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2024 MarsdenLR 2112
INDUSTRIAL COURT MALAYSIA
Low Boey Foon – Appellant
Versus
Atm Management Team Sdn. Bhd. – Respondent
6/4-1822/23
In dismissal cases, the employer bears the evidentiary burden to substantiate allegations of misconduct on a balance of probabilities. Parties are bound by their pleadings, and the employer must provide cogent evidence of a specific breach of duty rather than relying on after-the-fact, unsubstantiated claims.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Industrial Court reference - Dismissal for alleged misconduct - Burden of proof rests on the employer to establish misconduct on a balance of probabilities - Matters not pleaded cannot be used to justify termination - Section 30(5) stipulates that the Court acts according to equity, good conscience, and substantial merits. (Paras 13, 14, 15, 16, 54, 69)
(B) Dismissal - Mismanagement of funds - Necessity of cogency - Where an employer relies on specific instances of incompetence or neglect to justify dismissal, such grounds must be established by credible evidence. Mere allegations or speculative claims regarding financial losses are insufficient. (Paras 53, 65, 69)
(C) Procedural Fairness - Internal processes - Where an organization implements a multi-tiered verification process for financial transactions, liability for alleged mismanagement cannot be unilaterally assigned to a single role without demonstrating a clear breach of specific duty and evidence of operational override. (Paras 43, 44, 46, 60, 65)
Facts of the case:
An employee was terminated purportedly due to exceeding the retirement age. Upon judicial review, that ground was set aside, and the matter was remitted to determine if the employer had established a case of negligence and financial mismanagement. The employer alleged that the employee failed to oversee accounts, permitted faulty payments, and failed to deduct project advances, ultimately causing significant financial loss.
Findings of Court:
The employer failed to provide substantive evidence linking the employee's performance to the alleged financial losses. The internal payment verification procedure involved multiple levels of authorization, and the employer failed to demonstrate that the employee possessed exclusive authority or neglected specific instructed duties. Many of the allegations were determined to be after-the-fact rationalizations unsubstantiated by the procedural evidence.
Issues: The main issues were whether the employer established the pleaded allegations of negligence and mismanagement against the employee to justify the dismissal and whether the evidentiary burden was discharged by the employer.
Ratio Decidendi: The employer bears the burden of proving misconduct on a balance of probabilities. Parties are confined to their original pleadings, and the court will not consider justifications for dismissal that are not supported by cogent evidence or that are raised as secondary rationalizations. Dismissal must be based on proven misconduct, failing which it is considered without just cause or excuse.
Result: Dismissal held to be without just cause or excuse; compensation awarded.
| Table of Content |
|---|
| 1. procedural history and high court's remittal order. (Para 1 , 2 , 3 , 4 , 5) |
| 2. background facts and respective parties' pleadings regarding mismanagement allegations. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12) |
| 3. industrial court's role and the burden of proof in dismissal cases. (Para 13 , 14 , 15 , 16 , 17) |
| 4. evidentiary testimony presented concerning payment processes and alleged fund mismanagement. (Para 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50) |
| 5. court's analysis and rejection of employer's mismanagement claims based on evidence and pleadings. (Para 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68) |
| 6. finding of dismissal without just cause or excuse. (Para 69) |
| 7. calculation and award of backwages as appropriate remedy. (Para 70 , 71 , 72) |
REFERENCE :
This is a reference under S20(3) of the Industrial Relations Act 1967 (the Act) by the Honourable Minister of Human Resources arising out of the dismissal of Low Boey Foon (“the Claimant”) by ATM Management Team Sdn Bhd (“the Company”) on 30.08.2019.
AWARD
Preliminary
[1] A full Award in respect of the above dispute referred to by the Honourable Minister was handed down on 21.03.2023 (Award No. 6(18)/4-281/20)(“the said Award”) after hearing the full trial in the Industrial Court at Penang that I have presided on 17.08.2022, 18.08.2022 and 22.09.2022. Parties filed their respective submissions and based on the cause papers filed and the documentary and oral evidence tendered by witnesses, in the said Award, the Court concluded that the Claimant had been dismissed without just cause or excuse and awarded back wages to the Claimant.
[2] In the said Award, the Claimant was awarded backwages solely on the basis of the determination and the findings that the grounds of dismissal being that the Claimant had exceeded the retirement age of 60 was without just cause or excuse.
[3] Aggrieved by the decision handed down in the said Award, the Company filed an application to judicially review the decision of the Industrial Court at the High Court of Malaya at Penang (PA-25-40-06/2023).
[4] In the High Court, the following orders were made at para [27] of the grounds of judgment, now reproduced herein below for ease of reference as follows (without modifications):
“a. There was no error of law committed in the finding that the basis of termination on the ground of statutory retirement age was not made out;
b. The findings of unjust dismissal and dismissal without just cause at paragraphs 74 and 75 of the said Award are set aside as erroneously made based only on the ground stated in the letter of termination;
c. Consequently, the amount of RM335,280.00 awarded as compensation is also set aside;
d. The matter is remitted to the same Learned Chairman of the Industrial Court who heard the evidence on the issue of mismanagement of funds and for him to decide on the issue as pleaded and to make all necessary order consequential to any such findings;
e. I direct the matter to be fixed before the Registrar of the Industrial Court within 14 days of today with a view that the matter be remitted back to the same Learned Chairman to enable him to hand down another Award after considering the relevant pleading, evidence and submissions and in particular, to decide on the issue of whether the Company has established their pleaded case of negligence/mismanagement of funds being a matter that operated on the employer’s mind at the point of termination.”
[5] Pursuant to the orders made by the High Court in the judicial review proceedings, I now proceed to deliberate and determine on the issues as pleaded by the Company, whether there has been negligent/mismanagement of Company’s funds by the Claimant.
The Company’s Background
[6] The Company is a subsidiary company wholly owned by its parent company known as ATM Group Sdn. Bhd engage
