Mbsb Bank Berhad v 1. ) Mahkamah Perusahaan Malaysia (WA-25-208-04/2022)

AZHAR BIN ABU BAKAR (NO. K/P: 801022-07-5821) …RESPONDEN-RESPONDEN JUDGMENT [1] There is before me an application for judicial review to quash the Award of the Industrial Court dated 28.4.2022. In the Award, the Industrial Court found that the 2nd respondent was dismissed without just cause and excuse by the applicant Bank. [2] Leave to commence judicial review was granted by this Court on 16.6.2022. The Factual Background [3] The factual background that can be distilled from the grounds of the Award of the Industrial Court is as follows. [4] The 2nd respondent commenced employment with the applicant Bank on 19.6.2006 as an executive on a contract basis. Subsequently, by a letter dated 28.6.2007, the 2nd respondent was confirmed as a permanent employee of the Bank in his position as Executive Officer Grade 1. [5] The 2nd respondent’s last designation in the Bank was as a Manager, a post he held since his transfer to Asian Finance Bank Berhad (“AFB”), another Bank acquired by the applicant Bank, MBSB Bank Berhad effective 2.4.2018 until his dismissal on 13.9.2019. [6] On 8.7.2019, the 2nd respondent received an email requesting him to attend a meeting on 11.7.2019. The email states as follows: Dear En Azhar, Please be informed that there will be a meeting session with Human Resource Department as follows: Date : 11 July 2019 (Thursday) Time : 10.00 am Venue : HRD Meeting Room Level 5 Wisma MBSM Bank Kindly make yourself available for the said meeting. Your travelling expenses will be reimburse[d] by the Bank based on your entitlement. The claim must be supported by original receipts or supporting documents. [7] At the meeting, the representative from the Bank Internal Audit interviewed the 2nd respondent about the allegations that the travelling claims he submitted were fraudulent. [8] Subsequent to the interview, the 2nd respondent was issued with a show cause letter dated 15.8.2019. The 2nd respondent was then requested to provide his written explanation for the aforesaid allegation of misconduct. There were three charges proffered against the 2nd respondent. For context, they are reproduced here: [1] That you had on 27 February 2018, misrepresented the Bank by submitting mileage and parking claim vide Travel Claim Form, purportedly incurred by you on 25 to 26 February 2018 with the total amount of RM335.60 to visit and conduct surprise cash check at Kangar Branch and Langkawi Branch despite you had not travelled using your car for the above visit. [2] That you had on 26 September 2018, misrepresented the Bank by submitting a mileage claim vide Travel Claim Form, purportedly incurred by you on 19 to 21 September 2018 with the amount of RM400.00 to visit and conduct surprise cash check at Kangar Branch and Langkawi Branch despite you had not travelled using your car for the above visit. [3] That you had on 31 October 2018, misrepresented the Bank by submitting a mileage claim vide Travel Claim Form, purportedly incurred by you on 24 to 25 October 2018 with the total amount of RM400.00 to visit and conduct surprise check at Kangar Branch and Langkawi Branch, despite you had not travelled using your car for the above visit. [9] The 2nd respondent then submitted his written explanation vide his letter addressed to the Chief Corporate Officer dated 22.8.2019. In short, the 2nd respondent said that it was an honest mistake on his part. The written explanation can be summarised as follows:

The 2nd respondent regretted submitting the travelling mileage claims. According to the 2nd respondent, the submission was based on the misunderstanding that the claims were within his entitlement.

The 2nd respondent apologised for the conduct and assured the applicant Bank that he would be more alert in the future.

The duty to perform the monthly cash surprise checking was not within the 2nd respondent’s job scope, but he nevertheless undertook it upon being instructed by the management.

However, the 2nd respondent, at one point, informed his superior that he was not able to assist the management anymore due to his heavy workload.

If the 2nd respondent intended to gain monetary advantage out of the monthly cash surprise checking, he would not have informed his superior to exclude him from the task in the future.

On the contrary, the 2nd respondent saved the Bank’s expenses when he performed the monthly duty. According to the 2nd respondent, his outstation accommodation entitlement was RM210 per night, but he had decided to stay at the cheapest guest house, which cost between RM50 and RM80 per night. [10] Unfortunately, the Bank found the explanation to be unacceptable. The 2nd respondent was dismissed. The letter of dismissal, dated 13.9.2019 inter alia, states as follows: After due consideration of your explanation, we regret to inform you that the Bank finds it unacceptable. Pursuant to this and in view of the seriousness of the misconduct committed, the Bank can no longer repose the necessary trust and confidence in you to effectively discharge your duties as an employee of the Bank. Hence, you are hereby dismissed from the service of the Bank with immediate effect. [11] Aggrieved, the 2nd respondent made a representation under s 20 of the Industrial Relations Act 1967 (“IRA”). The dispute was then referred to under s 20(3) of the IRA by the Minister of Human Resources to the Industrial Court for an Award. At the Industrial Court [12] The issue before the Industrial Court was whether the misconduct complained of by the Bank constituted just cause or excuse for dismissal. [13] The 2nd respondent’s case before the Industrial Court can be summarised as follows:

The 2nd respondent submitted a mileage claim by travelling via car instead of the train since he was under the understanding that he was entitled to do so.

The 2nd respondent had taken a proactive step in saving the costs of the Bank by staying at a low-budget accommodation, which was in the range of RM50.00 to RM80.00 per night when he was entitled to about RM210.00 per night.

In any event, conducting the monthly surprise check at the Bank’s branches was not within the term of the 2nd respondent’s scope of employment. The 2nd respondent did that out of goodwill to assist the Bank in saving costs since the relevant branches were within his supervision. In the circumstances, there was no need to send another member of the staff for the job. In fact, due to the increased workload, the 2nd respondent informed his supervisor that he could not continue conducting the surprise check from January 2019. If the 2nd respondent had indeed wanted to take advantage of the disputed claims, he would have asked for the exercise to be continued.

The Bank had a dedicated Operation Unit to conduct the monthly surprise check. However, the 2nd respondent took up the job upon being instructed to do so. [14] It is the applicant Bank’s pleaded case that the 2nd respondent had purportedly committed an act of dishonesty which is against the express terms of his service as reflected in para 2.16(3)(i) of the People Operations Division and Policies & Procedures (“Company Policy”). It states as follows: An employee using own vehicle in the course of official duties irrespective of distance travelled is entitled to claim mileage provided the employee is not entitled to any other transport/travel allowance, unless, otherwise prescribed in the terms of the benefits given. [15] Based on this provision, the learned Chairman of the Industrial Court took cognisance that what is prohibited is for an employee to submit a double travelling claims, which include both mileage and another mode of transport. The learned Chairman was of the view that there is nowhere in the Company Policy which says that an employee is prohibited from making a mileage claim if he were to travel by another mode of transport. [16] The applicant’s case is that the 2nd respondent had admitted to committing the purported act of dishonesty and “confessed that he already did it”. According to the learned Chairman, this is not altogether true since the 2nd respondent had only admitted to his honest mistaken breach of the SOP as reflected in the Company Policy and not on any element of dishonesty. In any event, the burden of proving dishonesty is on the applicant Bank. [17] The learned Chairman of the Industrial Court was of the view that there was no element of dishonesty involved. The reasons, according to the Industrial Court, are as follows:

The 2nd respondent had indeed travelled to those destinations, as reflected in the Claim Forms.

Compared to another mode of public transport, for instance, the ETS train and the taxi fare, it is undisputed that the claims made by the 2nd respondent in the charges proffered against him were lesser – hence saving the applicant Bank’s costs.

The impugned claims were approved by the 2nd respondent’s superior, including COW-2, Nik Khairul Azwan bin Md Yazin. The approval was made even though there were no supporting documents, such as Touch & Go receipts, to support the 2nd respondent’s claim.

COW-2 admitted that the investigation against the 2nd respondent was based on complaints made by the 2nd respondent’s sales staff and not from the Bank’s own initiatives.

Under the circumstances, the Industrial Court found that the mode of travel by way of a mileage claim was acceptable by the 2nd respondent’s superiors, including COW-2. In any event, there was a lapse of more than a year from the claims’ approval and the issuance of the show cause letter to the 2nd respondent. There were no explanations given by the applicant Bank during the proceedings before the Industrial Court.

The Industrial Court further held that the applicant Bank acted unconscionably, which was detrimental to the 2nd respondent. On the one hand, it had approved the 2nd respondent’s claims without any further enquiries, even if they were without the supporting documents. On the other, the Bank contended that it was an act of “dishonesty”, which according to the Industrial Court, amounted to approbate and reprobate. [18] For the aforesaid reasons, the Industrial Court further held that the Bank had failed to prove dishonesty on the part of the 2nd respondent. [19] The learned Chairman then referred to two judgments of the Federal Court in Wong Yuen Hock v Syarikat Hong Leong Assurance Sdn Bhd and anor Appeal [1995] 2 MLJ 753 FC dan Milan Auto Sdn Bhd v Wong Seh Yen [1995] 3 MLJ 537 FC. In Milan Auto, the Federal Court was of the view that the function of the Industrial Court in a reference under s 20 of the IRA is twofold: first, to determine whether the alleged misconduct has been established, and second, whether the proven misconduct constitutes just cause or excuse for the dismissal. [20] The Industrial Court then concluded that the applicant Bank had failed to prove on the balance of probabilities that the alleged misconduct referred to in the show cause letter dated 15.8.2018 had justified the dismissal of the 2nd respondent from his employment. The dismissal, according to the Industrial Court, was made without just cause or excuse. The Bank had failed to show that it had acted bona fide in terminating the 2nd respondent’s services. [21] As to the remedy, the Industrial Court held that the time had lapsed from the date of the 2nd respondent’s dismissal to the date of the Award. Hence, reinstatement is not an appropriate remedy in the circumstances. [22] The Industrial Court then proceeded to award RM41,774 (less 20%) back wages for eight months and a further sum of RM78,324 compensation in lieu of reinstatement. The Court then ordered the applicant Bank to pay the said sum of RM120,098 to the 2nd respondent (collectively referred to as the “First Award”). [23] At this stage, I have to put on record that the case was heard by Puan Wong Chee Lin. Subsequently, Puan Wong was transferred to another agency and another Chairman, Tuan Muhammad Bukhari bin Ab Hamid, took over the conduct of the matter and delivered the Award based on the pleadings and records of proceedings prepared by Puan Wong. [24] Tuan Muhammad Bukhari initially handed down the First Award on 1.3.2022. [25] Subsequently, Tuan Muhammad Bukhari rectified the Award on 26.4.2022, which, according to him, was made pursuant to s 30(9) of the IRA. S 30(9) allows the Industrial Court to rectify any clerical error or mistake arising from any accidental slip or omission in any award. [26] Under the rectified Award (the “Second Award”), which he said was due to a clerical error made inadvertently, Tuan Muhammad Bukhari increased the backwages awarded from eight months to 20 months. The compensation in lieu of reinstatement remained the same at RM78,324. [27] The backwages were recalculated and increased from RM41,774 to RM104,432. [28] The final amount to be paid by the applicant based on the Second Award was RM182,756. It states as follows: FINAL ORDER OF THIS COURT It is this Court’s order that the Bank pays the Claimant a sum of Ringgit Malaysia One Hundred Eighty Two Thousand Seven Hundred and Fifty Six (RM182,756.00) only less statutory deduction (if any) within 30 days from the date of this Award. At the High Court: The judicial review [29] Aggrieved by the Award, the applicant Bank commenced this application for judicial review to quash the same. [30] This application for judicial review is supported by the affidavit of Ahmad Syukri bin Ab Rahman in Encl 3 (“AIS-3”). Encik Ahmad Syukri is the Head, Industrial Relations and Governance of the applicant Bank. There are further affidavits filed between the parties, which will be referred to in this judgment as and when the need arises. [31] Before me, learned counsel for the applicant submitted that while the learned Chairman took cognisance of the 2nd respondent’s admission of breaching the applicant’s Bank SOP, he had failed to consider the statutory percentage, which should be deducted for contributory misconduct. According to learned counsel, one of the factors to be considered in the Second Schedule of the IRA is that any relief given shall take into consideration the contributory conduct of the workman. [32] It is from this perspective that learned counsel contended that the learned Chairman had committed an error of law. [33] Secondly, learned counsel submitted that the learned Chairman should have considered the post-dismissal earnings of the 2nd respondent. Under cross-examination, the 2nd respondent admitted that after his dismissal, he had worked as a Grab driver, earning about RM50 per day. [34] My attention was then drawn to para 3 of the Second Schedule, which states that where there are post-dismissal earnings, a percentage of such earnings, to be decided by the Industrial Court, shall be deducted from the backwages given. Therefore, the applicant’s case is that as long as there are post-dismissal earnings, the Industrial Court shall deduct a percentage from the backwages. [35] Learned counsel highlighted that the learned Chairman had erroneously held that there were no post-dismissal earnings and that the 2nd respondent remained unemployed when there was sufficient evidence at the hearing that the 2nd respondent had obtained earnings after his dismissal. [36] Thirdly, learned counsel for the applicant, citing Wong Yuen Hock, submitted that the learned Chairman should have confined to firstly ascertain if the three charges proffered against the 2nd respondent had been proven and, if so, secondly to proceed to determine the proportionality of the punishment. In short, learned counsel contended that the learned Chairman had committed an error of law when he held that the 2nd respondent’s misconduct should be limited to a breach of SOP in making the travelling claims. [37] Learned counsel for the applicant submitted that the learned Chairman had erred in failing to make a finding of the 2nd respondent’s dishonesty when the 2nd respondent himself admitted in his letter of explanation on the “charge of an act of dishonesty” on his travelling claims. In the light of this explanation made by the 2nd respondent, learned counsel for the applicant submitted that the Industrial Court was under no further obligation to make any further inquiry; see UMW Toyota (M) Sdn Bhd v Chow Weng Thiem [1996] 5 MLJ 678. [38] The High Court held that in the light of the respondent’s admission, the court was under no further obligation to make any further inquiry since a decision could be made based on the admission made. [39] Fourthly, learned counsel for the applicant submitted that the learned Chairman of the Industrial Court had erroneously concluded that the 2nd respondent’s reply to the show cause letter was limited to the mistake of the SOP of the 2nd respondent instead of dishonesty when at all material times this was not the 2nd respondent’s pleaded case. [40] The line of argument of learned counsel is that having admitted in the show cause letter that he had committed an act of dishonesty, the 2nd respondent is estopped from claiming otherwise; see Mayland Lending Sdn Bhd v Pua Woon Kee [2011] MLRAU 152. In any event, it is the applicant’s case that an admission is under s 115 of the Evidence Act 1959 and is the strongest piece of evidence in support of the applicant’s claim. Analysis [41] The main ground of the applicant’s challenge against the Award of the Industrial Court is anchored on the purported admission of the commission of dishonesty. Learned counsel for the applicant submitted that the learned Chairman had erred in concluding the dishonesty had not been established as stated in his grounds: This Court is of the opinion that [the] Company had failed in every sense and that not even a single iota of evidence throughout the whole proceedings has been in any way proven by the Company in respect of the element of dishonesty save and except the so-called admission which after all, with due respect, was the mistake of SOP of Claimant instead of being dishonest to Company in committing dishonest acts portrayed by the Company. [42] Though the word “dishonest” does not appear in the charges preferred against the 2nd respondent, the pleaded case of the applicant is premised on the same. Para 10 of the Statement of Reply states as follows:

In his reply dated 22.8.2019 to the Company’s Show Cause letter, the Claimant admitted to committing the act of dishonesty and confessed he already did it. Para 7(b) of the Statement of Case is the summary of the Claimant’s justification for committing the dishonest acts. [43] Let me state what the law is. For an admission to bind the maker, it must be plain, unequivocal and unconditional. In short, as stated by Sargant J (later LJ) in Ellis v Allen [1914] 1 Ch 904, it must be “a clear admission of facts in the face of which it is impossible for the party making it to succeed”. [44] I have gone through the reply to the show cause letter. What the 2nd respondent said in the letter is that he was aware that he was charged with “an act of dishonesty”. But at the same time, as alluded to earlier, the 2nd respondent said he did what he did due to his “misunderstanding” and he “overlooked the company’s policy”. The 2nd respondent also explained in the letter that he thought he could make the claim “based on my travelling entertainment” and did not know that he could not do that. [45] It is quite apparent to me that the purported admission is not unconditional at all. To my mind, it does not justify the Bank’s conclusion that it no longer “reposes the necessary trust and confidence” in the 2nd respondent. Yet, the 2nd respondent was dismissed based on this letter of explanation. [46] The content of the letter of explanation should not be taken in isolation. It should not be confined to the purported admission by the 2nd respondent only and then taken out of context. It should be read as a whole in order to determine whether the purported admission if at all, is unequivocal and unconditional. My considered view is that it is not unequivocal and unconditional. With respect, my understanding of the letter of explanation is that the 2nd respondent was aware of a charge of “dishonesty” against him, but his conduct was due to his misunderstanding of the applicant company’s policy. There was mala fide on his part. If there was no mala fide, how could the conduct be construed as “dishonest”? [47] In the Brunei High Court case of Carabao Exports Pty Ltd v. Online Management Consultants Sdn Bhd & Ors [1988] 3 MLJ 271, Godfrey J held that: For this purpose, the admission must be a clear admission of all, and not simply evidence of some, of the facts upon which the plaintiff would have to rely to establish his cause of action. Carabao Exports was cited with approval by our Court of Appeal in Vithal Kumar a/l Jayaraman v Azman bin Md Nor [2010] 2 MLJ 67 CA. [48] Since the admission cannot be treated as such, and the applicant’s action in dismissing the 2nd respondent was primarily based on that purported admission, it is not an exaggeration to say that the applicant’s case collapses like a house of cards. For the same reason, the argument of estoppel can no longer be canvassed since there is no unequivocal and unconditional admission in the first place. [49] In any event, I am disturbed by the manner in which the applicant reacted upon receipt of the letter of explanation from 2nd respondent. During cross-examination, Mohd Isham bin Itam, COWS-3, who is the applicant’s Head of Human Resources, admitted that he did not make any investigation on the matters raised by the 2nd applicant in the letter of explanation: Claimant’s Counsel : After your department had received this explanation letter from En Azhar, did your department carry out investigation to check the content of this letter? COWS-3 : No. [50] In short, the 2nd respondent was dismissed by the applicant without the applicant having first undertaken the necessary investigation, as admitted by COWS-3. The 2nd respondent’s explanation was not considered by the applicant at all. This is, of course, in contrast with the pleaded case of the applicant in para 11 of the Statement of Reply, which states that:

The Company after due consideration, finds that the explanation given by the Claimant in his letter dated 22.8.2018 was regrettably unacceptable. Findings [51] In the circumstances of the case, the learned Chairman had not erred when he concluded that the applicant failed to prove on the balance of probabilities that the impugned misconduct, as stated in the show cause letter dated 15.8.2019, so as to justify the 2nd respondent’s dismissal with just cause or excuse. [52] The Award is not riddled with both errors of law as learned counsel for the applicant urged me to conclude neither it is such an unreasonable decision which no other tribunal based on similar facts would have arrived at such a perverse decision which calls for a curial intervention. It is not, therefore, amenable to judicial review. [53] The application for judicial review is therefore dismissed with costs of RM4,000 subject to allocatur. Tarikh: 22 Oktober 2024 (WAN AHMAD FARID BIN WAN SALLEH) Hakim Mahkamah Tinggi Kuala Lumpur. Pihak-pihak: Bagi Pihak Pemohon : Edwin Rajasooria, Kalai Selvi A/P Mariamuthu Tetuan Shearn Delamore & Co. Bagi Pihak Responden : Eng Yuh Pei, Tan Shin Yi Kedua Tetuan Chan Eng & Co.