Peter @ Petrose a/l G.P. Lazarus v 1. Sankyu (M) Sdn Bhd (Permohonan Semakan Kehakiman No. WA-25-140-08/2016)

Sankyu (M) Sdn. Bhd.

Mahkamah Perusahaan Malaysia … Responden-Responden 2 Grounds of Decision Azizah Nawawi, J: Application [1] This is the applicant’s judicial review application seeking the following prayers:

An order of certiorari to quash the entire and/or part of the 2nd respondent’s (“Industrial Court”) decision in Award No. 679 of 2016 dated 31.5.2016 (“Award”) which held that the applicant’s dismissal was without just cause and excuse.

(ii) An order of mandamus directing the Registrar of the Industrial Court to fix the Industrial Court Case No. 3/4-457/14 for hearing before a different Chairman.

(iii) Alternatively, a decision in favour of the applicant that he has been dismissed without just cause and excuse and that this matter to be remitted back to the 2nd respondent for determination of the appropriate remedies.

(iv) Alternatively, an order for this court to award a monetary compensation to the applicant in pursuant to Section 53 Rule 2(3) of the Rules of Court 2012. 3 [2] Having considered the application and the submission of the parties, this Court had dismissed the applicant’s application with cost and had affirmed the findings of the Industrial Court. The Salient Facts [3] The applicant was employed by the 1st Respondent (“Company”), which is a multinational logistics company based in Malaysia. [4] The applicant started as a programmer in 1990. The applicant was promoted as a Senior Manager of Information System Department (“ISD”), the last position that he held before he claimed that he was constructively dismissed by the Company. [5] The applicant claimed that on 1.8.2013, the Company had without consulting the Applicant, issued a new organization chart whereby one Mr. Nakamichi, who is an outsider, has been appointed as an Assistant General Manager. The Assistant General Manager position had never existed before and with the introduction of the new chart, the applicant has been demoted to a lower position in the chart. There was no memo or notice issued by the Company pertaining to Mr. Nakamichi’s appointment as the new Assistant General Manager. [6] The applicant then tried to seek for an explanation from Mr. Ueda, i.e. the General Manager of Logistic Division, but there was no clear explanation given to the applicant and the applicant was directed to 4 seek clarification from the Managing Director. Thus, the applicant wrote two memos dated 6.8.2013 and 16.8.2013 respectively to the Managing Director to raise the applicant’s concerns as to why the applicant’s duties are being transferred to another person. [7] In his second memo dated 16.8.2013, the applicant gave a 7 days’ notice to the Company to give the explanation, failing which, the applicant will have deemed himself to have been constructively dismissed by the Company. [8] Vide a letter dated 29.8.2013, the applicant left the company on the basis that he is deemed to have been constructively dismissed by the Company. [9] The applicant then filed a representation under Section 20 of the Industrial Relations Act 1967 (the “IRA 1967”) at the Industrial Relation Department. The applicant’s representation was referred to the Industrial Court for adjudication and was registered as Industrial Court Case No: 3/4-457/14. [10] After hearing both parties, the Industrial Court had on 31.5.2016 handed down the Award No. 679 of 2016 whereby the applicant’s claim for constructive dismissal was dismissed. Being aggrieved by the said Award, the applicant filed this judicial review application to challenge the said Award. 5 The Findings of the Court [11] The Federal Court in Ranjit Kaur S Gopal Singh v. Hotel Excelsior (M) Sdn Bhd [2010] 8 CLJ 629 has set out the function of the Court in an application for Judicial Review and the correct test to be applied in reviewing 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 6 when the said decision is based on finding of facts. 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. Zaid 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 7 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 [2001] 3 CLJ 9. However, there are exceptions to this restrictive principle where:

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 8 consideration, such findings are always amendable to judicial review”. (emphasis added) [12] In the present case, since the applicant has claimed for constructive dismissal in the Industrial Court, therefore the onus is on the applicant to establish his complaint on constructive dismissal. [13] In Wong Chee Hong v. Cathay Organisation Malaysia Sdn Bhd [1988] 1 CLJ (Rep) 298 where at p. 301, Salleh Abas LP explained the meaning of “constructive dismissal” as follows: “We think that the word "dismissal" in this section should be interpreted with reference to the common law principle. Thus it would be a dismissal if an employer is guilty of a breach which goes to the root of the contract or if he has evinced an intention no longer to be bound by it. In such situation the employee is entitled to regard the contract as terminated and himself as being dismissed. (See Bouzourou v. The Ottoman Bank [1930] AC 271 and Donovan v. Invicta Airways Ltd. [1970] Lloyd's LR 486). In Bouzourou 's case an employee would have been entitled, according to the Privy Council, to regard himself as being dismissed if his transfer from one province to another province rendered him exposed to an immediately threatening danger of violence or disease to 9 his person. And in Donovan 's case the Court of Appeal held that when the conduct of the employer was such that it rendered the continuance of the employee's service impossible, the latter was entitled to treat the contract as at end and to obtain damages for wrongful dismissal.” (emphasis added) [14] In Quah Swee Khoon v. Sime Darby Bhd [2001] 1 CLJ 19, the Court of Appeal described “constructive dismissal” as follows: “A reading of the pleaded case for the parties resolved the issue that fell for adjudication before the Industrial Court into what the profession has come to call as a “constructive dismissal”. There is no magic in the phrase. It simply means this: An employer does not like a workman. He does not want to dismiss him and face the consequences. He wants to ease the workman out of his organisation. He wants to make the process as painless as possible for himself. He usually employs the subtlest of means. He may, under the guise of exercising the management power of transfer, demote the workman. That is what happened in Wong Chee Hong (ibid). Alternatively, he may take steps to reduce the workman in rank by giving him fewer or less prestigious responsibilities than previously held. 10 Generally speaking, he will make life so unbearable for the workman so as to drive the latter out of employment. In the normal case, the workman being unable to tolerate the acts of oppression and victimization will tender his resignation and leave the employer's services. The question will then arise whether such departure is a voluntary resignation or a dismissal in truth and fact.” [15] The High Court in Bayer (M) Sdn Bhd v. Anwar Abd Rahim [1996] 2 CLJ 49 has set out the four conditions as follows which have to be met by an employee to be able to successfully claim for constructive dismissal:

there must be a breach of contract by the employer;

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

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

(iv) he 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. 11 Where the employee leaves in circumstances where these conditions are not met, he will be held to have resigned and there will be no dismissal within the meaning of the Act. [16] The Court of Appeal in Southern Investment Bank Bhd/Southern Bank & Anor v. Yap Fat & Anor [2017] 8 CLJ 159, with regards to constructive dismissal held as follows: “[18] We agreed with the submission of learned counsel for the appellants that in the overall conspectus of evidence adduced in this instant appeal, the constructive dismissal contended for by the first respondent was devoid of substance, and he failed to discharge the onus on him to prove that there was any breach of the employment contract by the appellant, let alone one which goes to the root of the contract justifying the resignation of the first respondent. [19] It is trite that the employee must prove that the employer's action amounted to a fundamental breach of contract or the law. In Moo Ng v. Kiwi Products Sdn Bhd, Johor & Anor [1998]1 3 CLJ 475, the court stated: In a broad sense constructive dismissal occurs when an employer repudiates a contract of employment. The repudiation may take the form of a breach, anticipatory breach or notice of intention. It may be 12 express or implied and it must go to the substance of the contract. If an employee asserts that he has been constructively dismissed, he must establish that there has been conduct on the part of the employer which breaches an expressor implied term of the contract of employment going to the very root of the contract. [20] It is important, therefore, to be cautious in adopting a wide interpretation of what conduct by an employer that would constitute constructive dismissal because of the danger of inviting a flood of employees who resign and then resile and claim to be constructively dismissed. The paramount consideration is the requirement that the breach must be so serious which goes to the root of the contract and the employee cannot be expected to continue with the contractual arrangement.” [17] In the Award, the Industrial Court made the following findings at pages 1057: “[25] Having said all that, it is therefore trite law that in constructive dismissal cases, the burden is on the Claimant, on the standard that is on the balance of probabilities, to prove that he had been constructively dismissed and the following need to be establish: 13

that the company had by its conduct breach the contract in respect of one or more of the obligations owed to the Claimant; the obligations breached maybe in respect of either express terms or implied terms or both;

that the terms which had been breached go to the foundation of the contract; or stated in other words, the Company had breached one or more of the essential terms of the contract;

that the claimant, pursuant to and by reason of the aforesaid breach, had left the employment of the company, that is, that he had elected to treat the contract as terminated; and

that the Claimant had left at an appropriate time soon after the breach complained of; that is, that he did not stay on in such circumstances as to amount to an affirmation of the contract, notwithstanding the breach of the same by the employer.” [18] I am of the considered opinion that the Industrial Court had applied the correct test in that the burden is on the applicant to prove that he was constructively dismissed. For that purpose, the applicant has a duty to prove to the Industrial Court that the Company had breached his contract of appointment which went to the root of the 14 contract or that the Company had evinced an intention to no longer be bound by the contract. In the present case, the Industrial Court had applied the correct principle on the issue burden of proof and found no evidence to support the applicant’s claim for constructive dismissal. [19] In Wong Chee Hong’s case, the Supreme Court held that: “so long as the Industrial Court directed itself properly in law as to its jurisdiction, its finding and therefore it’s award must stand unassailable.” [20] Before this court, the applicant’s challenge is mounted on the grounds of illegality, irrationality and procedural impropriety. Applying the principles in the above quoted cases, I will now deal with the issues raised by the applicant. [21] The Industrial Court held that the applicant’s claim on constructive dismissal are based on the letters dated 16.8.2013 and 29.8.2013. In the said letters, the grounds of constructive dismissal are as follows:

that the reorganization of the ISD under the Logistics division on 6.7.2010 by the company had placed many difficulties for the effective functioning of ISD; 15

(ii) that the company had frustrated the work of ISD by placing the applicant in the Health, Safety, Quality and Environment Committee for warehouse operation;

(iii) that the company had victimized and humiliated the applicant by giving him annual increments and bonus payment that were lower as compare to his subordinate; and

(iv) that the applicant’s status and position became worse with the appointment of Mr. Nakamichi whereby Mr. Nakamichi had replaced the applicant as Head of ISD. Ground (i) - reorganization of ISD [22] The applicant takes the position that the reorganization of the ISD under the Logistics division on 6.7.2010 by the Company had placed many difficulties for the effective functioning of ISD. This resulted in him not able to perform his functions smoothly and it also caused him to be confused as to who was his immediate superior. [23] However, despite the reorganization on 6.7.2010, the applicant had accepted the reorganization as he did not immediately walk off his job due to the reorganization. The Industrial Court found that the applicant remained with the Company since the reorganization, and only raise this issue in August 2013 as a ground for constructive dismissal, which is more than three (3) years later. The Industrial Court finds that: 16 “[34] The Claimant had remained in the Company in July 2010 but attempted to raise this allegation in August 2013 as a reason for his constructive dismissal, which was more than three (3) years later. This long period is clearly an unreasonable delay on the Claimant’s part and the court must rule that he had affirmed the alleged breach of the Company on the reorganization of the ISD. He had lost his right to treat himself as discharged since for those days, he appeared to have affirm the alleged breach of the Company… Therefore, the Claimant’s allegation that he was supposedly confused and affected by the 2010 reorganization is without basis because he had accepted COW7 as his immediate superior. [35] Even if there was a change after the reorganization, it merely related to the change in the line of reporting and such change had not eroded the functions of the Claimant as the Senior Manager of ISD… [36] In effect, when the reorganization took place in July 2010, the Claimant’s position was never affected as his duty remained the same, which is to report to his immediate superior 17 …. Therefore, such a change did not amount to a breach which had gone to the root of the Claimant’s contract of employment.” [24] Having considered the findings of the Industrial Court, I am of the considered opinion that the above finding is not perverse. The Industrial Court had considered that the reorganization which the applicant complained off was done three years earlier, and that even if that amounts to a breach, the applicant had affirmed to the same. Ground (ii) - placing the applicant in Health, Safety, Quality and Environment Committee for warehouse operation [25] On this issue, the Industrial Court found that the applicant has not proven that he was overburdened with work at any given time. On the issue of sitting on the committee, the Industrial Court made a finding that the Company has the right to require the applicant and other managers to serve on the committee, and the committee only has four (4) meetings in a year. As such, it cannot be said that being in the committee is a big burden on the applicant. Again, this finding of fact is based on the evidence before the Industrial Court, and this Court cannot disturb the said finding of facts as the same is not perverse. 18 Ground (iii) – paying the applicant lower increments and bonus than his subordinates [26] The applicant took the position that the Industrial Court had erred in not taking into consideration that his bonus and increments were supposedly lower compared to his subordinates in 2010, 2011 and 2012. [27] However, I agree with the Company that bonuses and increments are matters of the Company discretion, and that the applicant has no right to demand to be paid increment and bonus by the company under his contract of employment. In the case of Southern Investment Bank Bhd/Southern Bank & Anor v. Yap Fat & Anor [2017] 1 LNS, the Court of Appeal held that: “Our Courts have consistently recognized and upheld that any annual increment of salary or bonuses that maybe awarded to the employees is at the absolute discretion of the management. In Lim Seng Huat v. Fiamma Sdn Bhd [1997] 1 CLJ 90, this Court had adjudicated on this point as follows – ‘The payment of bonus is dependent on the discretion of the employer unless the said bonus is a contractual bonus, of which there is no evidence here. Hence the High Court was right in 19 setting aside the bonus award made by the Industrial Court.” (emphasis added) [28] Therefore, I agree with the Company that whether or not the Industrial Court had given any consideration to this issue of bonus and increment is irrelevant as the law is that the employee is not entitled as of right to the increment and the bonus, as these are within the management prerogatives of the Company. Ground (iv) – appointment of Mr. Nakamichi as Assistant General Manager of ISD [29] The applicant alleged that he was demoted and stripped of his duties as a result of the reorganization and the appointment of Mr. Nakamichi as the Assistant General Manager of ISD. [30] The applicant also complained that he was the Head of ISD, and that he was replaced by Mr. Nakamichi as the Head of ISD. On this issue, the Industrial Court made a finding of facts that the applicant was never appointed as the head of ISD. The Industrial Court finds that the highest rank that the applicant has held before his claim for constructive dismissal was that of a Senior Manager. The Industrial Court made a finding of fact that Mr. Nakamichi was replacing the applicant’s immediate superior, not replacing the applicant’s himself. 20 [31] As the Industrial Court has made a finding of facts based on the evidence before it, then this court has no jurisdiction to interfere in the questions of facts. In Yong Peng Kean v. Akira Sales & Services (M) Sdn Bhd & Anor [2015] 1 LNS 648, the Court of Appeal held that: “The learned Industrial Court Chairman accepted the appellant’s version and the law does not permit the High Court in a judicial review application to substitute that finding. It is well settled that appellate courts will not interfere with the findings of facts of the Industrial Court.” [32] With regards to the other issues raised during the hearing before the Industrial Court, but were not part of the grounds which the applicant claimed for constructive dismissal, I agree with the case of Tan Cheng Hing v. Federal Metal Printing Sdn Bhd [199] 3 MLJ 564 (which was applied by the Industrial Court), where the Court said that: “It is observed that the applicant in the instant case did not in his letter claiming constructive dismissal highlight or even address the issue of transfer … ….. I am of the view that the proposed transfer did not tantamount to a fundamental breach bearing in mind the fact that the respondents had the right to transfer and both proposals were at the very outset 21 rejected by the applicant and the applicant never mentioned this issue in his letter dated 27 June 1994 (CL-5)...” (emphasis added) [33] Be that as it may, on the applicant’s complaint that the Company had frustrated his work by changing the IBM AS/400 password, the Industrial Court has made a finding of fact in accepting the explanation given by COW-5 and COW-7. COW-5 gave evidence that the change in the password does not really affect the applicant’s work as the applicant had ceased to do much work on the AS/400 server. Im fact, it was COW -5 who was responsible for the server. COW-7 also explained that since the applicant was making statements on constructive dismissal, therefore the Company took the stand to protect its IBM Server, as the server hosted the accounting system of the Company and other important information. [34] In paragraph [66] of the Award, the Industrial Court held as follows: “[66] The Court is unable to find that the Claimant was driven out of his employment and he has also failed to prove that he was entitled to treat himself constructively dismissed. The court is of the opinion that the company had not breached any fundamental terms of the Claimant’s contract of employment. Nor has the court found that the cumulatively were there series of actions on the part of the Company which amount to a breach of 22 the terms of the Claimant’s contract of employment. The court therefore rules that there was no dismissal in this case and would not delve further to decide if the dismissal was for just cause or excuse.” [35] Having considered the Award and the submission of the parties, I am of the considered opinion that there is no legal basis for me to disturb the Award. The Industrial Court has applied the correct legal principles and has made a finding of facts based on the evidence before it. Therefore, it cannot be said that the Industrial Court has failed to take relevant consideration, or has taken irrelevant considerations or that the findings are perverse. In the premise, the application is dismissed with costs. (AZIZAH BINTI HAJI NAWAWI) JUDGE HIGH COURT MALAYA (Appellate and Special Powers Division 2) KUALA LUMPUR Dated: 9 August 2018 For the Applicant : Cedric Miranda and Lina Param with him. Messrs Cedric Miranda & Co Petaling Jaya, Selangor Darul Ehsan. For the 1st Respondent: Goh Meng Yew and Vinosha Nambiar with him. Messrs Iza Ng Yeoh & Kit Kuala Lumpur. 23 Cases referred:

Ranjit Kaur S Gopal Singh v. Hotel Excelsior (M) Sdn Bhd [2010] 8

Wong Chee Hong v. Cathay Organisation Malaysia Sdn Bhd [1988] 1 CLJ (Rep) 298.

Quah Swee Khoon v. Sime Darby Bhd [2001] 1 CLJ 19.

Bayer (M) Sdn Bhd v. Anwar Abd Rahim [1996] 2 CLJ 49.

Southern Investment Bank Bhd/Southern Bank & Anor v. Yap Fat & Anor [2017] 8 CLJ 159.

Southern Investment Bank Bhd/Southern Bank & Anor v. Yap Fat & Anor [2017] 1 LNS.

Yong Peng Kean v. Akira Sales & Services (M) Sdn Bhd & Anor [2015] 1 LNS 648

Tan Cheng Hing v. Federal Metal Printing Sdn Bhd [199] 3 MLJ 564.