R.Jayabalan
When a workman challenges his dismissal from employment at the Industrial Court, is it open to the employer to justify the dismissal on grounds other than that given at the time of the dismissal? What if the workman does not wish to be reinstated to his former position? Does that mean the Court ceases to have jurisdiction over the workman’s claim for unfair dismissal?
These issues came up again recently before the Court of Appeal in Melipoly Enterprise Sdn Bhd v. Ong Hong Yeok & Anor. In a decision given on 18.3.2024 the Court answered the questions in favour of the workman.
The workman was terminated by way retrenchment on grounds of economic recession and poor sales – as stated in the notice of termination. He claimed unfair dismissal and the dispute was referred to the Industrial Court. At the trial, the employer raised other grounds to justify the dismissal such as poor performance, failure to disclose conflict of interest and sexual harassment. And during the cross-examination when he was asked whether he was seeking reinstatement the workma n answered that he does not wish to be reinstated to his former position.
The grounds for the termination
The Industrial Court and the High Court held that the Court is only to inquire into the reasons advanced by the employer in the notice of termination and not to go into another reason not relied upon or to find one for it. The Court of Appeal agreed with this and held that the Court must confine itself (only) to the question of whether the grounds in the notice were proven. Reference was made to the well known case of Goon Kwee Phoy v. J& P Coats (M) Sdn Bhd [1981] 2 MLJ 129 that was recently affirmed by the Federal Court in Maritime Intelligence Sdn Bhd v Tan Ah Gek FC [2021] 10 CLJ 663.
In Goon Kwee Phoy the Federal Court stated that “If the employer chooses to give a reason for the action taken by him, the duty of the Industrial Court will be to enquire whether that excuse or reason has or has not been made out. If it finds as a fact that it has not been proved, then the inevitable conclusion must be that the termination or dismissal was without just cause or excuse. The proper enquiry of the court is the reason advanced by it and that court or the High Court cannot go into another reason not relied on by the employer or find one for it.”
In Maritime Intelligence the Federal Court reaffirmed Goon Kwee Phoy and held that “…. the passage restricts the enquiry of the Industrial Court to the reasons given for the action taken by the employer. That can only mean the reasons operating on the mind of the employer preceding his decision to terminate the workman’s services, which are usually specified in the letter of dismissal.”
Hence it is clear that the subsequently put-up grounds of poor performance, conflict of interest and sexual harassment ought not be considered. The Court confined its examination to the reasons in the notice of termination and agreed that the retrenchment on grounds of economic recession and poor sales was not proven. The dismissal was without just cause or excuse and the retrenchment was not bona fide.
On the effect of rejection of reinstatement.
The employer also contended that the Industrial Court had ceased jurisdiction to inquire into the dispute when the workman said in cross-examination that he did not wish to be reinstated and that he had started his own business after the termination.
The employer relied on Holiday Inn Kuching v Elizabeth Lee Chai Siok [1992] 2 CLJ (Rep) 521 where it was held that pursuant to s. 20(1) and (3) of the Industrial Relations Act 1967, the Industrial Court ceases jurisdiction if reinstatement is no longer applied for and that the workman must “want his job back” . The employer also referred to the Federal Court decision in Unilever (M) Holdings Sdn Bhd v So Lai @ Soo Boon Lai & Anor [2015] MLJU 234 where it was held that compensation in lieu of reinstatement may not be awarded when reinstatement is no longer possible.
The Court of Appeal rejected the argument and reaffirmed its decision in Sanbos (M) Sdn Bhd v Gan Soon Huat [2021] 4 MLJ 924 that had found Holiday Inn as not good law and held that the Court was seized with the jurisdiction to hear the dispute once the Minister made the reference under s. 20(3) of the Act notwithstanding that the workman may no longer wants the reinstatement and emphasised that the Court derives its jurisdiction from the order of reference by the Minister under s. 20(3). The Court does not cease to have jurisdiction if the remedy of reinstatement is not pursued or when the workman did wish to be “put back into employment”.
As for the reliance on Unilever, the Court pointed out the distinction on the facts. In Unilever reinstatement was no longer possible as the workman had reached the retirement age by the time the award was made. Here, the workman’s former post was still available and he has withdrawn from his own business; there was still legal basis for him to be reinstated. Consequently, the Industrial Court award allowing compensation in lieu of reinstatement and backwages was upheld.
This decision by the Court of Appeal made it clear once again that employers are bound by the reasons given in the termination notice or the reasons contemplated at the time to justify the termination and cannot look to rely on extraneous reasons that could be considered as afterthought. The decision also emphasized, after Sanbos earlier, that the jurisdiction of the Industrial Court is derived from the reference under the Act and not so much on whether the workman wants his job back. In total, it is a decision that advanced the interest of the workman under the Act and much welcomed.
