Omar Bin Othman v Kulim Advanced Technologies Sdn. Bhd. (K-02(A)-936-05/2017)

And OMAR BIN OTHMAN ... RESPONDENTS]

INDUSTRIAL COURT MALAYSIA CORAM: Hamid Sultan bin Abu Backer, JCA Badariah binti Sahamid, JCA Mary Lim Thiam Suan, JCA Hamid Sultan Bin Abu Backer, JCA (Delivering Judgment of the Court) 3 GROUNDS OF JUDGMENT [1] The appellant (employee) appeals against the decision of the High Court which had quashed the decision of the Industrial Court. [2] The central argument before the High Court as well as the Industrial Court was related to the jurisprudence of ‘termination simpliciter’. The Memorandum of Appeal reads as follows: “1. The learned Judicial Commissioner erred in law and/or in fact in finding that the Industrial Court had acted irrationally and/or unreasonably in a Wednesbury sense and/or illegally and/or with procedural impropriety in arriving at its decision.

The learned Judicial Commissioner erred in law and/or in fact when his Lordship disturbed and/or interfered with the Industrial Court's findings of law and/or fact which found that the Respondent had unlawfully terminated the Appellant's employment.

The learned Judicial Commissioner erred in law and/or in fact when His Lordship disturbed and/or interfered with the Industrial Court's findings of law and/or fact which found that there was termination simpliciter.

The learned Judicial Commissioner erred in law and/or in fact by failing to find, or failing to uphold the Industrial Court's finding that, terminating the Appellant's employment merely by giving notice, or paying in lieu thereof, without just cause or excuse, is a form of unlawful termination. 4

The learned Judicial Commissioner erred in law and/or in fact by:

5.1 incorrectly taking into account the Respondent's purported grounds in making the Application for Judicial Review in the High Court, including the Respondent's purported argument that the termination was justified:

5.1.1 as the Respondent had provided the Appellant contractual payment in lieu of notice of termination of employment; and/or

5.1.2 as there was a change of state government in Kedah.

5.2 incorrectly applying, or failing to apply, trite principles of law, including: 5:2.1 the laws in respect of when a decision of the Industrial Court is open to judicial review;

5.2.2 the laws in respect of termination of employment and/ or termination simpliciter,

5.2.3 the laws in respect of fixed-term and permanent employment; and/or

5.2.4 principles and limitations of pleadings. 5

The learned Judicial Commissioner erred in law and/or in fact when His Lordship failed to appreciate that the Industrial Court had properly applied the facts and law in discharging its duty and discretion in finding that:

6.1 there was unlawful termination of the Appellant's employment; and 6.2 the Appellant was entitled to compensation for the same.

The learned Judicial Commissioner erred in law and/or in fact by failing to appreciate that the Appellant was entitled to the sum awarded by the Industrial Court in its discretion, if not more.

The learned Judicial Commissioner erred in law and/or in fact by failing to appreciate that there were apparent and/or serious irregularities with the Respondent's Application for Leave for Judicial Review and/or in the Application for Judicial Review.” Preliminaries [3] It is now well established that ‘termination simpliciter’ a concept of common law is not part of Industrial jurisprudence of Malaysia - under the Industrial Relations Act 1967 (IRA 1967). The concept may be relevant in limited circumstances under the Employment Act 1955. [4] Termination simpliciter relates to the absolute common law right of an employer to terminate the employee pursuant to the terms of the contract. This common law right has been arrested by virtue of section 20 of IRA 1967 which reads as follows: 6 “20. (1) Where a workman, irrespective of whether he is a member of a trade union of workmen or otherwise, considers that he has been dismissed without just cause or excuse by his employer, he may make representations in writing to the Director General to be reinstated in his former employment; the representations may be filed at the office of the Director General nearest to the place of employment from which the workman was dismissed.” [5] It is also well established that even in a ‘probationary’ period, termination must be anchored on the concept of just cause and excuse. In Bennett Subash Peter v Bon Ton Sdn Bhd (Bon Ton Resort Langkawi) [2018] 6 AMR 225, the Court of Appeal had observed: “[9] Whether it is a permanent employee or one on probation, industrial jurisprudence does not permit arbitrary reasons for dismissal. The reasons for dismissal must be bona fide. The bona fide test need not be objective. It all depends on the facts and circumstances of the case. An honest reason as well as mutual agreement may be sufficient. A mutual agreement of termination based on lack of bona fide may not suffice to say there was indeed a just cause and excuse for dismissal. Industrial jurisprudence generally leans towards the employee as opposed to the employer. This biasness is one related to common sense as the employer and employee are not often seen to have equal bargaining powers. In Khaliah Abbas v Pesaka Capital Corporation S/B [1997] 3 CLJ 827, the Court of Appeal held: [1] An employee on probation enjoys the same rights as a permanent or confirmed employee and his or her services cannot be terminated without just cause or excuse. The requirement of bona fide is thus essential in his dismissal. If the dismissal is found to be a colourable exercise of the 7 power to dismiss or a result of discrimination or unfair labour practice, the Industrial Court has the jurisdiction to interfere and set aside such dismissal.” [6] In the instant case, we found that the learned Judicial Commissioner took the view on the facts that it was not a case of termination simpliciter and thereby quashed the decision of the Industrial Court. The Industrial Court had found the case to be one of termination simpliciter and that the appellant had been unlawfully terminated. We take the view whether it was indeed a ‘termination simpliciter’ depends on the facts and evidence before the Industrial Court, notwithstanding the Industrial Court may not have given proper or cogent reasons. The issue being related to facts and evidence and that too in relation to a decision of the Industrial Court, the High Court ought not ordinarily intervene as it is not an appeal process. Brief Facts [7] The appellant was employed by the respondent for a two year term from April 2011. The term was extended in March 2013. The appellant’s salary and allowance amounted to RM14,000.00. By a termination letter dated 23-07-2013, the appellant was terminated effective the same day with 3 months’ salary and allowances in lieu of notice. The said letter of termination reads as follows: 8 “No. Rujukan : ktechno/corp/hr/olc/05 Tarikh : 23 Julai 2013 Tuan Hj Omar bin Othman B31, Jalan Sejati 3/1 Taman Sejati Indah 08000 Sungai Petani Kedah Tuan, PENAMATAN PERKHIDMATAN SEBAGAI KETUA PEGAWAI EKSEKUTIF KTPC TECHNOLOGIES SDN BHD (KTECHNO) Saya dengan segala hormatnya ingin menarik perhatian tuan kepada perkara di atas. Mesyuarat Lembaga Pengarah KTECHNO yang bersidang pada tarikh 22 Julai 2013 memutuskan perkhidmatan tuan sebagai Ketua Pegawai Eksekutif ditamatkan berkuatkuasa pada tarikh 23 Julai 2013 sejajar dengan peruntukan dalam "Article 3, Part III, Conditions of Employment", Terma & Syarat Kontrak Perkhidmatan KTECHNO. Sehubungan dengan itu merujuk kepada "Article 3, Part 111, Conditions of Employment" tuan dibayar gaji ganti notis tiga (3) bulan dan akan dibayar dalam tempoh tujuh (7) hari daripada tarikh surat ini dikeluarkan. Saya bagi pihak Lembaga Pengarah dan kakitangan KTECHNO mengucapkan terima kasih di atas sumbangan dan perkhidmatan tuan di KTECHNO. Sekian. Dengan hormatnya KTPC TECHNOLOGIES SDN BHD (t/t) DATO' HJ ABDUL RAHMAN BIN IBRAHIM, DSDK, AMK, BCK Pengarah Saya mengaku menerima surat dan memahami isi kandungannya. 9 Tandatangan : (t/t) Nama : Hj Omar bin Othman Tarikh : 23-07-13 PAYMENT IN LIEU OF 3 MONTHS NOTICE HJ OMAR BIN OTHMAN KTPC TECHNOLOGIES SDN BHD Basic Salary Allowance 11,000.00

500.00 Transport

500.00 Subsistance 2,000.00 Housing - Entertainment - __________ 14,000.00 3 months salary in lieu of notice 42,000.00 Balance of annual leave as at 31 October 2013 9 days 3,807.69 45,807.69 Less: EPF Contribution 5,040.00 SOCSO Contribution PCB _________ TOTAL AMOUNT TO BE PAID 40,767.69 ========= Prepared by: Approved by: (t/t) Norizan bt Dollah Dato' Abdul Rahman bin Ibrahim” 10 [8] The said Article 3 of the Conditions of Contract reads as follows: “ARTICLE 3 - TERMINATION OF SERVICES & RESIGNATION The service of an employee may be terminated at any time by the Company without assigning any reason for willful breach of the terms and conditions of employment, committing criminal offenses, misconduct and indiscipline. On resignation or termination of service, an employee shall surrender all documents, records, files, keys, vehicles (if any) and other assets belonging to the Company and settle all outstanding liabilities, loans and other obligations to the Company. Executives All executives intending to resign from the service of the Company are to give three (3) months notice in writing or pay three (3) months salary in lieu of notice. The company shall give similar notice or make similar payment in lieu of notice as indicated in paragraph 1 above if it wishes to terminate the service of an executive. Non-Executives The period of notice for termination/resignation of employment shall be one (1) month notice or one (1) month salary in lieu of notice. The company shall give similar notice or make similar payment in lieu of notice as indicated in paragraph 1 above if it wishes to terminate the service of a non-executive.” 11 [9] In essence, the employer’s reason for termination was based on a contractual right to terminate pursuant to ‘Article 3’. The termination was not based on poor performance, misconduct, redundancy, etc. so as to demonstrate a prima facie case to terminate on just cause and excuse pursuant to section 20 of IRA 1967. [10] The respondent had argued and the learned Judicial Commissioner had agreed that the appellant had not ‘objected’ to the termination and had in fact proceeded to accept the payment given in lieu of notice. We agreed with the appellant that in the law of industrial relations, pleas of estoppel, res judicata, acquiescence, waiver or laches, are regarded as technicalities which are passed over in favour of the substantive merits in the case and where principles of equity and good conscience prevail. [See Telekom Malaysia Kawasan Utara v Krishnan Kutty Sanguni Nair & Anor [2002] 3 CLJ 314]. [11] The notice of termination impinges on section 20 of IRA 1967 as well as settled principles enunciated by case laws. Whether it is probationary period, fixed term contract, etc. where termination takes place before the expiry of the term, etc.; it was incumbent on the employer to demonstrate that the dismissal was based on just cause and excuse. Otherwise, the termination is unlawful and cannot stand. Support for the proposition is found in a number of cases. To name a few are as follows: 12

In Goon Kwee Phoy v J&P Coats (M) Sdn Bhd [1981] 2 MLJ 129, HRH Raja Azlah Shah CJ (as His Lordship then was) observed: “We do not see any material difference between termination of the contract of employment by due notice and a unilateral dismissal of a summary nature. The effect is the same and the result must be the same. Where representations are made and are referred to the Industrial Court for enquiry, it is the duty of that court to determine whether the termination or dismissal is with or without just cause or excuse. If the employer chooses to give a reason for the action taken by him, the duty of the Industrial Court will be to enquire whether that excuse or reason has or has not been made out. If it finds as a fact that it has not been proved, then the inevitable conclusion must be that the termination or dismissal was without just cause or excuse. The proper enquiry of the court is the reason advanced by it and that court or the High Court cannot go into another reason not relied on by the employer or find one for it.”

In Dr A Dutt v Assunta Hospital [1981] 1 MLJ 304, the Federal Court inter alia held: “3. The Industrial Court in this case had come to a finding of fact that the motive for the termination of the services of the appellant was oblique and therefore it was justified in holding that the appellant had been dismissed without just cause or excuse.” 13 [12] We took the view that this is not a fit and proper case for the learned Judicial Commissioner to have intervened in the decision of the Industrial Court. In consequence, we allowed the appeal and ordered the High Court order to be set aside and the Industrial Court award to be reinstated. We hereby ordered so. Dated: 15 October 2018 sgd (DATUK DR. HJ. HAMID SULTAN BIN ABU BACKER) Judge Court of Appeal Malaysia. Note: Grounds of judgment subject to correction of error and editorial adjustment, etc. For Appellant: Mr. G.L. Ambrose [with Aneera Chowdry] Louis Ambrose Chambers Advocates & Solicitors Unit A-1-3A, Tower A Vertical Business Suite Avenue 3, Bangsar South No. 8 Jalan Kerinchi 59200 Kuala Lumpur. [Ref: O/20170002] 14 For Respondent: Puan Siti Rafidah binti Abdul Raof [with Puan Nurfarhana binti Fadzil] Messrs. Aswandi Hashim & Co Advocates & Solicitors No. 9, 1st and 2nd Floor, Kompleks Perniagaan Sultan Abdul Hamid Persiaran Sultan Abdul Hamid 05050 Alor Setar Kedah Darul Aman. [Ref: AHC/LTG/KATSB-OBO(JR)/2016-122]