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2010 MarsdenLR 405
INDUSTRIAL COURT, KUALA LUMPUR
MUHAMMAD JOHOR – Appellant
Versus
KERETAPI TANAH MELAYU BERHAD – Respondent
Award No. 738 Of 2010 [Case No: 24(6)/4-915/05]
The dismissal of an employee is justified if proven misconduct exceeds the established entitlements, determined under the Industrial Relations Act.
Headnote:(A) Industrial Relations Act - Section 20(3) - Dismissal of employee for alleged excessive claims - The role of the Industrial Court includes determining the established misconduct of the employee and whether it constitutes just cause for dismissal. The standard of proof required is on the balance of probabilities (Para 12).
(B) Misconduct in employment - The court assesses whether the employer had reasonable grounds at the time of dismissal to believe the misconduct had occurred. The employee is only required to demonstrate that they acted reasonably in believing it was committed, not to prove the offence to a criminal standard (Paras 24-27).
(C) Burden of proof - The burden rests with the employer to establish the misconduct based on the evidence before them and must conduct inquiries in good faith, observing natural justice principles (Paras 18-20).
(D) Test for determining reasonableness of dismissal - The core issue is whether the dismissal was justified based on the established misconduct. The court will not interfere unless the punishment was unreasonable given the nature of the offence (Paras 33-36). (E) Conclusion - The court found there was just cause for dismissal due to the employee’s repeated unentitled claims, assessing whether claims exceeded entitlements per established company policy (Paras 37-39).
Result: Claimant's case is dismissed.
The Law
The role of the Industrial Court in a reference under s. 20(3) of the Industrial Relations Act was described by the Federal Court, per Mohd. Azmi FCJ, in the classic case of Milan Auto Sdn. Bhd. v. Wong Sen Yen , in the following words:-
"the functions of the Industrial Court in dismissal cases on a reference under Section 20 is two fold; first 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."
In the Federal Court decision of Wong Yuen Hock v. Syarikat Hong Leong Assurance Sdn. Bhd. and Another , , Mohd Azmi FCJ held (at p. 352):-
"On the authorities, we were of the view that the main and only function of the Industrial Court in dealing with a reference under s. 20 of the Act (unless otherwise lawfully provided by the terms of the 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."
In the Court of Appeal decision of Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair , Justice Abdul Hamid (later Chief Justice, since retired) made the following pertinent observations:-
"the Industrial Court should not be burdened with the technicalities regarding the standard of proof, the rules of evidence and procedure that are applied in a Court of law. The Industrial Court should be allowed to conduct its proceedings as a 'Court of arbitration', and be more flexible in arriving at its decision, so long as it gives special regard to substantial merits and decides a case in accordance with equity and good conscience".
Justice Abdul Hamid at p 324 made reference to the Indian Supreme Court decision in Management of Balipara Tea Estate v. Its Workmen AIR [1960] Supreme Court 191, in which the Court held:-
"In making an award in an industrial dispute referred to it, the tribunal has not to decide for itself whether the charge framed against the workman concerned (in this case falsification of accounts and misappropriation in funds) has been established to its satisfaction; it has only to be satisfied that the management of a business concern was justified in coming to the conclusion that the charge against its workman was well founded".
"The tribunal misdirects itself in so far as it insists upon conclusive proof of guilt to be adduced by the management in the inquiry before it. It is well settled that a tribunal has to find only whether there is justification for the management to dismiss an employee and whether a case of misconduct has been made out at the inquiry held by it."
These principles were also endorsed by the Court of Appeal decision of Menara Panglobal Sdn. Bhd. v. Arokianathan Sivapiragasam , at p 523.
In the more recent Court of Appeal decision of K A Sanduran Nehru Ratnam v. I-Berhad ; [2007] 1 ILR 257 p 267 [Sanduran Nehru Case] the Court of Appeal once again reiterated these principles. The Court of Appeal in this case affirmed the High Court decision (which had reversed the decision of the Industrial Court) holding that the Industrial Court had adopted a wrong standard of proof and taken a wrong approach in stating that "the respondent has not been able to discharge their evidential burden in failing to prove every element of the charge", [see p 268]. The High Court in Sanduran Nehru reiterated the principle that "it is clear that the Industrial Court is not a Court of law where technicalities of the law should be its prime consideration. On the same token, in determining the misconduct of the employee, the Industrial Court should not have proceeded as if it is exercising the function of criminal Court." This approach was affirmed by the Court of Appeal
