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2024 MarsdenLR 2079
INDUSTRIAL COURT SABAH
GOH SOON KING – Appellant
Versus
TWENTY TWENTY COMPUTERS SDN BHD – Respondent
Award No: 1918 Of 2024 [Case No: 17/4-1593/22]
A majority shareholder and Managing Director is not considered a 'workman' under the Industrial Relations Act 1967, thus dismissal claims under the Act are not applicable.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Dismissal of Managing Director - Claimant contended he was unlawfully dismissed without just cause; Company argued Claimant was not a workman under the Act. Court found Claimant was a majority shareholder and not an employee, thus not covered by the Act. (Paras 21-28)
(B) Dismissal - Burden of proof - Employer must prove dismissal was with just cause; Court ruled Claimant's case of constructive dismissal did not arise as he was not an employee. (Paras 12-13)
(C) Salary Reduction - Court held Claimant entitled to RM26,105.00 for unjust salary reductions during his tenure. (Paras 31-38)
Facts of the case:
Claimant was Managing Director and majority shareholder of the Company, dismissed after alleged misconduct. Court evaluated whether Claimant was a workman under the IRA 1967.
Findings of Court:
Claimant was not an employee under the IRA 1967; however, he was entitled to reimbursement for unjust salary reductions.
Issues: Whether the Claimant was a workman, whether there was a dismissal, and if so, whether it was with just cause.
Ratio Decidendi: The Claimant, as a controlling shareholder, was not an employee under the IRA 1967; thus, the dismissal was lawful.
Result: Claimant's claim for reinstatement dismissed; Company ordered to pay RM26,105.00 for salary arrears.
AWARD
A. Reference
[1] This is a reference by the Director General of Industrial Relations Malaysia under s 20(3) of the Industrial Relations Act 1967 ("the IRA 1967") arising out of the dismissal of Goh Soon King (hereinafter referred to as "the Claimant") by Twenty Twenty Computers Sdn Bhd (herein referred to as "the Company").
B. Preface
[2] This present case relates specifically on the Claimant's complaint of dismissal as Managing Director by the Company.
[3] The Claimant was at all material times one of the founding members of the Company with the core business in servicing of computer hardware and software and the related services since his appointment as the Managing Director on 5 April 2010 cum the single majority Shareholder holding 40% shares in the Company.
[4] There was no letter of employment issued nor prepared by the Company to the Claimant for his appointment as the Managing Director. Although there was no contract of employment issued by the Company specifying the roles and responsibilities of the Claimant, the Company had contributed to the Claimant's EPF and SOCSO accordingly.
[5] The Company had revoked the appointment of the Claimant as the Managing Director with one (1) month notice pursuant to arts 91, 92 and 93 of the Memorandum & Articles of the Association of the Company after a resolution was passed at the Board of Directors' meeting on 25 March 2022.
[6] The Company decided to terminate the Claimant as the Claimant was allegedly had set up a new company known as Al Geek Solution Sdn Bhd in competition with the Company and was allegedly against the best interest of the Company.
[7] The Claimant submits that he was a workman under the IRA 1967 and was unlawfully terminated and that his dismissal by the Company was without just cause or excuse.
[8] The Company however states the Claimant is not a workman as define under the IRA 1967. The Company prays for Claimant's claim to be dismissed.
C. Duty Of The Industrial Court
[9] First and foremost, it is the duty of the Industrial Court to determine whether the termination or dismissal is with or without just cause or excuse. In Goon Kwee Phoy v. J & P Coats (M) Bhd; , Raja Azlan Shah CJ:
"if the employer chooses to give a reason for the action taken by him, the duty of the Industrial Court will be to enquire whether the excuse or reason has or has not been made out". His Lordship went on to hold that if the Industrial Court finds that this has not been proved, "then the inevitable conclusion must be the termination or dismissal was without just cause or excuse".
[10] In Wong Chee Hong v. Cathay Organisation Malaysia Sdn Bhd ; ; [1988] 1 MLJ 92; [1988] 1 CLJ (Rep) 298, the Supreme Court held that:
"Where the Industrial Court is dealing with reference under s 20, the first thing that the Court will have to do is to ask itself a question whether there was a dismissal, and if so, whether it was with or without just cause or excuse".
[11] The Federal Court in Milan Auto Sdn Bhd v. Wong Seh Yen ; [1995] 4 CLJ 449; [1996] 1 AMR 049 at 455 held that the function of the Industrial Court in dismissal cases on a reference under s 20 is two-fold. 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.
D. The Law And Burden Of Proof
[12] In Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor; ; [2002] 3 MLJ 129; [2002] 3 CLJ 314; [2002] 3 AMR 2898 at the Court Appeal held that the standard of proof for cases heard before the Industrial Court is "on the balance of probabilities":
In our view the passage quoted from Administrative Law by HWR Wade & CF Forsyth offers the clearest statement on the standard of proof required, that is the civil standard based on the balance of probabilities, which is flexible so that the degree of probability required is proportionate to the nature of gravity of the iss
