INDUSTRIAL COURT OF MALAYSIA CASE NO: 22(26)(22)/4-398/16 BETWEEN TENGKU MOHD HASMADI BIN TENGKU HASHIM AND KONSORTIUM TRANSNASIONAL BERHAD (KTB) AWARD NO: 1509 OF 2019 BEFORE : Y.A. DATO' FREDRICK INDRAN X.A. NICHOLAS CHAIRMAN VENUE : Industrial Court Malaysia, Kuala Lumpur. DATE OF REFERENCE : 06.01.2016. DATES OF MENTION : 11.03.2016, 01.06.2016, 01.09.2016, 04.10.2016, 14.12.2016, 13.02.2017, 20.03.2017, 02.05.2017, 13.06.2017, 26.07.2017, 08.08.2017, 19.02.2018, 12.04.2018. DATES OF HEARING : 13.09.2018, 14.09.2018, 03.12.2018, 02.11.2018, 13.12.2018, 14.12.2018. REPRESENTATION : Mr. Muhendaran Suppiah together with Ms. Srividhya Ganapathy(Claimant’s Counsel) Messrs Muhendaran Sri (Solicitors for the Claimant) Mr. A. Ramadass together with Ms. Kavitha Thilagar(Company’s Counsel) Messrs Ramadass & Associates (Solicitors for the Company)
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INDUSTRIAL COURT OF MALAYSIA
CASE NO: 22(26)(22)/4-398/16
BETWEEN
TENGKU MOHD HASMADI BIN TENGKU HASHIM
AND
KONSORTIUM TRANSNASIONAL BERHAD (KTB)
AWARD NO: 1509 OF 2019
BEFORE : Y.A. DATO' FREDRICK INDRAN X.A. NICHOLAS
CHAIRMAN
VENUE : Industrial Court Malaysia, Kuala Lumpur.
DATE OF REFERENCE : 06.01.2016.
DATES OF MENTION : 11.03.2016, 01.06.2016, 01.09.2016, 04.10.2016,
14.12.2016, 13.02.2017, 20.03.2017, 02.05.2017,
13.06.2017, 26.07.2017, 08.08.2017, 19.02.2018,
12.04.2018.
DATES OF HEARING : 13.09.2018, 14.09.2018, 03.12.2018, 02.11.2018,
13.12.2018, 14.12.2018.
REPRESENTATION : Mr. Muhendaran Suppiah together with Ms. Srividhya
Ganapathy(Claimant’s Counsel)
Messrs Muhendaran Sri
(Solicitors for the Claimant)
Mr. A. Ramadass together with Ms. Kavitha
Thilagar(Company’s Counsel)
Messrs Ramadass & Associates
(Solicitors for the Company)
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AWARD
The Reference:
1. Tengku Mohd Hasmadi bin Tengku Hashim (‘the Claimant’), ceased from his
erstwhile service at Konsortiun Transnasional Berhad (KTB) (‘the Company’) with
effect from 1.4.2015.
2. The Claimant, being aggrieved by the circumstances surrounding the cessation of
his employment, made written representations to the Director General for Industrial
Relations, Malaysia on 3.4.2015; under s. 20 (1) of the Industrial Relations Act 1967
(‘the Act’). The said representations were duly entertained by the said Director
General as it was formally; and regularly filed well within the sixty-day period ~
allowed under s. 20 (1A) of the Act.
3. The conciliatory exertions thereafter undertaken by the said Director General’s
office in pursuance of that representation turned out to be unsuccessful; wherefore
that office, being convinced that the matter could not be amicably resolved thereat,
duly notified the Honourable Minister of Humans Resources, Malaysia; of that failed
reconciliation process. This notification was made pursuant to s. 20 (2) of the Act.
4. Upon the perusal of this notification and its ancillary papers; and by virtue of s.20
(3) of the Act, the Honourable Minister found it appropriate to exercise those powers
under that section to refer this matter to the Industrial Court of Malaysia for due
determination and final disposal.
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5. As a result, the Claimant’s initial representations were transformed into a
Ministerial Reference for an Award before this Court. The said Ministerial Order
was dated 6.1.2016; which was received by this Court’s Registry at Kuala Lumpur on
12.2.2016.
6. Prior to the commencement of the trial of this case before this Court, the said
Ministerial Reference took the route of a judicial review to and through our superior
courts. A stay of proceedings was granted with regard to the proceedings here, by
the High Court, in the second quarter of 2016. Having exhausted that judicial
process and upon the Federal Court disallowing leave to appeal thereto, it was finally
remitted to this Court to proceed with the matter. The instant Court was informed of
the same on 12.4.2018; whereupon the required directions on certain outstanding
issues were handed down; and this matter set down for hearing commencing from
13.9.2018. The trial then went on from that date; and from time to time, until
13.12.2018.
7. The Company then filed its written submissions and authorities on 7.2.2019;
whereupon the Claimant replied with his response on 4.3.2019. To this the Company
replied on 14.3.2019.
8. All that remains, is for this Court to hand down its written Award, which it does by
this:
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The Matrix:
9. The Claimant commenced employment at an entity called Nadicorp Holdings Sdn.
Bhd. (‘Nadicorp’) as its General Manager with effect from 1.9.2003, on a fixed term
contract of 2 years; expiring on 31.8.2005 (see Exhibit ‘CL-1’ in the Statement of Case).
Notwithstanding the expiry of his contract on the said date, the Claimant continued in
his employment and went on to be appointed as a Director of the said company on
27.9.2005.
10. With effect from 1.1.2006 the Claimant was promoted to the position of Chief
Operating Officer of the Transport Division encompassing all the transport entities
under Nadicorp (see Exhibit ‘CL-2’ in the Statement of Case).
11. Vide a letter dated 1.2.2007 (see Exhibit ‘CL-3’ in the Statement of Case), the
Claimant was informed that he had been transferred from Nadicorp to the
respondent Company in this case, following the Company’s listing in Bursa Malaysia.
Also, vide a Board of Directors special meeting convened on 23.5.2007 the Claimant
was appointed as Executive Director of the Company with effect from 1.6.2007, with
the commensurate variation to his salary and benefits (see Exhibit ‘CL-4’ in the
Statement of Case).
12. The Claimant’s role as the Chief Operating Officer / Executive Director are set
out in Clause 8 of the Statement of Case.
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13. The Claimant continued in this position until 30.3.2015; when upon returning
from a stint of annual leave, he was rather taken aback to receive a memorandum
dated 13.3.2015, which had been circulated to all the Company’s personnel, that
announced that one Muhammad Hariz Mohd Nadzmi was to be appointed as the
Company’s Head of Group Support Services with effect from 1.4.2015 (see Exhibit
‘CL-6’ in the Statement of Case).
14. This Muhammad Hariz Mohd Nadzmi happened to be the son of the Company’s
Chairman / Managing Director.
15. This impugned action by the Company had been initiated and carried out sans
the prior knowledge of, nor in consultation with the Claimant; and was ostensibly in
breach of the “Limits of Authority” set previously by the Board of Directors (see pages
36 to 42 of bundle marked ‘C’).
16. Feeling aggrieved by this unilateral action by the Company the Claimant issued
the following missive dated 1.4.2015 (reproduced in exact copy here):
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(*1)
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17. The Claimant is now before this Court to seek the appropriate relief for what he
believes to have been fundamental breaches by the Company of his contract of
employment; thus considering himself as constructively dismissed.; whilst the
Company is of a contrary view; and urges this Court to view his cessation of
employment as a voluntary resignation and/or an abandonment of his job.
18. At the time of his cessation of service it is undisputed that the Claimant’s total
remuneration was as set out in Clause 26 of the Statement of Case (reproduced
here for ease of reference):
(*2)
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The Issue:
19. The factual matrix of this case puts it squarely under the domain of what has
become known as “constructive dismissal” within the realms of Malaysian Industrial
jurisprudence. The issue consequently is two-fold - the first to be answered in the
affirmative - before there is a need for the second to be deliberated upon, i.e.:
i) was there a dismissal - de facto & de jure?
{And, if established in the affirmative by the facts and circumstances of the case ….}
ii) was the said (constructive) dismissal with just cause or excuse?
20. As groundwork for the consideration of this “two-fold question” it is perhaps best
that we first reconnoiter the established industrial jurisprudence in this type of
Industrial Court case.
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The ‘General Law’ followed by the ‘Specifics’:
The General Law:
21. When dealing with a reference under section 20 of the Industrial Relations Act,
1967 the first thing that the Industrial Court has to consider is the question of
whether there was, in fact, a dismissal. If this question is answered in the
affirmative, it must only then go on to consider if the said dismissal was with or
without just cause or excuse. Reference is drawn to that noteworthy utterance of the
then Lord President, the Right Honourable Mr. Justice Tun Salleh Abas in the case
of WONG CHEE HONG v. CATHAY ORGANISATION (M) Sdn. Bhd. [1988] 1 CLJ
45; [1988] 1 CLJ (Rep) 298 (of the then Supreme Court of Malaysia), which has
practical relevance here; it goes like this:
“When the Industrial Court is dealing with a reference under s. 20, the first thing that
the Court will have to do is to ask itself a question whether there was a dismissal, and
if so, whether it was with or without just cause or excuse.”
22. In GENERAL CONTAINERS Sdn. Bhd. v. YIP SIEW LING (Award No. 418 of
1994) it was stated:-
“It is a trite principle of industrial law that only a workman who has been dismissed
by his employer may seek the remedies available under section 20 of the IRA. This is
a jurisdictional fact which is more often than not a matter which is not disputed.
Where, however, the employer denies that he had dismissed the workman and alleges
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that it was the workman who had resigned, then the Industrial Court has the duty to
decide first of all the preliminary issue whether there was a dismissal. Once it is
established that there was a dismissal, the issue that is left for the court to decide is
whether or not the employer had just cause or excuse for dismissing the workman.”
[emphasis added]
23. In COLGATE PALMOLIVE Sdn. Bhd. v. YAP KOK FOONG [1998] 2 ILR 965
(Award No. 368 of 1998) it was held as follows: -
“In a section 20 reference, a workman’s complaint consists of two elements: firstly,
that he has been dismissed, and secondly that such dismissal was without just cause or
excuse. It is upon these two elements being established that the workman can claim
his relief, to wit, an order for reinstatement, which may be granted or not at the
discretion of the Industrial Court. As to the first element, industrial jurisprudence as
developed in the course of industrial adjudication readily recognizes that any act
which has the effect of bringing the employment contract to an end is a ‘dismissal’
within the meaning of section 20. The terminology used and the means resorted to by
an employer are of little significance; thus, contractual terminations, constructive
dismissals, non-renewals of contract, forced resignations, retrenchments and
retirements are all species of the same genus, which is ‘dismissal’.”
[emphasis added]
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The Specific Jurisprudence on Constructive Dismissal:
24. In the case of RAVI CHANTHRAN S SITHAMBARAM v. PELITA AKADEMI
Sdn. Bhd. [2007] 1 ILR 475 (Award No. 130 of 2007) the instant Court held @ 483
that: -
“Constructive dismissal is a creation of the law, a fiction, where a workman ceases
employment on his own volition as a result of the conduct of his employer and
thereupon claims that he has been dismissed. As with all legal fictions it is subject to
strict requirements being proved for it to sustain itself as a dismissal de facto and de
jure; and not convert into a (voluntary) resignation; where those prerequisites are
wanting.”
25. The principle underlying the concept of ‘constructive dismissal’, a doctrine that
has been firmly established in our industrial jurisprudence, was expressed by Tun
Salleh Abas LP in the case of WONG CHEE HONG v. CATHAY ORGANISATION
(M) Sdn. Bhd. (supra) in the following manner: -
“The common law has always recognized the right of an employee to terminate his
contract and therefore to consider himself as discharged from further obligations if the
employer is guilty of such a breach as affects the foundation of the contract, or if the
employer has evinced an intention not to be bound by it any longer.”
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26. In WESTERN EXACAVATING Ltd. v. SHARP [1978] 1 QB 761 (The Court of
Appeal) that late and great English judicial-luminary Lord Denning adroitly elucidated
this doctrine as follows:
“If the employer is guilty of conduct which is a significant breach going to the root of
the contract, or which shows that the employer no longer intends to be bound by one
or more of the essential terms of the contract, then the employee is entitled to treat
himself as discharged from any further performance. If he does so, then the employee
terminates the contract by reason of the employer’s conduct. He is constructively
dismissed. The employee is entitled in those circumstances to leave at the instant
without giving any notice at all or, alternatively, he may give notice and say he is
leaving at the end of the notice. But the conduct must in either case be sufficiently
serious to entitle him to leave at once. Moreover, he must make up his mind soon after
the conduct of which he complains; for, if he continues for any length of time without
leaving, he will lose his right to treat himself as discharged. He will be regarded as
having elected to affirm the (varied) contract.”
27. In ANWAR bin ADDUL RAHIM v. BAYER (M) Sdn. Bhd. [1998] 2 CLJ 197 His
Lordship Mahadev Shanker J. decreed as follows: -
“It has been repeatedly held by our courts that the proper approach in deciding
whether constructive dismissal has taken place is not to ask oneself whether the
employer’s conduct was unfair or unreasonable (the unreasonableness test) but
whether ‘the conduct of the employer was such that the employer was guilty of a
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breach going to the root of the contract or whether he has evinced an intention no
longer to be bound by the contract’ ” [emphasis added].
28. [See also the cases of HOLIDAY INN, KUCHING v. ELIZABETH LEE CHAI
SIOK [1992] 1 CLJ 141; WONG CHEE HONG v. CATHAY ORGANISATION (M)
Sdn. Bhd. (supra) and KONTENA NASIONAL Bhd. v. HASHIM ABD RAZAK
[2000] 8 CLJ 274].
29. And in; LEONG SHIN HYUN v. REKAPACIFIC Bhd. & Ors. [2001] 2 CLJ 288
the High Court referred with approval to the principle stated in the case of LEWIS v.
MOTORWORLD GARAGES Ltd. (C.A.) [1986] ICR 157 which was as follows:
“It is now well established that the repudiatory conduct may consist of a series of act
or incidents, some of them perhaps quite trivial, which cumulatively amount to a
repudiatory breach of the implied term of the contract of employment, that the
employer will not without reasonable and proper cause conduct himself in a manner
calculated or likely to destroy or seriously damage the relationship of confidence and
trust between employer and employee.”
30. The case above must be read together with the English Employment Appeal
Tribunal case of WOODS v. WM CAR SERVICES (Peterborough) Ltd. (1981) IRLR
p. 307 where it was said: -
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“In cases of constructive dismissal, an employee has no remedy even if his employer
has behaved unfairly, unless it can be shown that the employer’s conduct amounts to a
fundamental breach of the contract. Experience has shown that one of the
consequences of the Court of Appeal’s decision in Western Excavating (ECC) Ltd.
V. Sharp has been that employers who wish to get rid of an employee, or alter the
terms of his employment without becoming liable either to pay unfair dismissal
compensation or a redundancy payment have resorted to methods of “squeezing out”
an employee. Stopping short of any major breach of the contract, such an employer
attempts to make the employee’s life so uncomfortable that he resigns or accepts the
revised terms. Such an employer, having behaved in a totally unreasonable manner,
then claims that he has not repudiated the contract and therefore the employee has no
statutory right to claim either a redundancy payment or compensation for unfair
dismissal. For this reason, the implied term that the employers will not, without
reasonable and proper cause, conduct themselves in a manner calculated or likely to
destroy or seriously damage the relationship of mutual confidence and trust is of great
importance.”
31. [See also the case of UNITED BANK Ltd. v. AKHTAR (1989) IRLR 507 where
Knox J. held that this is an “overriding obligation” that an employer owes to his
employee].
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32. Dr. Dunston Ayadurai in his text Industrial Relations In Malaysia: Law &
Practice 3rd Edition at page 297 states: -
“A workman can seek a remedy under section 20 only if he had been dismissed. More
often than not, there is no dispute that there was an actual dismissal of the workman
by his employer. The only issue for the Industrial Court to determine is whether the
dismissal had been for just cause or excuse, the onus of proving the existence of the
same being cast upon the employer. Where, however, the workman’s claim for
reinstatement under section 20 is founded on a constructive and not an actual
dismissal, the workman is basing his claim on the repudiatory conduct of the
employer which gave him the option to treat the contract as having been terminated.
Consequently, in section 20 proceedings of this type, the onus of proving that he has
been constructively dismissed by his employer is cast on the workman.”
33. [See also the case of CHUA YEOW CHER v. TELE DYNAMIC Sdn. Bhd. [1999]
1 LNS 104].
34. The learned author went on to say on the same page of his authoritative text: -
“To prove that he has been constructively dismissed, it will be necessary for the
workman to establish the following:
(a) that the employer had by his conduct breached the contract in
respect of one or more of the obligations, owed to the workman;
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the obligations breached may be in respect of either express terms
or implied terms, or of both;
(b) that the terms which had been breached go to the foundation of the
contract; or, stated in other words, the employer had breached one
or more of the essential terms of the contract;
(c) that the workman, pursuant to and by reason of the aforesaid
breach, had left the employment of the employer; that is, that the
workman had elected to treat the contract as terminated; and
(d) that the workman 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.”
35. Once these preconditions for constructive dismissal have been established by
the Claimant in reference to a dismissal under section 20 of the Act, the Industrial
Court then moves into the next limb of inquiry; and that is to determine whether the
employer had just cause or excuse for the dismissal.
36. Here the burden shifts upon the employer.
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37. Raus Sharif J. in PELANGI ENTERPRISES Sdn. Bhd. v. OH SWEE CHOO &
Anor. [2004] 6 CLJ 157 refers to this ‘shift of the burden’; calling that upon the
workman as “the first burden of proof” at page 165 and that upon the employer as
the “second burden of proof” at page 166.
38. And where this onus or burden of proof is upon any party in an Industrial Court
case, it is to be proved by that party to a standard of a balance of probabilities (see
UNION of CONSTRUCTION, ALLIED TRADES AND TECHNICIANS v. BRAIN
[1981] ICR 542, [1981] IRLR 224, CA; SMITH v. CITY of GLASGOW DISTRICT
COUNCIL [1987] ICR 796, [1987] IRLR 326, HL; POST OFFICE (Counters) Ltd V.