Pos Malaysia Berhad v Hazari Bin Ismail (PA-16A-14-10/2024)

This is an appeal against Award No. 1477 of 2024 dated 25.09.2024 ("the Award") issued by the learned Chairlady of the Industrial Court, which decided in favour of the Claimant.

For ease of reference, the parties shall be referred to as they were in the Industrial Court, in that the Appellant as the Company and the Respondent as the Claimant.

A summary of the facts of the case, as submitted by both the Solicitors for the Claimant and Company, are reproduced hereinbelow, with the necessary amendments made therein.

The Claimant began his employment as a postman on 19.07.1996 with the Appellant at the Butterworth Post Office until 2001.

The Claimant was then transferred to Bukit Mertajam Post Office.

In 2019, the Claimant was promoted to Posmen Kanan cum Ketua Zon at Pusat Pos Laju (PPL) Bukit Mertajam.

At the time of his dismissal, the Claimant was still holding the same post.

On 17.03.2021, the Company issued a transfer order to the Claimant from Bukit Mertajam to PPL Bayan Lepas as Posmen Kanan cum Ketua Zon requiring him to report for duty on 29.03.2021.

By a letter dated 23.03.2021 issued to the Company, the Claimant rejected the transfer and proposed to remain as a courier at PPL Bukit Mertajam, in a grade lower than his current post.

Via a memo dated 26.03.2021, the Company rejected the Claimant's request for demotion and advised the Claimant to report for duty at PPL Bayan Lepas on 29.03.2021.

The Claimant was then on annual leave from 29.03.2021 until 05.04.2021.

Thereafter, the Claimant continued to report for work in Pusat Pos Laju (PPL) Bukit Mertajam.

In response, on 06.04.2021, the Company issued a Show Cause Letter to the Claimant for insubordination, in accordance with the disciplinary procedures of the Company.

The Claimant replied to the Show Cause Letter on the same day. In his reply, the Claimant acknowledged that he is insubordinate and reiterated his appeal to be demoted so as to avoid the transfer.

The Company then conducted a domestic inquiry on 14.04.2021, which the Claimant attended alongside his Union representative, where he pleaded guilty to the charge of insubordination.

Consequently, the Company found the Claimant guilty of misconduct of insubordination and issued a letter of dismissal dated 15.04.2021.

The Claimant appealed against this dismissal.

However, the Company vide a letter dated 05.05.2021, maintained the punishment imposed against the Claimant.

Dissatisfied with the decision, the Claimant filed a claim on 30.05.2022 pursuant to s.20 of the Industrial Relations Act 1967 claiming that his dismissal was without just cause or excuse.

The claim was heard by the Industrial Court of Penang on 08.09.2023 and 12.03.2024 respectively.

An Award was handed down on 25.09.2024, wherein the Industrial Court reinstated the Claimant to PPL Bukit Mertajam, albeit to the demoted position of courier with a reduced salary equivalent to his salary prior to his promotion in 2019. The Learned Chairlady also awarded the Claimant compensation consisting of 24 months of backwages from the date of his dismissal up until the date of the Award, calculated based on the Claimant's last drawn salary in 2021 subject to 30% reduction for contributory misconduct.

Aggrieved by the Award, the Company filed the appeal herein.

Notwithstanding various grounds were raised by the Company in its Memorandum of Appeal, the appeal generally centres on the following two (2) issues, which were raised and dealt with by the learned Chairlady in arriving at the Award, namely-

(a) Whether the Company has proven that the Claimant is guilty of insubordination as misconduct for which he was terminated and

(b) Whether the decision of the Company to terminate the Claimant's employment constitutes just cause or excuse for the Claimant's dismissal. First issue: Whether the Company has proven that the Claimant is guilty of insubordination as misconduct for which he was terminated

Pertaining to this first issue, the learned Chairlady analysed the chronology of events from the date of the transfer order to the date of dismissal and made a finding that "the decision was suspiciously made hurriedly and arbitrarily."

The learned Chairlady also made the following findings-

(i) The Company failed to act as a reasonable employer as it terminated the Claimant who had served 25 years of unblemished employment for single disobedience.

At this juncture, it is vital to note that the case of Chen Kok Choy (supra) merely reiterated the established principles governing employee transfers. Specifically, a transfer must not operate to the prejudice or determent of the workman, it must not occasion any economic loss in respect of wages, bonuses, or other monetary benefits to the workman, or it must not victimize the workman by way of demotion.

In view of the learned Chairlady's explicit finding that the transfer from PPL Bukit Mertajam to PPL Bayan Lepas was a lateral transfer, any issues concerning economic loss in wages, bonus or other monetary benefits, as well as victimisation by way of demotion, are entirely inapplicable to the present case.

Further, in determining whether the transfer was tampered with by mala fide intent or elements of victimization, the learned Chairlady erroneously took into account irrelevant considerations, particularly personal difficulties / issues of the Claimant.

For instance, the learned Chairlady highlighted that-

(i) the Claimant will be incurring more costs and travelling hours;

Thus, the learned Chairlady erred by taking into consideration the subjective personal difficulties of the Claimant, which are entirely irrelevant to establishing mala fide intent or victimization on the part of the Company.

Consequently, the learned Chairlady made no definitive or specific finding of mala fide intent or victimization against the Company.

Next, the learned Chairlady had also made a finding of fact that during the Show Cause Inquiry ("SCI") on 14.04.2021, the Claimant had submitted his three (3) medical certificates dated 09.04.2021, 12.04.2021 and 13.04.2021.

Flowing from this, the learned Chairlady concluded that employees are not obligated to disclose their medical conditions if such conditions do not interfere with their job performance.

However, notwithstanding the production of the abovesaid three (3) medical certificates, the learned Chairlady erred when she failed to appreciate that the Claimant's alleged medical condition had already been in existence for the eight (8) months prior to the date of the SCI.

At this juncture, reference is made to a Memo dated 09.04.2021 authored and signed by Dr. Nagesvaran of Klinik Joe Fernandez, Juru, which states as follows (please see page 341 of Rekod Rayuan Enclosure 4) - The patient Hazari bin Ismail 750218-07-5383 claims having on and off allergic dermatitis might be due to his working condition in the store. Kindly give him task or job that does not cause occupational hazard.

In addition thereto, a "To Whom It May Concern" letter dated 12.04.2021, duly authored and signed by Dr. Puspharani of Klinik Joe Fernandez, Bukit Mertajam, reads as follows (please see page 342 of Rekod Rayuan Enclosure 4) - This is to inform that the abovenamed is suffering from generalised rash and itchiness and currently on treatment for the past 8 months. Due to the above health issues, his working duties may be affected. Kindly see him and do the needful.

A perusal of the said Memo and the "To Whom It May Concern" letter from the two (2) doctors of Klinik Joe Fernandez, particularly the "To Whom It May Concern" letter dated 12.04.2021, shows that the Claimant had been suffering from allergic dermatitis for eight (8) months prior to 12.04.2021 meaning as early as September 2020.

Yet, the Claimant adduced no evidence of any request made by him to the Company for a change in his working conditions due to his alleged medical condition.

Crucially, the issue of the said medical condition only arose upon the existence of the transfer order. The Claimant's eight-month silence regarding his condition strongly supports the inference that the alleged allergic dermatitis was a mere afterthought, rather than the true reason for his refusal to report for work at PPL Bayan Lepas.

Moreover, it is settled law that personal health grievances do not provide a legal justification for an employee to unilaterally refuse a valid transfer order.

Moving on, with regard to the Claimant's proposal for a demotion, it is trite law that an employee cannot dictate working conditions to the employer. The right to manage business operations and deploy human resources remains a settled management prerogative.

Furthermore, it is not for the Claimant to dictate the terms of his employment to suit his personal convenience at the expense of his employer (i.e. the Company).

In prioritizing his own preferences, the Claimant entirely disregarded the operational needs and legitimate business decisions of the Company regarding the management and organization of its workforce.

Had the Company accepted the Claimant's request for a demotion, it would have created a significant risk of consolidating a clear claim of victimization against the Company, notwithstanding the fact that the demotion was initiated by the Claimant himself.

Logically, but for the valid transfer order, the Claimant would never have sought such a demotion.

Thus, the learned Chairlady erred in concluding that the Claimant faced an arduous choice regarding his demotion request, as it was never within his purview to dictate such operational alternatives.

Rather, the Claimant's demand for a demotion operated as a coercive tactical leverage against the Company.

Furthermore, as a senior employee with twenty-five (25) years of service, the Claimant ought to have been deeply well-versed in the Company's business operations.

Consequently, the Claimant should not have engaged in such blatant misconduct, lest it set a highly damaging precedent for other employees to follow.

In any event, based on the evidence adduced, the transfer order is entirely valid for the reasons set out-

(i) Clause 2.6 of the Letter of Appointment ("LOA") clearly states that the Claimant is subject to transfer at the discretion of the Company.

Bearing in mind that both Clauses 2.6 of the LOA and CA are silent on the requirement of a valid reason to be afforded in a lateral transfer, the learned Chairlady erred when she made a finding that the Company gave no valid reason to the Claimant for the lateral transfer.

In addition thereto, the learned Chairlady's finding that the Company's refusal to offer the Claimant the demoted position was pre-determined is a mere supposition based on the chronology of events, rather than a conclusion drawn from substantiated evidence.

Consequently, such a finding is wholly unsustainable, as it directly contradicts the uncontroverted evidence on record—namely, the unchallenged testimony of Shahrul Nizam bin Shahram ("COWS-2"), which conclusively established the operational necessity to fill a vital vacancy at PPL Bayan Lepas.

The learned Chairlady also erred in finding that Shahrul Nizam bin Shahram ("COWS-2") was the "key person" orchestrating the events that led to the Claimant's dismissal. While COWS-2 may have suggested the dismissal, the ultimate and final decision-making power rested solely with the Company's Headquarters.

Notwithstanding the analysis of the facts and evidence adduced, the learned Chairlady failed to make any definitive finding on the threshold issue, namely, whether the Company had proven that the Claimant was guilty of the alleged insubordination that triggered the dismissal.

Crucially, there is a material omission in the Industrial Court's Award in that, the learned Chairlady arrived at a conclusion without making a clear and definitive finding as to whether the Claimant's conduct amounted to insubordination as charged.

Be that as it may, this question must be answered in the affirmative, as the minutes of the SCI clearly demonstrate that the Claimant pleaded guilty to the charge of refusing to report for work at PPL Bayan Lepas (see paragraphs 2 and 2.5 of page 19 of the said minutes exhibited as page 108 of the Rekod Rayuan @ Enclosure 4).

The Claimant's refusal to report for work at PPL Bayan Lepas is a clear defiance of the transfer order and wilful insubordination on the part of the Claimant.

Accordingly, the Company has proven on the balance of probabilities that the Claimant has committed the misconduct of insubordination. $ 2^{n d} $ issue: Whether the decision of the Company to terminate the Claimant's employment constitutes just cause or excuse for the Claimant's dismissal

Under this $ 2^{\mathrm{nd}} $ issue, the learned Chairlady made a finding that the dismissal is excessive and inconsistent with principles of natural justice.

The learned Chairlady was of the view that demotion will be the most appropriate punishment as it shall also deter other employees from committing similar disobedience.

Paradoxically, by utilizing the phrase "from committing similar disobedience", the learned Chairlady implicitly conceded that the Company had successfully proven the Claimant's misconduct regarding his refusal to report for work at PPL Bayan Lepas.

Although, as mentioned earlier, the learned Chairlady made no explicit and definitive finding as to whether the Claimant's conduct amounted to insubordination as charged.

Moving on to whether the dismissal was excessive or justified in the context of a defiance of transfer orders, the Federal Court in Pan Global Textiles Bhd Pulau Pinang v Ang Beng Teik [2022] 1 CLJ 181 clearly laid down the applicable governing principles.

The apex court firmly established that an employee's continued absence from work or refusal to comply with a bona fide management directive strikes at the very root of the employment contract, thereby fully justifying a summary dismissal.

In delivering the judgment of the Federal Court, Ahmad Fairuz FCJ also cited B.R. Ghaiye's "Misconduct in Employment" (2nd edn) at page 306, which states as follows: - "...If an employee tries to disobey apparently lawful order on the ground of illegality it would be difficult for the management to maintain discipline and industrial peace. It is the duty of the employee to first obey the order and then challenge it..."

Reference was also made to OP Malhotra's "The Law of Industrial Disputes" (2nd edn.), at p. 581-582, which states as follows: No employee can claim leave of absence as a matter of right, and remaining absent without leave will itself constitute gross violation of discipline. Hence, continued absence from work without permission will constitute misconduct justifying the discharge of a workman from service... (emphasis added)

Based on the doctrine of stare decisis and applying the aforementioned principles of law to the facts, the Claimant's refusal to report for work at PPL Bayan Lepas constitutes clear defiance of a lawful transfer order and wilful insubordination, thereby entitling the Company to dismiss him.

In other words, the decision of the Company to terminate the Claimant's employment was made with just cause or excuse.

Quoting once again the principle from B.R. Ghaiye's "Misconduct in Employment" (2nd edn) that "it is the duty of the employee to first obey the order and then challenge it", the Claimant should and ought to have obeyed the transfer order by reporting for work at PPL Bayan Lepas, and subsequently raised his financial and medical grievances with the Company.

The learned Chairlady thus erred in fact and in law when she concluded that the dismissal was excessive and inconsistent with the principles of natural justice.

The appeal is allowed with costs of RM5,000-00 subject to allocator fees. The Award by the learned Chairlady is hereby set aside. Penang High Court (4) Counsel(s): Ms. Rajeswari Karupiah together with Mr. Muhamad Sharulnizam bin Mohd Rosni from Messrs Rosli Dahlan Saravana Partnership for the Appellant. Mr. Domnic Selvam a/l Gnanapragasam from Messrs. Domnic Pragasam Tan & Co. for the Respondent. Case(s) referred to: Chen Kok Choy v M Force Bike Holdings Sdn Bhd [2023] MELRU 1863; Pan Global Textiles Bhd Pulau Pinang v Ang Beng Teik [2022] 1 CLJ 181.