Ng Teck Fay v Mahkamah Perusahaan Malaysia (W-01(A)-690-12/2019)

MAHKAMAH PERUSAHAAN MALAYSIA … RESPONDEN

PERTAMA SYARIKAT TAKAFUL MALAYSIA BERHAD … RESPONDEN KEDUA [Dalam Mahkamah Tinggi Malaya Di Kuala Lumpur Permohonan Semakan Kehakiman No. WA-25-97-02 TAHUN 2019 Antara Ng Teck Fay … Pemohon

Mahkamah Perusahaan Malaysia … Responden

Pertama Syarikat Takaful Malaysia Berhad … Responden Kedua] [Decided by Her Ladyship, Y.A. Dato' Sri Mariana Binti Haji Yahya at Kuala Lumpur High Court on the 21st November 2019] CORAM: LAU BEE LAN, JCA MOHD SOFIAN BIN ABD RAZAK, JCA LEE HENG CHEONG, JCA 2 ) GROUNDS OF JUDGMENT

The Appellant contended he was constructively dismissed by the 2nd Respondent and referred his constructive dismissal to the Industrial Court (“the 1st Respondent”) and the Chairman of the 1st Respondent (“Chairman”) after hearing the Appellant’s reference, handed down Award No. 3106 Year 2018 on 3.12.2018 (“the Award”), dismissing the Appellant's claim.

The Appellant then filed an application for Judicial Review at the Kuala Lumpur High Court for judicial review pursuant to Order 53 Rule 2 of the Rules of the Court 2012 ("RHC”) to quash the Award handed down by the 1st Respondent. The application for Judicial Review was dismissed by the learned High Court Judge (“the learned High Court Judge”). Hence, this Appeal to the Court of Appeal.

For ease of reference, the parties herein will be referred to as they were in the proceedings before this Court.

We heard the appeal and after due deliberation and having carefully considered the submissions of both parties, we found that there are merits in the appeal and unanimously allowed the appeal with costs. We propose to give reasons for our decision with respect to the appeal. 3 .

The Appellant commenced his employment on 11.4.2008 as an Assistant General Manager with the 2nd Respondent at a monthly salary of RM14,000.00 and a travel allowance of RM1000.00. On 11.8.2008, the Appellant was confirmed in his position of Assistant General Manager. His last drawn salary was RM17,150.00 per month•

As a result of the 2nd Respondent’s restructuring, the 2nd Respondent informed the Appellant that with effect from 1.7.2009, he was appointed as the Head of the Family Claims department and the 2nd Respondent maintained the position of the Appellant as the Assistant General Manager•

The Appellant was given annual salary increments and bonus throughout his service with the 2nd Respondent. In the year 2013 the Appellant was nominated by a Committee of the 2nd Respondent and offered a total of 9900 ordinary shares in the 2nd Respondent.

On 6.5.2014, the Appellant received a Show Cause letter for sending an internal email to the 2nd Respondent's Third Party Administration (PM Care). The Appellant in his explanation letter, apologized to the 2nd Respondent for the oversight of extending an internal email to PM Care.

On 19.5.2014, the Appellant received a warning from the 2nd Respondent. On the following day, that is 20.5.2014, the 2nd 4 . Respondent’s General Manager of Human Resources informed the Appellant that he was required to attend a meeting with the Group Managing Director on 22.5.2014. At the Group Managing Director's office, the General Manager of Human Resources in the presence of the Group Managing Director, handed over 2 letters both dated 22.5.2014 to the Appellant. The Group Managing Director told the Appellant that if he did not agree to the contents of the two letters then he can resign.

One of the said letters dated 22.5.2014 which was entitled 'Change of Job Scope', reduced the Appellant's scope of duties by taking away, the medical claims for health Insurance products from him. As regards the other letter bearing the same date, it was entitled "Job Regrading to Senior Manager", the 2nd Respondent demoted and downgraded the Appellant from his position as Assistant General Manager (Grade 3) to Senior Manager (Grade 4) with effect from 26.5.2014.

On 30.5.2014, four days after his demotion came into effect, the Appellant in his letter bearing the same date, cited constructive dismissal and left the service of the 2nd Respondent. He gave the reason for alluding constructive dismissal as he was demoted, re-graded and his benefits were reduced.

The matter was then referred to the 1st Respondent and after hearing the reference, the 1st Respondent delivered and handed down the Award, dismissing the Appellant's claim. 5

The Appellant then filed an application for Judicial Review at the High Court and which application was dismissed by the learned High Court Judge. Thus this Appeal to this Court. FINDINGS OF THE 1st RESPONDENT

The Chairman of the 1st Respondent held inter alia that the re-grading of the Appellant did not involve any changes to his salary and seniority. It only involved changes to his benefits arising from the alignment of the Appellant's new job grade, scope of work and accountabiIity.

The Chairman also found that the Appellant had failed to prove on balance of probabilities that the 2nd Respondent had breached the relevant terms of his employment contract which goes to the root of the employment contract which entitled him, to consider himself constructively dismissed by the 2nd Respondent. Thus, the Appellant had on his own accord, abandoned his job.

The learned High Court Judge found no grounds for intervention in the exercise of its supervisory function in the judicial review proceeding. The learned High Court Judge further held that that 1st Respondent had made findings of facts which it should not readily interfere and 6 · dismissed the Appellant's Judicial Review Application with costs of RM2,000-00.

The Appellant contended as follows:-

That the learned High Court Judge failed to consider that the 2nd Respondent had allegedly conducted a restructuring/reorganisation exercise without any reason or evidence for the need of the restructuring and that only the Appellant was involved in the restructuring exercise;

(ii) The learned High Court Judge failed to consider that when the Appellant commenced his employment with the 2nd Respondent, he was holding the position of Assistant General Manager (Grade 3) and when he was "demoted" to Senior Manager (Grade 4), the 2nd Respondent had altered his entire employment contract;

(iii) The learned High Court Judge failed to consider that the 2nd Respondent had "demoted" the Appellant from Assistant General Manager (Grade 3) to Senior Manager (Grade 4) even though the Appellant had never previously held the position of Senior Manager; 7

(iv) The learned High Court Judge had failed to consider the fact that not only was the Appellant's job scope reduced but his limit of authority to approve claims was also reduced;

The learned High Court Judge failed to consider that the "demotion" of the Appellant's position and grade by the 2nd Respondent is in breach of the fundamental terms of his employment contract and the Appellant was thereby entitled to consider himself constructively dismissed;

(vi) The learned High Court Judge failed to accordingly consider that the 2nd Respondent's "unilateral conduct of demoting" the Appellant's position and grade was through no fault of the latter;

(vii) The learned High Court Judge had failed to consider whether the law permits the 2nd Respondent to "demote" the Appellant's position and grade (from Assistant General Manager to Senior Manager and from Grade 3 to Grade 4) under the pretext of restructuring/reorganisation; and

(viii) The learned High Court Judge had failed to consider that the 2nd Respondent had given the medical claims portfolio, which is the Appellant's "main responsibility" to a new Manager, Sharon Ang. 8 THE 2ND RESPONDENT’S CONTENTIONS BEFORE THIS COURT

In response, the 2nd Respondent contended inter alia as follows:-

that the learned High Court Judge had correctly directed herself in regards to the law and had given due weight to the evidence before reaching its conclusion that the 1st Respondent was correct in arriving at its findings;

(ii) The Award of the 1st Respondent shows that it had applied trite principles of law and industrial jurisprudence to the facts of the case as meticulously found by it upon a careful evaluation of the evidence adduced;

(iii) That the learned High Court Judge sitting in a supervisory capacity had correctly refused to interfere with the findings of the 1st Respondent, more so when these findings relate to findings of credibility and evaluation of documentary and oral testimony, which are matters which fall wholly within the purview of the functions of the Industrial Court; and

(iv) The Appellant has failed to prove that there is any element of illegality or irrationality in the 1st Respondent's Award such as to warrant the High Court's intervention by way of judicial review. 9 THE LAW

It is trite law that the specific finding of facts by the learned High Court Judge as a trier of facts should not be disturbed by an appellate court such as this Court herein unless that finding was plainly wrong: See Ming Holdings (M) Sdn Bhd v Tuan Syed Azahari bin Noh Shahabudin & Anor [2010] 4 MLJ 577; [2010] 6 CLJ 857 (FC) paras 41–48;

It is trite law that the specific finding of facts by the learned HCJ as a trier of facts should not be disturbed by an appellate court such as this Court herein unless that finding was plainly wrong: See Ming Holdings (M) Sdn Bhd v Tuan Syed Azahari bin Noh Shahabudin & Anor [2010] 4 MLJ 577; [2010] 6 CLJ 857 (FC) paras 41–48;

We were mindful of the limited role of the appellate court in relation to findings of facts made by the court of first instance. In the case of Lee Ing Chin v. Gan Yook Chin & Anor [2003] 2 CLJ 19; [2003] 2 MLJ 97 where the Court of Appeal held as follows: “ ….. an appellate court will not, generally speaking, intervene unless the trial court is shown to be plainly wrong in arriving at its decision. But appellate interference will take place in cases where there has been no or insufficient judicial appreciation of the evidence.” [Emphasis added]

Reference is also made to the decision of the Federal Court in Gan Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 4 CLJ 309 10 where the Federal Court held that the test of "insufficient judicial appreciation of evidence" adopted by the Court of Appeal was in relation to the process of determining whether or not the trial court had arrived at its decision or findings correctly on the basis of the relevant law and the established evidence.

In Ranjit Kaur S Gopal Singh v. Hotel Excelsior (M) Sdn Bhd [2010] 8 CLJ 629, the Federal Court set out the role of the Court in an application for Judicial Review and the correct test to be applied in reviewing the findings of fact made by the Industrial Court, to be 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 scrutinize 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. [16] The Rama Chandran decision has been regarded or interpreted as giving the reviewing court a license to review without restrain decisions for substance even when the said decision is based on finding of facts. 11 However, post Rama Chandran cases have applied some brakes to the courts' liberal approach in Rama Chandran. The Federal Court in the case of Kumpulan Peransang Selangor Bhd v. laid Mohd Noh [1997] 2 CLJ 11 after affirming the Rama Chandran decision held that there may be cases in which for reason of public policy, national interest, public safety or national security the principle in Rama Chandran may be wholly inappropriate. [17) The Federal Court, in Petroliam Nasional Bhd v. Nik Ramli Nik Hassan [2003] 4 CLJ 625, again held that the reviewing court may scrutinise a decision on its merits but only in the most appropriate of cases and not every case is amenable to the Rama Chandran approach. Further, it was held that a reviewing judge ought not to disturb findings of the Industrial Court unless they were grounded on illegality or plain irrationality, even where the reviewing judge might not have come to the same conclusion. [18] The Court of Appeal has in a number of cases held that where finding of facts by the Industrial Court are based on the credibility of witnesses, those findings should not be reviewed (see William Jacks & Co (M) Sdn Bhd v. S Balasingam [1997] 3 CLJ 235, National Union of Plantation Workers v. Kumpulan Jerai Sdn Bhd (Rengam) [2001) 1 CLJ 681, Quah Swee Khoon v. Sime Darby Bhd [2001] 1 CLJ 9, Colgate Palmolive (M) Sdn Bhd v. Yap Kok Foong & Another [2001J 3 CLJ 9. However, there are exceptions to this restrictive principle where: 12

reliance upon an erroneous factual conclusion may itself offend against the principle of legality and rationality, or

there is no evidence to support the conclusion reached. (See Swedish Motor Assemblies Sdn Bhd v. Hj. Md Ison Baba [1998] 3 CLJ 288]. [19] It is clear from the above authorities that the scope and ambit of Rama Chandran had been clearly explained and clarified. Decided cases cited above have also clearly established that where the facts do not support the conclusion arrived at by the Industrial Court, or where the findings of the Industrial Court had been arrived at by taking into consideration irrelevant matters, and had failed to consider relevant matters into consideration, such findings are always amendable to judicial review". (Emphasis added)

Bearing in mind, the above principles distilled from the above authorities, we will now c o n s i d e r the Appellant’s appeal.

The decision of the High Court in the case of Bayer (M) Sdn. Bhd. v Anwar Abdul Rahim [1996] 2 CLJ 49 which was subsequently upheld by the Court of Appeal in Anwar Abdul Rahim v Bayer (M) Sdn. Bhd. [1998] 2 CLJ 197 laid down essentially four conditions that have to be met in 13 order for the Appellant to be able to successfully claim constructive dismissal by the 1st Respondent. They are as follows:

There must be a breach of contract by the employer;

(ii) That breach must be sufficiently important to justify the employee resigning;

(iii) The employee must leave in response to the breach and not for some other unconnected reason; and

(iv) The employee must not occasion any undue delay in terminating the contract, otherwise he will be deemed to have waived the breach and agreed to vary the contract.

It is trite that if an employee leaves the employment of the employer, without the above conditions, being fulfilled, he will be deemed to have resigned and there will be no dismissal within the meaning of the relevant legislation at all. See Wong Chee Hong v Cathay Organisation [1988]

From the grounds of judgment of the learned Chairman of the 1st Respondent, we find that the learned Chairman of the 1st Respondent erred in law when she took into consideration irrelevant matters and had failed to consider relevant matters when arriving at her decision to dismiss the Appellant's case. 14

The learned Chairman of the 1st Respondent held that Appellant considered the 2nd Respondent’s announcement via email dated 26.5.2014 to all staffs of the Second Respondent was to humiliate the Appellant as to the re-grading of his position and that was the reason for the Appellant, to consider himself, being constructively dismissed. This is what the learned Chairman held at para [60] of the Award: "[60] PYM juga turut menyatakan bahawa tindakan pihak Responden menghantar emel. bertarikh 26.05.2014 bagi membuat pengumuman kepada semua pihak di dalam syarikat bertujuan untuk memalukannya kerana pengredan semula jawatan PYM juga telah dimaklumkan. ltulah antara sebab PYM membuat tuntutan pemecatan kerja secara konstruktif.”

This finding of the learned Chairman of the 1st Respondent is contrary to the evidence adduced as the Appellant stated his reason for citing constructive dismissal in his letter dated 30.5.2014 which was sent to the 2nd Respondent's General Manager of Human Resources. This is what he said: "... I cannot agree to my position to be downgraded from 'Assistant General Manager (Job Grade 3) to 'Senior Manager (Job Grade 4). Furthermore as you are aware the terms and benefits in Job Grade 4 are lower than in Job Grade 3 and therefore I can only conclude that I'm being demoted which I cannot agree. I will have to view your actions of demoting me as breach of my contract of employment and I have no choice but to leave as I have been deemed to be 'Constructively Dismissed' with immediate effect." 15

The Appellant clearly did not state in his above letter that the reason for him to consider himself as constructively dismissed was because he felt humiliated by the 2nd Respondent's action of sending an email to all the staff, announcing that the Appellant was demoted to Senior Manager.

The learned Chairman then went on to hold that the Appellant failed to prove on the balance of probabilities that the 2nd Respondent has breached the fundamental term of the contract of employment.

We find that the learned Chairman ought to have considered whether the 2nd Respondents act of demoting and re-grading the Appellant from the position of Assistant General Manager (Job Grade 3) to Senior Manager (Job Grade 4), is a breach of a fundamental term which goes to the root of the Appellant’s contract of employment. Thus, in this respect, it is our considered view that the 1st Respondent failed to take into account the relevant consideration and acted contrary to the evidence.

In the present appeal, we are of the considered opinion that the 2nd Respondent’s decision to re-grade the Appellant from his post as Assistant General Manager (Grade 3) to Senior Manager (Grade 4) with effect from 26.5.2014 in order to align his new job scope with the 2nd Respondent's re-organisational structure of the Family Claims portfolio, amounted to a breach of the Appellant’s employment contract which entitled the Appellant to deem himself constructively dismissed despite his 16 acceptance of the 2nd Respondent's decision dated 22.5.2014 on 23.5.2014.

In his position as the Assistant General Manger, the Appellant was the head of the Business Unit, Family, Group and Medical Claims. When he was regraded and demoted, the 2nd Respondent took away the Medical Claims Administration from his original scope of responsibilities and gave it to one, Ms. Sharon Ang who was just employed. This resulted in the Appellant, having lesser responsibilities.

Further, when the Appellant was demoted to Senior Manager, the 2nd Respondent took away, one Deputy Manager and one Assistant Manager from reporting to him. The benefits enjoyed by the Appellant were also reduced when he was demoted to Senior Manager.

The learned Chairman of the 1st Respondent and the learned High Court Judge, both failed to consider that an employee cannot be demoted (re graded or whatever name it is called) to a post which he never held before.

We find support for the above proposition of the law in the Supreme Court of Hussain Sasansaheb Kaladgi v State of Maharashtra (1987) AIR 1627 where the court inter alai stated: “…direct recruit to a post, I cannot be gainsaid, cannot be reverted to a lower post. It is only a promotee who can be reverted from the promotion post to the lower post from which he was promoted. 17 These proposition are so elementary that the same are incapable of being disputed and have not been disputed." (Emphasis is mine)

In another Indian Supreme Court case of Nyadar Singh v Union of India & Others (1988) AIR 1979, which involved an imposition of a penalty of reduction in rank, reducing the petitioner from the post of Assistant Locust Warning officer to which he was recruited directly on 31.10.1960 to that of a Junior Technical Assistant. The court held for the appellant, by setting aside the penalty of reduction in rank and restoring him to the original position and stated as follows:- "A person initially recruited to a higher time scale grade or service or post cannot be reduced by way of punishment, to a post in a lower time scale grade or service or post which he never held before."

The above two cases were adopted with approval by our High Court in the case of Aidiladha bin Sulaiman v Mahkamah Perusahaan Malaysia & Anor (2016) 7MLJ 333.

In the present appeal, the Appellant joined the 2nd Respondent, 6 years before his regrading to a senior Manager. After performing his duties as an Assistant General Manager for that many years, he was suddenly instructed to assume the post of Senior Manager, a post he never held before.

The above proposition of the law clearly applies here and both the learned High Court Judge and the learned Chairman of the 1st 18 Respondent erred when they failed to take into consideration this relevant piece of evidence in their decision making process i.e that from the time the Appellant joined service he was an Assistant General Manager and never held the position of Senior Manager.

The learned Chairman failed to consider the principle of law that the Appellant cannot be reverted to a position he never held before in the Company.

In the English case of Western Excavating (ECC) Ltd v Sharp [1978] 1 ALL ER 713, Lord Denning MR held inter alia, in relation to constructive dismissal as follows: "If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct. He is constructively dismissed. The employee is entitled in those circumstances to leave at the instant without giving any notice at all or, alternatively, he may give notice and say he is leaving at the end of the notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once. Moreover, he must make up his mind soon after the conduct of which he complains; for, if he continues for any length of time without leaving, he will lose his right to treat himself as discharged. He will be regarded as having elected to affirm the contract." 19

In the light of the above, we are of the considered opinion that there was insufficient judicial appreciation of the totality of the evidence by the 1st Respondent and the learned High Court judge. The very fact that the reason proffered by the Appellant in his letter of constructive dismissal was not property considered constitutes error of law that attract appellate intervention in the form of judicial review.

The Chairman of the 1st Respondent accorded unjustifiable emphasis to the humiliation suffered by the Appellant and that the Appellant’s actions does not qualify him to consider himself as constructively dismissed. This constituted an error of law as the contract test as laid down in the Supreme Court's case of Wong Chee Hong supra has stated that relegation of responsibility with its consequent humiliation and frustration and loss of estimation amongst his fellow· employees entitles the Appellant to walk out of his employment and consider himself, as constructively dismissed.

We find that the Appellant in this case succeeded in proving that his regrading and demotion was a breach of his contract of employment and that he had correctly treated such regrading and dismissal as constructive dismissal. We further find that the 2nd Respondent had failed to show that the dismissal of the Appellant, was with a just cause or excuse.

Further we are of the considered view that learned High 20 Court Judge in her Grounds of Judgment also took into account irrelevant consideration such as the email dated 26.5.2014, harassment, the Appellant’s embarrassment and humiliation as the grounds relied upon by the Appellant, for constructive dismissal. The learned High Court Judge clearly failed to take relevant considerations such as the Appellant’s letter dated 30.5.2014 to the 2nd Respondent's General Manager of Human Resources, informing that the reason why he considered himself, constructively dismissed is because he was regraded and demoted from an Assistant General Manger to a senior Manager. The Appellant repeated the reasons for his constructive dismissal in his witness Statement in the proceedings before the 1st Respondent.

Having examined the Records of Appeal, we are of the respectful view that the Appellant succeeded in proving that he was constructively dismissed by the 2nd Respondent and that he has fulfilled the 4 conditions laid down by Bayer (M) Sdn. Bhd. v Anwar Abdul Rahim supra and upheld by the Court of Appeal in Anwar Abdul Rahim v Bayer (M) Sdn. Bhd. supra.

Even though the learned High Court Judge found that the Appellant had accepted without objection of the new re-grading on 23.5.2014, we find that the Appellant is entitled to change his mind bearing in mind that at the meeting with the 2nd Respondent’s General Manager of Human Resources in the presence of the Group Managing Director, the Appellant was 21 threatened that either he accepted the re-grading or resign. We further find that that it is perfectly reasonable for the Appellant, after being confronted with such threats and being deprived of legal advice and time to consider the offers, was entitled to change his mind, 4 days later.

Even though the 2nd Respondent contended that before and after 2014, the following officers of the 2nd Respondent were re-graded:-

Encik Mathews George was re-graded from Assistant General Manager (grade 3) to Senior Manager (grade 4);

(ii) Encik Azhar Tahir was re-graded from Senior Manager (grade 4) to Manager (grade 5);

(iii) Puan Nik Anum was re-graded from Deputy Manager (grade 6) to Assistant Manager (grade 7); and

(iv) Puan Mahanim Mahmud was re-graded from Senior Manager (grade 4) to Manager (grade 5). We find that the Appellant was the only officer who was regraded during that particular re-organizational exercise. 22 CONCLUSION

Premised on the reasons enumerated above, we find that there are merits in the appeal which warrants appellate intervention and the appeal is allowed with costs. In the premises, we order that judgment be entered against the Defendant in the following terms:-

The Appeal against the order of the Kuala Lumpur High Court for Judicial Review Application No. WA-25-97- 02/2019 dated 21/11/2019 is allowed with costs of RM15,000 to be paid by the 2nd Respondent to the Appellant, being costs here and below;

(ii) An order of Certiorari is issued to quash the decision of the 1st Respondent vide Award No. 3106 of 2018 dated 3/12/2018 in Kes Mahkamah Perusahaan Malaysia No. 5/4-1111/2015;

(iii) An Order of Mandamus is issued to the 1st Respondent to hear the case and to award the appropriate remedies in respect of Kes Mahkamah Perusahaan Malaysia No. 5/4- 1111/2015; and 23

The decisions of the Industrial Court dated 3.12.2018 and the High Court dated 21.11.2019 are set aside. Dated: 1 September, 2021 sgd (LEE HENG CHEONG) Judge Court of Appeal, Malaysia For the Appellant : Jeevaretnam A/L Valautham together with Kumarappan A/L Ramasamy For the 2nd Respondent : Shariffullah Majeed together with Arissa