Sabah Forest Industries Sdn Bhd (84330-K) …Appellant v the Honourable Minister of Human Resources Malaysia (S-01(IM)(NCVC)-291-08/2016)

(a) That leave granted to Sabah Forest Industries Sdn Bhd, the Applicant herein, to apply for an Order of Certiorari to remove into this Honourable Court for the purpose of quashing in totality the decision dated 26th March 2015 under Section 9(1c) of the Industrial Relations Act 1967 of the Honourable Minister of Human Resources, the 1st Respondent herein, on the capacity of the several workmen who are employees of the Applicant as stated in paragraph (ii) thereto (“the impugned Decision”)

(b) That pending the disposal of this application all actions and proceedings there under which may be or have been taken in 4 pursuance of the said Decision be stayed.

(c) That all necessary and consequential directions and/or other orders be given.

(d) That the costs occasioned by this application be taxed. [5] Briefly the salient and undisputed facts of the case are as follows. The 2nd Respondent had for a long time attempted to represent the workers of the Applicant. By letter dated 10th March 2014, the Director of the Sabah Branch of the Department of Industrial Relations (DIR Sabah) allowed the 2nd Respondent to serve a fresh claim for recognition to represent the eligible employees of the Applicant. Form A dated 17th March 2014 under Section 9(2) of the Act was served on the Applicant. The Applicant rejected the claim for recognition vide letter dated 2nd April

The 2nd Respondent reported the matter under Section 9(4) of the Act to the Director General for Industrial Relations (DGIR) by letter dated 4th April 2014. [6] The DGIR then proceeded to act under Section 9(4) (a) and (b) of the Act requiring the Applicant to furnish the list of the employees’ names in Form B as at the date of the 2nd Respondent’s claim, for recognition. The Appellant furnished Form B vide latter dated 22nd August 2014. The DGIR then directed the DIR Sabah to conduct the 5 secret ballot process. Meetings on the secret ballot were duly held on 22nd September 2014 and 26th September 2014 but a dispute arose as to the scope of the 2nd Respondents’ membership. The Applicant allegedly sought to exclude employees in the categories of Supervisor, Commercial, Sales & Marketing and Administration Divisions. [7] Subsequent to that, vide a letter dated 29th September 2014, the 2nd Respondent referred the matter to the DGIR pursuant to section 9(1A) of the Act to determine whether the Applicant’s employees were employed in a managerial, executive, confidential or security capacity or otherwise. [8] Upon direction by DGIR vide letter dated 17th October 2014, DIR Sabah held several meetings pursuant to section 9(1B) of the Act to discuss the list of the employees’ names in the disputed post and those who were eligible for the secret ballot. The parties could not agree on the eligibility of 154 employees but they agreed that the Department of Industrial Relations should conduct investigations to determine whether the said employees were employed in the managerial, executive, confidential or security capacity or otherwise. The Applicant contended that 139 of the 154 employees were in the Supervisory Category and the balance of 15 employees were from the Human Resource Division 6 holding the posts of Paramedic, Assistant Nurse, Clerk, Medical Assistance, Housekeeper/Clinic Attendant, Trained Assistant Nurse, Assistant System Administrator, Administrative Assistant, CCTV Operator and Senior Clerk from Medical, Residence & Facilities and Administration Departments. Therefore, the Applicant argued that all of the 154 employees were not eligible for the Union Membership. [9] Meanwhile, the Applicant and the 2nd Respondent agreed that a sample of 15 employees from the Human Resource & Administration Department (Medical, Residence & Facilities and Administration) and 102 employees from the category of Supervisors shall be interviewed by the DIR Sabah to ascertain their capacity and thereupon apply the result obtained from the interview to determine the capacity to the rest of the 154 employees. For the purpose of investigation, the Applicant forwarded information regarding the job descriptions carried out by those relevant employees to the DIR Sabah for the DIR Sabah to conduct random interviews and/or enquiries on the employees in each post which was disputed. The interview and enquiries were done on numerous dates to identify the job scope, role, responsibility and other information in relation to the job of the employees involved. 7 [10] After the investigation was completed, the DIR Sabah forwarded the investigation report to the DGIR and received on 14th January 2015. The DGIR informed and notified the 1st Respondent of the same pursuant to section 9(1c) of the Act. The report was later forwarded to the Minister by the DGIR under the same sub-section. In exercise of his powers under section 9(1D) of the Act, the Minister made a decision in respect of the dispute in Form E on 26th March 2015. [11] The Minister’s decision was in two parts, i.e. in Part (i) he decided that the employees in six (6) posts are not eligible to Union Membership and in Part (ii) he decided that employees in thirty-five (35) posts are eligible for Union Membership (the impugned decision). The relevant part of the Minister’s decision are reproduced below:

(i) The positions of Senior Supervisor, Supervisor (Electrical), Supervisor (Logging), Supervisor (Boiler Operator), Assistant Supervisor (ITC Ply Mill), Assistance Supervisor (QC) are paid employees under the managerial , executive, confidential or security capacity; and

(a) The Minister had acted unreasonably and therefore the impugned decision was irrational;

(b) The Minister had failed to take into account the duties and responsibilities of the respective employees as described in their respective job descriptions before coming to the impugned decision; and 9

(c) The Minister had left indeterminate the capacities of 57 employees out of the sample of 117 employees who were allegedly interviewed by the DIR Sabah. [14] The findings of the High Court were as follows:

(a) There was no merit in the ground of challenge that the Minister had left indeterminate the capacity of 57 employees. The challenge by the Applicant is only on unreasonableness or irrationality as envisaged under Paragraph 25 of the Affidavit In Support affirmed by Susiman A/L Theyan @ Many on behalf of the Applicant. This outside the common accepted grounds to challenge the decision of an administrative authority which are illegality, procedural impropriety and proportionality (see Council of Civil Service Unions and Other Appellants v. Minister for the Civil Service Respondent [1985] A.C. 374 and Ambank

(M) Berhad v. Menteri Sumber Manusia & Persatuan Pegawai-Pegawai Bank Semenanjung Malaysia (ABOM) [2014] 1 LNS 686.

(b) Based on agreement between the Applicant and the 2nd Respondent, a sample of 15 employees from Human Resource and Administration and 102 employees from the categories of Supervisors was interviewed by the DIR Sabah to ascertain their eligibility to became Union Members and the result applied to the balance of the 154 employees. In the premises, the Minister had decided on all the eligibility of all the said employees whose status was disputed;

(c) On the argument that the decision of the Minister was irrational, the learned High Court Judge had considered the employees job 10 description and their confidential capacity before deciding that he see no reason to criticize the decision of the Minister on grounds of unreasonableness or irrationality; and

(d) There is no impropriety or unreasonableness in the impugned decision and the court should give effect to section 9(6) of the Act in that the decision of the Minister shall be final and shall not be questioned in any court (see Minister of Human Resources, Malaysia v. Diamet Klang (Malaysia) Sdn Bhd & Another Appeal [2015] 6 CLJ 181). [15] Based on the above findings, the learned High Court Judge dismissed the Application with costs. Thus the appeal before us. The Appeal [16] In its Memorandum of Appeal, the Applicant forwarded six (6) grounds of appeal as follows:

(a) The 1st Respondent had failed to take into account the detailed job descriptions of each employees in the list provided before deciding that the employees in paragraph (ii) of the impugned decision are in the managerial, executive, confidential or security capacities;

(b) The 1st Respondent had acted irrationally when he included in paragraph (ii) of the impugned decision those employees who are eligible for union membership but excluded employees with similar jobs descriptions for union membership in paragraph (i) of the said impugned decision; 11

(c) The 1st Respondent had acted irrationally when he excluded an Assistant Supervisor as eligible for union membership and placed him in paragraph (i) of the said impugned decision but included a Supervisor with similar or higher responsibilities as eligible for union membership and placed him in paragraph (ii) of the said impugned decision;

(d) The 1st Respondent had acted irrationally when he included the CCTV Operator, whose scope of work is strictly security in nature, as eligible for union membership and placed him in paragraph (ii) of the said impugned decision;

(e) The 1st Respondent had acted irrationally when he included the Administration and Accounts Supervisor in the Plantation Division as eligible for union membership and placed her in paragraph (ii) of the said impugned decision whereas all employees in the Finance Department were agreed between the parties to be excluded from union membership; and

(f) The 1st Respondent had failed to decide on the capacity of 57 employees thereby leaving their capacities for union membership indeterminate. [17] Before us, learned counsel for the Applicant canvassed only one issue, i.e. that that learned High Court Judge had erred in law and in fact when His Lordship dismissed the Applicant’s Judicial Review Application on the ground that the Minister did not err in fact and law and thereby did not act irrationally as the Minister did not leave the capacity of any employees indeterminate. Learned counsel submitted that even though 12 117 employees had been interviewed, nevertheless, the Minister had left the capacities of 57 employees undetermined for eligibility for union membership. [18] Learned counsel argued that the Minister had failed to decide on the eligibility for union membership of the following posts: - Boiler Supervisor (ITC); - Supervisor (Timber Production – Raw Material); - Supervisor (ITC Sawmill); - Supervisor (Clonal Multiplication); - Supervisor (Pulp & Paper); - Senior Supervisor (Pulp & Paper); - Supervisor (Plantation); - Supervisor (Plumbing); - Supervisor (Commercial Procurement); - Supervisor (Integrated Timber Complex); and - 47 employees in the Supervisory Category. [19] Learned counsel further argued that the Minister had left out about 49% of the sample of 117 employees agreed between the Applicant and the 2nd Respondent. Hence, Learned Counsel urged this Court to allow the appeal to quash the decision of the Minister on the ground that the results obtained from the impugned decision were incomplete and as such cannot be applied to the remaining employees in the list to determine their eligibility for union membership. 13 [20] Finally, learned counsel argued that the decision of the learned High Court Judge was plainly wrong when His Lordship held that: “Thus the employees only need to refer to the posts referred to on the decision of the Minister to find out their eligibility.” [21] Learned Senior Federal Counsel for the 1st Respondent (learned SFC) submitted that the argument put forth by the learned counsel for the Applicant was an afterthought simply on the ground that the Applicant had abandoned the same argument in the court below. Learned SFC submitted that the Applicant cannot raised the same issue now before this court. They are estopped from raising the same argument. Learned SFC relied on the Federal Court decision in Asia Commercial Finance (M) Berhad v. Kawal Teliti Sdn Bhd [1995] 3 CLJ 783. Our Decision [22] The matter before us concerned with an issue on the eligibility of employees of the Applicant to be members of a Union, Kesatuan Pekerja-Pekerja Industri Perkayuan Sabah, the 2nd Respondent herein. The Applicant contended that 139 employees out of 154 employees were in the Supervisory Category and that 15 employees are from the Human Resource Division and therefore not eligible for union 14 membership. It is not disputed that the 2nd Respondent had been registered as a trade union pursuant to the Trade Unions Act 1959 and had been recognized under section 9 of the Act. [23] Section 9 of the Act sets out the statutory procedure before an employee can become eligible or recognized as a member of a trade union. It is pertinent that the views of the employer, in this case, the Applicant, must be obtained and taken into account. Section 9 states: “9. (1) No trade union workmen the majority of whose membership consists of workmen who are not employed in any of the following capacities that is to say –

(a) managerial capacity;

(b) executive capacity;

(c) confidential capacity; or

(d) security capacity, May seek recognition or serve an invitation under section 13 in respect of workmen employed in any of the above-mentioned capacities.

(a) accord recognition; or

(b) if recognition is not accorded, notify the trade union of workmen concerned in writing the grounds for not according recognition.

(c) (Deleted by Act A1322).

(a) of the receipt of the notification; or

(b) after the twenty-one day period in subsection (3) has lapsed, report the matter in writing to the Director General, failing which the claim for recognition shall be deemed to have been withdrawn.

(a) The competence of the trade union of workmen concerned to represent any workmen or class of workmen in respect of whom the recognition is sought to be accorded; and

(b) By way of secret ballot, the percentage of the workmen or class of workmen, in respect of whom recognition is being sought, who are members of the trade union of workmen making the claim.

(a) Shall have the power to require the trade union of workmen, the employer, or the trade union of employers concerned to furnish such information as he may consider necessary or relevant within the period specified in the requirement;

(b) May refer to the Director General of Trade Unions for him to ascertain the competence of the trade union of workmen concerned to represent any workmen or class of workmen in respect of whom recognition is 17 sought to be accorded, and the performance of duties and functions by the Director General of Trade Unions under this paragraph shall be deemed to be a performance of his duties and functions under the written law relating to the registration of trade unions; and

(c) May enter any place of employment where any workmen in respect of whom a claim for recognition is sought to be accorded are being employed to examine any records or documents or to conduct secret ballot.

(i) The traditional view in respect of judicial review, in respect of executive decision which is still good law in the Malaysian context was expounded in the case of Council of Civil Service Unions & Ors v. Minister for the Civil Service [1985] 1 AC 374. That case anchors the point to say judicial review is not an appeal from a decision, but a review of the manner in which the decision was made. In doing so, the court are obliged to consider the jurisprudence related to illegality, irrationality and procedural impropriety and when it relates to sentence or deprivation thereof of the subject then the proportionality principle need to be taken into consideration. [See Menteri Kewangan & Anor v. Wincor Nixdorf (M) Sdn Bhd [2016] 6 CLJ 215]. However, when judicial review is related to a tribunal decision, Malaysian courts have expanded the scope to say that the courts are permitted to scrutinize the decision not only for the process but also for substance. [See R. Rama Chandran v. Industrial Court of Malaysia & Anor [1997] 1 CLJ 147; [1997] 1 MLJ 145; Ranjit Kaur a/p S Gopal Singh v. Hotel Excelsior (M) Sdn Bhd [2010] 8 CLJ 629; [2010] 6 MLJ 1]. 19

10.25 AM – 27 June 2016 RAVINTHRAN PARAMAGURU Judge” [Emphasis Added] 23 [29] The Applicant in their Affidavit In Reply affirmed by Susiman a/l Theyan @ Many dated 12th January 2016 (pages 89 – 92 of the Appeal Record Volume 2 Part B and C) had not disputed the averment at paragraph 32 of the 1st Respondents’s Affidavit In Opposition. Paragraph 13 of the Applicant’s Affidavit In Reply thus stated: “13. Paragraph 32 of the 1st Respondent Affidavit In Opposition is not disputed.”. [30] Paragraph 32 of the 1st Respondent’s Affidavit In Opposition averred to the issue of understanding and the agreement between the Applicant and the 2nd Respondent to ascertain the capacity of the rest of the 154 employees to be determined by way of an interview. Paragraph 32 of the said Affidavit In Opposition averred that: “32. In response to paragraph 17 of the Applicant’s Affidavit, I shall aver that both the Applicant and 2nd Respondent agreed that a sample of 15 employees from the Human Resource & Administration Department (Medical, Residence & Facilities and Administration) and 102 employees from the category of supervisors shall be interviewed by the Department of Industrial Relation, Sabah to ascertain their capacity and thereupon apply the result obtained from the interview to determine the capacity to the rest of the 154 employees.”. 24 [31] The learned trial Judge tackled the same issue in this manner at pages 36 – 37 of the Appeal Record volume 1 Part A as follows: “I shall first consider the second ground of challenge. Counsel for the applicant argued that the Minister left indeterminate the capacity of 57 employees. I find no merit in this ground for the following reason. The total number of the employees that the parties could not agree in respect of their eligibility to become union members was 154. It is not disputed that the applicant and the 2nd respondent agreed that a ‘sample’ of 15 employees from the Human Resource and Administration Department (Medical, Residence & Facilities and Administration) and 102 employees from the category of supervisors shall be interviewed by the Department of Industrial Relation, Sabah to ascertain their eligibility to become union members and that the result be applied to the balance of the 154 employees. The decision of the Minister which was reproduced earlier is in two parts: the first part refers to employees in six different posts that are not eligible for membership and the second part refers to employees in 35 posts who would be eligible for membership. Thus the employees only need to refer the posts referred to in the decision of the Minister to find out their eligibility. In the premises, the Minister had decided on all eligibility of all the said employees whose status was disputed. For sake of completeness, I must mention that in the final oral arguments, this issue was not pursued by counsel for applicant.” [32] It is our judgment that since the Applicant had in the court below abandoned the challenge on the issue as alleged by the Applicant that the Minister had left indeterminate the capacities of 57 employees out of 25 the sample of 117 employees who were allegedly interviewed by the DIR Sabah, the learned counsel for the Applicant is barred from ventilating the same issue before us under the doctrine of estoppel per rem judicatum. We found support from the decision of Peh Swee Chin, FCJ in Asia Commercial Finance (M) Berhad v. Kawal Teliti Sdn Bhd, supra, where His Lordship stated: “Thus, in SCF Finance Co. Ltd. v. Masri & Another (No. 3) [1987] QB 1028 the English Court of Appeal held that even a reservation of an issue by a party in a previous proceeding was ineffective to prevent the estoppel from arising against the said party, where the said party had pleaded that issue but elected not to proceed on the issue in the previous proceeding. It was held she was not entitled to assert that issue afresh in subsequent proceedings, even if that issue was not heard and determined and it was even “reserved”. ………. Another source of small confusion is the rule that generally an estoppel, of which an estoppel per rem judicatum is a kind, as the name implies, has to be pleaded. But in Superintendent Pudu Prison v. Sim Kie Chong [1986] 1 MLJ 494, 498, Abdoolcader, SCJ, applying the doctrine of res judicata against a party even if it has not been pleaded. We venture to think the reason for the ratio is that an estoppel or exclusion of evidence is based on a question of public policy ie. in this case, the question of public policy that there should be finality in litigation……..” 26 [33] It is trite that the grounds to challenge the decision of an administrative authority are based on illegality, procedural impropriety and proportionality. The challenge by the Applicant in this case before us are based on unreasonableness which is not the common accepted grounds to challenge the decision of an administrative authority. More so, the decision of the Minister shall be final and shall not be questioned in any court as envisaged by section 9(6) should be upheld. We find no material before us and before the court below of any impropriety or unreasonableness in the decision of the Minister. The issue on unreasonableness or irrationality had been answered by the Minister in his Affidavit In Opposition. [34] Learned Counsel for the Applicant argued that the Minister had failed to take into consideration the detailed job description of each of the employees that were deemed eligible for union membership in the Part (ii) of the impugned decision. Learned counsel for the Applicant also complained that the employees in the Medical Services branch such as nurses, medical assistants and medical clerks were included in Part (ii) of the Minister’s decision. The two issues raised had been succinctly answered by the Minister in his Affidavit In Opposition in paragraph 37.4 and 37.7 which we reproduce below: 27 “37.4 Though the organization chart supplied by the Applicant showed that the Supervisor and Assistant Supervisor were placed in the same Division (Plywood Mill Production) but both posts were in separate units namely the Assistant Supervisor was in Quality Control Unit, whereas Supervisor was in Ply Mill Prod. Unit. Besides that, investigation found that:

37.4.1 The Assistant Supervisor did not report to the Supervisor, but both posts directly reported to the Superintendent;

37.4.2 The functions, scopes of duty and responsibilities of the Assistant Supervisor and Supervisor were different according to the division or unit to which they were placed; …….

37.7 The main duty of the employees holding the posts was to only process and monitor the movement of the invoices for the purpose of payment, to manage the petty cash, lorry and machine rentals, to prepare monthly and weekly reports (salvage) and to prepare documents in relation to the plantation to the auditor;” [35] In Minister of Human Resources, Malaysia v. Diamet Klang (Malaysia) Sdn Bhd & Another Appeal [2015] 6 CLJ 181, this court had decided that: “The learned judge should have found that there was no impropriety or unreasonableness in the decision by the Minister to accord recognition to the Union (or the competency of the Union) to represent the company’s employees. In our view the learned High Court judge should, in the circumstances and facts of the case give effect to s. 9(6) 28 of the Act as to the conclusiveness and finality of the Ministerial decision on competency. The provision was inserted so as to provide some stability in the labour management and organization in this country. Therefore the courts should be slow to find fault with the Minister’s decision in exercising his discretion to accord recognition to a Union of workers.” [36] Whatever it is, as we alluded to earlier in this judgment, the only issue raised by learned counsel for the Applicant had been abandoned during the proceeding in the court below. Therefore, the learned counsel for the Applicant was estopped from ventilating the same issue before us under the doctrine of estoppel per rem judicatum. Conclusion [37] Having heard the submissions and having examined the Appeal Records and perused the written submissions, we held the view that the learned High Court Judge had rightly dismissed the Applicant’s application. There was no error committed by the learned High Court Judge to warrant an appellate intervention. [38] For reasons stated above, we were of the view that there was no merit in the appeal. Therefore, the appeal was dismissed with cost of RM15,000.00 to be paid by the Applicant/Appellant to the 1st 29 Respondent and costs of RM5,000.00 to be paid by the Applicant/Appellant to the 2nd Respondent, both costs subject to the payment of allocator. Deposit was to be refunded. Dated: 10 November 2017 Signed (KAMARDIN BIN HASHIM) Judge Court of Appeal Malaysia Counsel/Solicitors For the Applicant/Appellant: S.Venugopal Messrs S.Vanugopal & Partners Lot B 1113 & Lot B 1115, 11th Floor, Mail Box No. B284, Wisma Merdeka Phase 11, Jalan Tun Razak, 88000 Kota Kinabalu. For the 1st Respondent: Andi Razalijaya Senior Federal Counsel Attorney General’s Chambers Kompleks Pentadbiran Kerajaan Persekutuan Sabah Aras 5, Blok A Jalan UMS, Peti Surat 10855 88809 Kota Kinabalu For the 2nd Respondent: George Aludah Messrs Aludah & Co Lot 27-2, 2nd Floor, Lorong Lintas Plaza, Lintas Plaza, Off Jalan Lintas, Luyang, 88773 Kota Kinabalu