Dismissing an employee should only be done as a last resort when all other forms of disciplinary measures have failed, and the employee is no longer relevant.
P Mewah Sdn. Bhd. vs FHL Industrial Court 30 January 2002
The dispute, in this case, is a result of the dismissal of FHL (the claimant) by P Mewah Sdn Bhd (the company).
Introduction
The company contends that:
The claimant was dismissed because of the claimant's absence for too long without a valid reason.
As a result, the claimant's performance has been badly affected; he could not complete his job function as a supervisor.
The claimant's inability to function has affected the company's production capacity.
The claimant contends that:
He doesn't know why the company dismissed him. He was never given any warning or show cause letter about his performance.
The termination letter didn't specify the reason.
The claimant was not given any opportunity to defend himself.
The company held no domestic inquiry to hear the claimant's story.
Facts Of Case/Evidence
The claimant joined the company on 17 April 1995 as a supervisor. The claimant was terminated effective on 31 August 1998.
The areas mentioned in the termination letter, the reason for dismissal fit for the assigned job responsibilities".
The company, however, gave three reasons for the dismissal, namely:
absence from work
company work cannot run smoothly and
that the claimant had his own business.
However, in the company's pleadings, it was stated that the reason for the claimant's dismissal was that he was absent without leave. From the evidence, it is evident that absenteeism is the main reason for the dismissal.
The evidence before the court shows that the claimant was a monthly paid employee. If the claimant were absent without leave, he would not be paid for the day. If the claimant produced a medical certificate from a clinic not on the company's panel, he would not be paid for the day. The claimant is, however, paid for all Sundays, public holidays and medical certificates from clinics of company panels.
Claimant's Job Functions
The claimant's main job is to supervise the company workers and the company's production.
In addition to the above, the claimant would also be required to handle problems caused by Bangladeshi workers,
e.g., taking them to the hospital or the police station whenever a fight between them.
This extra job of handling Bangladeshi workers would sometimes involve odd hours of the day.
The claimant was also asked to entertain some Taiwanese businessmen. This would also entail odd hours of the day.
Doing these extra jobs, the claimant was paid separately by the company in the form of pocket money, which is not reflected in the salary voucher.
Procedures For Application For Leave
Company procedures stipulate that leave can be obtained by applying for leave.
For emergency cases, call and inform one of the three staff of the company, i.e., F, W and A.
However, the next day the applicant still has to fill up the leave form.
But for supervisors like the claimant, COW1 must still approve the leave. This was confirmed by Company 1st and 2nd Witnesses, i.e. COW1 and COW2.
Warning
The company contended that verbal warnings were given from time to time to the claimant by COW1 and other staff.
COW1 stated about 60 verbal warnings were given to the claimant to improve himself and not to be absent without leave.
The verbal warnings were given over two to three years.
The company produced one warning letter to the claimant, which the claimant did not sign. The claimant denied receiving this warning letter and that he didn't sign for it.
COW2 stated that the warning letter was prepared by one L. However, L has since left the company.
COW2 handed the warning letter to the claimant, but the claimant refused to sign it.
Show Cause Letter
It is not in dispute that no show-cause letter was given to the claimant before his dismissal.
The claimant further alleged that he was not allowed to explain his case.
The company contends that:
The shortcoming was pointed out to the claimant by COW1 and other company staff,
But the claimant failed to adhere to the verbal warnings.
Breach Of Natural Justice
The claimant testified that no misconduct charges were ever formed or sent to him before he was terminated. The company would again rely on the evidence of COW1 that the claimant was given sufficient verbal warnings to improve.
The Law
The issues here are:
The claimant's absence without leave is the main reason for his dismissal by the company, whether the claimant had just cause for such absence.
If proven he was absent without leave too many times, does that justify his dismissal?
Was the claimant given sufficient warning before he was dismissed from his service?
Principles of Dismissal
The general principles relevant to dismissal cases were reiterated in Kama Morris Sdn Bhd v. Lee Chwee Say[1990] 1 MELR 499; [1990] 1 ILR 435 as follows:
It is a fundamental principle of industrial law that the court would be wrong to interfere with the bona fide exercise of powers which are given to the management by common law and by contacts of service or which are inherent in management. If there has been no abuse of discretion, no discrimination, no unfairness, no capricious or arbitrary action if the management has acted in good faith and upon fair investigation, an arbitrator should not disturb the decision taken by the employer. However, as a court of equity and good conscience, it will interfere not only where there has been victimisation but also where it believes that upon the substantial merits of the case, the action taken by the management was perverse, baseless and unnecessarily harsh or was not just or fair or where there has been a violation of natural justice or where there has been unfair labour practice or other mala fide action on the part of management in the exercise of its power... . It is also settled that the power to order reinstatement is not limited to cases where the worker has been dismissed summarily on the express ground of misconduct. Even where the dismissal has been effected upon the proper notice, and the real ground for the employer's decision is misconduct suggested or alleged against the workers, the court will inquire into a complaint that the decision has been harshly or unfairly made. The absolute right of an employer under the common law to hire and fire is, however, no longer available to him completely under the industrial law, and the court will apply the same principle here as in cases where the employer has exercised his right to dismiss the worker without any notice on the ground of misconduct.His Lordship, Steve LK Shim, in the same case quoted above, also stated that an employer would be entitled to dismiss a worker summarily where the conduct of the workman is inconsistent with the maintenance of the relationship created by the contract.
Sometimes, this would be evident from a course of conduct. In other cases, a single act of disobedience would suffice, but it must have the quality of wilfulness and perhaps some degree of seriousness.
And in Goon Kwee Phoy v. J & P Coats (M) Sdn Bhd [1981] 2 MLJ 129, Raja Azlan Shah CJ (Malaya) (as he then was) said:
We do not see any material difference between the termination of the contract of employment by due notice and a unilateral dismissal of a summary nature. The effect is the same, and the result must be the same.
Decision
Reason for the Dismissal
The company's termination letter stated that the claimant was "unfit for the assigned job responsibilities."
COW1 explained that the claimant was unsuitable to perform his job function because he was absent too often without leave.
Being a supervisor, he should be more responsible towards his job.
Although three reasons were given by COW1, absenteeism was the natural and foremost reason for the claimant's dismissal.
Reason for the Absence
The claimant's reason for his absence was that he had to work till late evening before he could go home.
He was the supervisor for the Bangladeshi workers, and he had to attend to any problems created by the foreign workers.
This is more so if the problem happens after office hours. Sometimes the workers got sick, and he had to send them to a hospital or clinic.
Sometimes they would fight amongst themselves and get injured; the claimant had to take them to the hospital and police station.
Other than dealing with the problems of Bangladeshi workers, the claimant was also asked to entertain Taiwanese engineers. For all this extra work, the claimant was paid between RM20 to RM30 by COW1. This payment is not reflected in the salary as it was given as pocket money to the claimant.
Witness Statement from the Company
COW1 had testified that there were more than ten Bangladeshi workers in the company at any one time.
COW1 denies allowing the claimant the next day off if the claimant works late the night before.
COW1 further stated that other staff had also assisted in handling the Bangladeshi problems.
COW1 also clarified that sending Bangladeshis to hospitals or police stations was rare.
About 90% of the incidents happened during office hours. After-office hours were sporadic. On these rare occasions, the claimant sent Bangladeshis to a hospital or police station maybe only once a year.
If this happened, COW1 agreed that the claimant was given the day off the next day. From 1994 to 1998, the claimant had sent Bangladeshi workers only twice to the hospital.
The procedure of application for Leave
The company's procedure for staff taking leave was to fill out a leave form three days before the leave.
For emergency cases, staff can call the office and inform W, F or A. But they'll have to fill out the leave form the next day.
For annual leave and medical certificates, the company would pay in full.
However, the medical leave must be from the company panel or the general hospital.
The company does not pay for medical certificates other than those on the company panel.
For leave, without approval or reason, the company does not pay for the absent day. The claimant also confirms this procedure as the company's practice.
During the Cross-examination
The claimant admitted under cross-examination that he had been absent without leave.
For example:
The claimant admitted he was absent in January 1997 for three days.
In February 1997, he was absent for five days, and it was because of the Chinese New Year.
On the whole, the claimant admitted he exceeded his leave entitlement for the whole year.
His salary was deducted at RM40 a day for the days the claimant was absent. The claimant did not protest his salary deduction. The claimant further admitted that the company paid him overtime if he worked late.
,
The claimant stated that he was absent from work because of attending to Bangladeshi problems. But when asked again, "were you absent because of Bangladeshi problems" his answer was, "I was absent but can't remember the reasons."
When the company's counsel again asked why he was absent on 11 and 12 August 1997, he replied, "I can't remember." When further asked why he was absent from 22 to 24 September 1997, his answer "I can't remember, maybe a Bangladeshi problem."
Court's Findings
From the above evidence, the court can only conclude that the claimant was absent for his own reasons or benefits.
He would have probably been absent because of Bangladeshi problems for only a few days.
The claimant was absent without leave for the year 1997 for 37 days and the eight months of 1998 for 25 days.
To be absent for more than a month without leave for one year would undoubtedly affect the smooth running of the company.
Whether The Claimant Was Warned Before He Was Dismissed
The claimant submitted that he was not given any show cause letter to explain why he was taking excessive leave, as alleged.
The company only produced one warning letter after being challenged by the claimant.
No verbal warnings were given, although the company's witness, COW1, claimed to have given about 60 times over three years.
It is settled law that before an employee is dismissed, he must be given the warning to inform him of his conduct. He must be given sufficient time to improve himself before taking any action.
Warning Letter
The written warning was only given once to the claimant at CO4.
The company did not produce the letter earlier because the claimant did not sign it.
The company considered the unsigned letter by the claimant as of no value, which was not included in the bundle of documents.
However, during the cross-examination of COW1, the claimant's counsel challenged the witness to produce the said letter, resulting in the document being produced.
The other issue with the warning letter by the claimant was that the maker of the letter was not called to testify in court.
The maker, in this case, is L, who has since left the company. This court, however, agrees with the company's submission that the claimant has testified that he had tried to serve a subpoena on L but was informed by his landlord that L had moved out of the house a long time ago. This clearly shows that L can no longer be contacted. The question of invoking s. 114(g) of the Evidence Act 1950 does not arise here. It is also evidence of COW2 that COW1 had asked her to prepare the letter, and she instead asked L to prepare it. The letter was actually on the instruction of COW1.
COW2 testified that she personally handed the warning letter to the claimant, but the claimant refused to sign to acknowledge receipt of the letter.
Court's Findings
The court would agree with the evidence of COW2 that the claimant had refused to sign the warning letter.
From the evidence, it is clear that the claimant is the type of employee who does not like to sign letters given by his employer.
He had refused to sign the new contract of employment with the company but kept on working with the company despite not signing the new contract.
The court does not see any good reason why he should refuse to sign the new contract.
Even though the claimant denies being given the new contract to sign. There is no reason why the company did not ask the claimant to sign when others were asked to sign.
It was not new when COW2 testified that the claimant had refused to sign the warning letter. The employment contract is not something against the claimant, yet he had refused to sign. The warning letter is something against the claimant, and naturally, he would refuse to sign.
Was The Claimant Verbally Warned For Excessive Leave Taken
The claimant's submission is whether it is believable/reasonable that the company had verbally warned him about 60 times.
As COW1 stated, the 60 times was over 2-3 years.
The claimant further claims that the evidence of COW1 was not corroborated on the issue of verbal warnings.
COW3 (the 3rd witness from the Company) had testified during examination-in-chief that the company had given the claimant warnings for 1997 until August 1998.
During cross-examination, COW3 testified that COW2 had given verbal warnings to the claimant in her office.
He was not sure what time and who else was present at that time.
When asked further by the claimant's counsel, COW3 said he could not remember how many times the verbal warnings were given.
During the re-examination of the claimant's testimony, the claimant answered the following question:
Q: Did your boss advise you not to be absent?
A: Although the company understands my problem but told me to try my best to come to work.
Court's Findings
From the above evidence, it is clear that verbal warnings were given to the claimant by the company. This is corroborated by the claimant himself and COW3.
As to the number of times it was given, no one is sure whether it was 60 times or less.
The fact remains that the warnings were given as acknowledged by the claimant.
Did The Company Condone The Claimant's Absenteeism
The claimant alleged that despite being absent excessively since 1997, the company did not take any action to terminate him.
By the company's conduct in not taking action against the claimant, the company has waived/condoned its right to terminate the claimant.
The company's witness, COW1, had testified that in 1997 the company gave the claimant increment.
The increment was given because the claimant was absent from work, and COW1 thought that maybe the claimant did not have enough money, so he gave the claimant the increment. This evidence is corroborated by the claimant in his evidence as follows:
Q: Is it not true that the company even gave you an increment to incentivise you to work hard?
A: Yes.
COW1 further testified as follows:
Q: Why not terminate the claimant at that time (1997) instead of giving a warning?
A: Because I can't find the right person to replace him, I hope the claimant can improve and be punctual.
To another question, COW-1 answered:
Q: You've given the claimant many verbal warnings. Why not sack the claimant earlier?
A: When the claimant first joined, he was good, and later, he was absent from work, I warned him, and W also talked to him and hoped the claimant would improve back to normal.
Court's Findings
From the evidence/the company had not condoned/waived its right to terminate the claimant but has merely given the claimant a chance to improve his performance.
The company had been very accommodating towards the claimant.
Despite the claimant's deteriorating performance due to his constant absence, the company was still hoping that the claimant would improve.
However, after more than two years, without any sign of improvement shown by the claimant, the company was left with no alternative but to take action.
The company has to consider and prioritise the general well-being and interests of the company over the interests of an individual employee.
The next question is whether the claimant came to work from 1 to 3 September 1998.
The Claimant
The claimant's evidence was that he went to work from 1 to 3 September 1998 but found his punch card missing.
He was told by a clerk to see COW1, but the claimant was not able to meet COW1.
This continued until 3 September 1998.
This evidence was supported by CLW2 (2nd witness of the Claimant), formerly working under the claimant's supervision.
The witness left the company on 8 February 2000.
The claimant further avers that the letter of termination dated 28 August 1998 was only given to him on 3 September 1998.
The Company
The company's case is that the termination letter was handed to the claimant on the same day the letter was prepared, that is, on 28 August 1998, by COW2.
The claimant did not turn up for work on 29 August 1998 and after that. 29 August 1998 was a working day, but since the claimant was absent without leave, he was not paid for the day.
The claimant was paid for 30 August 1998 as a Sunday.
The claimant produced a medical certificate for 29 August 1998 from a clinic which is not on the company's panel.
The claimant is fully aware from his own testimony that the company would not pay for a medical certificate produced other than the company's panel of doctors. Despite this regulation by the company, the claimant still produced a medical certificate which the company does not accept. That must have been why the claimant did not protest for not paying his salary on 29 August 1998.
Apparently, there are two versions of what happened from 1 to 3 September 1998.
In the claimant's version, he went to work, whilst in the company's version, the claimant was absent from 29 August 1998 and thereafter.
Court's Findings
The company's story is supported by the evidence of COW1, who stated that on 1 and 2 September, he did not tell any of his staff to say to the claimant to come again the next day.
COW1 said he is not sure whether the claimant came to the office on 1, 2 and 3 September 1998 as he was seldom in the office.
COW2 avers that she gave the termination letter personally to the claimant on 28 August 1998. She doesn't know whether the claimant came to the office from 1 to 3 September 1998, but she did not see him.
The evidence of CLW2 supports the claimant's story. CLW2 testified that he met the claimant on the 1, 2 and 3 September 1998. The claimant told the witness that the claimant had received the termination letter on 3 September 1998. He remembers well because the claimant shook hands with him and the workers. However, under cross-examination, a question was posed to him.
Q: The incident happened in 1998; how can you be sure whether it was on 28 August 1998 or 3 September 1998?
A: When the problem happened, the claimant did not inform me. Actually, I do not know when, whether it was 28 August 1998 or 3 September 1998 - Yes! I am not sure.
The witness later said he was sure the date was 3 September 1998 when re-examined by the claimant's counsel.
From the court's observation as to the demeanour of CLW2, it is evident that he is not sure of the date he met the claimant, whether it was on 28 August 1995 or 3 September 1998.
COW2 did not see the claimant in office from 1 to 3 September 1998.
The court would believe the company's story that COW2 gave the termination letter to the claimant on 28 August 1998.
The claimant's termination was effective from 31 August 1; why would the company wait until 3 September 1998 to give the termination letter to the claimant?
No Reason Stated For The Termination
The termination letter had stated "unfit for the assigned job responsibilities" as the reason for the claimant's termination.
From the wording of the termination letter, the claimant should be aware of why he was terminated.
No one can perform his job functions well if he is missing from the office too often.
Being a supervisor, the responsibility is more demanding as he has to show a good example to those under his supervision.
If a supervisor does not show commitment to his job, it would be difficult for his subordinates to do their jobs.
In this situation, it is evident that the claimant cannot perform all the jobs assigned to him due to his own doing.
This the claimant should have known as the reason for his termination.
Under the circumstances, the company doesn't need to go into detail about the cause of termination.
The court agrees with the company's submission that it has been said that a reason for the dismissal of an employee is a set of facts known to the employer, or it may be beliefs held by him which cause him to dismiss the employee.
Per chairman Steve LK Shim in Kama Morris Sdn Bhd v. Lee Chwee Say[1990] 1 MELR 499; [1990] 1 ILR 435:
There may be a reason or principal reason for the dismissal. However, neither the Court nor the Company is required to dissect the reason or reasons in excessive analytical detail. Generally， it is not necessary for the Company to go into every sub-reason because， in practice， a reason and even a principal reason may be compounded of several elements which do not necessarily each in themselves constitutes a separate reason. ... As Lord Cairns said in Abernethy:If, at the time of the dismissal, the employer gives a reason for it, that is no doubt evidence, at any rate, against him as to the real reason, but it does not necessarily constitute the real reason.In a gist, the court must still look at the matter and determine the real reason.
Failure To Hold Domestic Inquiry
It has been held that failure to hold a domestic inquiry is not fatal to the case. In the case of American International Assurance Co Ltd v. Seah Chee Teck[1995] 2 MELR 76; [1996] 1 ILR 239, which states:
Our highest Court has held that the failure of natural justice by itself does not stop the Industrial Court from coming to a finding as to the justification for dismissal. This is because the hearing before the Industrial Court itself provides a better and impartial forum for the employee than the domestic inquiry for the employee to be heard in accordance with the rules of natural justice.The court agrees with the company's submission that s. 13 of the Employment Act applies here; that is where the employer is exercising his contractual right to terminate the claimant. The claimant's termination was accompanied by indemnity payment in lieu of notice.
Award
After perusing all the evidence and testimonies of witnesses in court, the court believes that the company had proven its case on the balance of probabilities.
The claimant was indeed absent for his own benefit instead of the alleged reasons for handling Bangladeshi problems.
The claimant's absence is severe because the number of days taken without leave is substantial.
It would have been acceptable to the company if the claimant had only taken a few days in a year.
Despite constant warnings by the company officials, the claimant had not shown any improvement. In the circumstances, the court believes that the disciplinary measures taken against the claimant are not excessive or unnecessarily harsh.
Therefore the claimant's dismissal is with just cause and excuse. The claimant's claim is, at this moment, dismissed.
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