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2025 MarsdenLR 3165
INDUSTRIAL COURT MALAYSIA
Nurul Hanisah Binti Mohd Isa – Appellant
Versus
Continental Tyre PJ Malaysia Sdn. Bhd. – Respondent
22/4-160/22
An employer has the right to terminate an employee who demonstrates habitual lateness and engages in unauthorized secondary business activities during work hours, as such conduct constitutes a breach of the duty of fidelity and express terms of the employment contract, thereby justifying dismissal.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Dismissal of employee - Misconduct - Burden of proof - The employer must prove charges on a balance of probabilities - The function of the court is to determine if the alleged misconduct occurred and whether it justifies termination (Paras 17-21).
(B) Employment Contract - Restrictive covenants - Unauthorized secondary activity - engaging in private commercial ventures during office hours, including breaks, violates the duty of fidelity and performance obligations - Habitual lateness for work, despite prior warnings, constitutes grounds for disciplinary action (Paras 26, 31, 39, 41).
Facts of the case:
The employer terminated the contract of the employee citing habitual lateness, unauthorized operation of a private online business, and failure to disclose a family connection within the organization. The employee challenged the termination, claiming the actions did not justify immediate dismissal.
Findings of Court:
The court determined that the allegations of habitual lateness and unauthorized business activities were proven. The allegation regarding the family connection was not substantiated. The court concluded that the proven conduct justified the termination.
Issues: Whether the employee was guilty of the alleged misconduct and whether those acts warranted dismissal.
Ratio Decidendi: The persistent failure to adhere to structured working hours and the unauthorized conduct of secondary business interests during working hours breached the duty of fidelity and the contractual terms, thereby destroyed the trust necessary for the professional relationship.
Result: Case dismissed.
| Table of Content |
|---|
| 1. outline of the procedural history and jurisdictional reference of the dismissal case. (Para 1 , 2 , 3 , 4) |
| 2. summary of rival arguments regarding employment terms and alleged misconduct grounds. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16) |
| 3. judicial standards for determining just cause and the employer's burden of proof in dismissals. (Para 17 , 18 , 19 , 20 , 21 , 22) |
| 4. habitual tardiness and unauthorized absence constitute serious workplace misconduct. (Para 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35) |
| 5. conducting side business during working hours violates contractual obligations and implied trust. (Para 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44) |
| 6. failure to prove allegations due to lack of direct evidence regarding nondisclosure. (Para 45 , 46 , 47 , 48 , 49 , 50 , 51) |
| 7. proven misconduct justifies dismissal despite some unsubstantiated charges. (Para 52 , 53 , 54 , 55 , 56 , 57) |
REFERENCE :
This is a reference made under Section 20 (3) of the Industrial Relations Act 1967 (Act 177), arising out of the dismissal of Nurul Hanisah Binti Mohd Isa (hereinafter referred to as “the Claimant”) by Continental Tyre PJ Malaysia Sdn. Bhd. (hereinafter referred to as “the Company”) on 31 May 2021.
AWARD
[1] The reference by the Director General of Industrial Relations (“DGIR”) in this case required the Court to hear and determine the Claimants’ complaint of dismissal by the Company on 31 May 2021.
I. Procedural History
[2] The Industrial Court received the letter pertaining to the DGIR’s reference under Section 20(3) of the Industrial Relations Act 1967 on 20 January 2022.
[3] The matter was fixed for mention on 7 March 2022, 18 April 2022, 2 June 2022, 24 August 2022, 6 March 2023, 5 May 2023, 16 August 2023, 11 September 2023 and 12 January 2024.
[4] The trial of the matter proceeded on 23 October 2024.
II. Parties’ Position On The Merits
(a) The Claimant
[5] The Claimant was employed by the Company as an HR Operations Payroll Analyst by way of a Contract of Employment dated 31 July 2019. She effectively commenced her employment with the Company on 23 September 2019 at a monthly salary of RM4,250.00 and within 6 months, she was confirmed in her position by the Company with her salary remaining the same.
[6] The Claimant had worked for the Company for about 1 year and 7 months before being terminated from her employment on 31 May 2021. Prior to the termination, the Claimant was not informed of the 3 charges levelled against her in the Letter of Termination of Employment dated 31 May 2021 which were as follows:-
i. Tardiness, i.e. consistently taking 2 hour lunch breaks without informing or getting approval from her Immediate Manager;
ii. Started an online business via social media and posted promotional materials which contravenes with Clause 4 of the employment contract;
iii. Failure to declare family member joining the Company in another department.
[7] The Claimant was never warned that she was facing the possibility of termination and was instantly terminated verbally on 31 May 2021 effective 1 June
2021 whereby the Termination Letter was only given on 1 June 2021 and was immediately asked to return all of the Company’s belongings.
[8] The Claimant finds the actions and decisions of the Company to be contrary to the principles of natural justice, equity, good conscience and an unfair labour practice which ought to be struck down.
(b) The Company
[9] The Claimant commenced her employment with the Company on 23 July 2019 as a Human Resource Operations Payroll Analyst. Her last drawn salary was RM4,250.00 per month.
[10] By virtue of Clause 4.1 of the Contract of Employment dated 31 July 2019, the Claimant had to devote her full business time to the Company and the Continental Group.
[11] Pursuant to Clause 4.2 of the Contract of Employment, the Claimant agreed that during the continuance of her employment with the Company, she would not on her own or in conjunction with or o
