ZCM MINERALS SDN. BHD. v Shanmugam A/l Govindasamy (WA-16A-49-08/2023)

The Respondent’s employment was terminated by the Appellant on 9.8.2021 when the latter discovered stocks of which the Respondent was in charge, were missing.

Consequent upon the dismissal, the Respondent made representations to the Director General of Industrial Relations that he was dismissed without just cause and excuse. His representations were referred to the Industrial Court for an award.

On 14.8.2023, having heard the parties and the evidence adduced, the Industrial Court held that the Respondent had been dismissed from his employment without just cause and excuse. An award of RM 135,880.00 was made in favour of the Respondent as compensation.

The Appellant now appeals against the award of the Industrial Court. Key background facts

The Respondent commenced employment with the Appellant on 14.2.2011 as a Logistic Executive with a monthly salary of RM 3,000.00.

Thereafter on 1.7.2011 he was transferred to Phoenix Lake Sdn Bhd., and re-transferred to work with the Appellant on 18.12.2014 as a Logistic/Inventory Executive.

His job functions included the following:

In charge of recording incoming/outgoing stocks;

(ii) Supervise the washing plant pertaining only to the Appellants’ stock;

(iii) Prepare daily output and monthly inventory report;

(iv) In charge of mixing the finished ore product;

Supervise the weigh bridge and the report prepared by the clerk;

(vi) Assist operators, in the event there is a shortage of heavy equipment operators; and

(vii) Take instructions from his superior on ad hoc basis (as and when instructed).

During the Covid pandemic, the Respondent contracted the Covid- 19 virus and was quarantined from 4.7.2021 until 17.7.2021. He was put on medical leave until 26.7.2021.

On 26.7.2021, whilst he was still on medical leave, he received a phone call from the Human Resource Manager. She alleged the Respondent to have sold 1 stock pile of iron ore from the Appellant’s stock on site.

The Respondent denied the allegations. He also stated that he was willing to cooperate in the investigations on the alleged theft. He was asked if he knew of any employees who were involved in the sale of the iron ore, to which he denied knowledge.

The Respondent then sent a text message to the Director of the Appellant to deny any involvement in the alleged theft.

The following day, on 27.7.2021, the Respondent turned up for work but was denied entry into the premises of the Appellant. Thereafter, he made a police report on the matter.

On 28.7.2021, the Gebeng police station called to request the Respondent’s presence at the police station. After waiting at the police station for about half an hour, he was told that there would be no investigation.

On the same day, namely 28.7.2021 the Respondent received a suspension letter informing him that his services were suspended. No reasons were mentioned for the suspension.

On 9.8.2021, the Respondent received a termination letter from the Appellant. The letter stated that, “We regretfully inform you that your employment as Logistics/Inventory Executive has been terminated, effectively immediately. You are dismissed owing to your constant poor performance.”

At the time of his dismissal, the Respondent was drawing a monthly basic salary of RM 4,300.00.

The Industrial Court found that the Respondent was dismissed without just cause and excuse. The essence of the judgment of the learned Chairman was this. She found that the reason proffered by the Appellant, that there was poor performance on the Respondent’s part, was not supported by cogent evidence. She also found that the evidence pertaining to the missing ore was not convincing and inadequate, in particular the evidence to establish that the missing ore belonged to the Appellant. Finally, the evidence as to the culpability of the Respondent was lacking. Grounds of appeal

Dissatisfied with the award of the Industrial Court, the Appellant has advanced numerous grounds of appeal. However, at the hearing of the appeal, counsel for the Appellant had narrowed its grounds to only the following:

The award was based on unpleaded grounds of victimization. The Respondent’s Statement of Case made no reference to victimization;

(ii) The Industrial Court had taken into account irrelevant consideration when it held that the Appellant had wrongly found the Respondent solely to be blamed for the missing ore. It is wholly irrelevant whether the Respondent was solely or jointly to be blamed for the missing ore. Instead, it suffices if the Appellant was able to prove that the Respondent was a poor performer, which the Respondent had succeeded in proving;

(iii) The Industrial Court had failed to judicially appreciate the evidence in several aspects. Firstly, it wrongly found the Respondent to be responsible only for the Appellant’s goods, and not goods of third party contractors, namely Y.S. Makmur. Secondly, it erred in finding the Respondent was only required to enter loading details of stocks belonging to the Appellant. Thirdly, it was wrong to conclude that the missing ore were not owned by the Appellant when there was cogent evidence that it belonged to the company. Fourthly, it fell into error when it found that the minerals were purchased from Y. S. Makmur. Y. S. Makmur was a third party contractor who was operating in the Appellant’s premises. Finally, it wrongly found that the Appellant had delayed the investigation into the missing ore. There was no delay as the missing ore was discovered only in July 2021;

(iv) The quantum in the award determined by the Industrial Court was without basis. It appeared to have been a figure plucked from the air. Analysis and finding Principles applicable on appeal

The legal principles of appellate intervention in cases of a full trial involving oral evidence of witnesses are well-settled. It is trite law that an appellate court will not intervene in a trial court’s decision except in the following circumstances:

The trial court was plainly wrong in arriving at its decision;

(ii) There was no or insufficient judicial appreciation of the evidence;

(iii) No reasonable judge, similarly circumstanced, would have decided in the manner that he did;

(iv) There were wrong inferences of fact drawn; and

The trial judge erred in law or in principle in arriving at a decision in the case. (See: Gan Yook Chin (P) Anor v Lee Ing Chin @ Lee Teck Seng & ors [2005] 2 MLJ 1; He-Con Sdn Bhd v Bulyah binti Ishak & Ors (as administrators for the estate of Nor Zainir bin Rahmat, the deceased) and another appeal [2020] 4 MLJ 662; Ng Hoo Kui @ Anor v Wendy Tan Lee Peng, Administrator of the Estates of Tan Ewe Kwang [2020] 10 CLJ 1). Ground 1-unpleaded ground of victimization

The finding of victimization by the Industrial Court cannot be read in isolation. The Industrial Court came to this conclusion only after it found that the ground of poor performance relied on by the Appellant to dismiss the Respondent was not made out.

To recapitulate, the letter of termination of 9.8.2021 stated in no uncertain terms that the Respondent was to be terminated for constant poor performance. When the dismissal is challenged, it is incumbent on the Appellant to establish the fact of poor performance.

Upon evaluating the evidence before it, the Industrial Court then held as follows: “[46] The Company has failed to prove that it has followed the established guidelines above. The Company did not adduce any credible evidence in this Court to prove poor performance on part of the Claimant…. [47]…..Therefore after evaluating the facts of this case and analyzing the evidence presented, this Court is of the opinion that the Claimant was targeted and victimized by the

It is only upon finding that there was a lack of evidence establishing poor performance that the Industrial Court concluded there was victimization.

In my view, the Industrial Court was entitled to come to that conclusion when it found no evidence of poor performance. The finding of victimization was a finding that was incidental to the fact that Appellant was dismissed without just cause. The fact of victimization was not the premise of the Appellant’s case before the Industrial Court.

In the circumstances, there is no validity in the contention that the Industrial Court made a finding of victimization in the absence of any pleading. Ground 2-taking into account irrelevant considerations

The ground is premised on the fact that the Industrial Court wrongly found it unfair that the Respondent was solely to be blamed for the missing ore.

The Industrial Court came to this finding only after having duly considered the evidence.

I find that the Industrial Court had duly analyzed the evidence and concluded that the evidence pointing to the Respondent’s culpability was unsatisfactory. The relevant witnesses were not questioned about the missing ore. The security guard who was in charge of the lorries going in and out of the premises of the Appellant was not questioned. Neither was the lorry driver who transported the missing ore. The Appellant’s own witness was herself uncertain as to the involvement of the Respondent.

The Respondent submits that the taking out of the iron ore from the Appellant’s premises involved several stages. It was therefore incumbent on the Appellant to produce evidence that it had enquired about missing ore from the Respondent’s superior and the weigh bridge clerk. Other relevant evidence it ought to have adduced would have been the weigh bridge report, as well as the entry and exit log book of the security. As none of these were adduced in evidence, the Industrial Court did not err when it decided that the Respondent cannot be solely blamed for the missing iron ore.

I find much merit in the submission. Ground 3-failed to judicially appreciate the evidence

This ground centers on three main findings of fact by the Industrial Court. Firstly, it found that Respondent was only responsible for ore owned by the Appellant. The evidence did not establish that the Applicant owned the ore. Secondly, the minerals were found to have been purchased from Y.S. Makmur, another contractor which was operating in the vicinity. Finally, the Appellant had delayed the investigation into the missing ore. The Appellant contends that these findings by the Industrial Court were arrived at as a result of failing to judicially appreciate the available evidence before it.

I find the Appellant’s contention to be unwarranted. On the issue of ownership of the ore by the Appellant, the Industrial Court found that the issue was not proven. I am of the view that its findings were substantiated by the evidence before it.

The Appellant’s second witness merely made an assumption that the ore belonged to the Appellant based on the grade of the mineral bought by the third witness. However, its third witness testified that he never dealt with the Respondent. He only dealt with one Eric who worked for Y.S Makmur, the third party contractor. This third witness was also uncertain and was unable to say conclusively that the ore belonged to the Appellant.

The ownership of the ore is a material fact that the Appellant is obliged to prove if it is pin blame on the Respondent, and justify the termination. Based on the evidence adduced, it did not sufficiently prove that the Appellant owned the missing ore.

In the circumstances, the Industrial Court finding that the Appellant failed to prove it owned the ore, was justified from the evidence.

Apart from what is stated above, the Industrial Court also found that the issue of ownership was not proven based on the following:

There was no evidence that the Plant Manager gave approval to transport the iron ore from the Appellant;

(ii) There was no recording of the stock in the loading book;

(iii) There was no complaint about the missing iron ore in 2020 by the Company; and

(iv) The buyer of the iron ore only dealt with Eric.

However, the Appellant submits that these findings of fact by the Industrial Court equally supports an inference that there was fraud perpetrated on the Appellant, which was contributed by the Respondent’s failure in keeping track of the stock on the Appellant’s premises.

To my mind, the mere fact that the evidence can admit of a different inference is insufficient to show that the Industrial Court was plainly wrong in its decision. In any event, the issue of fraud was not pleaded and is raised for the first time in these proceedings.

The Industrial Court also found that on the evidence, the investigation was delayed and this fact is material in evaluating the credibility of the Appellant’s case. The ore was missing in 2020. However, the investigation only commenced when the Respondent was on medical leave in July 2021. More significantly, the police report was lodged only after the Respondent was terminated.

The Appellant claims that it only knew about the missing ore in July 2021 when told by the 3rd witness for the Appellant. In the circumstances, it was not possible to have commenced investigation in 2020. Whilst that may be so, the fact that the police report was lodged on 27.8.2021 only after the Respondent was terminated cannot be overlooked. It is not unreasonable to have expected the Appellant to have lodged report soon after the discovery of the fact especially when it was considered to have been serious enough to dismiss the Respondent.

In the final analysis, the question to be answered is whether there is evidence to support the alleged “constant poor performance” mentioned in the letter of termination. If there is none, then the Industrial Court was justified in finding that the Respondent was dismissed without just cause and excuse.

Having examined the totality of the evidence considered by the Industrial Court and the findings it arrived at, I am of the view that it did not err in its conclusion. Ground 4-the quantum of the award

The Industrial Court awarded the Respondent back wages of 24 months based on his last drawn salary of RM 4300.00. It then made a 10% deduction for post dismissal earning (RM 103,200.00-RM 10,320.00=RM 92,880.00).

Added to that was compensation in lieu of reinstatement calculated on the basis that one month of salary is awarded for every year of service. The Respondent had been in the employment of the Appellant for 10 years. (RM 4300 x 10=RM 43,000.00) It then arrived at a total figure of RM 135,880.00 as the quantum to be awarded to the Respondent.

The relevant provisions governing the award for quantum are s. 30(5), s. 30(6A) and the 2nd Schedule to the Industrial Relations Act, 1967. I find that the award on quantum accords with the provisions therein.

Premised on the foregoing reasons, the Appellant has not demonstrated that the Industrial Court was plainly wrong. I therefore find no reason to interfere with the findings of the Industrial Court.

In the result, the appeal is dismissed. I order that costs of RM5,000.00 be paid by the Appellant to the Respondent. Dated: 20th April 2026 -sgd-Alice Loke Yee Ching Judge High Court Kuala Lumpur Counsel for Appellant: En. Kumaresan Thurairaju (Pn. Komal Trikamlal together with him) Tetuan Thurairaj T. Kumar & Associates Counsel for Respondent: En. VK Raj (Pn. S.P Devi together with him) Tetuan A. Rajadurai P. Kuppusamy & Co.