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2014 MarsdenLR 161
HIGH COURT MALAYA IPOH
NARENTHRA RAO TG SOMANATHA RAO – Appellant
Versus
MALAYAN BANKING BERHAD – Respondent
[Civil Appeal No: 16-2-02/2013]
Legitimate expectation cannot override express contractual terms; employer's adherence to Article 7(1) is valid, upholding refusal of paid leave post-March 2011.
Headnote:(A) Industrial Relations Act 1967 - Section 6 - Employment Act 1955 - Collective Agreement Article 7(1) - Paid leave for trade union duties - Appellant had previously enjoyed paid leave for six years without caveat, which was abruptly denied upon new application citing non-compliance with contractual requirements - Labour Court upheld employer's position based on Article 7(1), while denying appellant's claim for unpaid wages - Appellant entitled to paid leave only for March 2011 with later leave without pay valid. (Paras 1-48)
(B) Legitimate expectation - Concept primarily rooted in public law now recognized in limited private law contexts and applicable given circumstances of the case - Appellant’s assertion of legitimate expectation rejected due to express contractual stipulations. (Paras 9, 10, 11, 24, 39)
(C) Assessment of mala fide action - Allegations of bad faith improperly substantiated; employer justified requirements based on contractual terms and past agreements. (Paras 32-39)
Facts of the case:
Appellant, a trade union leader and bank employee, claimed unpaid leave compensation after his employer denied paid trade union leave citing non-compliance with regulations, leading to a loss of RM3,993.87. (Paras 4, 5)
Findings of Court:
Appellant awarded RM1,155.64 for March 2011 leave but remained responsible for non-compliance with subsequent leave applications. (Paras 48)
Issues: The legitimacy of the employer's refusal to grant paid leave, mala fide intent claims, and adherence to contractual leave requirements. (Paras 4-6, 32-34)
Ratio Decidendi: Employer's insistence on compliance with Article 7(1) reaffirmed, valid discontinuation of paid leave applicable, and legitimate expectation not upheld due to existing contractual provisions. (Paras 39, 48)
Result: Appeal partially allowed; unpaid leave for March 2011 compensated, with denial of claim for subsequent months upheld.
| Table of Content |
|---|
| 1. appellant's union leave request rejected. (Para 1 , 1 , 2 , 3) |
| 2. claim for unpaid leave due to employer's denial. (Para 4 , 5 , 6) |
| 3. arguments regarding legitimate expectation (Para 7 , 32) |
| 4. legal concept of legitimate expectation explained. (Para 8 , 9 , 10 , 11 , 16) |
| 5. doctrine and principles of legitimate expectation (Para 12 , 13 , 14 , 15) |
| 6. arguments on communication of past leave approvals. (Para 17 , 18 , 19 , 20) |
| 7. requirements of the memorandum and its application (Para 21) |
| 8. contractual obligations under article 7(1) clarified. (Para 22 , 23 , 24) |
| 9. mala fide claim unsupported without evidence. (Para 26 , 30 , 36) |
| 10. limitations of legitimate expectation in contractual agreements (Para 27 , 28) |
| 11. considerations of relevant and irrelevant factors by the labour court (Para 35 , 39 , 40 , 41 , 44) |
| 12. conclusion and order regarding the appellant's leave entitlements (Para 46 , 47) |
[1] The appellant is a trade union leader. He is the Honorary Treasurer of the National Union of Banking Employees ("NUBE") for its Ipoh branch. He is also an employee of the Respondent. He has been working as a clerk for the respondent bank for 30 years. Under the scheme of trade union protection and promotion, both under the Industrial Relations Act 1967 , the Employment Act 1955 and the relevant Collective Agreement between NUBE and Malayan Commercial Banks' Association ("MCBA"), the appellant was accustomed to applying for paid leave to attend to his trade union activities. No question was asked as to whether the leave was required to attend to his trade union activities in relation to industrial matters concerning his employer. Neither was he required to set out the specific activities of the trade union that he had to attend. That had been the position from 2005 to February 2011.
Problem
[2] However, when the appellant applied on 2 March 2011 for his usual paid leave on ground of his need to carry out his trade union duties, the respondent replied to state that it was not in a position to grant the appellant paid trade union leave. The respondent bank stated that the application for trade union leave did not comply with the express provision of the collection agreement, in that, the appellant had failed to state the reasons for such a trade union leave. His attention was drawn to Article 7(1) of the Memorandum of Agreement between NUBE and the MCBA. The respondent pointed out to the appellant that he had not complied with the requirement that the leave applied for must be stated to be for attending to industrial matters concerning his employer as required under Article 7(1) before paid leave may be granted.
[3] Be that as it may, the appellant was granted, as a measure of goodwill, unpaid leave. That was communicated to him by an email notice of 15 March 2011.
[4] The appellant felt aggrieved by the decision of his employer. Translated into monetary terms, he suffered a loss of RM3,993.87 between March 2011 to September 2011 for the number of days of unpaid leave taken. That amount had been deducted from his salaries. He brought his claim in the Labour Court for the above amount that was not paid to him. He claimed that his salaries had been unlawfully deducted. The complaint was made under s 69 of the Employment Act 1955 where the Director General of Labour may inquire into and decide any dispute between an employee and his employer in respect of wages under (a) any term of the contract of service between such employee and his employer.
[5] The Labour Court dismissed his claim on 15 January 2013. The Labour Court was of the view that the employer was well within its legal rights as provided for under Article 7 (1) of the Memorandum of Agreement as contractually the appellant could only be entitled to paid leave if in the leave application to the employer, it had been disclosed the reasons for the trade union leave in that it was in relation to industrial matters concerning his employer.
[6] Dissatisfied with such a decisio
