Resignation is effective upon submission, disqualifying the employee from the annual bonus due to resignation during the financial year.

Reference

[1] This is a reference by the Honourable Minister of Human Resources, Malaysia dated 21 April 2022 made under s 26(2) of the Industrial Relations Act 1967 , arising out of a trade dispute between Kesatuan Pekerja-Pekerja Perusahaan Makanan ("the Union") and Etika Dairies Sdn Bhd ("the Company").

Introduction

[2] The dispute emanates from the Company's decision to reclaim the annual bonus disbursed to one Tiyagarajan a/l Muruthey, ("the employee") upon him tendering his resignation letter dated 7 December 2021 to the Company by deducting the amount of RM2,791.80 from the Claimant's monthly salary of December 2021 and January 2022 to clawback the annual bonus paid to the Claimant on 15 December 2021.

The Proceedings

[3] This case came up for hearing on 23 June 2023 wherein at the outset, parties had by consensus informed the Court that the only issue in this reference to be decided by this Court is whether the resignation submitted by an employee on 7 December 2001 takes effect on the date it was submitted to his employer or at the end of the notice period. Parties to the dispute had further informed the Court, that they would file their respective submissions for this Court to determine on the issue of when the resignation was effective without having to tender any witnesses to adduce evidence for this dispute. The following cause papers were filed:

(a) Statement of Case dated 12 December 2022

(b) Statement In Reply dated 17 January 2023

(c) Rejoinder dated 20 January 2023

(d) Union's Bundle of Documents and Authorities

(e) Company's Bundle of Documents and Authorities

(f) Union's Written Submission and Submission In Reply

(g) Company's Written Submission and Submission In Reply

The Court's Function

[4] The Honourable Minister's reference in this case is for the Industrial Court to consider the salary cut to clawback the financial year bonus of one Thiagarajan A/L Muruthey who was a Boilerman during his employment with the Company and to hand down an Award accordingly. The Court is in agreement that in deciding the issue pertaining to the salary cut and the clawback of the bonus paid to the employee, it has to be determine if the relevant Articles had been breached in the face of the resignation tendered by the employee after having received the bonus pay out.

[5] In short, whether the employee was entitled to the bonus paid to him by the Company for the financial year 2021.

Background Facts

[6] The crux of the dispute relates to the Collective Agreement that was given cognizance by the Industrial Court entered into between the Union and the Company (referred to as the "CA 2019 - 2021") which took effect on 1 January 2019 for a three (3) years period and expired on 31 December 2021.

[7] It is the Union's case that the Company by deducting the Claimant's salaries to clawback the annual bonus of RM5,583.60 awarded to the Claimant had breached art 10 of the CA 2019 - 2021 which reads:

Perkara 10 Bonus Tahunan

(a) Syarikat akan membayar bonus tahunan kepada semua pekerja yang telah berkhidmat selama tidak kurang dua belas (12) bulan berterusan sehingga akhir 31hb Disember setiap tahun dan pembayaran akan dibuat pada setiap 15 haribulan November setiap tahun pada kadar berikut:

i) Gred NE-1 - 2.0 bulan gaji pokok

ii) Gred NE-2 - 1.8 bulan gaji pokok

iii) Gred NE-3 - 1.6 bulan gaji pokok

iv) Gred NE-4 dan ke atas - 1.5 bulan gaji pokok

(b) Pekerja yang meletak jawatan atau ditamatkan perkhidmatan oleh Syarikat dalam tahun kewangan semasa adalah tidak layak untuk mendapat bonus tahunan.

(c) Pekerja yang telah disahkan dalam