THE INDUSTRIAL COURT OF MALAYSIA CASE NO.

5/4-451/07 BETWEEN PUAN CHOY THAK LIN AND HONG HONG DOCUMENTS SDN. BHD. AWARD NO. 160 OF 2013 Before Venue : Y.A. PUAN ASLINA BINTI JONED CHAIRMAN : The Industrial Court of Malaysia, Kuala Lumpur 8 November 2006

Date of Reference : Dates of Mention

: 5.3.2007, 10.4.2007, 9.5.2007, 29.5.2007, 27.11.2007, 18.12.2007, 4.1.2008, 3.6.2008, 27.11.2008, 21.1.2009, 23.2.2009, 21.8.2009, 4.12.2009, 22.3.2010, 17.2.2011, 11.4.2011, 21.2.2012 and 26.6.2012. 10.3.2009, 11.3.2009, 12.6.2009, 23.6.2010, 24.6.2010, 23.8.2010, 24.8.2010, 16.12.2010, 18.2.2011, 25.4.2011, 19.5.2011, 16.8.2011 and 3.1.2012. Mr. Kam Booi Keong from Messrs Yunus Ali & Kam (Counsel for the Claimant)

Dates of Hearing :

Representations :

: Mr. R. Ravindra Kumar (Lee Kim Wai with him) from Messrs Raja, Darryl & Loh (Counsel for the Company) Reference: This is a reference made under Section 20 (3) of the Industrial Relations Act 1967 (Act 177) arising out of the dismissal of Puan Choy Thak Lin (hereinafter referred to as the Claimant) by Hong Hong Documents Sdn. Bhd. (hereinafter referred to as the Company).

AWARD

The matter was referred to the Industrial Court through a reference ordered by the Honourable Minister of Human Resources dated 8 November 2006 and duly received by the Court on 9 January 2007.

THE BRIEF FACTS

1.

The Claimant commenced employment with the Company as a Sales Manager on 27.11.2003.

2.

Pursuant to a Letter of Appointment (LOA) dated 18.11.2003, the Claimant was required to undergo a probation period of six (6) months from the date of commencement of employment.

3.

By a letter dated 10.2.2004, the Company terminated the Claimant from her service with immediate effect on 10.2.2004. The ground for dismissal relied upon by the Company was that the Claimant had made a misrepresentation of material information in her employment application form. Her qualification in Bachelor In Business and Business Administration (BBBA) was allegedly not recognised in Malaysia at that time.

4.

The Claimant had only completed three (3) months of probation at the time of dismissal.

5.

The Claimant contends that the Company's act in questioning her qualification is an afterthought. She avers that her termination was without just cause or excuse and such dismissal was contrary to the principles of natural justice, equity, good conscience and an unfair labour practice.

6.

The Company submits that the Claimant's declaration that she possessed a Bachelor of Business in Business Administration from Royal Melbourne Institute of Technology (RMIT) in collaboration with MIM Education Sdn. Bhd. (MIM) is not true as at the time of declaration on 18.11.2003, she had not obtained the degree as she has yet to complete 3 compulsory LAN's (National Accreditation Board) subjects. As such the Company maintains

that the termination was with just cause or excuse.

THE LAW

The function of the Industrial Court is clearly enunciated in the case of Goon Kwee Phoy v. J & P Coats (M) Bhd. [1981] 2 MLJ 129 where Raja Azlan Shah CJ (Malaya) (as HRH then was) speaking for the Federal Court ruled at pg. 136,

Where representations are made and are referred to the Industrial Court for inquiry, it is the duty of that Court to determine whether the termination or dismissal is with or without just cause or excuse. If the employer chooses to give a reason for the action taken by him the duty of the Industrial Court will be to inquire whether that excuse or reason has or has not been made out. If it finds as a fact that it has not been proved, then the inevitable conclusion must be that the termination or

dismissal was without just cause or excuse. The proper inquiry of the Court is the reason advanced by it and that Court or the High Court cannot go into another reason not relied on by the employer or find one for it. [Goon Kwee Phoy]

The role of the Industrial Court is succinctly explained in the case of Milan Auto Sdn. Bhd. v. Wong Seh Yen [1995] 4 CLJ 449 at pg. 445, where the Federal Court decided as follows:

As pointed out by this Court recently in Hong Leong Assurance Sdn. Bhd. v. Wong Yuen Hock [1995] 3 CLJ 344, the function of the Industrial Court in dismissal cases on a reference under s. 20 is twofold, firstly to 5 determine whether the misconduct complained of by the employer has been established and secondly whether the proven misconduct constitutes just cause or excuse for the dismissal. [Milan Auto]

The Federal Court in the case of Wong Yuen Hock v. Syarikat Hong Leong Assurance Sdn. Bhd. & Anor Appeal [1995] 3 CLJ 344 at page 352 decided inter alia:

On the authorities, we were of the view that the main and only function of the Industrial Court in dealing with a reference under section 20 of the Act (unless otherwise lawfully provided by the terms of reference) is to determine whether the misconduct or irregularities complained of by the management as the grounds of dismissal were in fact committed by the workman, and if so, whether such grounds constitute just cause or excuse for the dismissal. [Wong Yuen Hock]

As a court of arbitration this Court is minded that section 30(5) of the Industrial Relations Act 1967 (Act 177) requires the Court to decide a case in accordance with equity and good conscience. In doing so I am guided by Gopal Sri Ram JCA's decision in Harris Solid State (M) Sdn. Bhd. & Ors v. Bruno Gentil Pereira & Ors [1996] 4 CLJ 747 CA that it is incumbent upon the Court to have regard to substantial merits of the case rather than to technicalities. [Harris Solid State]

In Khaliah Abas v. Pesaka Capital Corp Sdn Bhd [1997] 3 CLJ 827 the Court of Appeal decided at Pg 831 as follows:

It is our view that an employee on probation enjoys the same rights as a permanent or confirmed employee and his or her services cannot be terminated without just cause or excuse. The requirement of bona fides was essential in the dismissal of an employee on probation. However, if the dismissal or termination was found to be a colourable exercise of the power to dismiss or was a result of discrimination or unfair labour practice, the Industrial Court would have the jurisdiction to interfere and to set aside such dismissal. [Khaliah Abas]

THE STANDARD OF PROOF

It is a principle of Industrial Relations jurisprudence that in a dismissal case, the employer must produce convincing and cogent evidence that the workman committed the misconduct the workman is alleged to have committed for which he has been dismissed. The burden of proof lies on the employer, the Company in the instant case. Thus it is incumbent on the Company to prove its case on a balance of probabilities and to adduce evidence that the Claimant's dismissal was for just cause or excuse. See Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor [2002] 3 CLJ 314. as per Abdul Hamid JCA (as His Lordship

then was). [Krishnan Kutty]

THE EVALUATION OF EVIDENCE AND FINDINGS

This Court commends both learned Counsels for the Company and the Claimant for their in depth research done on this case.

It is not disputed that the Claimant was still a probationer at the time of her dismissal. As a probationer the Claimant enjoys the same rights as a permanent or confirmed employee (see Khaliah Abas, supra).

Therefore the issues that this Court has to deal with are the same with the unlawful dismissal of a permanent employee vis-a-vis:

(1)

Whether the Claimant's misconduct as alleged by the Company had been established? (see Milan Auto, supra)

(2)

Whether the proven misconduct constitutes just cause or excuse for the dismissal (see Milan Autho, supra)

The Company called two (2) witnesses to support its case while the Claimant relied on testimonies of two (2) witnesses which includes her own.

(1)

Misconduct A cursory look at the Company's Statement in Reply shows that the Company's case is grounded on misconduct to justify the dismissal. The Claimant's letter of dismissal was signed by one Yvonne Theng, Human Resources and Administration Manager of the Company. reproduced below: The letter is

In keeping with Goon Kwee Phoy's, supra principle ........the proper inquiry of the Court is the reason advanced by it and that Court or the High Court cannot go into another reason not relied on by the employer or find one for it, this Court will only examine the alleged misconduct of the Claimant in evaluating the evidence available in this Court.

COW-1, the Company's Managing Director testified that on 18.11.2003 in response to the Company's internet advertisement, the Claimant attended an interview with the Company. As a pre-requisite, the Claimant filled up the

Employment Application Form and declared that she possessed a Bachelor of Business in Business Administration from RMIT.

Based on the interview and the Claimant's representation that she possessed a Bachelor's degree in Business Administration, the Company offered her the position of Sales Manager. The Company also issued a Letter of Appointment dated 18.11.2003. Under the terms of her employment, the Claimant was to

undergo probation for 6 months.

He informed the Court, on 12.1.2004, the Claimant submitted a leave application for 15 and 16 January 2004. The Claimant cited the reason as to prepare for the Moral Education Examination on 17.1.2004. The management

then requested the Claimant to produce proof that she was indeed required to sit for the examination. The Claimant requested MIM Education Sdn. Bhd. (MIM) to

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forward a note to the Company to justify her taking leave.

On 13.1.2004, the

Company received a letter from MIM stating that it was necessary for the Claimant to sit for the exam. This is to enable her to obtain her degree as part of the

requirements set out by the National Accreditation Board (LAN).

The Company was surprised and sought further clarification from MIM pertaining the same. MIM subsequently informed the Company that the Claimant

had completed the degree programme but would need to further complete 3 LAN subjects before the Claimant would receive the certificate of award. A circular which made known the compulsory requirement of the Ministry of Education was also forwarded by MIM. Based on the explanation by MIM, the Company viewed

the Claimant's lack of qualification as a serious misrepresentation.

The Company had no choice but to issue a show cause letter dated 20.,1.2004 requesting her to present her original degree certificate for verification purposes. She was also put on suspension pending the reply to the show cause. The Claimant did not present the original degree certificate. Instead she informed the Company vide letter dated 20.1.2004 that the degree certificate had yet to be issued.

The Company then extended the deadline

to 27.1.2004 to enable the

Claimant to produce a letter from MIM confirming that she was conferred the said degree.

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On 27.1.2004, the Company received a letter from MIM confirming that the Claimant had completed the requisite 15 subjects. on the issue of the 3 compulsory LAN subjects. This letter was however silent

Dissatisfied with MIM's response, the Company extended the Claimant's suspension for a further two (2) weeks until 9.2.2004. The Company also wrote a further letter to MIM seeking clarification on the Claimant's qualification. The

Company requested a reply by 3.2.2004 in view of the urgency of the matter. According to COW-1 MIM did not reply to this letter.

In view of the continuing uncertainty in relation to the Claimant's qualification status, the Company after due consideration terminated the services of the Claimant on 10.2.2004 in accordance with the employment contract. The

Company viewed the Claimant's misrepresentation of her qualification as a serious misconduct. Furthermore the Claimant had signed a declaration in the

Employment Application Form. The Claimant had agreed and accepted that in the event that any part is found to be false or incorrect, the Company reserved the right to terminate her services instantly.

The Claimant testified that she did fill up and submit a job application form to the Company before her interview with COW-2. The relevant part of the form is reproduced below:-

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13

14

It is clearly shown above that the Claimant had filled in

Bachelor of

Business in Business Administration under the column qualification obtained. The Claimant also maintained that she gave a copy each of her transcripts to Ms Cheng, the Human Resources Manager at the material time.

The Claimant informed the Court that she pursued her studies in MIM who conducted the Bachelor in Business and Business Administration (BBBSA) programme offered by the Royal Melbourne Institute of Technology (RMIT) of Australia.

At the interview, the Claimant was asked by COW-2 about her qualification. The Claimant told COW-2 that she had completed her undergraduate programme for a degree in Business and Business Administration (BBBA) after passing all the 15 subjects and thus qualified to be awarded the said degree. She also mentioned that she could not attend the convocation that was held in Australia in September 2003 as it was costly. So she is waiting to attend the one to be held in Malaysia sometime in April 2004.

The Claimant was subsequently asked to see COW-1 who also asked her about her qualification which she obligingly explained. She was later asked to see COW-2 who then offered her the position of a Sales Manager.

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The Claimant's narration of even leading to her termination was consistent with COW-1's testimony.

The Company's learned Counsel submitted that the Claimant was making a false representation as to her true qualification when she said she is qualified to obtain the BBBA degree on 18.11.2003 without first passing her LAN subjects. This is supported by the Company witnessess' testimony, whereby COW-1 testified that the Claimant did not at any given time disclose during the interview on 18.11.2003 that she had not passed her LAN subjects yet. COW-2 had also corroborated the above by testifying that the Claimant did not furnish any documentary details of her qualifications including the degree or the academic transcript during the interview on 18.11.2003. Both COW-1 and COW-2 have testified that the possession of a degree was a pre-requisite to the position they were offering at the material time.

The Claimant's learned counsel argued that there is no misrepresentation by her to the Company as the job advertisement did not specify the requirement that she must possess a recognised degree as understood by COW-1. At the time of the Claimant's interview, COW-1 had failed to ask whether the Claimant's degree is recognised in Malaysia or not.

Having evaluated evidence from both ends of the spectrum this Court holds that the Claimant's version is highly probable as compared to the Company's for the following reasons:

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1.

At the time of declaration in the application form (18.11.2003) the Claimant had passed all the 15 subjects required under the BBBA undergraduate programme designed by RMIT. This is supported by CLW-2 who is the CLW-2

Senior Manager for Professional Education Programme of MIM.

further testified that the Claimant is deemed to have completed all academic requirement for the degree of BBBA on 27 June 2003.

2.

The Claimant and CLW-2's testimonies is supported by the Statement of Academic Completion issued by RMIT which clearly certified that the Claimant had completed all academic requirements for the degree of

Bachelor of Business (Business Administration) and was deemed to have completed all academic requirements on 27 June 2003. MIM also issued transcripts to the Claimant to proof that she had completed and passed the subjects enrolled for her BBBA programme conducted by RMIT.

3.

CLW-2 further explained that even though her conferral date or graduation is on 17.4.2004 as per the scroll issued by RMIT, the Claimant is considered to have completed all academic requirement for the degree of BBBA as of 27.6.2003.

4.

CLW-2 also informed this Court that MIM will normally advise their students that they can start to apply for employment relying on the fact that they have

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successfully completed the BBBA degree pending the Graduation Ceremony. To support this exercise MIM will issue transcripts to the students as supporting documents. They do not have to wait until they actually received the physical degree certificate before they can declare they have obtained the said degree. This is due to the fact that the graduation ceremony can be carried out in 3 ways:-

(I) (II) (III)

attend the end of the year Melbourne Graduate Ceremony in Australia; attend the Offshore Graduation Ceremony in Malaysia; or receive the degree certificate through mail if the student decide to graduate in absentia.

CLW-2 went on to explain that at times the students may have to wait for two (2) years to receive the physical degree certificate by attending an Offshore Graduation Ceremony in Kuala Lumpur if there are insufficient participants for the Offshore Graduation Ceremony in Kuala Lumpur.

5.

The confusion was started by the MIM's circular and letter stating that it was necessary for the Claimant to be present for the examination to enable her to obtain her degree as part of the requirements set out by the National Accreditation Board (LAN). This was explained clearly by CLW-2 that for the BBBA intake 20(E) of which Claimant was the student, RMIT of Australia is the institution who issues the BBBA degree certificate which is not a

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registered Private Higher Educational Institution under the Private Higher Educational Institutions Act 1996. Hence the prerequisite that a student who is a citizen of Malaysia must pass the 4 LAN subjects before a degree can be awarded by RMIT does not apply to the Claimant. This is because RMIT of Australia was not registered as a Private Higher Educational Institution under the Private Higher Educational Institution Act 1996 (Act 555) RMIT Australia can award the BBBA degree certificate once the students for BBBA programme Intake 20(E) fulfilled all the requirements set by RMIT alone.

Tracing back the 18.11.2003's declaration, this Court holds that the Claimant was entitled to claim that she had obtained BBBA under column qualification obtained as her RMIT Certificate as well as MIM's written assurance she had completed the academic requirement for the degree. The application does

not require the Claimant to declare that she has a degree which is recognised in Malaysia. As it stands on 18.11.2003, Claimant did hold a BBBA degree

issued by RMIT. The convocation is only a formal ceremony to confer the degree scroll. This Court takes cognisance that it is normal for graduates to start applying for jobs using their result transcripts pending convocation and employers generally do accept them unless they have reasons to doubt the authenticity. In this case the Claimant did say she had given the transcripts to Miss Theng even though COW-1 and COW-2 denied receiving them. This Court does not have any reason not to accept the Claimant's testimony. It is most unusual that someone could be offered a job without any background

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verification done. This is not a case where someone holds out that he had a degree when in fact he has none. The Claimant was correct in declaring that she did possess a degree at the time of declaration.

It is unfortunate that the circular sent by MIM to the Company was wrongly interpreted and applied by MIM's own personnel. The Company should have waited for the response to its final letter to MIM dated 28.1.2004 as the time line given was too short for MIM to come back with the explanation which CLW-2 had painstakingly done in Court. Furthermore CLW-2 testified that MIM has no record of receiving the said letter, otherwise it would have replied to it.

This Court understands both the Company and Claimant's positions. As a mature graduate, the Claimant was full of zest and ready to enter the job market based on her hard earned degree.

The Company welcomes a new employee whom it thought meets the requirement to do the job. It was ready to offer the Claimant the opportunity to grow with the Company but felt shortchanged by this unfortunate incident and reacted in that manner.

Based on the aforesaid discussion this Court holds that the Company had on a balance of probabilities failed to prove that the Claimant misrepresented

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her qualification at the time she declared the same in the application form on 18.11.2003 (see Krishnan Kutty, supra). proven. Therefore misconduct was not

2.

Just Cause or Excuse

This Court now moves on to examine the 2nd issue posed earlier. Since the Company failed to discharge its burden to prove that the Claimant had committed misconduct, the answer to the above question must also be in the negative. This Court holds that the Company's action in terminating the

Claimant was without just cause or excuse.

This Court is minded that finding the equilibrium between Employers' and employees' rights is a very delicate process. This Court takes cognisance of an Employer's right to recruit and retain the best talent with integrity to ensure that they can stay competitive in the market. Having said that, it is pertinent also to note that an employee should not be treated as an expendable chattel or an object without feelings and emotions. [see Naza Motor Trading Sdn. Bhd. v. Abd. Rahman Mohd Sheriff [2005] 1 ILR 868] where the learned Chairman quoted Selwyn in his book The Law of Employment at Pg 881.

To quote the apex Court's decision in Hong Leong Equipment Sdn. Bhd. v. Liew Fook Chuan [1996] 1 MLJ 481, the right of livelihood quite apart from

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being a proprietary right, is one of the fundamental liberties guaranteed under Part II of the Federal Constitution. The expression of Life in Art 5(1) of the Federal Constitution is wide enough to encompass right of livelihood. The employee's right to a livelihood should also be protected.

Eventhough the Claimant remains a probationer until her termination, she enjoys the same rights accorded to a permanent staff [see Khaliah Abas, supra]. Therefore the right to livelihood for the Claimant should not have been cast aside. Employers should be slow in invoking their prerogative in terminating an employee unless in the most justified circumstances. This obviously is not the case here.

In the upshot, acting on equity and good conscience, having due regard to the substantial merit of this case without regards to technicalities and legal form [section 30(5)) of Industrial Relations Act 1967 (Act 177] this Court finds that the Company has failed to establish the Claimant's poor performance. The Claimant's dismissal is therefore without just cause or excuse. The Claimant's case is hereby allowed.

THE OTHER ISSUES

(1)

The Company also submitted that in addition to making false representations

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to the Company, the Claimant had also committed various acts of misconduct whilst in the employment of the Company which is summarised as follows:

(a) (b) (c) (d) (e)

Poor understanding of Business Operations and Product knowledge Infringement of Non-Disclosure Agreement Failure to submit Weekly Activities Report Insubordination Failure to prepare Customer Tender

This Court does not take into consideration of the above misconduct as they do not form the ground of dismissal as mentioned in the termination letter. This is in line with the principle propounded in Goon Kwee Phoy, supra.

(2)

CLW-2 does not have personal knowledge and her evidence is hearsay. As a Senior Manager for Professional Programme of MIM CLW-2 gave evidence based on her knowledge and Company records which she has access to by virtue of her position in the Company. Therefore she is entitled to explain content of documents in the Company's records including certificates issued by RMIT. This Court accepts CLW-2's testimony and

therefore her evidence is not hearsay.

(3)

Letter from RMIT dated 22.10.2010 should not be considered. This Court agrees with the Claimant's Counsel that the content of the letter

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should be considered even though the author was not called to testify as his attendance could be exempted under section 32(1)(d) of the Evidence Act 1950. The author Dr. Maddy Mc Master is in Australia and therefore her attendance could not be procured without an amount of delay or expense which under the circumstances of the case appears to the Court unreasonable. Furthermore the letter was addressed to the Claimant based on her e-mail queries.

(4)

Failure to call LAN personnel is not fatal to the Claimant's case as CLW-2's testimony is sufficient to support the Claimant's case. Therefore adverse

inference under section 114 illustration (g) Evidence Act has no application in the instant case.

(5)

The Claimant's testimony may not be consistent at times but this Court holds that there was no material contradictions affecting her case. Her testimony in respect of the declaration she made on 18.11.2003 is consistent throughout the trial. [see PP v Datuk Hj Harun Idris [1977] 1 MLJ 15] where Azlan

Shah FJ (as HRH then was) observes In my opinion, discrepancies there will always be, because in the circumstances in which the event happened, every witness does not remember accurately every single thing that happened.........................question of weight to be given to certain evidence in particular circumstances.

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THE REMEDY

The Claimant had sought for an order of reinstatement to her former position without any loss of seniority, wages and benefits, monetary or otherwise together with arrears of salary, allowance, bonus and/or compensation in lieu of reinstatement. Given the fact of this case and its peculiarity, industrial harmony does not demand the Claimant be reinstated to her former position.

The Federal Court in Dr. A. Dutt v. Assunta Hospital [1981] 1 MLJ 304 held that the Industrial Court is authorised to award monetary compensation if of the view that reinstatement is not appropriate.

Compensation in such instances constitutes two elements:

(a) (b)

Compensation in lieu of reinstatement, and Backwages

See also the Court of Appeal decision in Koperasi Serbaguna Bhd. Sabah v. James Alfred Jabu & Anor [2000] 3 CLJ 758.

In Hotel Jayapuri v. National Union of Hotel Bar & Restaurant Workers [1980] 1 MLJ 105, the Federal Court held that if there was a legal basis for paying

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compensation, the question of amount is very much at the discretion of the Court to fix under section 30 (5) of the Act which provides:

The Court shall act according to substantial merit of the case.

equity, good conscience and the

The prevailing practice in the Industrial Court of this nation is to base compensation in lieu of reinstatement on the multiplicant of one (1) month's total remuneration. The multiplier would be the total number of years in service.

This reference was made pre amendment to section 30 (6A) of the Industrial Relations Act 1967 [Act 177] which came into effect on 28.2.2008 (Act A 1322). The schedule:

Notwithstanding subsection (6), the Court in making an award in relation to a reference to it under subsection 20 (3) shall take into consideration the factors specified in the Second Schedule.

The Second Schedule prescribes:

(2)

In the case of a probationer who has been dismissed without just cause or excuse, any backwages given shall not exceed

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twelve months backwages from the date of dismissal based on his last drawn salary.

(3)

Where there is post dismissal earnings, a percentage of such earnings, to be decided by the Court, shall be

deducted from the backwages given.

Therefore the factors laid in the schedule are not taken into consideration due to the date of reference.

Based on the authories and circumstances of the instant case this Court orders as follows:

(a)

Compensation in lieu of reinstatement The Claimant remains a probationer during her termination and therefore this Court does not award her any compensation in lieu of reinstatement.

(b)

Backwages The Claimant had only served the Company for 3 months. After

termination she did take up several employments and is presently unemployed. This Court holds that it is equitable to award the Claimant backwages of four (4) months in view of the peculiar circumstances of the

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case which is computed as follows:-

RM4,500 x 4 months = RM18,000.00

THE FINAL ORDER

The sum of RM18,000.00 shall be paid by the Company to the Claimant within one (1) month from the date of award subject to deductions for income tax and contributions to the Employees Provident Fund and Employee's Social Security Fund if any.

HANDED DOWN AND DATED THIS 18th day OF JANUARY 2013

t.t. ( ASLINA BINTI JONED ) CHAIRMAN INDUSTRIAL COURT OF MALAYSIA IN KUALA LUMPUR

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