Managing Workplace Misconduct

Managing Workplace Misconduct

What is Misconduct? BR Ghaiye: Misconduct is not a term of art If the conduct of an employee is of such a character that he is not regarded as worthy of employment it may be liable to be called misconduct.

Pearce v. Foster (1886) 17 QBD 536 Per Lopes LJ: If a servant conducts himself in a way inconsistent with the faithful discharge of his duty in the service, it is misconduct which justifies immediate dismissal

Lewis v. CW Railway Co [1877] 3 QBD 195 the doing of something or the omitting to do something which is wrong to do or omit

Types of Misconduct Minor Major Criminal

Minor Misconduct Occasional late coming Smoking in non-smoking area Negligence in performance of duty Non-adherence to SOPs

Major Misconduct One that is serious enough to warrant dismissal Dishonesty Gross insubordination Theft Threatening behaviour Assault of superior

Criminal misconduct Actions that warrant a police report and attracts criminal prosecution Theft Cheating Stealing Sabotage Tampering with employer s property

What are the Characteristics of Misconduct? ESSO Production Malaysia Inc v Md Yusop Nordin [1997] 2 ILR 711 Inconsistent Prejudicial Unsafe Grossly immoral Difficult

Characteristics of Misconduct Peace Disturbing Insulting Insubordinate Negligent

Examples of Misconduct Absenteeism Less than 2 days minor? More than 2 days Employment Act 1955 Habitual absenteeism Tardiness similar treatment as absenteeism

Examples of Misconduct Excessive medical leave In excess of authorised limit No proof of illness

Examples of Misconduct Defences to Absenteeism Unavoidable reason Condonation

Examples of Misconduct Disobedience / Insubordination Intrakota Komposit Sdn Bhd v. Kdr (B) Mohamed Bakar Mansor [2001] 2 ILR 523

Intrakota Komposit Industrial Court: It is abundantly clear from the authorities that for disobedience to be a misconduct it must be grave and wilful and the burden of proof is on the employer to establish that the workman was disobedient and that such disobedience was wilful

Examples of Misconduct Defences where employer s instruction was unlawful/ unreasonable Supply Oilfiled Services Sdn Bhd, Labuan v. Abdul Wahap Baki [1998] 2 ILR 78 Ngeow Voon Yean v. Sungei Wang Plaza Sdn Bhd / Landmarks Holding Bhd [2006] 3 CLJ 837

Examples of Misconduct Ngeow Voon Yean v. Sungei Wang Plaza Sdn Bhd / Landmarks Holding Bhd [2006] 3 CLJ 837 If an employee is doubtful whether the order is legal, the proper course is for the employee is to obey the order first and to challenge its legality in separate proceedings. If the law allows the employee to disobey any order he thinks is not legal, it would be impossible for the management to maintain discipline and industrial peace. He can point out his difficulties, if any, to the superior and if the latter insists on the order being carried out, he can do the work and take the matter further in proceedings against his employer or to complain to his union. If he disobeys, he must take the risk if the court finds the order to be lawful and reasonable.

Supply Oilfiled Services Sdn Bhd, Labuan v. Abdul Wahap Baki [1998] 2 ILR 78 Facts The claimant was employed as a foreman at the time of the dismissal. The company had dismissed him based on two charges, namely: (i) the claimant was said to have refused to obey the instructions of his superior. (ii) it was alleged that the claimant had failed to report to work on several occasions.

Supply Oilfield Services Held: There is merit in the submission made on behalf of the claimant that the claimant had in these circumstances been subjected to instructions which were not within the scope of his duties as a foreman. In the circumstances they were calculated to humiliate him and lower his esteem in the sight of his colleagues. Having been directed to do chipping work together with other rigging under the supervision of another foreman, the claimant a foreman was unceremoniously summoned to perform other rigging duties. This was adding insult to injury and the court is of the view that the claimant was justified in these circumstances to refuse to comply with COW2 s instructions.

Kong Seng Chai V. Perusahaan Otomobil Nasional Sdn Bhd Award No. 465 Of 2017 Facts The claimant had been employed by the company as the General Manager-Supply Chain Management. Approximately a year and a few months into his employment with it, he was issued a show cause letter for charges, inter alia, of being insubordinate, ie. by his actions of failing to wear a necktie, despite being instructed to do so, and for failing to make a presentation to the Task Force Customer Complaint Meeting.

Kong Seng Chai Charge 1 In view of the importance of the Task Force Customer Complaint Meeting that was held on 29 August 2012 at 9.30 a.m. at VIP Lounge, COE; and the presentation you were to make to the Deputy Chief Executive Officer, it was incumbent upon you as a staff holding a General Manager position to ensure that you were properly attired by wearing a necktie when you attend the said meeting. You failed to wear a necktie and had thereby acted disrespectfully.

Kong Seng Chai Charge 2 At the Task Force Customer Complaint Meeting that was held on 29 August 2012 at 9.30 a.m. at VIP Lounge, COE, the Deputy Chief Executive Officer commented on your failure to wear a necktie and you were instructed by the Deputy Chief Executive Officer to get a necktie. It was clear and implied from his instruction that you were to return to the said meeting wearing a necktie and to make your presentation. You left the meeting at about 9.36 a.m. and failed to return to the said meeting to make the presentation. In doing so, you had been insubordinate and disobedient.

Kong Seng Chai Charge 3 In failing to make the presentation at the Task Force Customer Complaint Meeting that was held on 29th August 2012 at 9.30 a.m. at VIP Lounge, COE, you had also disobeyed the instruction of Encik Abdul Rashid Musa, Sector Head Technical Operations where the instruction was given earlier to you during the Preparatory Meeting on 28 August 2012 between 2.30 p.m. to 4.30 p.m. at his Office.

Kong Seng Chai Held for the company: dismissal with just cause and excuse The company had succeeded in proving the misconduct of the claimant, which had justified his termination. Although his actions of not wearing a necktie for the meeting could be viewed as a minor misconduct, what had ensued after the meeting had constituted serious misconduct and it had been a reflection of his attitude of not being able to accept his superior's instructions. His actions had amounted to serious acts of insubordination and disobedience.

More Examples of Misconduct Abusive language May be treated in similar fashion as fighting at workplace Defences Isolated incident Provocation Length of services Previous service record

Examples of Misconduct Steelform Industries Malaysia Sdn Bhd v Foo Fook Ban [1991] 1 ILR 442 whilst the claimant had committed a serious offence, he had been greatly provoked by what he thought was an accusation that he has misappropriated money belonging to his fellow workers.

Examples of Misconduct Negligence Employee to exercise reasonable care and skill Jupiter General Insurance Co Ltd v Shroff [1973] 3 All ER 67 the standards of those of men and not those of angels.

Examples of Misconduct Rank Xerox Ltd v Chong Siew Sing @ Hong Lian Hwa [1989] 1 ILR 594 a single act of negligence by an employee may justify dismissal if it is so gross or the consequences of further error are so serious

Investigation What are the purposes of investigation? Fact-finding To find out if employee has a case to answer

Investigation What are the methods of investigation? Interview Record statements

Suspension What are the purposes of suspension? Facilitate investigation Prevent tampering of evidence Prevent commission of further offence Enable employee to prepare defence Prevent sabotage

Suspension Suspension according to Employment Act 1955 14 days on half pay Employment contract Contract silent? Advisable to suspend on full-pay

Suspension Implications of suspension Accusation of victimisation Claim of constructive dismissal PLUS Bhd v. Mohd Shukri Ngah [2001] 2 ILR 10

PLUS Bhd v Mohd Shukri Ngah [2001] 2 ILR 10 Facts The claimant worked for the company as a superintendent in the traffic department. The company alleged that he had committed three acts of dishonesty and suspended his services for 14 days on half pay pending inquiry. His suspension period was extended, but on full pay. The claimant subsequently left the company, claiming that he had been constructively dismissed on the ground that the company allegedly breached a fundamental term of his contract by deducting, without his consent, his pay by half pay during the initial 14 days of his suspension.

PLUS Bhd Held: There was no specific provision, express or implied, which would empower the company to suspend the claimant on half pay pending the domestic inquiry. There was no evidence to show that the company had made known to the claimant the relevant rule, regulation, procedure, practice or policy which was to be read as a term of his contract, and which empowered the company to suspend the claimant on half pay.

PLUS Bhd By effecting the said suspension, the company did commit a fundamental breach of the claimant s contract of employment. To unilaterally deduct the pay of an employee without his consent is a serious breach. If the suspension had been on full pay then it may be a different story altogether.

Charge What is the implication of a defective charge? ESSO Production (M) Inc v Maimunah bte Ahmad & Anor [2002] 2 MLJ 45

Implication of A Defective Charge Telekom Malaysia Kawasan Utara v Krishnan Kutty Sanguni Nair [2002] 3 CLJ 314 it is quite clear to us that the Industrial Court should not be burdened with the technicalities regarding the standard of proof, the rules of evidence and procedure that are applied in a Court of Law.

Implication of A Defective Charge See also Dreamland Corp (M) Sdn Bhd v Chong Chin Sooi [1988] 1 MLJ 111 Wong Yuen Hock v Syarikat Hong Leong Assurance Sdn Bhd & Anor [1995] 3 CLJ 344

Domestic Inquiry What is domestic inquiry? A due inquiry that is conducted before any punishment is meted out Employment Act 1955, Section 14

Domestic Inquiry What is the purpose of a domestic inquiry? Opportunity for the employee to defend himself Inquiry is conducted in an orderly manner Inquiry is completed expeditiously

Domestic Inquiry What are the guidelines of Domestic Inquiry? KJJ Cleetus v. Unipamol (Malaya) Sdn Bhd Kluang (Award 66 of 1975): Earliest possible after suspension Particulars of misconduct to be documented Reasonable time for preparation

KJJ Cleetus Right of employee to be represented Impartiality of officers Examination of relevant witnesses Proceedings to be documented

Punishment What are the types of Punishment? Warnings Withholding of benefits Suspension without pay Transfer Downgrading Demotion

Punishment What are the factors to be considered? Gravity of misconduct Employee s employment record Goodyear Malaysia Bhd v. National Union of Employees in Companies Manufacturing Rubber Products (Award No. 88 of 1986) Sugayindran a/l Vellasamy v. TNB Distribution Sdn. Bhd. (Award No. 923 of 2008)

Punishment Provocation Felda Oil Products Sdn Bhd v Salleh bin Mohayat (Award No. 92 of 1991) Disparity in punishment Bank Bumiputera Malaysia Bhd v Ghazali bin Kassim [1995] 1 ILR 113 Zainudin Md Ali v. Paling Industries Sdn Bhd [2007] 1 ILR 124

Bank Bumiputera Malaysia Bhd v Ghazali bin Kassim [1995] 1 ILR 113 Facts The claimant was the chief cashier in the employ of the bank, and contends his dismissal, in sequel to an alleged misconduct for dereliction of duty and negligence for failure to supervise unauthorised withdrawals, is without just cause or excuse. The claimant submitted that the company had been inconsistent in its punishment of employees who had committed similar acts of misconduct. He claimed the bank had not imposed the extreme penalty of dismissal in other cases of similar misconduct.

Bank Bumiputera Malaysia Bhd Industrial Court: the disparity argument is fundamentally founded on the basis of the principle of equity which requires an employer to treat sufficiently like cases alike and which deplores any arbitrariness or uneven handedness in the treatment of employees who have committed similar offences in similar circumstances. The existence of such lack of equity might well be reflected in the manner in which an employer deals with a subsequent offender similarly circumstanced as the claimant. In this regard it does not matter that the case which is referred to as an example of inconsistent punishment occurred soon after the claimant s case so long as the offence is essentially similar and the circumstances in which the two had occurred are also fairly comparable.

Zainudin Md Ali v. Paling Industries Sdn Bhd [2007] 1 ILR 124 Facts The claimant was employed by the company as a shift supervisor, responsible for the night shift workers. The claimant was caught gambling in a group of 8 workers during the night shift, when he should have been attending to the machines. The company issued suspension letters to all the 8 employees concerned including the claimant. The claimant was also issued a show cause letter, to which he responded. The company was not satisfied with the claimant's explanations and proceeded to terminate his employment.

Zainudin Md Ali Industrial Court: The claimant also raised the issue of disparity in punishment. COW2, the claimant's fellow worker was only punished with (2) weeks suspension and (1) week without salary whereas the claimant was dismissed from service. The principle of equity and good conscience certainly requires employees who behaved in much the same way to receive the same punishment. Hence, if one person is penalized much more heavily then another for a similar offence, then the employer has not acted fairly. However, with respect, this principle is not applicable in the instant case, as the facts

Zainudin Md Ali show that the claimant was the most senior employee at the time and he had instigated the gambling. As such he was a bad influence on the other workers and his dismissal served as a warning to others. It is for this reason, his punishment could not be the same as COW2, his junior coworker. In conclusion, for the reasons stated the court finds that in all the circumstances of the case, that the punishment imposed is commensurate with the gravity of the misconduct proved against the claimant. Hence, the dismissal is with just cause or excuse.

Punishment Double punishment Medipro Manufacturing (M) Sdn Bhd v. Siti Azmah Mat Taib [1999] 1 ILR 449

Medipro Manufacturing (M) Sdn Bhd v. Siti Azmah Mat Taib [1999] 1 ILR 449 Facts In this case the company had demoted the claimant from her position as administrative and personnel manager in the personnel department to executive in the same department with a reduction in salary. The claimant contended that aside from the fact that the company had no power to demote her the company had punished her twice because prior to demoting her the company had also given her a severe warning. She claimed since the date the warning had been given she had not committed a fresh misconduct to entitle the company to demote her. The company contended after being warned for two misconducts the company discovered another misconduct committed by the claimant which the company was not aware of at the time of giving her the warning. Thus the demotion.

Medipro Manufacturing (M) Sdn Bhd Held: The court was satisfied that when the company demoted the claimant it was not aware of her third misconduct. On the balance of probabilities the court finds the company discovered this after demoting the claimant. However, the court is now well aware of the fraudulent action of the claimant in ordering tickets for persons who had no connection with the company In the circumstances, although the company was not aware that the claimant had committed the third misconduct the court would hold that her demotion was with just cause.

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