JUDGMENT

Steve Shim CJ (Sabah & Sarawak):

The Issues

This is an appeal against the decision of the Court of Appeal given on 23 May 2003. Leave to prosecute this appeal was granted by this court on 23 September 2003 on the following question:

Whether the Industrial Court in exercising its power and jurisdiction under section 56(1) of the Industrial Relations Act, 1967, can exercise its interpretative functions under section 33(1) of the Act in respect of the scope and ambit of a term of a collective agreement for the purposes of deciding whether there has been a non-compliance of the term complained of.

The Background Facts

The factual matrix relevant to this appeal can be briefly stated. The appellant ran a hotel which employed some members of the respondent union as workmen. The contract of employment of these workmen was governed by a collective agreement which was given cognizance of by the Industrial Court as No. 255/93. By letters dated 1 September 1996, the appellant served notice on the respondent stating that the appellant would effect " a closure of business" from 1 December 1996 due to renovation and refurbishment works. On the same date, the appellant also gave notice of termination of service to its employees expiring on 30 November 1996. The appellant paid the employees the retrenchment benefits but did not grant them bonus. The respondent claimed that the employees should be paid pro-rata bonus under art. 11 of the collective agreement. Accordingly, it filed with the Industrial Court a complaint under s. 56(1) of the Industrial Relations Act 1967 ("the Act") for non-compliance of the said art. 11 by the appellant. The appellant disputed the complaint. The matter was heard by the Industrial Court. It decided in favour of the respondent and ordered the appellant to pay the employees their pro-rata bonus for 1996. Dissatisfied, the appellant applied to the High Court for an order ofcertiorarito quash the award. In granting the order, the High Court held that the Industrial Court had erred in exercising an interpretative function under s. 56(1) of the Act when it could only do so under s. 33 thereof. On appeal, the Court of Appeal reversed the High Court's decision. Against that reversal, the appellant sought leave to appeal to the Federal Court. Leave, as we have said, was granted.

Court Of Appeal's Perspective On ss. 56 And 33 Of The Act

Essentially two main issues were raised in the Court of Appeal. First, whether the Industrial Court had jurisdiction to exercise its interpretative power under s. 33(1) of the Act in non-compliance proceedings brought under s. 56 thereof. Second, whether the interpretation by the Industrial Court of the collective agreement in the instant case disclosed an error of law. Let us begin with the first issue.

In determining this issue, the Court of Appeal appears to have relied more on the dissenting view expressed by Wan Suleiman, SCJ inHoliday Inn Kuala Lumpur v. National Union of Hotel, Bar & Restaurant Workers[1988] 1 CLJ 133; [1988] 1 CLJ (Rep) 116 as well as its own decision in Syarikat Kenderaan Melayu Kelantan Bhd v. Transport Workers Union[1995] 2 CLJ 748. The majority decision of the Supreme Court inHoliday Innis expressed by Sean SCJ who, in construing s. 56 of the Act, states as follows:

Now, section 56 is concerned with the enforcement in a summary manner of an award made by the Industrial Court or of a collective agreement which has been taken cognizance of by the Court under section 17 after a complaint has been lodged as to its non-compliance. The non-compliance of a term of the award or collective agreement must exist as an antecedent fact before the Industrial Court can exercise its power contained in sub section (2) thereof. It is therefore a condition precedent to the exercise of those powers that there should be in existence a breach or non-observance of a term of the award or collective agreement. This must be satisfactorily established by the complainant.

Applying