IN THE INDUSTRIAL COURT OF MALAYSIA CASE NO: 9/4-1395/06 BETWEEN JOO SIM KEE AND PATENT LICHT BULBS & LAMPS SDN BHD AWARD NO: 819 OF 2009

Transcription

1 IN THE INDUSTRIAL COURT OF MALAYSIA CASE NO: 9/4-1395/06 BETWEEN JOO SIM KEE AND PATENT LICHT BULBS & LAMPS SDN BHD AWARD NO: 819 OF 2009 Before Venue : MOHD. AMIN FIRDAUS ABDULLAH CHAIRMAN : INDUSTRIAL COURT OF MALAYSIA, PENANG BRANCH Date of Reference : 8 TH OF MAY 2006 Dates of Mention : 29 TH OF AUGUST 2006, 29 TH OF SEPTEMBER 2006, 9 TH OF NOVEMBER 2006, 13 TH OF DECEMBER 2006 & 22 ND OF JANUARY Dates of Hearing : 14 TH OF JANUARY 2008, 25 TH OF JULY 2008, 14 TH OF AUGUST 2008, 10 TH OF NOVEMBER 2008, 17 TH OF FEBRUARY 2009 & 24 TH OF FEBRUARY Representation : For the Claimant - Arumugam Ganapathy; M/s Ghazi & Lim For the Respondent - Eric Cheah Woon Leng; M/s Tung, Chan & Partners Reference : The reference under Section 20(3) of the Industrial Relations Act 1967 by the Honourable Minister of Human Resources Malaysia, is regarding the dismissal of Joo Sim Kee ( the Claimant ) by Patent Licht Bulbs & Lamps Sdn. Bhd. ( the Respondent ). 1

2 AWARD The reference under Section 20(3) of the Industrial Relations Act 1967 by the Honourable Minister of Human Resources Malaysia, is regarding the dismissal of Joo Sim Kee ( the Claimant ) by Patent Licht Bulbs & Lamps Sdn. Bhd. ( the Respondent ). It was dated the 8 th of May 2006 and received by the Court on the 12 th of July Background The Claimant commenced employment with the Respondent Company ( Company ) in the Head Office in Penang as a Sales Executive on the 17 th of June 2002 on a basic salary of RM1, per month. On the 1 st of November 2003, the Claimant was promoted to Sales Manager with her monthly salary adjusted to RM1, On the 3 rd of December 2004, the Company terminated the employment of the Claimant in view of her open defiance of the Company s directives in her capacity as Sales Manager. 2

3 On the 30 th of November 2004, an official directive was issued to all sales personnel in respect of the new Customer Distribution List emphasising that the monthly sales target remained at RM60, for all of them including the Claimant. It was to take effect from the 1 st of December The Claimant was not happy with this arrangement and expressed her dissatisfaction by not answering telephone calls from the Managing Director. Hence, she was terminated. On the 14 th of December 2004, the Claimant made a representation under Section 20 of the Industrial Relations Act 1967 to the Industrial Relations Department complaining of her unfair dismissal. In consequence of the complaint, the Company reinstated the Claimant and instructed her to report back for work on the 7 th of February 2005 which the Claimant complied with the instruction. 3

4 After resuming work with the Company, on the 18 th of April 2005, the Company issued a letter titled Non Performance Warning (CLB; page 17) to the Claimant drawing her attention to not achieving her sales target for the past few months, that is, a monthly sales target of RM60, Vide a letter dated the 3 rd of May 2005 with its heading Final Warning for Non Performance to the Claimant (CLB; page 20), the Company told her that she had just only managed to achieve 26.6% of her April monthly sales target. If she still could not improve her sales performance for the month of May 2005, the Company might be forced to take action against her. On the 16 th of July 2005 the Company informed the Claimant that she would be transferred to the Selangor Branch office in view of her poor performance in the Penang region. On the 18 th of July 2005, a Notice of Relocation (COB; page 59) was issued to the Claimant directing her to report to the Selangor office in Petaling Jaya on the 23 rd of July

5 The Claimant did not report for duty there on the 23 rd of July The Company by another letter dated the 27 th of July 2005 however gave her a final opportunity to comply with the transfer order to the Petaling Jaya office taking effect from the 1st of August Nonetheless, the Claimant reported for work in the Penang office on the 2 nd of August 2005 but was told to leave the office and instead to report to the Petaling Jaya Office as instructed. The Claimant refused to obey the order. When she came back from lunch at 1.00 p.m. she was not allowed to enter the office because the Company explained that the Claimant had already been transferred to the Petaling Jaya office in Selangor. The Company did not pay her salary for the month of July 2005 as her July salary had been sent to the Petaling Jaya office in Selangor. Consequently the Claimant claimed constructive dismissal by reason of the aforementioned conduct of the Company. On the other hand, the Company viewed that by not reporting for work at the Petaling Jaya office in Selangor for the third time, it deemed that the Claimant was no longer 5

6 interested to work for the Company. It opined therefore that the Claimant had abandoned her employment with the Company. Issue Whether the Claimant had been constructively dismissed by the Company or that she had abandoned her employment with the Company? Parties Contentions Claimant Harassment after Reinstatement on the 7 th of February 2005 After the Claimant was reinstated on the 7 th of February 2005, she was constantly harassed by Ian Siow Hock Aun (COW2), the Managing Director of the Company. COW2 scolded and shouted at her in the presence of other staff that is, Victor Chan or Wong Huey Chein. She was humiliated. These two staff members were not called by the Company to give evidence and the Court should draw an adverse inference against the Company. 6

7 The Company also stopped reimbursing the Claimant for lunch money spent with customers including her own lunch expenses while doing outstation sales. Prior to her reinstatement, she was reimbursed for them. When she brought up the matter with COW2, she was instead issued with a warning letter (COB; page 22). On the 18 th of April 2005, COW2 rejected the application of the Claimant for annual leave (CLB; page 14). Reasons were that annual leave is not a right but merely a privilege; she had taken too many days of medical leave and her performance was poor. The Claimant s learned counsel argued that annual leave is not a question of right or privilege but was provided by the contract of employment dated the 17 th of June 2002 (CLB; page 2) which laid down that Any other matters not covered in this letter or by the Company shall be per the Employment Act (Act 265). Act 265 provides the Claimant with 12 days of annual leave per year. 7

8 The Company did not also request the Claimant to re-schedule her annual leave if the timing of the application was not suitable to its business requirement. Such a request is permissible. At that material time, the Claimant had taken 4 days of medical leave namely on the 10 th and 22 nd of March 2005 and on the 6 th and 7 th of April The 4 days of medical leave were not excessive and they were certified by qualified doctors (COB; pages 69 and 70). There was no poor performance considering that the Customers List of the Claimant had been revised. Although the Claimant had just returned to work only about two months after the reinstatement, she still managed to obtain the sales sum of RM4, in February 2005 after working just only 14 days and RM18, in March As the reduced sales was caused by the Company s own doing, COW2 was not justified in rejecting her annual leave on the ground of poor performance. Another act of harassment was issuing Show Cause Letter or demanding orally for written explanations on petty grounds. For instance, 8

9 on the 14 th of April 2005 and the 27 th of May 2005, the Claimant was queried on why she did answer the telephone call from COW2 or telephone him (CLB; pages 16 and 24). As a Sales Manager, the Claimant needed to be on the road everyday implying that she could not be attentive to all the office telephone calls. The Claimant also explained that she did not use the new SIM card given to her because she required time to inform all her customers of the change to the new telephone number, yet she was given a Show Cause Letter for this matter. Apart from all these acts of harassment, the Claimant was finally directed to be transferred to its Petaling Jaya Office in Selangor. 1 st Transfer By a letter dated the 6 th of June 2005, the Company directed the Claimant to be transferred to its Petaling Jaya office in Selangor and to 9

10 report to work there the following day. She told another Director of the Company named Ooi Peng Kiat that it was unreasonable to give her less than 24 hours notice to move down to Selangor from Penang. He answered that he did not know about the transfer and took back the letter from her, telling her that he would speak to COW2 about it. Meanwhile he told the Claimant that she did not need to report there. The Claimant said that she could not produce this letter as it was taken back by Ooi Peng Kiat. COW2 gave evidence that the Claimant however was informed about the transfer by a letter dated the 1 st of June 2005 (COB; page 49) stating that she would be transferred to the Selangor office with effect from the 7 th of June The Claimant denied receiving this letter dated the 1 st of June 2005 and did not acknowledge its receipt. The learned counsel contended that the Claimant was telling the truth. If COW2 had indeed sent the letter dated the 1 st of June 2005, there would be no reason for the Claimant to send a note dated the 17 th of June 10

11 2005 (COB; page 51) to him requesting for one week in advance before being transferred to the Selangor office. This note is consistent with the evidence of the Claimant that she was only given one day notice of the transfer. The Company disputed the version of the Claimant but it did not call Ooi Peng Kiat to rebut her claim, thus attracting Section 114(g) of the Evidence Act 1950 for the Court to make an adverse inference against it. COW2 claimed that the Claimant must have received the letter dated the 1 st of June 2005 as this letter instructed her to follow up with Sony Bangi in Selangor which the Claimant did visit. This is not correct as she complied with the instruction of an earlier letter of the Company dated the 31 st of May 2005 (COB; pages 47 to 48). Therefore the evidence of the Claimant is true showing that the letter dated the 6 th of June 2005 actually existed. On the contrary, the letter dated the 1 st of June 2005 was concocted, thus showing COW2 not to be a 11

12 credible witness. COW2 had used the transfer to victimize the Claimant in order to drive her out of the Company. 2 nd Transfer The Company s letter dated the 18 th of July 2005 did not mention the reason for the transfer but the subsequent letter dated the 27 th of July 2005 (CLB; pages 42 to 45) gave the reason for the transfer as poor sales performance. COW2 confirmed the reason. It was argued that the transfer was not bona fide based on the following factors:- a) The alleged poor performance was brought about by the Company when her customer base was reduced; b) The transfer was actuated with improper motive to put pressure on the Claimant to resign; c) It was also intended to harass and victimize the Claimant and 12

13 d) the transfer did bring about a change in the conditions of service. Reduction in Customer Base Prior to December 2004, the Claimant had almost 40 accounts including at least 7 major customers but after her reinstatement, about 21 accounts including the 7 major customers accounts were taken away from the Claimant and given to other staff. She was only given 21 accounts including 3 major accounts. Out of the 21 accounts, at least 3 accounts were yet to become the customers of the Company. This reason given by the Claimant was real. Although the Claimant admitted that the employer was entitled to redistribute the customer base of its employees but the Company should not have expected the Claimant to meet the same sales target immediately. Customers who had already placed orders with the Company through the Claimant had their orders reassigned to other sales staff. It was not fair to maintain her sales target at RM60, when the customers were not given back to her. 13

14 In the circumstances, the Company did not give the Claimant enough time to build up her sales volumes although her seniority and experience supposed to stand her in good stead. The Company could not expect the Claimant to achieve the same sales target as before and treat her failure as poor performance. The conduct of the Company is likened to harassment and victimisation. recklessly. COW2 is not a trustworthy witness as he hurled wild accusations Even though the sales of the Claimant improved from 13.5% to 56% yet the Company still issued two reminders both dated the 2 nd of July 2005 regarding her poor sales performance (CLB; pages 31 and 32). The Final Warning for Non Performance dated the 3 rd of May 2005 sent to the Claimant was incorrect as it stated that she achieved only 26.6% of her sales target when she had actually reached 41% for the 14

15 month of April The Company did not wait to see whether the Claimant could reach the RM60, for any of the months before issuing this letter. The explanation that the account of Silterra was transferred to Victor Chan as that company needed technically skilled staff to service them is dubious. The Claimant had secured more sales in July, September, October and December in 2003 and in March 2004 than the total sales obtained by Victor Chan for Silterra from February to July The Claimant did not consent to the transfer by her said note dated the 17 th of June 2005 as claimed by the Company. How could the Claimant agree to a transfer that was only notified to her one month later on the letter of the Company dated the 18 th of July 2005 (COB; page 59)? She had objected to the transfer to the Selangor office on the ground that she could not meet her monthly sales target was unreasonable because the Company had taken away her customer base. It was a ploy to 15

16 dismiss her or force her into resigning. Besides, she was also required to report to Simon Kow Kong Yuan (COW1) a Sales Executive who was junior in rank to her. It was actually the Company who suggested to the Claimant to resign and pay her an additional month of salary and not vice versa. The Claimant did not demand salaries amounting to 6 months in order for her to resign and if not, she would cause trouble to the Company. The Company had also not paid the commission of the Claimant for the months of September, October and November The commission was to have been paid in January Furthermore her July salary 2005 was also not paid and the Company took away her briefcase and call cardholders. It was submitted by the learned counsel that the Company especially COW2 the Managing Director, had harassed the Claimant by a series of act and had evinced an intention to repudiate the contract of employment 16

17 and henceforth the Claimant was entitled to consider herself to have been constructively dismissed. Respondent Company Transfer The Company s learned counsel contended that the right of the Company to transfer is enshrined in Paragraph 7 of the Contract of Employment of the Claimant. The possibility of a transfer was first broached with the Claimant vide the letter of the Company dated the 25 th of May 2005 (COB; page 37). The Claimant was receptive to it as seen in her note (COB; page 51) but later rejected it outright. The letter dated the 20 th of May 2005 is seen here (in verbatim):- patent LICHT bulbs & lamps Specialty & Optical Purpose Lamp Specialist Head Office :- Branch :- No.32, Jalan Siam No.81, 1 Floor, Jalan PJS 11/9, Bandar Sunway Penang, Malaysia Petaling Jaya, Selangor, Malaysia. Tel: Tel: / 6703 Fax: Fax;

18 Website: Contact: Website: Contact: 20 th May 2005 Ms. Joo Sim Kee Jalan Sekolah La Salle, Pulau Pinang Dear Ms. Noni Joo, Reference: Reminder on Sales Performance Referring to your Up-to-date Sales Report for the month of May 2005, The Management would like to remind you that you had just managed to achieve 12.49% from your monthly sales target RM60, The Management again urges you to improve your sales before end of the month. If you fail to achieve or do not improve your sales performance, The Company will consider to transfer you to Selangor branch for better opportunity. This action is due to your poor performance/non-performance and unable to hit your target for several months. Again, The Company seeks your co-operation on this. Yours sincerely, 18

19 Signed. To sign on behalf of: OOI PENG KIAT DIRECTOR Acknowledge Receipt and date. Noni Joo s Copy Patent Licht Copy The reason behind the transfer was in response to her continuing poor performance as the Claimant had complained about sales had been very slow as seen from her sales forecast for April, May and June 2005 (COB; pages 24 and 31). The Company had not acted mala fide in transferring the Claimant on this ground. The transfer was to help the Claimant as the market is bigger in the central region. Vide a letter dated the 31 st of May 2005 (COB; page 46), the Company reminded her that her gross margin from actual sales achieved in May 2005 was only RM meaning only 9.30% of RM7, and the amount was insufficient to pay for her expenses. 19

20 COW2 testified during cross-examination that this sum obtained by the Claimant could not even maintain her because it cost the Company RM every month to cover expenses incurred by the Company in respect of her. He posed the question How long can you bleed? On the 31 st of May 2005, the Claimant gave a written explanation on why she could not achieve the sales target for the month of May 2005 (COB; page 44). Sony (Prai) had just implemented VR/VSS and production was slow as audio business in the market was waning. Sharp Roxy being in the same business as Sony was also experiencing slow production and Varitronix had closed down one plant in the factory. This was followed by a letter of transfer dated the 1 st of June 2005 (COB; page 49) (in verbatim):- patent LICHT bulbs & lamps Specialty & Optical Purpose Lamp Specialist Penanq Office:- Selangor Office :- 20

21 No.32, Jalan Siam, No.81, 1 st Floor, Jalan PJS 11/9, Bandar Sunway Penang, Malaysia Petaling Jaya, Selangor, Malaysia. Tel: Tel: / 6703 Fax: Fax: Website: Contact: sales@patent-licht.com Website: Contact: medical@patent-licht.com 1 st June 2005 Ms. Joo Sim Kee Jalan Sekolah La Salle, Pulau Pinang Ms. Joo, Reference: Transfer to Selangor Office In view of your non performance from February 2005 to May 2005 and after discussion with other management staffs, the company will still offer you another opportunity. The management believes that you will perform better at Selangor office covering central region. You will be able to maximise your potential and experience and expertise. Central region is a vast market and offers a much bigger potential. Your experience and expertise is much needed in Selangor office. 21

22 Moreover, after consideration and evaluation from your report about major accounts like Sony, Komag, Sharp Roxy Spansion and Varitronix (All located in Penang) business slowdown, the management would like to inform you that for your personal growth and development, you will be transferred to Patent Licht Bulbs and Lamps Sdn. Bhd. (Selangor office) with effect from 9.00am on 7 th June 2005 officially. (The company exercises the right in article 7 in your employment letter). There will be a familiarization purposes and introduction to colleagues at Selangor branch on the day, 7 th June Please be punctual. Major Accounts (Allocated to you for follow up) at Central Region. 1. Sony Bangi ~ Since Sony has moved purchasing and other major operations to Sony Bangi from Sony Penang. 2. Spansion at Kuala Lumpur has bigger potential than Spansion in Penang. 3. Agilent (Penang) outsourced many production to subcontracters in Central Region. 4. Pokka 22

23 5. Carlsberg 6. JVC 7. Konica Minolta 8. Infineon 9. Texas Instruments 10. Shinetsu 11. NEC Semiconductors 12. Freescale Semiconductors 13. Nichia 14. Stat Chippac 15. Fujitsu 16. Flextronics 17. Renesas Accommodation The company is providing accommodation at the Arcadia in USJ 11/1 (location near Selangor office for convenience and ease of travel from office), Selangor so that this would not caused you inconvenience for accommodation. Allowance 1. Full claims on petrol bill including personal usage. 2. Full claims on phone bill for customer calls. 3. Full claims for customer visit on toll and parking charges. 23

24 Yours sincerely, Signed Ian Siow Managing Director Singed. Ooi Peng Kiat Director Acknowledge Receipt and date. Noni Joo s Copy Patent Licht Copy The Claimant vehemently denied receiving this letter dated the 1 st of June 2005 because its contents prove the falsity of her allegations that COW2 did not brief her about her position after the transfer nor on the question of accomodation there. This particular letter gave the details of the accomodation, maintaining the status quo of her position and giving the reasons for her transfer to the Branch office in Petaling Jaya in Selangor. The Claimant s claim that the letter dated the 6 th of June 2005 which gave her only one day notice to report at the Selangor office did exist is not substantiated by evidence. The Company asserted that the letter dated the 6 th of June 2005 claimed by the Claimant to have ordered the transfer does not exist 24

25 because as pointed out by the Claimant s learned counsel that the Claimant is one person who meticulously keeps all her letters and replies to them. If so, why she did not photo copy this letter in question for her own interest? The conclusion to be drawn is that there was actually no such letter. The Claimant also said that this letter dated the 6 th of June was taken back by Ooi Peng Kiat, the Company s Director. It is not the duty of the Company to call this witness as argued by her learned counsel. On the contrary, it should be the Claimant herself to call as the person who asserts must prove. Thus an adverse inference must be drawn against her under Section 114(g) of the Evidence Act She also denied having received the list of customers allocated to her vide on the 30 th of November 2004 which the Company doubted. The Company admitted that some months Victor Chan a junior Sales Executive also did not reach the RM60, sales target but in February and April 2005, he exceeded the sales target by 50%. In comparison, the 25

26 Claimant consistently failed to reach the target although being a Sales Manager, she was more experienced than him. The Claimant gave the excuse that she had not done well as her five major customers were removed from her list by the Company, namely Certance, Osram Opto, Qdos, Silterra and SMCI Globetronics. When shown the Sales Transaction Listing of the Company for February to July 2005 during cross-examination, the Claimant admitted that Qdos remained her customer. Based on the Agent Sales Listings between January 2003 till May 2004, the Claimant only recorded a single transaction with Osram Opto earning a commission of RM6.00 while the Company earned RM Therefore it cannot be true that Osram Opto was one of her major customers. The only major customers transferred to Victor Chan were Certance and Silterra. The transfer of Silterra was justified as being the first waferfabrication technology company in Malaysia, it then required technically skilled people to service them and Victor Chan is a qualified engineer. 26

27 The Company transferred Certance to him as he was then new whereas the Claimant had about 2 1 / 2 years of sales experience. It was a fair administrative decision. The learned counsel argued that the sales potentialities of the Claimant s portfolio was always there, only waiting to be tapped. Reporting to Simon Kow (COW1) When the Claimant was asked to report to Simon Kow (COW1) who was junior to her at the Branch office, it was not meant to be a demotion as he was merely asked to help the Claimant to familiarise with her new environment. Glancing from the letters of the Company dated the 1 st of June 2005 and the 27 th of July 2005 (COB; pages 49 to 50 and 65 to 68), the Claimant was accorded all the due respect as a Sales Manager even though she did not perform well. Accomodation was also provided free for her in the Petaling Jaya office and the list of customers for the central region was also prepared and given to her. Her terms and conditions of employment also remained the same. 27

28 Despite being given almost three months of preparation to go on transfer, the Claimant eventually rejected it for reasons better known to herself. The learned counsel for the Company concluded that COW2 was more credible than the Claimant when assessing both their evidence. The transfer was meant to be a solution for both parties but the Claimant instead chose insubordination and abandonment of employment. Thus, the Company did not dismiss the Claimant constructively. Findings Generally, the Court will not delve into events which happened before the reinstatement of the Claimant by the Company on the 7 th of February 2005 because they are not relevant. The Claimant argued that the constructive dismissal of the Claimant was caused by the constant harassment, unilateral changes to the terms and conditions of her employment like its failure or refusal to pay her salary and commission and transferring her to the Petaling Jaya Branch office in Selangor which was actuated by malice. 28

29 The transfer of the Claimant to the Branch office was the last straw that broke the camel s back which eventually led to her constructive dismissal. Harassment after reinstatement on the 7 th of February 2005 The claim of the Claimant that she was scolded and shouted at by COW2 on various pretexts including that she could not bring in sales always in the presence of Victor Chan or Wong Huey Chin. In examination-in-chief, COW2 testified that he did shout at the Claimant when she still reported to the Penang office on the 2 nd of August 2005 although she was directed to report at the Petaling Jaya office in Selangor on the 1 st of August The Claimant however, took medical leave on the 1 st of August The Claimant knocked on the glass panel door entrance with her bag and COW2 ticked her off for doing it. The Court finds that the reaction of COW2 towards the disobedience of the Claimant was reasonable. 29

30 He also admitted that on another occasion, he did shout at the Claimant when she quarrelled with another staff named Lily Leong in his room. COW2 was then trying to mediate between both of them when the Claimant raised her voice at Lily Leong. believes it. The explanation of COW2 was not unreasonable and the Court On the other hand, the Claimant gave a general picture that COW2 shouted and humiliated her on various occasions without elaboration. Moreover, the Claimant did not call Victor Chan or Wong Huey Chein to substantiate her claim of harassment. It is not for the Company to subpoena them as it is settled law that whoever asserts must prove it. Hence, the Claimant had failed to prove harassment against her by the Company. 30

31 Salary for July 2005 not paid The Company had explained that based on the contents of the letter dated the 17 th of June 2005 (COB; page 51) when the Claimant requested for one week grace period in order to prepare herself to be transferred to Selangor, her salary for the month of July 2005 was sent to the Branch office there. The Court finds this explanation to be reasonable in view of the contents of the Claimant s letter. There was nothing sinister about the action of the Company. Briefcase and call cardholders taken away By its letter dated the 6 th of August 2005 (CLB; pages 49 and 50), the Company had clarified to the Claimant that her briefcase and two call cardholders were taken away from her work place in Penang and sent to the Selangor office as she had been transferred to the Branch office there. Outstation meal allowances COW2 gave evidence that the Company does not provide lunch allowances for staff on outstation duty but if the Claimant had brought 31

32 along customers then she was entitled to such allowances. The Claimant pleaded that after her reinstatement she was no longer provided with such allowances but she did not mention that she had entertained customers for lunches. A perusal of the contents of the Letter of Employment (CLB; pages 1 to 3) also does not show that lunch allowances are provided for outstation assignments for the Claimant. Thus it was not a contractual right. Annual leave COW2 was wrong to view that annual leave is not a right but merely a privilege. The Company however had the right not to approve the application of the Claimant for annual leave (CLB; page 14) although it should have stated the reason for the disapproval to her on the 18 th of April 2005, the very day itself when it was not approved. From all the evidence adduced, the Court concludes that the Company is a small one without many staff and taking into consideration that the Claimant had still not achieved her monthly sales target, looking from that angle, it was reasonable for it to view that the Claimant by taking 32

33 4 days of medical leave spanning two months consecutively in March and April 2005, had taken excessive medical leave (COB; pages 69 and 70). The Court finds that the disapproval does not necessarily mean that the Company had evinced an intention not to be bound by the terms and conditions of the employment contract or that it had breached a fundamental term of it. On the contrary, it had given the reasons for not allowing the application for annual leave as the Claimant had taken excessive number of days of medical leave and she had still not achieved her monthly sales target of RM60, Perhaps it ought to be faulted for not advising the Claimant to reschedule the date of her leave. It is to be noted that the Company did not state that the Claimant was not entitled to annual leave at all. Not answering the telephone calls from COW2 COW2 had proven that he did telephone the Claimant (CLB; page 16) but there was no response until he had to call one Cheang to call the Claimant. The reason that the Claimant being a Sales Manager was on the road daily and implied that she could not be attentive to all the telephone 33

34 calls while outdoors is not an excuse because she could have stopped by the roadside to answer incoming calls while driving. The Claimant herself admitted that she had forgotten to telephone back COW2 on the 25 th of May Nonetheless, the point to note is that the telephone calls were from COW2, the Managing Director of the Company which the Claimant being the Sales Manager should not have forgotten to call back. COW2 was not bent on finding fault with the Claimant as he being the Managing Director had the right to know why his telephone calls to her went unheeded. COW2 was not her colleague. He was her boss. It is noteworthy that prior to her reinstatement when the Claimant was not happy with the Customer Distribution List, she also displayed her dissatisfaction by not answering the telephone calls of COW2. 34

35 Show Cause Letter for not using new SIM card The Company had acted reasonably by issuing the Show Cause Letter dated the 18 th of July 2005 to the Claimant for not changing to the new SIM card provided to her. It was frustrating for the Company to try to contact her vide this new telephone number to get some information but unsuccessful. The Claimant explained that she did not use the new number as she needed time to inform all her customers about the new number is not acceptable because it would have taken her 2 to 3 days or may be even fewer days than that to inform each of her customer by telephone calls about the new number. Reporting to Simon Kow Kong Yuen (COW1) The Claimant was insinuating that by instructing her to report to COW 1 who was her junior at the Branch office in Selangor on the 23 rd of July 2005 meant that it was a demotion does not hold water. The Company had led evidence that being the Sales or Marketing Executive there, he was only to help the Claimant to get acquainted with her new working 35

36 environment. In the strictest sense of the word, she was not reporting to him as her superior officer. The Company gave evidence that all her terms and conditions of her employment contract remained unchanged on transfer there. Hence her fear was unfounded. Transfer The failure of the Claimant to achieve her monthly sales repeatedly was the primary reason for the Claimant to be transferred and the other lesser reason was her complaint that sales had been very slow for the past few months when she made her Sales Forecast for April, May and June 2005 on the 18 th of April 2005 (COB; page 24 and COB; page 31). In fact the Claimant admitted her failure as the Company s learned counsel pointed out. The Claimant tried to justify her failure to reach her monthly sales target by alleging that the Company had taken away her major customers that is Certance, Osram Opto, Qdos, Silterra and SMCI Globetronics. Evidence had been led by the Company that Qdos still remained her 36

37 customer and that she had only one transaction with Osram Opto earning a commission of RM6.00. Therefore her claim is not true. Silterra was given to Victor Chan as the customer needed a technically qualified staff. Victor is a qualified engineer. Certance was given to him he as he was junior to the Claimant in order to help him to boost his sales whereas she was more experienced in sales. Although her customer base was reduced, there was no evidence that it was done with malice. Nevertheless, the learned counsel for the Claimant himself admitted that the Company possesses the right to redistribute its customer list or customer base among its staff. To avoid needless repetition, evidence had been adduced to show that the Claimant repeatedly had not reached her monthly sales target and as COW2 had lamented How long can the Company bleed? The reshuffle was done to save the Company and was not motivated with any ulterior motive. 37

38 The argument that the Claimant was not given enough time to achieve her sales target is without merit as other staff even junior sales personnel to her in Penang and the Branch office in Selangor had achieved or surpassed their respective sales targets. (Please see COB; page 65). The Claimant moreover had the edge over the junior staff with her experience and as a Sales Manager. As admitted by the learned counsel for the Claimant that a Company has the prerogative to transfer its employees within its own organization provided the transfer was not actuated by improper motive. In essence, it must not result in a change to the terms of the employment contract detrimental to the employee. Please see the Court of Appeal case in Ladang Holyrood v. Ayasamy a/l Manikam & 16 Others [2004] 3 MLJ 339. After delving into all the evidence adduced by both parties, the Court concludes that the transfer was not activated by any hidden agenda. It was made in good faith for pure business reason as seen from the testimony of COW2 who testified How long can the Company bleed? The Claimant was not meeting her monthly sales target of RM60, consecutively and COW2 had said that the Company needed RM5, to pay for the 38

39 expenses incurred by the Claimant as an employee every month. The income she managed to bring in was not even enough to reimburse such expenses. Thus the Company was forced to take remedial action by transferring her to the Branch office where the market is bigger in the central region. The transfer was not to harass or victimize the Claimant. The Management had acted bona fide in the interest of its business and the transfer did not involve a change in the terms and conditions of her service. The Company had been very accommodating towards her by delaying the transfer in response to her request in order to give her more time to prepare for it. Accommodation was even provided for her at the Branch office although the Company was under no contractual obligation to do so. At the risk of repetition, her terms and conditions of employment still remained the same on transfer. Despite the magnanimity displayed by her employer (Please see COB; pages 49 and 50; 39; 61; 65 to 68 and 79 to 80), the Claimant instead in a sudden turnabout refused to obey the lawful and reasonable order of transfer in open defiance of her contractual 39

40 obligation embodied in her employment contract (CLB; page 2; Item 7) dated the 17 th of June 2002 which stipulated:- Transfer The Company reserves the right to transfer you to any other department, subsidiary or associated company or to re-assign or modify your job responsibilities. On the 18 th of June 2002, the Claimant herself had signed the contract stating that she understood and agreed to all the terms and conditions as stipulated in the document. The Court also finds that the Claimant had not satisfied the requirements of law as laid down in the Supreme Court case of Wong Chee Hong v. Cathay Organisation [1988] 1 CLJ 45 where it held that:- The common law has always recognised the right of an employee to terminate his contract of service and therefore to consider himself as discharged from further obligations if the employer is guilty of such a breach as affects the foundation of the contract or 40

41 if the employer has evinced or shown an intention not to be bound by it any longer. Again the landmark case of Western Excavating (ECC) Ltd v. Sharp [1978] 1 QB 761 where the eminent Lord Denning (MR) propounded the concept of constructive dismissal is also not applicable to the Claimant s case:- If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that he no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer s conduct. He is constructively dismissed. The employee is entitlted in those circumstances to leave at that instant without giving any notice at all or, alternatively, he may give notice and say he is leaving at the end of the notice. But the conduct must in either case be sufficiently serious to entitle him to leave at once. Moreover, he must make up his mind soon after the conduct of which he complains. If he continues for any length 41

42 of time without leaving, he will lose his right to treat himself as discharged. He will be regarded as having elected to affirm the contract. To recapitulate, after evaluating the total evidence and arguments of both parties in relation to the facts and surrounding circumstances of the case, the Court finds that there was no constructive dismissal. The Claimant instead had abandoned her employment on the 2 nd of August Claimant. In the light of the findings, the Court now dismisses the claim of the HANDED DOWN AND DATED THIS 8 JULY 2009 (MOHD. AMIN FIRDAUS ABDULLAH) CHAIRMAN INDUSTRIAL COURT OF MALAYSIA PENANG BRANCH 42