Nor Asma Binti Johor v 1. ) Mahkamah Perusahaan Malaysia (WA-25-489-09/2022)

FELDA D’SAJI SDN. BHD. (No. Syarikat: 200401032734 (671242-U) …RESPONDEN JUDGMENT [1] There is before me an application for judicial review to quash the entire decision of the 1st respondent, the Industrial Court, dated 9.6.2022. [2] The factual background of the case can be distilled from the grounds of judgment of the Industrial Court. [3] It is as follows. [4] The 2nd respondent is a subsidiary of FELDA and Koperasi Permodalan FELDA. It is principally engaged in the catering business for events and students’ hostels. [5] The applicant’s case at the Industrial Court is as follows. According to the applicant, she was employed by the 2nd respondent for 35 years when the company was a mere catering unit under the Perbadanan Niaga Felda and subsequently became Felda Trading Sdn Bhd. In 2004, the catering unit became what the 2nd respondent is today – Felda D’Saji Sdn Bhd. [6] The applicant held the post of Senior Supervisor G1 in the Account Receivable Department of the 2nd respondent before she left the company, purportedly on constructive dismissal. The memos issued by the 2nd respondent [7] By a Memo dated 15.6.2020, the 2nd respondent directed all of its employees, including the applicant, to attend a town hall meeting scheduled to be held on 18.6.2020. The purpose of the meeting was to explain to the employees the proposed implementation of unpaid leave or furlough on a voluntary basis by the 2nd respondent. [8] By another memo dated the same day, the 2nd respondent informed the employees of the company’s financial predicament and incapacity. [9] Another memo dated 16.6.2020 on the impending implementation of the furlough or unpaid leave on a voluntary basis was issued by the 2nd respondent’s Chairman to the Human Resources and Administration. At the Town Hall meeting [10] At the town hall meeting, a letter dated 17.6.2020 (“the Furlough Letter”) was circulated to the applicant and other employees. The employees were offered to take unpaid leave on a voluntary basis for a period of six months, commencing on 1.7.2020. [11] The terms of the Furlough Letter can be summarised as follows:

The 2nd respondent agreed to assist those employees with salary of RM4,000 and below to submit an application under the Employment Retention Program (“ERP”) for financial assistance of RM600 per month from the Government through PERKESO.

The 2nd respondent was willing to accept 24-hour service of notice of resignation should any of the employees wish to resign voluntarily subject to the approval from their respective Head of Department.

If at any time an operation requirement is needed, priority would be given to them to be recalled on a duty roster rotation or part-time basis. [12] The employees were also furnished with a consent letter dated 17.7.2020 (“the Consent Letter”) prepared by the 2nd respondent for their execution, indicating their agreement to the terms of the Furlough Letter. Post-Town Hall Meeting [13] However, in a letter dated 29.6.2020 to the Chairman of the 2nd respondent company, the applicant expressed her opinion on the Furlough Letter for the consideration of the 2nd respondent. In the event that the 2nd respondent did not agree with her opinion and intended to proceed with the furlough exercise, she would treat that the 2nd respondent had breached s 15(1) of the Employment Act

S 15(1) provides that an employer shall be deemed to have broken his contract of service with the employee if he fails to pay wages. [14] Despite her reservation to the furlough exercise, the applicant nevertheless executed the Consent Letter on 30.6.2020 and returned the same to the 2nd respondent. The letter inter alia states as follows: Saya NOR ASMA JOHOR No. Petugas 3300027 bersetuju bagi pengambilan cuti tanpa gaji secara sukarela serta memahami isi kandungan surat cuti tanpa gaji tersebut. However, the applicant made a notation with the addendum “(untuk tuntutan Perkeso)” prior to putting down her signature. [15] It is not in dispute that the 2nd respondent had assisted the applicant in getting the monthly RM600 special assistance under the Government’s ERP program. [16] Be that as it may, the applicant, in her letter dated 18.8.2020, retracted her consent (“Retraction Letter”) and revoked her agreement to take the unpaid leave. The applicant contended that the 2nd respondent had breached the terms of the employment and intended to terminate her employment without notice. [17] The applicant then made representation to the Director General of Industrial Relations (“DGIR”) on 21.8.2020 that she was dismissed by the 2nd respondent without just cause and excuse on 1.7.2020. [18] The Minister of Human Resources referred the dispute to the Industrial Court under s 20 of the Industrial Relations Act 1967 (“IRA”) for adjudication. [19] In the meantime, the 2nd respondent, on 8.9.2020, replied to the applicant’s Retraction Letter, denying the allegations contained therein. The 2nd respondent reaffirmed that the applicant was still an employee of the company at the material time. At the Industrial Court [20] The two issues before the Industrial Court were:

Whether the applicant’s representation to the DGIR was premature as there was no dismissal as of 1.7.2020; and

(ii) Whether the 2nd applicant committed a fundamental breach of the employment contract, entitling the applicant to claim constructive dismissal. [21] In his grounds of judgment, the learned Chairman of the Industrial Court was of the view that the applicant had to prove that the 2nd respondent had committed a fundamental breach of her contract of employment, entitling her to repudiate the contract. [22] Upon the applicant successfully establishing the fundamental breach, the burden of proof would then shift to the 2nd respondent to prove that the dismissal was with just cause and excuse. The learned Chairman relied on the judgment of the Industrial Court in Selangor Medical Centre v Zainal Abidin Md Tamami [2002] 2 ILR 527 on the aforesaid proposition. In that case, there was no convincing evidence by the claimant to prove that the company had repudiated the contract of employment. The claimant was not able to discharge the burden of proof, which was on him to prove, on a balance of probabilities, that the company as the employer had been guilty of any fundamental breach that goes to the root of the contract or that the company had evinced any intention to be no longer bound by it. [23] The applicant’s contention at the Industrial Court is this. According to her, she was dismissed by the 2nd respondent on 1.7.2020 after the 2nd respondent failed to respond to her 29.6.2020 letter asking the company to reconsider the company’s decision. [24] However, the learned Chairman took cognisance that the applicant had executed the Consent Letter on 30.6.2020, a day after the 29.6.2020 letter was sent to the 2nd respondent. [25] At the hearing, the applicant testified that she signed the Consent Letter in order to receive the ERP in the form of financial assistance of RM600 per month from the Government through PERKESO. The applicant alleged that she was enticed or forced to sign the Consent Letter by the 2nd respondent. [26] However, the learned Chairman rejected this line of argument. In his grounds of judgment, the learned Chairman held as follows: [33] The Claimant’s admission of signing the Consent Letter to receive the financial assistance from PERKESO is ipso facto evidence of the implicit intention of the Claimant to take the unpaid leave. If the Claimant disagrees to take the unpaid leave, there would not be any issue of her receiving the financial assistance from PERKESO as the unpaid leave was one of the preconditions under the ERP that the Claimant would have continued with work on 1.7.2020. [27] There is evidence that the applicant returned to the office to work on 1.7.2020 and recorded her attendance as usual in the morning. However, she decided to leave the office because her colleagues were being cynical of her presence despite her name not being on the work list. [28] In any event, the learned Chairman further held that the applicant did not adduce any evidence of her being forced to sign the Consent Letter. [29] The learned Chairman then came to a conclusion that there was no cogent evidence to show that the 2nd respondent had committed any fundamental breach of the applicant’s contract of employment, entitling the applicant to claim constructive dismissal. The Industrial Court further held that the furlough imposed by the 2nd respondent was reasonable in the circumstances and that it was done in good faith. [30] Since the applicant failed to prove that she was dismissed by the 2nd respondent on 1.7.2020, the applicant’s case was therefore dismissed. At the High Court [31] At the High Court, the applicant’s challenge against the Industrial Court’s dismissal of her claim was anchored on the grounds that the learned Chairman had erred in law and fact:

In failing to consider that the applicant’s consent to take unpaid leave in the form of the Consent Letter was not made voluntarily.

In failing to consider the legal implication of the applicant’s withdrawal of consent to take unpaid leave for a month.

In deciding that the Consent Letter dated 30.6.2020 had replaced the objection letter dated 29.6.2020 because the consent letter was executed after the objection letter.

In failing to consider the cumulative events that led to the applicant’s constructive dismissal claim on 1.7.2020. [32] I will deal with grounds (a) and (c) together. On the voluntariness of the Consent Letter, learned counsel for the applicant attracted my attention to the evidence given by CLW-2, Rasiyuddin bin Hariri, who was the Head of Department for College and Institutional Catering (“CIC”). CLW-2 was the applicant’s immediate superior at the material time. [33] According to CLW-2, the town hall session was supposed to be a forum to discuss the issue between the 2nd respondent and the employees. However, as it turned out, the session had culminated in an announcement and instruction where the employees were told that they had no choice but to sign the Consent Letter. As a result, learned counsel submitted that the applicant was forced to sign the Consent Letter since the failure would mean that the applicant would not be able to receive the financial assistance of RM600 per month from PERKESO. [34] In short, according to learned counsel, the applicant was coerced to sign the Consent Letter. My attention was then drawn to the judgment of the High Court in Mohd Fariq Subramaniam v Naza Motor Trading Sdn Bhd [1998] 6 MLJ 193. The case carries the proposition that economic duress is a coercion of will that vitiates consent. [35] Further, learned counsel for the applicant contended the Consent Letter dated 30.6.2020 could not replace the applicant’s letter dated 29.6.2020. Learned counsel’s reason is this. As the applicant was told that she would not be receiving her salary commencing from July, the applicant was put in a difficult position due to her monthly financial commitments. In short, the applicant had no choice but to sign the Consent Letter to obtain the RM600 from the PERKESO’s scheme. [36] Secondly, learned counsel for the applicant submitted that the applicant had withdrawn her consent to take unpaid leave vide the Retraction Letter dated 18.8.2020. The applicant’s argument is this. Despite the Retraction Letter, the 2nd respondent failed to recall the applicant to work and pay her salary in August. [37] According to the applicant, she continued receiving RM600 from PERKESO until October 2020. The applicant contended that even if we were to accept that the applicant is an employee on unpaid leave, why did the 2nd respondent fail to restore her salary after October 2020? Learned counsel for the applicant submitted that the 2nd respondent’s action was in direct breach of the applicant’s contract of employment. [38] Citing the judgment of the Court of Appeal in Anwar bin Abdul Rahim v Bayer (M) Sdn Bhd [1998] 2 MLJ 599 CA, learned counsel contended that the test of constructive dismissal is whether the conduct of the employer was such that the employer was guilty of a breach going to the root of the contract or whether he has evinced an intention no longer to be bound by the contract. [39] Finally, learned counsel for the applicant submitted that evidence at the hearing shows the applicant’s unwillingness to go on an unpaid leave. The applicant actually came to work on 1.7.2020. She then left the premises after she was shunned by her fellow employees. [40] Had she not signed the Consent Letter, the applicant’s fate, according to learned counsel, would have been worse. CLW-2, for example, refused to sign the Consent Letter. As a result, he was not paid his salary the following month and was never called to work. [41] In the circumstances, learned counsel for the applicant urged this Court to conclude that the Award made by the Industrial Court was illegal, irrational and procedurally improper, which warrants this Court's curial intervention. The Analysis [42] Let me begin by stating the law on the finding of facts made by an Industrial Court. [43] The general proposition is that the finding of facts based on the credibility of the witnesses is immune from judicial review; see Colgate Palmolive (M) Sdn Bhd v Yap Kok Foong & Anor Appeal [2001] 4 MLJ 97 CA. The same proposition can be seen in another judgment of the Court of Appeal in Quah Swee Khoon v Sime Darby Bhd [2001] 1 CLJ 9 CA. The Court of Appeal held that: If a judge to whom application is made for certiorari inquiries into and disturbs findings of fact based on the credibility of witnesses, he does indeed exercise appellate functions. It is important to remember that in judicial review proceedings the High Court must accept as gospel findings of fact made by the Industrial Court based on credibility of witnesses. [44] As I alluded to earlier, that is the general proposition. An exception can be found in another judgment of the Court of Appeal in Ng Chang Seng v Technip Geoproduction (M) Sdn Bhd & Anor [2021] 1 MLJ 447 CA, where it was observed that the factual findings of an Industrial Court can only be disturbed if they are evidently or evidentially irrational. [45] In delivering the judgment of the Court of Appeal in Ng Chang Seng, Lee Swee Seng JCA held as follows: Be that as it may any review of facts must necessarily be that of a low intensity review and unless its findings are not unreasonable or that it is not evidently or evidentially irrational or perverse, the findings of fact of such a tribunal should not be disturbed. [46] The pleaded case of the applicant, as can be seen in para 7 of the Statement of Case, is as follows: At the onset, the very thing which persuaded the Claimant to reluctantly accept the ‘unpaid leave’ scheme was to benefit from the ‘SOCSO’ benefit of RM600.00 per month. She received the SOCSO benefit applied by the Company on her behalf for four (4) months only until October

She no longer received the SOCSO benefit from November 2020 onwards. [47] The 2nd respondent, in para 9 of their Statement in Reply, admitted that the applicant had received the PERKESO benefit applied by the 2nd respondent on her behalf for four (4) months until October 2020. [48] Now, even if this Court were to agree with the learned Chairman of the Industrial Court that the Consent Letter was signed voluntarily by the applicant and that the Consent Letter prevails over the applicant’s 29.6.2020 letter asking the 2nd respondent to reconsider the company’s decision, what happens after October 2020? Does that mean that the applicant was still in the employment of the 2nd respondent? [49] What then are the terms of the Furlough Letter dated 17.6.2020 addressed to the applicant? It is undisputed that the Furlough Letter indicated in no uncertain terms that the unpaid leave is for a period of six months commencing from 1.7.2020. This means that it was supposed to have ended on 1.1.2021. [50] There is no evidence before the Industrial Court that this period has been extended with the consent of all parties. [51] The crucial question is, was the applicant asked to attend work commencing from 1.1.2021? There was no evidence of that either. In short, if the Furlough Letter were to be of any guide, and if indeed the applicant was never dismissed by the 2nd respondent, as the 2nd respondent claimed, the applicant would have been asked to resume work on 1.1.2021. [52] Since the 2nd respondent insisted that the applicant was never dismissed, constructive or otherwise, the question that arises is was the applicant paid her salary after the unpaid leave arrangement expired on 31.12.2020? [53] Unfortunately, it is this very crucial issue, which was well pleaded by the applicant in para 16 of the Statement of Case, that was not addressed by the learned Chairman of the Industrial Court. In short, the applicant’s case is that she was dismissed without just cause or excuse. [54] The extension of the argument is simple. Granted, the Consent Letter was signed voluntarily. Granted, the Consent Letter, having been signed on 30.6.2020, takes precedence over any other previous letters. Granted that the learned Chairman held that the Retraction Letter was of no consequence since the applicant never complained of being enticed or forced to sign the Consent Letter in the said Retraction Letter. [55] But the facts remain that the applicant was never paid any salary after the expiry of the unpaid leave period. [56] It is trite that non-payment of salary, being a fundamental term of the contract of employment, is a serious breach that entitles a claimant to walk out of the employment. If any authority is needed for the aforesaid proposition, it can be found in the judgment of the High Court in D Rayanold Pereira v Minister of Labour, Malaysia & Anor [1997] 5 MLJ 366. The High Court reiterated the proposition that it is a long-recognised implied term that there is an agreed obligation to pay agreed wages promptly. Where the employee was not paid according to the contract, this entitled the employee to resign and have her resignation treated as constructive dismissal because the employee has repudiated a term of the contract. [57] I take cognisance that the applicant had filed her claim before 31.12.2020. But I also note that the proceedings before the Industrial Court had only commenced on 11.11.2021. [58] The question that arises is whether the applicant should have waited until 31.12.2020 to file her claim. My answer to this is that, even if she waited, it would not have made any difference anyway since she was not paid her January 2021 salary. I am aware that the Federal Court in Ranjit Kaur v Hotel Excelsior (M) Sdn Bhd [2010] 8 CLJ 629 FC held that the Industrial Court, like the civil courts, must confine itself to the four corners of the pleading. [59] However, it is also correct to say that where a matter or material facts are not pleaded but the evidence is led without objections at the hearing, the court, in this case, the Industrial Court, is duty bound to consider such evidence, although it may be a departure from the pleading. [60] The authority for the aforesaid proposition can be seen in the judgment of the Federal Court in Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 FC. The case involved the failure to plead estoppel. The Federal Court held that: Thirdly, where there is no pleaded case of estoppel, but there is let in, without any objection, a body of evidence to support the plea, and argument is directed upon the point, it is the bounden duty of a court to consider the evidence and the submissions and came to a decision on the issue. It is no answer, in such circumstances, to say that the point was not pleaded. However, there is a caveat. In delivering the judgment of the Court, Gopal Sri Ram JCA (later FCJ) cautioned that such departures should rarely be permitted, for otherwise, the rule that a party is bound by its pleadings will be rendered meaningless. [61] That the applicant was never paid any salary after 31.12.2020 was never disputed. What is more important is there is no evidence adduced by the 2nd respondent that it was entitled to withhold the applicant’s salary under the circumstances. With respect, the learned Chairman should have appraised this fact and held that there was a breach of a fundamental term of the contract of employment, which entitled the applicant to treat herself as being constructively dismissed. [62] In the absence of any extension to the unpaid leave period agreed by both parties, the 2nd respondent should have asked the applicant to report for duty on 1.1.2021. Since there was no such instruction and she was not paid for the month of January, the applicant was constructively dismissed on 31.1.2021 when the 2nd respondent failed to pay her salary without reasonable cause or excuse. [63] These facts were before the learned Chairman at the proceedings. In my respectful view, it is the duty of the Industrial Court to consider the evidence and the submissions and come to a decision on the issue. The failure of the Industrial Court is unreasonable which any decision maker, similarly circumstanced, would not have made it. Findings [64] There was therefore a serious error made by the Industrial Court in the form of Wednesbury unreasonableness that would make the Award amenable to judicial review. [65] An order of certiorari is therefore issued to quash the Award. [66] In view of my ruling, the matter is therefore remitted to the Industrial Court for the purpose of addressing the proper remedies to be awarded to the applicant. [67] Costs is fixed at RM1,000 subject to allocatur. Tarikh: 13 Jun 2024 (WAN AHMAD FARID BIN WAN SALLEH) Hakim Mahkamah Tinggi Kuala Lumpur. Pihak-pihak: Bagi Pihak Pemohon : Amelia Edreena Binti Azmir Raja Saidatul Akhma Binti Raja Lope Tetuan Lope Maizura Bagi Pihak Responden : Syafiq Amani bin Md Sabri R2 Nur Zur’Ain binti Mat Ramlee Tetuan Mahadi Redzuan & Co.