industrial court of malaysia
TRANSCRIPT
INDUSTRIAL COURT OF MALAYSIA
CASE NO: 20/4-262/09
BETWEEN
ENCIK MUSTAFFA BIN CHE YUSOFF
AND
RHB BANK BERHAD
AWARD NO: 1463 OF 2009
Before : DATO' HAJI SULAIMAN BIN ISMAIL - Chairman
Venue : Industrial CourtKuala Terengganu
Dates of Reference : 3.6.2009
Dates of Mention : 9.7.09, 28.7.09, 18.8.09
Dates of Hearing : 9.9.09
Representation : Encik Mohd Ridzuan bin MuhamadMessrs K.H . Tay & AssociatesKota Bharu, KelantanCounsel for the Claimant
Claimant : Attend
Mr Vincent ArokiasamyMessrs Kamil Hashim Pury & LimPetaling Jaya, SelangorCounsel for the Company
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AWARD
This was a reference by the Honourable Minister of Human
Resources pursuant to Section 20(3) Industrial Relations Act
1967 arising out of the alleged constructive dismissal against
Encik Mustaffa bin Che Yusoff (“The Claimant”) by RHB Bank
Berhad (“The Company”) on 2 May 2008.
Brief Facts of the Case:
The Claimant commenced employment with the Company
as Assistant Executive Officer on 1 January 1985 at the salary of
RM1,392.00 per month. He continued in the normal course of
his employment until the Company was undergoing a
transformation process and the Claimant was reassigned from
Regional Branch Operation Manager to Business Support
Manager. The Claimant tendered his resignation vide letter
dated 1 April 2008. The resignation was accepted to take effect
from 2 May 2008. The Claimant last drawn salary RM6,950.00
per month.
The Claimant contends that he had to tender the
resignation as he believe that he had been victimised by the
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Company and constructively dismissed without just cause and
excuse, a negation of the Principles of Natural Justice and
tantamount to unfair Labour practise.
For ease of reference the Claimant's resignation letter is
hereby reproduced as follows:
1/4/08
Head Of Human ResourceRHB Bank BerhadBangiSELANGOR
Dear Puan,
NOTICE OF RESIGNATION
After considerable thought and soul searching, I decided to tender my resignation with one month notice from the date herewith.
Pleased be informed that with the transformation of the Banking Group and the implementation of the new organizational structure which was on 1/1/2008, I have not been given any position nor responsibility to carry out in the East Coast Region. No new appointment letter was issued to me.
As at to-date I have yet to receive any instruction on my appointment nor job scope and responsibility from the Bank or the Regional Director of East Coast.
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By merely coming to the office daily and starring at my pc to read my mail from 8:45am to 5:45pm, is very demoralising and stressful. Am I targeted to be manage out or is this waiting game another form of mental torturing me. I was earlier informed that I do not fit in the Regional structure and thus was left to the mercy of HR on where they want to post me. It looks like the Bank have forgotten my past contributions as Branch Manager and RBO. I am sure if you could kindly refer my past performance from my previous superiors, they would speak highly of me.
After careful consideration and discussion with my family members (who resides in Kota Bharu), it is with heavy heart that I submit to this resignation to be with my family who have been supportive. I wish to thank the Bank for the past opportunities and recognition and I guess this “transformation” is a lesson learnt for all. I wish the bank all the best of luck. Thank you.
Yours truly,
MUSTAFFA BIN CHE YUSOFFSTAFF ID 142131
c.c. Regional Director East Coast
The Company, on the other hand denies allegation and
state that the Claimant voluntarily tendered his resignation.
The Issue:
As this is a case of alleged constructive dismissal the
question before the Court is two fold:
i) Was there a dismissal infact and in law?
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If, affirmation
ii) Was the dismissal with just cause or excuse?
The two fold query will begin with a deliberation of the
established jurisprudential position in this type of Industrial Court
cases.
The Law:
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 the 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 the case of
Wong Chee Hong v Cathay Organisation (Malaysia) Sdn Bhd
[1988] I CLJ 45 : [1988] I CLJ (Rep) 298 Federal Court for
Salleh Abas LP.
In Colgate Palmolive (M) Sdn Bhd v Yap Kok Foong
[1998] 2 ILR 965 (Awards No. 368 of 1998) it was held as
follows:
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“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 the Industrial adjudication readily
recognises that any act which has the effect of bringing the
employment contract to an end and 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 resignation, retrenchments and retirements
are all species of the same genus, which is “dismissal”.
Constructive Dismissal:
The 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 there upon claims that
he has been dismissed. As with all legal fictions it is subject to
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strict requirements being proved for it to sustain itself as a
dismissal de facts and de ju re and not translate into a voluntary
resignation where those prerequisites are wanting.
The principles underlying the concept “constructive
dismissal”, a doctrine firmly established in our Industrial
jurisprudence, was expressed by Salleh Abas LP in the case of
Wong Chee Hong v Cathay Organisation (Malaysia) Sdn Bhd
in the following manner:
“The common law has always recognised 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 effects the foundation of the contract,
or if the employer has evinced an intention not to be bound by it
any longer”.
In Anwar Abdul Rahim v Bayer (M) Sdn Bhd [1998] 2
CLJ 197. His Lordship Mahadev Shanker held as follows:
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“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 breach going to the root of contract or whether he has
evinced an intention no longer to be bound by the contract”.
In Leong Shin Hyun v Rekapacific Bhd & Ors [2001] 2
CLJ 288 High Court referred with approval to the principles
stated in the case of Lewis v Motorworld Garages Ltd (CA)
[1980] 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.
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It is a trite law that the implied term that the employer 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.
Dr Dunston Ayadurai in his text Industrial Relations In
Malaysia Law & Practise 3rd Edition at p.297 states.
“To prove that the workman has been constructively
dismissed, it will be necessary for him to establish the followings:
- that the employer had by his conduct breached the contract
in respect of one or more of its obligation, owed to the workman,
the obligations breached may be in respect of either express
terms or implied term or both.
- 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.
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– that 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
– that the workman left at an appropriate time soon after the
breached complained of : that is 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.
Once these prerequisites for constructive dismissal had
been established by the workman in a reference to a dismissal
under Section 20 of the Industrial Relations Act 1967, the
Industrial Court then moves into the limb of inquiry: and that is to
determine whether the employer had just cause or excuse for the
dismissal. Here the burden shifts upon the employer.
The Evidence:
The Claimant's case.
The Claimant testified on his own behalf and that which is
the essence of what he had to say.
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The Claimant had been with the Company for some 24
years before the events that transpired in this case. He joined
the Company on 1 November 1985 than United Malayan
Banking Corporation Berhad and continued employment until he
resigned in May 2008.
At the time of his resignation he was in Senior Manager
Group and his last drawn salary was RM6,950.00 per month.
He testified that the Company was undergoing a
transformation process in January 2008. As the result the new
organizational structure had been implemented and Puan
Fatimah Sidek had been appoints as Regional Director.
With the transformation of the Banking Group and the
implementation of the new organizational structure which has on
1 January 2008, the Claimant was not given any position or
responsibilities to carry out in the East Coast Region.
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He testified that last week of December 2007, all personnel
involved in the new structure of the East Coast Region had been
called for the briefing on the new posting except him.
The Claimant personally went to see Puan Fatimah Sidek
at her office in Kuantan to inquire about his position. He further
testified that Puan Fatimah had told him that he was not fit in the
new Regional Structure of the Region and thus left him to the
mercy of the Human Resources Head Office on where they
wanted to post him.
As the result of the new structuring he had to hand over his
current job to his successor ie Encik Abdul Aznan bin Yaakob.
On the 2nd week of February 2008 he attended the meeting
at Kuantan whereby Puan Fatimah and Encik Ghazali bin Mat
Noh (COW-1) proposed to appoint him as Business
Development Manager for Area I East Coast which was under
Encik Ghazali bin Mat Noh.
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At the said meeting Puan Fatimah had promised to follow
up with HR on the issuance of the appointment letter within 3
working days. He had not received any appointment letter and
job scope until his last day with the bank which was 1 May 2008.
He made an afford to contract Encik Ghazali bin Mat Noh in
March 2008 but was told that the HR had yet to issue the letter of
appointment.
The Claimant felt so isolated it looked like the Bank had
forgotten his post contribution as Branch Manager and Head of
Regional Branch Operation East Coast and Regional Branch
Operation from July 2005 until December 2007.
He further testified that from the period of 1 January 2008
until 30 April 2008 he merely coming to office daily and starring
at his PC to read mail. He felt very demolishing and stressful.
He thought that he has a targeted to be manage out or was
this waiting game another form of mental torturing.
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He has admitted to Perdana Specialist Hospital in February
2008 and undergone an operation. He believe that it came from
his acts on just starring at PC while scratching “Ketumbuhan”
with finger nail on his neck and he got some sort of virus's
infection to it.
He submitted his resignation letter dated 1 April 2008 as he
believe that he has been victimized by the Company and
constructively dismissed without just cause or excuse. He seek
to be reinstated to his former job as Regional Branch Operation
Manager without any loss wages, allowances, service, seniority
and privileges.
Company's Case:
The sole witness called by the Company was one Encik
Ghazali bin Mat Noh, Deputy Regional Director Area Manager I,
East Coast Retail (COW-1).
He testified that in 2007 the Company started a major
transformation programmes as the result of amalgamation of
Several Banks.
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In the East Coast Region, Regional Commercial Banking
and Regional Consumer were streamlined and known as
Regional Retail Banking and as a result he was re-designated.
In 2007, the Claimant was the Regional Branch Operation
Manager in Grade PG4 and in 2008 the Claimant was performing
the function of Business Support Manager in Grade PG4 and
reported to him.
There were 11 employees involved of which 5 were from
Regional Commercial Banking and 6 were from Regional
Consumer Banking. All those employees were re-designated.
He further testified that there were no official notification
from Head Office of the Company. The Claimant was not
officially appointed to perform the function as Business Support
Manager and no job scope ever given to him.
The COW-1 testified that the Claimant tendered his notice
of resignation dated 1 April 2008 and HR Services Head Office
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accepting the resignation of the Claimant vide letter dated April
10, 2008 (page 79 of COB).
He denied that the Company had any mala fide against the
Claimant.
The Evaluation of the Evidence and the Finding:
The crucial point here is to ascertain what term(s) the
employer is alleged to have breached.
Having identified that the Court will have to consider
whether the said term(s) were essential to the contract of
employment.
For this the Court will have to asses the evidence adduced
to determine whether the Company had by its conduct
committed such a breach of contract as to entitle the Claimant to
consider himself dismissed.
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In Lewis v Motorworld Garages Ltd, Glidewell L.J. Stated
the principles as follows:
In order to prove that he has suffered constructive
dismissal, an employee who leaves his employment must prove
that he did so as the result of a breach of contract by his
employer, which shows that the employer no longer intends to
be bound by an essential term of contract …..
In that case the employee had claimed that the employer's
repudiatory breach was that of the implied term that “the
employer would not undermine the relationship of mutual trust
and confidence between employer and employee.
And in relation to “implied term” Lord Reid in Sterling
Engineering Co. Ltd. V Patchett [1955] AC 534 said:
“Strictly speaking, I think that an implied term is something
which, in the circumstances of a particular case, the law may
read into the contract if the parties are silent and it would be
reasonable to do so. It is something over and above the
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ordinary incidents of the particular type of contract ….. But the
phrase “implied term” can be used to denote a term inherent in
the nature of the contract which the law will imply in every case
unless the parties agree to vary or exclude it”.
Upon considering all the evidence before it, this Court finds
that the Claimant has succeeded in establishing the breach of
the following implied essential terms of the contract of
employment by the Company, ie of preserving the relationship of
mutual trust and confidence between employer and employee.
The Claimant was expected to be given letter of
appointment and his job scope before he could perform his
duties. He should be invited for the briefing by the Company
together with 11 employees.
The conduct of the Company by appointing Encik Abdul
Aznan bin Yaakob to take over the job of the Claimant was
clearing demoralising him.
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He was not given any job scope and duties from 1 January
2008 until 30 April 2008.
The conduct of the Company through Puan Fatimah binti
Sidek clearly shows the Company indicated that the Company
wanted the Claimant to leave the Company. The words “you are
not fit in the new Regional Structure of the Region and it was left
to the mercy of HR Head Office”.
In such circumstances the doctrine of constructive dismissal
in this Section 20 claim for reinstatement can be called in aid to
established the jurisdictional fact that there had been a dismissal
in this case.
Though the Company had not literally “dismissed” the
Claimant but rather had forced him to leave the employment by
not giving him any job function and an appointment letter and so
be it the ruling of this Court.
This Court finds that the Claimant had put in his resignation
when he did solely by reason of the repudiation conduct of the
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Company. He had therefore exercised his option to bring the
contract of employment to an end.
The Company by its conduct failed to response the
allegation made by the Claimant in his resignation letter.
Under the circumstances, it is the finding of this Court that
the Claimant by tendering his resignation when he did, had acted
decisively and had not failed or delay in acting firmly in refusing
to accept the Company's breach.
The burden here is upon the Company to show an a
balance of probabilities that the Claimant's termination from
employment was for just cause or excuse.
The whole case revolved around the failure of the Company
to issue the letter of appointment and job scope to enable the
Claimant to perform his job.
The Claimant alleges that the Company's conduct towards
him was victimization and tainted by unfair labour practise.
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To sum up, all the evidence on balance of probabilities
points to a strong indictment against the Company which it is
unable to refute. The Company failed to convince the Court as
the reason why the appointment letter was not issued to the
Claimant 3 months after the transformation process took place.
There was no witness from HR office to testify as what actually
happened to the Company during the transformation process
and the new organization structure.
The consequence is that the dismissal is found to be
without just cause or excuse, and so it is the ruling of this Court.
The Remedy:
It would not be in the interest of either party to order
reinstatement of the Claimant to his former post.
Compensation in lieu of reinstatement and back wages
shall be the alternative remedy ordered here.
It is undisputed that the Claimant's last drawn salary was
RM6,950.00 per month.
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Compensation In Lieu of Reinstatement:
As there is prevalence in the Industrial Court to base
compensation in lieu of reinstatement on the multiplicand of one
(1) month salary, this Court can see no justification from
departing from this precedence.
The multiplicand is therefore RM6,950.00.
As regard to the multiplier, it is undisputed that the Claimant
had served the Company for a period of 24 years. The multiplier
will be 24.
In the circumstances, compensation under this head
amounts to RM6,950.00 x 24 = RM166,800.00.
Back wages:
In this case the effective date of constructive dismissal was
2 May 2008 and the hearing of this reference effectively
concluded on 9 September 2009 a period of 18 months.
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The amount of back wages thus awarded is
RM125,100.00.
In Dr James Alfred (Sabah) v Koperasi Serbaguna
Senya Bhd (Sabah) [2001] 3 CLJ 541 Steve Shim CJ (Sabah &
Sarawak) ruled that the Industrial Court in assessing the
quantum of back wages should take into account the fact that a
workman has been gain fully employed elsewhere after his
dismissal.
In the instant case, the Claimant had gained an
employment 4 months after his dismissal, therefore as a
consequence there is re-scaling of back wages at 20% (see the
case of Ravi Chanthran S. Sithambaran v Pelita Akademi Sdn
Bhd [2007] I ILR 475 (Award No. 130 of 2007), therefore the
amount of back wages are as follow:
RM125,100.00 less 20% = RM100,080.00
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The Final Order:
The Court now orders that the Company do pay the
Claimant through his Solicitors the sum of RM266,880.00 less
statutory deductions if any not later than 30 days from the date
of this award. The said sum is made up as follows:
Compensation in lieu of reinstatement – RM166,800.00
Back wages (after 20% less) - RM100,080.00
Total compensation before statutory
deductions - RM266,880.00
HANDED DOWN ON 17TH DECEMBER 2009
(DATO’ HAJI SULAIMAN BIN ISMAIL)CHAIRMAN
INDUSTRIAL COURT, MALAYSIAKUALA TERENGGANU
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