INDUSTRIAL COURT OF MALAYSIA CASE NO : 2/4-346/15 BETWEEN MOHAMED HASLAM BIN ABDUL RAZAK AND PERUSAHAAN OTOMOBIL NASIONAL SDN BHD AWARD NO. 552 OF 2018 Before : Y.A. PUAN ROSENANI BINTI ABD RAHMAN - Chairman (Sitting Alone) Venue : Industrial Court of Malaysia, Kuala Lumpur Date of Reference : 26.3.2015 Dates of Mention : 23.6.2015; 30.7.2015; 7.9.2015; 28.9.2015; 16.10.2015; 17.3.2016; 12.4.2016; 10.1.2017; 3.2.2017 Dates of Hearing : 9.11.2016; 10.11.2016; Representation : Encik Chandra Segaran Messrs Prem & Chandra for the Claimant Reference: Dato' T. Thavalingam together with Encik Saifullah Majeed Messrs Lee Hishammuddin Allen & Gledhill for the Company This is a reference made under Section 20(3) of the Industrial Relations Act, 1967 arising out of the dismissal of Mohamed Haslam bin Abdul Razak ( the Claimant ) by Perusahaan Otomobil Nasional Sdn Bhd ( the Company ). 1
AWARD Case No. 2/4-346/15 Brief Facts The Claimant commenced employment with the Company on 8.3.2010 as Executive in Model Development & Cost Management in Group Procurement. He is incharge of overseeing the development of special project : 25 th Anniversary Trio Project & Exora Bold Thailand. By a letter dated 29.6.2011, the Claimant was reassigned as Executive TP 51-Power & Distribution at Group Technical Procurement. On 1.6.2013, the new Procurement Head from DRB management ordered for a GEMBA visit to each of the current suppliers to monitor performance on top of current development project. Standard Operation Procedure (SOP) were released on 1.6.2013. GEMBA - is a Japanese word which means to visit and be at the premises where the product is made or manufacture to look / observe and monitoring what is happening. On 14.4.2014, the Claimant was served a show cause letter and suspended from service from 14.4.2014 until 18.4.2014 with instruction to report back at Industrial Relation & Union Management GHR on 21.4.2014. The Claimant replied to the show cause letter and report back to GHR on 21.4.2014. Following that on 15.5.2014 Claimant was served with Notice of Domestic Inquiry schedule for 29.5.2014. Three charges were preferred against the Claimant: 2
Charge 1 That you, in your capacity as the Executive of TP 51 - Power & Distribution have falsified and misled the Management on your GEMBA Report for your Vendor GEMBA Visits to Astra Simfoni Sdn Bhd on 12 December 2013 and 12 February 2014. You have not reported the actual situation and given false safety rating and you did not follow the Assessment Guideline when conducting your assessment. Charge 2 That you, in your capacity as the Executive of TP 51 - Power & Distribution have failed to notified and/or informed your superior, the Head of TP 5, En. Khairul Anuar Bin Yahya that the Process Change Proposal (PCP) was dully signed and approved by you and Mazlan Bin Md Noor on 31 March 2014 for Astra Simfoni Sdn Bhd to relocate their plant from Meru to Nilai when they conduct ad-hoc GEMBA Visit to Asta Simfoni Sdn Bhd on 14 April 2014. Charge 3 You was suspended from 14 April 2014 to 18 April 2014 and reported back for work on 21 April 2014 and you were alleged to have ignored doing your daily job and responsibility as Executive of TP 51 - Power & Distribution since 21 April 2014 until the date of this notice. The Claimant attended the Domestic Inquiry as schedule and contends that the Domestic Inquiry was held against the rule of natural justice. 3
On 6.6.2014 Group Procurement updated the SOP and notified all Group Procurement staff through email that photograph cannot be reused on GEMBA report activities. Subsequent to that on 13.6.2014 another email was issued to all Group Procurement staff to hold back the implementation of the updated SOP until further notice. On the same day, the Claimant was handed a letter by Syed Azhar from Human Resources which stated that the Claimant was found guilty of Charge No 1 and that his service were terminated with effect from 13.6.2014. Later on 6.8.2014 Group Procurement informed all staff through email that photograph cannot be reused on GEMBA Report activities. The Claimant claims that his immediate superior were terminated and that he was a victim of collateral damage as the New Procurement Head from DRB has his own preferred choice of supplies and sought to remove the current suppliers. The Claimant claim that his dismissal is without just cause or excuse and in breach of the principle of natural justice. The Domestic Inquiry panel found the Claimant guilty of Charge 1 after due inquiry in compliance with rule of natural justice and procedural fairness. Considering the Claimant's position of trust, the nature of Company's operation, and the gravity of the misconduct, the Company could no longer repose the necessary trust and confidence in the Claimant to continue in employment. 4
The Law The Federal Court in Wong Yuen Hock v Syarikat Hong Leong Assurance Sdn Bhd & Another Appeal [1995]3 CLJ 344 at page 352 ruled that in reference of a dismissal under s.20 of the Act the role of Industrial Court is as follows: On the authorities, we were of the view that the main and only function of the Industrial Court in dealing with a reference under s. 20 of the Act (unless otherwise lawfully provided by the terms of the reference) is to determine whether the misconduct or irregularities complained of by the management as the grounds of dismissal were in fact committed by the workman, and if so, whether such grounds constitute just cause or excuse for the dismissal. Issue The issue to be determine is whether the Claimant's dismissal was with just cause or excuse. The Burden of Proof The burden is on the Company to prove the Claimant's misconduct on a balance of probabilities. Domestic of Inquiry It is trite law that any irregularity that has accursed during Domestic Inquiry and absence of a Domestic Inquiry would not per se render a dismissal was unfair. 5
In the case of Hong Leong Equipment Sdn Bhd v Liew Fook Chuan & Other Appeals [1997]1 CLJ 665 at page 716, the Court of Appeal decided as follows: The fact that an employer has conducted a domestic inquiry against his workman is, in my judgment, an entirely irrelevant consideration to the issue whether the latter had been dismissed without just cause or excuse. The findings of a domestic inquiry are not binding upon the Industrial Court which rehears the matter afresh. However, it may take into account the fact that a domestic inquiry had been held when determining whether the particular workman was justly dismissed. In this case the Court notes that albeit there being a Domestic Inquiry conducted by the Company to investigate the allegation against the Claimant, this Court will hear the case 'de novo'. This Court has to make a finding of fact premised on the evidence adduced before the Court as to whether the charge of misconduct had been established against the Claimant on the balance of probabilities. Evaluation And Findings The Claimant was terminated base on the finding of the Panel of Domestic Inquiry which found him guilty for Charge No. 1. Charge No. 1: That you, in your capacity as the Executive of TP 51 - Power & Distribution 6
have falsified and misled the Management on our GEMBA Report for your Vendor GEMBA Visits to Astra Simfoni Sdn Bhd on 12 December 2013 and 12 February 2014. You have not reported the actual situation and given false safety rating and you did not follow the Assessment Guideline when conducting your assessment. Refer to the Letter of Termination dated 13 June 2014 (page 83, COB 1). The Company avers that the Claimant has misled the Company by not reporting the actual situation at Astra Simfoni Sdn Bhd plant (vendor of the Company) in his GEMBA report as required by the Assessment Guideline. The Claimant had reused the same photograph which were exhibited in the GEMBA report on 12.12.2013 into the GEMBA report on 12.2.2014. The Claimant was charged for not reporting the actual situation and given false safety rating and did not follow the Assessment Guideline. The Claimant has given his explanation to the charge as per the reply to the show cause letter (pages 10-11, COB 1). According to the Claimant, he has conducted GEMBA as per the guideline and what is reported in the GEMBA are correct at the time of audit and supported with photographs taken during the audit was conducted. The Claimant also explained as to why the rating is AB. This is because 1 day before the GEMBA visit to Astra Simfoni plant, they has been notified. They were given ample time to make preparation on the plants and that resulted the AB rating. The visit on 14.4.2014 was a spot check GEMBA where the Astra 7
plant manager was only notified 10 minutes before the team arrived. They only have 10 minutes to prepare and the result is 'C' rating. The Court is of the opinion the result of those two GEMBA Visit cannot be compared as they were the outcome of two different situation. On the issue of the photographs that support the report, the Claimant admitted that he personally took the photographs for GEMBA Audit on 12.12.2013 (page 43, COB 1). For GEMBA Audit on 12.12.2014 the same rating was given by the Claimant (pages 39-41, COB 1). The Claimant also did not deny that the same photographs was used for both GEMBA report except for photographs No. 2 and No. 8. The purpose of taking the photograph is to show the actual situation in the factory/plant. Picture No 2 and 8 was taken on 12.2.2014, whereas photograph No. 1, 3, 4, 5, 6 and 7 were taken on 12.12.2013. The Claimant agreed that he reused the same photograph for GEMBA report dated 12.2.2014. The Claimant testified that he reused the 6 photographs because there is no change in the rating between GEMBA Report 12.12.2013 and GEMBA Report 12.2.2014. If there is a change in rating, it will be supported by a new photograph that show the current situation. Furthermore there is nothing in the guideline that states how many photograph to be taken and submitted with the report. Here, the Court observed that it was only after the Claimant's GEMBA Visit on 12.2.2014, the Group Procurement updated the SOP on 6.6.2014 and notified all the staff through email that photographs cannot be reused on GEMBA Report activities. However on 13.6.2014 another email was issued by Group Procurement to hold 8
back the implementation of the SOP in email dated 6.6.2014 until further notice. This show that the Company was undecided on the issue of whether photograph could be reused on GEMBA report. Finally on 6.8.2014, the Company informed all Group Procurement staff that photograph cannot be reused on GEMBA report activities. This is clearly after the Claimant's case was settled where he was terminated on 13 June 2014 for reason of the alleged misconduct that is reusing the same photograph in both GEMBA Report. It is interesting to note at the time of the so call misconduct was committed on 12.2.2014 there was no rule or guideline issued by the Company which provide that photograph cannot be reused on GEMBA Report activities. The Court agrees with the Claimant's submission that during that material period there was no requirement that the same photograph may not be used. Looking back at Charge 1 where the word used was:... falsified and misled.... The second part of the charge:... you did not follow the assessment guideline... During cross-examination, COW 1 was asked about the guideline (pages 7-9, COB 2) that the Claimant did not follow. His answered that he cannot pin point and he was not sure whether that is the guideline referred to is the change. COW 4 in his evidence confirmed that there is no express provision in the guideline that photograph cannot be reused. He further explained that when the Claimant reused 9
the photograph taken in December 2013 for report on 12.2.2014, he has falsified the report and misled the management. The purpose of the photograph that was attached to the report is to prove the condition of the surrounding of the premise at the time of the visit. The Claimant testified that the photograph at page 1, COB 2 attached to GEMBA Report on 12.12.2013 was personally taken by him and he has given rating AB. The following GEMBA Report dated 12.2.2014 (page 39-41, COB 1) which the Claimant gave the same rating AB. He admitted that he has used the same photograph (photo No. 1, 3, 4, 6, 7, 8, page 2, COB 3). Photograph No 2 and 8 was taken on the day of the visit. During cross examination, the Claimant agrees that the purpose for taking the photograph on 12.2.2013 was to show the actual situation in the factory. Claimant disagree that by reusing 6 photographs in the GEMBA Report dated 12.2.2014, he has falsified and misled the management. He explained that he reused the photographs because there is no changes in the rating of the two GEMBA Report. Here the Court is of the view that Claimant's explanation as to why he reused the photograph is acceptable. Until and unless there is a specific provision that says the same photograph cannot be used again, its up to the person incharge whether to use the same photograph or new photograph to support the report. Base on the facts and circumstance of this case, it is the finding of this Court that the Company has failed on the balance of probabilities to proved the misconduct as per Charge 1. The Claimant did not deny that he reused the 10
photograph taken for GEMBA Report on 12.12.2013 in GEMBA Report dated 12.2.2104. The question to be asked is that how can such act of reusing the photograph for the second GEMBA Report has falsified and misled the management. The Company has also failed to prove that the Claimant did not follow the assessment guideline. The revised SOP only came into place on 6.8.2014, almost two month after the Claimant was terminated. Conclusion On the totality of evidence produced before the court and considering the written submission by both parties and bearing in mind s.30(5) Industrial Relations Act 1967 to act according to equity and good conscience and the substantial merit of the case it is the court finding that the Claimant's dismissal were without just cause or excuse. Hence the Claimant's claim is hereby allowed. Remedies The Court is of the view that reinstatement of the Claimant is not the appropriate remedy in the circumstances and facts of this case as it would not be conducive to industrial harmony. The Court of Appeal in the case of Koperasi Serbaguna Sanya Bhd (Sabah) v Dr James Alfred (Sabah) & Anor [2000]3 CLJ 718 at page 766 decided as follow: In industrial law, the usual remedy for unjustified dismissal is an order of reinstatement. It is only in rare cases that reinstatement is refused. For example, as here, where the relationship between the parties had broken 11
down so badly that it would not be conducive to industrial harmony to return the workman to his place of work. In such a case, the Industrial Court may award monetary compensation. Such an award is usually in two parts. First, there is the usual award for the arrears of wages, or backwages, as it is sometimes called. It is to compensate the workman for the period that he has been unemployed because of the unjustified act of dismissal. Second, there is an award of compensation in lieu of reinstatement. On the issue of post dismissal earning, the Claimant testified that he was still unemployed as at the date of the hearing. This is confirmed by EPF statement (CLB 5). In order to sustain his living, he reduced his expenses and used whatever he has and also doing small business. In the case of DTS Trading Sdn Bhd v Wong Weng Kit [2008]1 ILR 548 (Award No 222 of 2008) the Industrial Court decided as follows: In a society such as ours where a person would invariably have to work in order to sustain day to day living, the court is of the view that even if no evidence is adduced as regards post dismissal earnings, the court is entitle nevertheless to make a deduction for post dismissal earnings. As such, a claimant who has not been gainfully employed since his dismissal, or who has been gainfully employed but on a woefully small salary, should clearly say so to the court. To remain silent is to risk the court making a deduction deemed reasonable by the court. 12
Backwages and Compensation In Lieu of Reinstatement Backwages awarded shall not exceed 24 months from the date of dismissal on the last drawn salary of the Claimant who has been dismissed without just cause or excuse. If there is post dismissal earning, percentage of such earning shall be deducted from the backwages. It is the practice of the Court to allow compensation in lieu of reinstatement base on the formula of one month's salary for every completed year of service of the Claimant with the Company. In this case, the Claimant last drawn salary was RM3,074.00 with a fixed allowance of RM64.00 per month. Dispite the Claimant's evidence that he was unemployed, this Court is entitle to make a deduction for post dismissal earnings. A person would invariably have to work in order to sustain day to day living (see DTS Trading Sdn Bhd v Wong Weng Kit (supra). Here a deduction of 20% is a reasonable amount in calculating the backwages. The Claimant's length of service with the Company was also taken into account. Claimant's backwages is calculated as follows: RM3,138.00 x 20 month = RM62,760.00-20% = RM50,208.00 The Claimant joined the Company on 8.3.2010 and was terminated on 13.6.2014. He has served the Company for a total of 4 completed years. Thus the Court award the Claimant's compensation in lieu of reinstatement as follows: RM3,138.00 x 4 month = RM12,552.00 13
Total = RM50,208.00 + RM12,552.00 = RM62,760.00 Final Order The court order the Company to pay the Claimant through the solicitors Messrs Prem & Chandra the sum of RM62,760.00 less statutory deduction of any within 30 days from the date of the award. HANDED DOWN AND DATED THIS 14 MARCH 2018. signed ( ROSENANI BINTI ABD RAHMAN ) CHAIRMAN INDUSTRIAL COURT MALAYSIA KUALA LUMPUR 14