The court emphasized that deductions from commissions were lawful under the Incentive Bonus Scheme, contradicting claims of unlawful deductions and shared liability.

[1] There were two appeals before us involving the parties herein which by consent were heard simultaneously. The two appeals arose from the decision of the High Court in suit no. D1-22-1667- 1998 filed by Raja Safiah binti Raja Lope Ahmad against PB Securities Sdn Bhd. The appeal record filed in appeal no. W-02- 3382-2010 (the appeal filed by PB Securities Sdn Bhd) was the primary record referred to during the appeal. For the purposes of this judgment Raja Safiah will be referred to as the 'plaintiff' and PB Securities Sdn Bhd will be referred to as the 'defendant', as they were in the Court below.

Background facts

[2] The plaintiff was a paid dealer's representative ("PDR") employed by the defendant, a stockbroking company. As a PDR she was paid a monthly salary and an annual merit bonus. The evidence showed that by letters dated 5 May 1990, 21 April 1991, 19 May 1992, 31 December 1992 and 20 December 1993 the defendant adjusted the plaintiff's basic salary and from 1 January 1994 she was paid a basic salary of RM2,000.00 per month. The salary adjustments made were inclusive of her annual increments payable by the defendant on the 1st January of each year. The defendant averred that by 1998 the plaintiff was paid a monthly salary of RM2,500.00 per month.

[3] In July 1991 the defendant introduced the 'Incentive Bonus Scheme' ("the IBS"). It was the plaintiff's evidence that she had opted to join the IBS. In January 1992 the defendant sent out a memorandum to the plaintiff ("the Memo") which stated as follows (page 918 appeal record) -

INCENTIVE BONUS SCHEME

As you know, the above scheme started in July 1991. In reviewing the scheme, we deem it necessary to consider some changes shortly for the Management's approval.

Meanwhile, we would advise that your contributions with effect from 2 January 1992 will be measured by the Scheme which will include the forthcoming amendments.

Basically, the structure will be the same except that the salary factor (of the dealer concerned) will be incorporated into the 'Overheads Contribution'. In other words, the higher the salary, the higher would be the contribution requirement to be deducted from the gross contribution.

Please note that the incentive is awarded in the form of bonus and applications of the scheme to any Company Paid Dealer is subject to the discretion and decision of the Management.

[4] In January 1993 the defendant implemented the IBS. The IBS (as represented by Appendix A) showed as follows (page 1151) -

E) IBS Scheme Structure

[5] The plaintiff contended that under the IBS she would receive, in addition to her monthly salary, a brokerage commission of 25% out of the 1% of the value of every purchase and sale transaction, but from clients trading through commercial or merchant banks she would receive 10% of the 0.75% of the purchase and sale transaction as brokerage commission. Her salary, employer's contribution under the Employees Provident Fund Act 1991 and other benefits should not have been factored in as deductions as the commissions were earned by her. The plaintiff contended that by deducting her salary and the employer's EPF contribution from the commissions, she would in fact be paying her own salary and the employer's EPF contribution. Therefore the deductions made were unlawful and without justification. The plaintiff also averred that contra losse