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2022 MarsdenLR 2557
INDUSTRIAL COURT PERAK
LEE FEN NEE – Appellant
Versus
WRP ASIA PACIFIC SDN BHD – Respondent
Award No: 2465 Of 2022 [Case No: 10/4-339/21]
Dismissal of an employee must follow due process including proper investigation and substantiation of misconduct; failure to adhere to natural justice renders the dismissal unjust.
Headnote:(A) Industrial Relations Act 1967 – Section 20(3) – Dismissal of employee – Claimant alleged unfair dismissal by Company after failing to notify of misconduct and issues related to forced labor allegations – Court finds dismissal without just cause or excuse due to lack of proper domestic inquiry and failure to demonstrate misconduct – Claimant awarded compensation totaling RM270,180. (Paras 73-82)
(B) Employment Law – Dismissal procedures must adhere to natural justice principles – No warning or investigation conducted against employee prior to dismissal – Court reinforces that the burden of proof lies with the employer to substantiate reasons for dismissal, which were not met in this case. (Paras 19, 31, 36-39)
Facts of the case: Claimant alleged wrongful dismissal on 30 January 2020 by the Company following forced labor allegations and a Withhold Release Order (WRO) issued by USCBP. Company failed to establish just cause for dismissal due to lack of prior warnings or inquiries. (Paras 2-5, 6-7)
Findings of Court: The Company's evidence was insufficient to substantiate the grounds for dismissal and the Claimant was not afforded a fair opportunity to defend against the accusations made prior to her termination. (Paras 72, 74)
Issues: Whether the dismissal was justified and if proper procedures were followed in addressing alleged misconduct by the Claimant. (Paras 29-30)
Ratio Decidendi: The court emphasized the requirement for due process, highlighting the necessity for domestic inquiries in dismissal cases, and ruled that the Employer must prove just cause for termination, which was not established. (Paras 19-20, 22-24)
Result: Claimant's claim allowed, company ordered to pay RM270,180. (Para 82)
AWARD
Reference
[1] This is a reference by the Honourable Minister of Human Resources Malaysia pursuant to s 20(3) of the Industrial Relations Act 1967 arising out of the alleged dismissal of Lee Fen Nee (hereinafter referred to as "the Claimant") by WRP Asia Pasific Sdn Bhd (hereinafter referred to as "the Company") on 30 January 2020.
Factual Backgrounds
[2] WRP Asia Pacific Sdn Bhd (the Company) is a company in the business of manufacturing and exporting premium quality glove products and as one of the leading glove exporters to countries as the United Kingdom and the United States of America. In year 2019, a winding up petition was presented against the Company vide Kuala Lumpur High Court (Winding Up Petition No WA-28NCC-403-04/2019). On 29 November 2019, the Interim Liquidators for the Company were appointed by the High Court pursuant to s 476 of the Companies Act 2016 . By virtue of the appointment of Interim Liquidators, the power of the directors of the Company was suspended and the affairs of the Company were now vested with the Interim Liquidators.
[3] On 30 December 2019, the Interim Liquidators issued a circular (Circular 30.12 at p 78 of CLB-1) to all the Company's employees informing that the operation and business of the Company were suspended with immediate effect. However, on 17 January 2020, the Company's Board of Directors regained back the management powers following with an interim stay order of the appointment of Interim Liquidators granted by the Kuala Lumpur High Court (at pp 80-81 of CLB-1). The Company now is under the management of the Board of Directors and it has been lifted from the Interim Liquidators.
[4] The Claimant commenced her employment with the Company with effect from 1 October 2016 as a General Manager - Marketing equivalent to Head of marketing of the Company vide Letter of Appointment dated 1 July 2016 (at p 1 of COB-1) with a basic salary RM17,000.00 per month. Thereafter the Claimant was confirmed her position as General Manager - Marketing with effect from 1 February 2017 with adjusted salary of RM18,700.00 per month vide Confirmation of Employment letter dated 17 February 2017 (at p 4 of COB-1). Prior to the Claimant's dismissal, her last drawn gross salary was RM23,700.00 per month.
[5] The events leading to the alleged dismissal of the Claimant are summarised as follows:
(i) "The Guardian" Article:
There was a news article by The Guardian (a global news organization) on 9 December 2018 that the Company at that time was involved in the use of forced labour in its operations in the headline reads as "NHS rubber gloves made in Malaysia factories linked with forced labour" and made several references leading to the Company which raised excessive overtime, confiscation of passport belonging to the Company's employees, illegal withholding of pay, restrictions imposed on the Company's employee's from leaving the Company's premises and failure to ensure that the Company's employees had adequate rest days (at pp 40-45 of COB-1).
Notwithstanding this, the Claimant being the Head of Marketing of the Company at the material time, failed and/or neglected to highlight the Guardian article, including giving prompt information and/or records pertaining thereto to the Board of Directors of the Company.
(ii) Withhold Release Order (WRO) by the United States Customs and Border Protection (USCBP):
The USCBP issued a Withhold Release Order (WRO) against the Company stating that there were multiple indicators of forced labour practised by the Company (at p 46 of COB-1). In this regards, the Company's products were banned and/or blocked from importation into the USA, and the WRO has adversely affected the Company's business through, amongst others, loss of revenue and profits as products exported to USA formed a significant portion of the sales of the Company (pp 49-56 of COB-1 for an article by the Edge on the WRO dated 2 October 2019). The Company holds that the Claimant had failed to address an
