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2024 MarsdenLR 1661
INDUSTRIAL COURT SARAWAK
GOH CHII YEW – Appellant
Versus
PPES WORKS (SARAWAK) SDN BHD – Respondent
Award No: 570 Of 2024 [Case No: 8/4-303/23]
The employer must prove just cause for dismissal, and the Industrial Court may lift the corporate veil to determine the true employer-employee relationship.
Headnote:(A) Industrial Relations Act 1967 (Act 177) – Section 20 – Dismissal of employee – Claimant dismissed for alleged misconduct without a Domestic Inquiry – The Industrial Court must determine if misconduct was established and if it constituted just cause for dismissal – The employer bears the burden of proof to show just cause for dismissal. (Paras 15, 18, 21, 24, 57)
(B) Burden of Proof – The employer must provide convincing evidence of the alleged misconduct for dismissal – The standard of proof is on the balance of probabilities. (Paras 18, 22)
(C) Corporate Veil – The Court may lift the corporate veil to establish the true employer-employee relationship when companies operate as one business enterprise. (Paras 35, 39)
Facts of the case: The Claimant was employed by the Company and dismissed for misconduct on 8 July 2022. The dismissal was disputed, leading to this reference under the Industrial Relations Act. The Claimant failed to provide updates on a significant project, leading to termination. (Paras 3, 13, 55)
Findings of Court: The Company did not conduct a Domestic Inquiry but justified the dismissal based on the Claimant's failure to comply with directives regarding project updates. (Paras 24, 57)
Issues: Whether the Claimant's dismissal was with just cause or excuse and whether the Company acted reasonably in the dismissal. (Paras 62, 68)
Ratio Decidendi: The Court found that the Claimant's failure to comply with the Company's directives constituted serious misconduct, justifying the dismissal. The burden of proof lies with the employer to establish just cause for dismissal. (Paras 57, 68)
Result: Claimant's case dismissed.
AWARD
Reference
[1] This is an order of reference dated 27 January 2023 by the Director General of Industrial Relations Department pursuant to subsection 20(3) of the Industrial Relations Act 1967 (Act 177) arising out of the alleged dismissal of Goh Chii Yew (the Claimant) by PPES Works (Sarawak) Sdn Bhd (the Respondent) on 8 July 2022.
Brief Facts
[2] The Company is an associate of Cahya Mata Sarawak Berhad (CMSB). The Company is part of the Road Maintenance Division of the Cahya Mata Group. It is managed by Cahya Mata Sarawak Management Services Sdn Bhd (now known as Cahya Mata Professionals Sdn Bhd), a subsidiary in the Cahya Mata Group.
[3] The Claimant commenced his employment with the Cahya Mata Sarawak Group of Companies on 1 July 1995 as a Mechanical Engineer in Steel Industry Sarawak Sdn Bhd (later known as CMS Steel Berhad), a subsidiary of the Cahya Mata Group. At the time of his dismissal from the Company on 8 July 2022, the Claimant was the Head of Commercial and Contracts of PPES Works (Sarawak) Sdn Bhd (an associate company of the Cahya Mata Group) with a last-drawn monthly salary of RM32,813.00.
[4] In 2016, the Board of Directors of Cahya Mata Sarawak Berhad appointed the Claimant as a Chief Executive Officer of Samalaju Properties Sdn Bhd, a subsidiary of the Cahya Mata Group.
[5] On 1 September 2018, the Board of Directors of Cahya Mata Sarawak Berhad appointed the Claimant as a Chief Executive Officer (CEO) of Malaysian Phosphate Additives (Sarawak) Sdn Bhd (MPAS).
[6] On 14 January 2019, Malaysian Phosphate Additives (Sarawak) Sdn Bhd (MPAS) became a subsidiary of the Cahya Mata Group through its wholly owned subsidiary, Samalaju Industries Sdn Bhd (SISB).
[7] As of 14 January 2019, the shareholders in MPAS were as follows:
(a) Samalaju Industries Sdn Bhd ("SISB"): 60%
(b) Malaysian Phosphate Venture Sdn Bhd ("MPV"): 27.17%
(c) Arif Enigma Sdn Bhd ("AE"): 12.83%
[8] On 14 February 2019, the Claimant, as the CEO of MPAS, prepared a Board Paper for the Cahya Mata Board to update the Board on the status of the MPAS project as of the end of the 4 Quarter 2018 and sought approval from the Board to appoint Independent Project Analysis Pte Ltd (IPA) to undertake an early execution evaluation of the Malaysia Phosphate Additives Sarawak (MPAS) project.
[9] On 26 February 2019, the appointment of IPA was approved by the Cahya Mata Board, and the Board directed the Claimant to notify them of the outcome. But, the Claimant failed to provide updates on the IPA Review and the IPA Report to the Cahya Mata Board.
[10] On 1 November 2019, the Claimant's position as a Chief Executive Officer of MPAS was re-designated as the Deputy Managing Director of MPAS.
[11] On 31 December 2020, the Claimant resigned as MPAS's Deputy Managing Director.
[12] On 1 January 2021, The Claimant was employed by the Company as the Head of Commercial and Contracts after the Company had considered the Claimant's previous employment with CMSB Group.
[13] On 8 July 2022, the Company terminated the Claimant due to misconduct via a termination letter dated 8 July 2022.
[14] Dissatisfied with the Company's decision, the Claimant commenced this action.
The Law
Role And Function Of The Industrial Court
[15] The role of the Industrial Court under s 20 of the Industrial Relations Act 1967 (Act 177) is succinctly explained in the case of Milan Auto Sdn Bhd v. Wong Seh Yen , . His Lordship, Justice Mohd Azmi bin Kamaruddin FCJ, delivering the judgment of the Federal Court, needed to state the following:
"As pointed out by this Court recently in Wong Yuen Hock v. Syarikat Hong Leong Assurance Sdn Bhd & Another Appeal, [1995] 2 MLJ 753, the function of the Industrial Court in dismissal cases on a reference under s 20 is twofold, firstly, to 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. Failure to determine these issues on the merits w
