(Oral)

Gopal Sri Ram JCA:

[1] This is the judgment of the court.

[2] The appellant before us is the owner of a rubber estate. The two respondents are its former employees. By a Collective Agreement which by its terms was deemed to take effect from 1 December 1990 made between the appellant and the National Union of Plantation Workers of which the respondents are members, the terms and conditions of employment of the appellant's employees were negotiated and settled. That Collective Agreement was taken cognizance of by the Industrial court under s 16 of the Industrial Relations Act 1967 . Accordingly, the terms set out in the Collective Agreement became implied terms in the contract of service that existed between the appellant and the respondents. This is as a result of s 17(2) Industrial Relations Act 1967 which reads as follows:

17(2) As from such date and for such period as may be specified in the Collective Agreement it shall be an implied term of the contract between the workmen and employers bound by the agreement that the rates of wages to be paid and the conditions of employment to be observed under the contract shall be in accordance with the agreement unless varied by a subsequent agreement or a decision of the court.

[3] One of the terms of the Collective Agreement concerns the payment of an outturn allowance. It appears under art. 14 of the Collective Agreement. For reasons which will become obvious later in this judgment a re-production of the whole of art. 14 is necessary. This is what that article says:

Article 14 - Rates of Pay for Rubber Tappers

For carrying out the duties of tappers in their respective standard task size as set out in Article 13 above all tappers shall be remunerated as below:

Price Above Above Above Above Above Above Above

Zone 160-180 180-190 190-200 200-220 220-240 240-260 260-280 280-300 in (incl) (incl) (incl) (incl) (incl) (incl) (incl) (incl) Kilo

Basic

Wage

(in 6.70 6.70 6.70 #9; 6.70 6.70 6.70 6.70 6.70 Ringgit)

Price

Bonus Nil 0.40 0.60 0.80 1.00 1.20 1.40 1.60

Basic

Weight

(in kg.)

H/Y 11 11 11 11 11 11 11 11

L/Y 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5

Scrap

Rate (in

sen per

kg.)

(wet) 14 16 17 17 17 17 17 17

(a) An outturn allowance of $65.00 shall be payable to all employees who perform work on all normal working days on every month. For each day of absence without reasonable excuse or cause the estate shall reduce the said sum by $13.00 for each day of such absence.

(b) Non-applicability of the provision of this Agreement

Should the price of rubber fall below 160 sen per kg. for any three (3) successive months, the wage rates provisions relating to tappers shall be deemed to be inoperative so long as the price of rubber remains below 160 sen per kg. Wages payable during such period shall be determined by the parties to this Agreement.

(c) For every 20 sen increase in the price of rubber above the price zone of 280-300 sen, an additional price bonus of 20 sen per day worked shall be paid for each such increase in the price zone.

[4] Subsequently a dispute arose between the appellant and the respondents about the payment of outturn allowance. The dispute centred on the calculation of outturn allowance for all days in a month including public holidays. The appellant's contention was that "outturn allowance" is a discretionary payment provided as an incentive only. It is not part of wages. If a worker does not come to work then in accordance with art 14(a) of the Collective Agreement he or she will lose RM13 per day of absence.

[5] The respondents took a much wider position. They took and continue to take the stand that in calculating the rate of pay outturn allowance should be taken into account. They accordingly wanted the payment made to them on that basis. The appellant declined. So the respondents took their complaints before the Director General of Labour. He held an enquiry and came to the conclusion that the respondents were right in their contention. He ordered payment of RM1,716.96 (see p