INDUSTRIAL COURT OF MALAYSIA CASE NO: 18(12)/4-411/15 ZAKARIA BIN ISMAIL DAN EASTERN PACIFIC INDUSTRIAL CORPORATION BERHAD AWARD NO: 857 OF 2017 Before : Y.A. TUAN GULAM MUHIADDEEN BIN ABDUL AZIZ CHAIRMAN Award Issued at : Industrial Court of Malaysia, Kuala Lumpur. Date of Reference : 26 March 2015 Dates of Mention : 8 July 2015, 10 August 2015, 10 September 2015, 19 October 2015, 26 November 2015, 17 December 2015, 14 January 2016, 19 February 2016, 4 March 2016, 21 March 2016, 4 April 2016, 6 September 2016, 26 September 2016, 2 December 2016, 13 December 2016, 16 January 2017, 13 February 2017 & 13 March 2017 Dates of Hearing : 5 October 2016 & 6 October 2016, Company s Written Submission : 6 December 2016 Claimant s Written Submission : 13 February 2017 Representation : Mr. A. Sivananthan Malaysia Trades Unions Congress (Representative for the Claimant) Miss Teoh Alvare & Miss K.C. Wong Messrs Zul Rafique & Partners (Learned Counsel for the Respondent) 1
AWARD The parties before this Court are Zakaria bin Ismail ( the Claimant ) and Eastern Pacific Industrial Corporation Berhad (EPIC) ( the Company ). The dispute is over the termination of the Claimant from the services of the Company with effect from 1 November 2014. It is a reference made by the Honourable Minister of Human Resources to the Industrial Court pursuant to Section 20 of the Industrial Relations Act 1967 ( the Act ). Facts of the Case The Claimant commenced employment as the Senior Manager, Operation (Grade 39) with the subsidiary of the Company, Pangkalan Bekalan Kemaman Sdn. Bhd. ( PBKSB ) on 17 August 2008. By a letter dated 11 November 2008, the Claimant was appointed as the Acting General Manager of PBKSB, with effect from 15 November 2008. By a letter dated 21 April 2009, the Claimant was informed that he has been promoted as General Manager of PBKSB with effect from 1 April 2009. The Claimant was informed that his new terms and conditions of employment shall be in line with his new position grade as stipulated in the Company s Terms and Conditions of Service. By a letter dated 3 January 2011, the Claimant wrote to the Company to inform that he was due to attain his mandatory retirement from service with the Company at the age of 55 on 8 April 2011. As such, the Claimant applied to the Company to consider extending his term of service until he attained the age of 58 on 8 April 2014. 2
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By a letter dated 19 January 2011, the Company informed the Claimant that the management of the Company had reviewed and approved the Claimant s application. 4
In the circumstances, the Claimant s term of service after his mandatory retirement age was extended till the Claimant attain the age of 58. The extended term was for a period of 3 years from 9 April 2011 to 8 April 2014. By a letter dated 8 April 2014 the Claimant was informed that effective from 9 April 2014 his services with the Company was on a month to month basis until his employment contract is terminated ( the Monthly Contract ). 5
By a letter dated 14 August 2014, the Claimant was informed, amongst others, the he would be re-designated as General Manager, West Wharf with effect from 15 August 2014. The West Wharf is owned and operated by Sukma Samudra Sdn. Bhd., a member of the EPIC Group. By a letter dated 20 October 2014, the Claimant was informed that his contract of service with the Company would be terminated with effect from 1 November 2014. The Claimant was further informed that the Company was agreeable to the Claimant s early release from service effective 23 October 2014. 6
By a memo dated 23 October 2014, the Claimant was reminded to return the following Company s equipment / assets in order to expedite payment of the Claimant s salary for the month of October 2014: (a) Apple iphone 5s; (b) Petrol Card for Vehicle No. TAX 1148; (c) Apple ipad Air; (d) Toshiba Laptop (Protégé Z830); and (e) HP Computer Desktop. Notwithstanding the reminder by the Company vide its memo dated 23 October 2014, the Claimant failed to return any of the Company s equipment / assets listed therein. By a letter dated 20 November 2014, the Company referred to its memo dated 20 October 2014 and requested that the Claimant return all of the Company s equipment/ assets listed therein on or before 23 November 2014. Notwithstanding the second reminder by the Company vide its letter dated 20 November 2014, the Claimant failed and/or refused to return any of the other Company s equipment/ assets, save and except for the Petrol Card for Vehicle No. TAX 1148. By a letter dated 9 December 2014, the Company informed the Claimant that his salary for the month of October 2014 had been credited into his bank account with Affin Bank Berhad on 9 December 2014. The Claimant was further informed that the amount credited had included deductions for the Company s equipment/ assets which the Claimant had not returned, namely the Apple iphone 5S, Apple ipad Air, Toshiba Laptop (Protégé Z830) and HP Computer Desktop. 7
The issues The main issues before this Court are: 1. Whether the Claimant was dismissed by the Company or whether upon his retirement he was placed on a genuine fixed term contract (inclusive of the Monthly Contract and the said fixed term of 3 years). If there is a finding that there was a genuine fixed term contract then the issue of whether the Claimant was dismissed with just cause or excuse does not arise. 2. If the Claimant was in fact dismissed by the Company then the question that needs to be determined is whether the said dismissal was with just cause or excuse. The Law on Fixed Term Contract It is necessary for this Court to decide firstly whether the Claimant s contract of employment is a genuine fixed term contract or one which is permanent in nature but dressed up as a fixed term contract. If it is a genuine fixed term contract, following the case of M. Vasagam Muthusamy v Kesatuan Pekerja-Pekerja Resorts World, Pahang & Anor [2003] 5 CLJ 448, the Court need not have to go into the question of whether there was a dismissal with just cause or excuse. Once it is established that it is a fixed term contract, the dissolution of the contract upon reaching the expiry date of the fixed term would clearly spell the end of the worker s tenure. 8
Faiza Tamby Chik J, the High Court held as follows: I am of the opinion that the Industrial Court had correctly addressed the issue in this case by determining first whether or not the contract in question was a genuine fixed term contract (see pp. 3 and 4 of the said award). If the Industrial Court made a finding that it was not a genuine fixed term contract but was really a contract of employment, then only would the Industrial Court be required to ask whether there was a dismissal or not and that if so whether it was with just cause or excuse. In the instant case, since a finding was reached that the contract concerned was indeed a genuine fixed term contract, the question of there being a dismissal or not does not arise. Once it was established that there is a genuine fixed term contract, the dissolution of the contract upon reaching the expiry date of the fixed term would clearly spell the end of the worker s tenure with the relevant company. [Emphasis Added] The decision of the High Court in M. Vasagam was reinforced by the Court of Appeal in the case of M. Vasagam Muthusamy v Kesatuan Pekerja-Pekerja Resorts World, Pahang & Anor [2005] 4 CLJ 93 Evaluation and Findings Before proceeding on the merits of the case, it is pertinent to note that the Claimant s representative had filed the Statement of Case on 10 September 2015. A scrutiny of the Statement of Case clearly shows that the Claimant had failed to raise any issues in regard to the case except by stating that the termination of service is baseless unwarranted and without just cause or excuse. The Court is unable to determine the issues or to narrow the area of conflict based on the Statement of Case. 9
The importance of the Claimant s Statement of Case pleaded in this Court makes it immensely important to reproduce it in extenso as follows : 1. The dispute before this Honourable Court is by way of reference by the Honourable Minister of Human Resource under Section 20(3) of the Industrial Relation Act 1967 for adjudication and award. 2. Whereas the dispute is over the termination of service of Zakaria bin Ismail (hereinafter referred to as the Claimant ) by Eastern Pacific Industrial Corporation Berhad (EPIC) (hereinafter referred to as the Company ) with effect from 1 November 2014. 3. The Claimant avers that he joined the Company from 17 August 2008 as the General Manager based at Pengkala Bekalan kemaman Sdn. Bhd. The last drawn salary at the time of termination of service is RM17,065.00 per month. 4. Via letter dated 30 May 2013, the Claimant s position is redesignated with effect from 1 June 2013 as General Manager Infrastructure & Development, EPIC reporting to the Managing Director / Chief Executive Officer, EPIC. Again via letter dated 14 August 2014 the Claimant s position was redesignated with effect from General Manager, West Wharf, EPIC reporting to the Managing Director / Chief Executive Officer, EPIC. 5. Vide letter dated 20 October 2014, the service of the Claimant was terminated with effect from 1 November 2014 and further the Company agrees to release him early that is 23 October 2014. The Claimant avers that no reason was given for the termination of the service and put the Company to strict proof. 6. By way of letter dated 9 December 2014, the Company credited the salary payment for the month of October 2014 less the necessary deduction into the Claimant s account at Affin Bank Berhad. 10
7. The Claimant states that the termination of service is baseless, unwarranted and without just cause or excuse. 8. The Claimant states and will establish during the hearing that the termination or service is without just cause or excuse. 9. The Claimant humbly pray that the Honourable Court will hand down an Award finding dismissal wrongful, void and inoperative and further order reinstatement without any loss of wages, seniority and such other benefits earned or any other relief which this Honourable Court deems fir and proper to grant. Dated : 9.9.2015 In the Federal Court judgement of Ranjit Kaur a/p S. Gopal Singh v Hotel Excelsior (M) Sdn. Bhd., [2010] 8 CLJ 629, it was held that the parties are bound by the basic rules of pleading. The Industrial Court must confine itself to the four corners of the pleading and Section 30(5) of the IRA could not be used to override or circumvent the basic rules of pleading. It further states : Pleading in the Industrial Court are as important as in the Civil Courts. The appellant must plead its case and the Industrial Court must decide on the appellant s pleaded case. This is important in order to prevent element of surprise and provide room for the other party to adduce evidence once the fact or an issue is pleaded. Thus, the Industrial Court s duty, to act according to equity, good conscience and substantial merits of the case without regard to technicalities and legal form under s 30(5), does not give the Industrial Court the right to ignore the Industrial Court Rules 1967 made under the principle Act. [Emphasis Added] 11
The Industrial Court has no jurisdiction to take evidence or rely on an enpleaded fact to justify its decision. This issue was specifically addressed by the Federal Court in R.Rama Chandran v The Industrial Court of Malaysia & Anor [1997] 1 CLJ 147: It is trite law that a party is bound by its pleadings. The Industrial Court must scrutinise the pleadings and identify the issue, take evidence, hear the parties arguments and finally pronounce its judgement having strict regard to the issues. It is true that the Industrial Court is not bound by all technicalities of a civil court (s 30 of the Industrial Relations Act 1967) but the object of pleadings is to determine what are the issues and to narrow the area of conflict. The Industrial Court cannot ignore the pleading and treat them as mere pedantry or formalism, because if it does so, it may lose sight of the issues, admit evidence irrelevant to the issues or reject evidence to the issues and come to the wrong conclusion. The Industrial Court must at all time keep itself alert to the issues and attend to the matters it is bound to consider. [Emphasis Added] Based on the above authorities, it is obvious that the Claimant has failed to raise the necessary issues or material facts to show that he was dismissed without just cause or excuse. Further, the Claimant had not filed any Rejoinder in this case and thereby failed to address and reply the various facts and issues raised in the Statement in Reply. Be that as it may the Court will still proceed to consider the merit of the case. The terms and conditions of the Claimant s employment were governed by his employment contract and also the Company s Terms and Conditions of Service ( TACOS ). The retirement clause under TACOS which was applicable to the Claimant at the material time expressly states that : 12
Article 11 : Retirement 11.1 An employee is considered to retire from service with the Company upon: (a) Attaining the age of fifty-five (55) years as mandatory retirement; (b) Further, the Claimant during cross-examination admits that the retirement clause under TACOS was applicable to the Claimant and his mandatory retirement age at the material time was 55 years which he has attained on 8 April 2011. S : Sila rujuk m/s 8 Encik Zakaria Ini adalah TACOS pada masa itu. Terms and Conditions of Services. Setuju dengan saya pada masa itu TACOS yang terpakai menyatakan umur persaraan adalah pada umur 55 tahun? J : Betul. Further, the Claimant had voluntarily written to the Company vide a letter dated 3 January 2011 whereby he acknowledged that his mandatory retirement age was 55 years old which he would attain on 8 April 2011. The Claimant then applied to the Company to consider extending his term of service until he attained the age of 58 on 8 April 2014. as follows: The salient passages of the Claimant s letter dated 3 January 2011 is reproduced Pada 8 hb April 2011, genap umur saya 55 tahun untuk bersara wajib untuk jawatan saya sekarang. Dengan itu, amatlah besar harapan saya agar dapat kiranya tuan mempertimbangkan untuk meluluskan permohonan saya 13
bagi melanjutkan tempoh perkhidmatan saya sehingga umur saya mencapai 58 tahun. (2014). During cross-examination, the Claimant testified as follows: S: Setuju dengan saya anda telah membuat permohonan ini sebab anda telah mencapai 55 tahun persaraan wajib? J: Betul.. S: Encik Zakaria, sekarang sila rujuk m/s 12. Setuju ini adalah surat daripada Syarikat membenarkan permohonan anda untuk melanjutkan tempoh perkhidmatan? J: Betul S: Mengikut surat ini tempoh perkhidmatan anda selepas umur persaraan wajib telah dilanjutkan selama tempoh tetap 3 tahun iaitu semasa anda mencapai 58 tahun? J: Betul S: Setuju tempoh tetap perkhidmatan anda telah tamat pada 8 April 2014? J: Betul Based on the above evidence, it is clear that the Company had reviewed and approved the Claimant s application and the Claimant s term of service after his mandatory retirement age was extended period of 3 years until the age of 58 i.e. from 9 April 2011 to 8 April 2014. Further, the fact that the Claimant had written to the Company to apply for an extension of employment until the age of 58 showed that the Claimant acknowledged that he was not entitled to permanent or indefinite employment beyond his retirement age. 14
Therefore, the Claimant knew at all material times, that the Fixed Term would come to its natural end after 3 years on 8 April 2014. Thus, by reason of this postretirement employment and his consent to be employed for another 3 years, the Claimant was employed on a genuine fixed term contract. Upon expiry of the Claimant s Fixed Term of 3 years on 8 April 2014, the Company had vide its letter dated 8 April 2014 continued employing the Claimant on a month to month basis, to which the Claimant never raised any objections. The salient wordings in the said letter is clear and unambiguous and it is reproduced as follows: Please be informed that effective from 9 th April 2014 your performance assessment will be based on the monthly basis until your contract is terminated. The Claimant in his evidence-in chief testified that after the expiry of his 3 years Fixed Term, he was on Monthly Contract: S: Soalannya 8 April 2014 Encik telah genap tahun 58? J: Betul S: Lepas itu Syarikat bagi secara kontrak bulanan? J: Seperti yang telah diberitahu. ya. After the issuance of the above letter dated 8 April 2014, the Company by its letter dated 14 August 2014 re-designated the Claimant as the General Manager of West Wharf with effect from 15 August 2014. The Claimant had never made any objections to the Monthly Contract as per letter dated 8 April 2014 nor the redesignation. Instead, he had abided with the letter of redesignation and continued to perform his duties without any objections. 15
The Claimant at all material times, knew that his post-retirement employment was not permanent and/or never meant to be indefinite and that his contract could be terminated at the expiry of the fixed term. The determination of the Claimant s month to month contract, including its extension or termination were matters within the management prerogative of the Company as the Claimant had already retired from service without any possibility or permanent or long term employment. The Claimant had been employed by the Company on a Monthly Contract subsequent to the expiration of the Fixed Term. The Claimant cannot now be allowed to claim that his status of employment be reverted back to a permanent staff. In the case of Thavaratnam Thambipillay v OM Education Sdn. Bhd. [2010] 2 ILR 201, the Industrial Court held that: (the Claimant) having received the benefit of gainful employment past the age of retirement under these contracts, he cannot now be heard to say that he is actually entitled to permanency of employment. This Court, as a Court of equity and good conscience cannot allow the Claimant to approbate and reprobate in this manner. [Emphasis Added] In addition, once the employee passes retirement age (i.e. 55 years), the Claimant no longer has lien to the job and he is liable to be released at any time. Since the Claimant had been employed by the Company on a month to month contract subsequent to the expiration of the Fixed Term, there had not been any necessity for the Company to give reasons for the termination and/or non-extension of 16
the Claimant s month to month contract. This is because the Claimant was on a genuine fixed term contract which expired by effluxion of time. In the light of the above, the Court held that the Claimant was not dismissed without just cause or excuse. Conclusion For reasons adumbrated and having regards to the evidence in its totality the Court is of the considered view that the Company has provided on a balance of probability that the Claimant s termination was perfectly reasonable and justified. It was carried out in good faith and in accordance to fair labour practice. Based on equity and good conscience and the substantial merit of the case without regard to technicality and legal form, the Court finds that the Claimant s termination was carried out with just cause and excuse. The claim is hereby dismissed. HANDED DOWN AND DATED THIS 16 th DAY OF JUN 2017. (GULAM MUHIADDEEN BIN ABDUL AZIZ) CHAIRMAN INDUSTRIAL COURT OF MALAYSIA PENANG BRANCH AT GEORGE TOWN 17