatic devaluation" of the annual salary increment;

the 3 Comparable CAs had provided for fixed amounts of annual salary increments and should be followed in this case;

before the Trade Dispute regarding the $ 13^{\mathrm{th}} $ CA,the $ 1^{\mathrm{st}} $ Respondent had adopted fixed amounts of annual salary increments for 35 years;

the Appellant's Proposed 6% Increase (Annual Salary Increment) catered for the rise in the cost of living;

the Appellant's Proposed 6% Increase (Annual Salary Increment) recognised the skill sets and work experience of the $ ^{1} \mathrm{st} $ Respondent's employees "over the years";

the $ 1^{\mathrm{st}} $ Respondent's employees had a "legitimate expectation" regarding the implementation of the Appellant's Proposed 6% Increase (Annual Salary Increment) based on the past practice of the $ 1^{\mathrm{st}} $ Respondent;

the Appellant's Proposed 6% Increase (Annual Salary Increment) would serve as an incentive for the employees to remain in the $ 1^{\mathrm{st}} $ Respondent, continue their loyal service and contribute to the $ 1^{\mathrm{st}} $ Respondent's success;

an annual salary increment represented the added value of the employees (in terms of their skill and experience) to the $ ^{1 \mathrm{st}} $ Respondent. Reliance was placed on the IC's award in Association of Bank Officers, Peninsular Malaysia v Malayan Commercial Banks Association, IC Award No. 115/1980 (Association of Bank Officers' Case); and

the Appellant relied on a previous award of IC in Kesatuan Pekerja-pekerja Perkilangan Perusahaan Makanan v Nestle Manufacturing Malaysia Sdn Bhd which decided that an annual salary increment was a "fixed component" in both the "Profitability Model" and "Productivity Model". Consequently, the Appellant was not required to prove "added value" which could justify an annual salary increment.

The reasons for the Majority IC's Decision (Annual Salary Increment) were as follows:

the $ 1^{\mathrm{st}} $ Respondent's Proposal (Annual Salary Increment) was "much more productive oriented" which contributed to the added value of how the $ 1^{\mathrm{st}} $ Respondent's employees could apply themselves to the job;

the Majority IC's Decision (Annual Salary Increment) followed the IC's award in Kesatuan Pekerja-Pekerja Polyplastics Asia Pacific Sdn Bhd v Polyplastics Asia Pacific Sdn Bhd [2016] 2 ILR 159 which decided that the justification for an annual salary increment was not to meet an increase in the cost of living; and

the 1 $ ^{st} $ Respondent's Proposal (Annual Salary Increment) had a "reasonable parity between the employee's contribution and the reward" to the employee.

The Dissenting Opinion of Employees' Representative (Annual Salary Increment) accepted the Appellant's Proposal (Annual Salary Increment) due to the "past practice" the $ 1^{\mathrm{st}} $ Respondent to "motivate its employees".

In paragraphs 46 to 51 of the High Court's Written Judgment, the learned High Court Judge decided that the Majority IC's Decision (Annual Salary Increment) could not be challenged by way of Judicial Review.

We dismiss This Appeal regarding the Majority IC's Decision (Annual Salary Increment). Our reasons are as follows:

in accordance with s 13(2A)(c) IRA, annual salary increment should be based on Added Value (Employment) and not on Step Based System. As explained in the above sub-paragraph 20(1), cases which have been decided prior to the enforcement of Act A1322 [which introduced s 13(2A)(c) IRA], including Association of Bank Officers' Case, should be read with caution;

Added Value (Employment) cannot be confined to Job Familiarisation - please refer to the above sub-paragraph 20(2);

the Evidence (IC) did not support -

the Appellant's Proposed 6% Increase (Annual Salary Increment); and

the Dissenting Opinion of Employees' Representative (Annual Salary Increment);

the past practice of the $ 1^{\mathrm{st}} $ Respondent in providing for fixed amounts of annual salary increments for 35 years, could not bar or estop the making of the $ 1^{\mathrm{st}} $ Respondent's Proposal (Annual Salary Increment) for the purpose of the $ 13^{\mathrm{th}} $ CA. In the Supreme Court case of Marlin bte Rajiman & Ors v MAA Services Sdn Bhd [1994] 2 MLJ 404, at 406, Eusoff Chin SCJ (as he then was) decided that by virtue of s 30(5) IRA, estoppel cannot apply in proceedings in the IC;

there was no error of law committed with regard to the Majority IC's Decision (Annual Salary Increment). Nor was the Majority IC's Decision (Annual Salary Increment) so perverse or unreasonable which no reasonable IC would have made; and

the Appellant had failed to persuade us that the learned High Court Judge had erred in the exercise of his discretion to dismiss the JRA regarding the Majority IC's Decision (Annual Salary Increment). J. Whether there should be appellate intervention regarding the Unanimous IC's Decision of 6% Increase (Salary Adjustment)

The Appellant proposed for a 8% increase in the salary adjustment [Appellant's Proposed 8% Increase (Salary Adjustment)]. The The following grounds were advanced in support of the Appellant's Proposed 8% Increase (Salary Adjustment):

the Appellant's Proposed 8% Increase (Salary Adjustment) would cater for the rise in the cost of living;

the rate of increase in salary adjustment had been stagnant for the previous 3 CAs encompassing a period of nine years; and

the $ 1^{\mathrm{st}} $ Respondent is a profitable enterprise through the hard work of its employees and can afford an 8% increase in the salary adjustment.

According to the Unanimous IC's Decision of 6% Increase (Salary Adjustment) -

there was reliance on the IC's previous award in Malayan Commercial Banks Association v National Union of Bank Employees [1982] 1 ILR 246 which decided that as a general rule, an increase in salary based on an increase in the CPI, should not be less than 60% or more than 2/3 of the average increase of the CPI over the previous three years;

the Unanimous IC's Decision of 6% Increase (Salary Adjustment) had accepted the IC's award in Penfibre;

an employer should not increase salaries solely because the employer is making a profit;

the IC has to balance between the employees' interest and the Employer's Financial Capacity as decided by the IC in Malayan Agriculture Producers' Association v National Union of Plantation Workers, IC Award No. 8/1968;

the Appellant's Proposed 8% Increase (Salary Adjustment) was higher than the increase in the CPI;

the Appellant could not explain what "skill enhancement" could be obtained by the Appellant's Proposed 8% Increase (Salary Adjustment);

the IC considered a host of non-monetary benefits granted by the $ 1^{\mathrm{st}} $ Respondent to its employees （ $ 1^{\mathrm{st}} $ Respondent's Non-Monetary Benefits for Employees），eg., cost of meals, medical benefits and insurance, which was equivalent to nearly 50 sen per month. The conferment of the $ 1^{\mathrm{st}} $ Respondent's Non-Monetary Benefits for Employees, ensured the employees had a higher disposable income; and

the $ 1^{\mathrm{st}} $ Respondent had provided monetary benefits to its employees in the form of overtime and other fixed monetary allowances （ $ 1^{\mathrm{st}} $ Respondent's Monetary Benefits for Employees). The $ 1^{\mathrm{st}} $ Respondent's Monetary Benefits for Employees had been taken into account by the IC in this case.

According to paragraphs 36 to 42 of the High Court's Written Judgment, the learned High Court Judge explained why the Unanimous IC's Decision of 6% Increase (Salary Adjustment) could not be quashed by way of a certiorari order.

We have perused the grounds for the Unanimous IC's Decision of 6% Increase (Salary Adjustment) and the High Court's Written Judgment which dismissed the JRA in respect of the Unanimous IC's Decision of 6% Increase (Salary Adjustment). This Appeal regarding the Unanimous IC's Decision of 6% Increase (Salary Adjustment) is dismissed on the following grounds:

the Unanimous IC's Decision of 6% Increase (Salary Adjustment) should considered together with the following benefits conferred by the $ 1^{\mathrm{st}} $ Respondent on its employees-

the $ 1^{\mathrm{st}} $ Respondent's Non-Monetary Benefits for Employees; and

the $ 1^{\mathrm{st}} $ Respondent's Monetary Benefits for Employees Taking into account the above two benefits, the Unanimous IC's Decision of 6% Increase (Salary Adjustment) was fair and reasonable because -

the increase in CPI had been considered; and

(ii) the higher cost of living for the $ 1^{\mathrm{st}} $ Respondent's employees in the Klang Valley had been taken into account;

the IC had rightly maintained a balance between the interest of the $ 1^{\mathrm{st}} $ Respondent's employees and the $ 1^{\mathrm{st}} $ Respondent's financial capacity;

the IC did not commit an error of law with regard to the Unanimous IC's Decision of 6% Increase (Salary Adjustment);

the Unanimous IC's Decision of 6% Increase (Salary Adjustment) was not irrational in the sense that no reasonable IC would have made; and

there was no error in respect of the exercise of the High Court's discretion in dismissing the JRA regarding the Unanimous IC's Decision of 6% Increase (Salary Adjustment). K. Should there be appellate intervention regarding the Majority IC's Decision (Bonus)?

The Appellant had proposed a fixed sum of 1.8 months' bonus in the $ 13^{\mathrm{th}} $ CA [Appellant's Proposal (Fixed 1.8 Months' Bonus)]. The following grounds had been submitted in support of the Appellant's Proposal (Fixed 1.8 Months' Bonus):

both the IC and High Court had failed to consider the 3 Comparable CAs which provided for fixed sums of two months' bonus;

the Appellant relied on the judgment of Su Geok Yiam J in Kesatuan Eksekutif Airod v Airod Sdn Bhd & Anor, Judicial Review Application no. 25-7-01/2015, which held that bonuses are given to employees by their employers so as to enable the employees to-

share in the employers' profits; and

encourage the employees to work harder;

before the $ 13^{\mathrm{th}} $ CA, all the CAs for the past 30 years had provided for a fixed sum of 2 months' bonus;

an acceptance of the Appellant's Proposal (Fixed 1.8 Months' Bonus) would mean that at the end of the year, the $ 1^{\mathrm{st}} $ Respondent's employees would be able to "manage their children's school expenses and other financial commitments"; and

the $ 1^{\mathrm{st}} $ Respondent's financial performance had been strong.In fact, as at 31.1.2017, the $ 1^{\mathrm{st}} $ Respondent's profit before tax was RM124,433,000.00, the highest in its history.

According to the Majority IC's Decision (Bonus) -

bonus is given by the $ 1^{\mathrm{st}} $ Respondent based on two considerations, namely-

the productivity of the $ 1^{\mathrm{st}} $ Respondent's employees; and

the $ 1^{\mathrm{st}} $ Respondent's profitability [2 Relevant Considerations (Bonus)]; and

premised on the 2 Relevant Considerations (Bonus), the Majority IC's Decision (Bonus) decided on One-Month Fixed Bonus and any other bonus exceeding the One-Month Fixed Bonus, should be earned through PLWS.

The Employees' Representative gave a dissenting decision on bonus, namely-

a fixed sum of 1.5 months bonus (1.5 Months Fixed Bonus) should be given; and

any other bonus exceeding the 1.5 Months Fixed Bonus, should be earned through PLWS.

In paragraphs 52 to 57 of the High Court's Written Judgment, the learned High Court Judge explained why there could not be a Judicial Review of the Majority IC's Decision (Bonus).

We decide that there is no ground for appellate intervention regarding the Majority IC's Decision (Bonus). Our reasons are as follows:

the Majority IC's Decision (Bonus) had not erred in law by taking into account the 2 Relevant Considerations (Bonus);

no error of law was committed with regard to the Majority IC's Decision (Bonus);

the Majority IC's Decision (Bonus) was not so unreasonable which no reasonable IC would have made; and

no appealable error had been committed by the learned High Court Judge in refusing the JRA in respect of the Majority IC's Decision (Bonus). L. Outcome of This Appeal

Premised on the above reasons and Evidence (IC) the Appellant:

This Appeal is dismissed;

the High Court's Decision is affirmed; and

the Appellant shall pay to the $ 1^{\mathrm{st}} $ Respondent a sum of RM10,000.00 as costs for This Appeal (subject to allocatur fee).

A draft copy of this judgment (Draft) had been previously forwarded to Ravinthran N. Paramaguru and Faizah bt. Jamaludin JJCA. Both my learned brother and sister had agreed with the Draft. DATE: 5 NOVEMBER 2025 WONG KIAN KHEONG Judge Court of Appeal Mr. R. Chandrasegaran, Mr. V.K. Raj & Counsel for Ms. S. P. Devi Sangaran (Messrs A. Rajadurai P.Kuppusamy & Co.) Counsel for Mr. Rutheran Sivagnanam & Ms. Chong Yi Zhen (Messrs R. Sivagnanam & Associates) the $ 1^{\mathrm{s t}} $ Respondent: