KESATUAN KEBANGSAAN PEKERJA-PEKERJA BANK SEMENANJUNG ... · PDF file[2012] 1 MELR 469 KESATUAN KEBANGSAAN PEKERJA-PEKERJA BANK SEMENANJUNG MALAYSIA v. MALAYAN BANKING BERHAD Industrial

469[2012] 1 MELR

KESATUAN KEBANGSAAN PEKERJA-PEKERJA BANKSEMENANJUNG MALAYSIA

v.MALAYAN BANKING BERHAD

Industrial Court, Kuala LumpurSusila Sithamparam Employees' Panel: Anthony PappuEmployers' Panel: Ooi Kok KeeAward No: 218 of 2012 [Case No: 1/3-230/10]17 February 2012

Trade Dispute: Collective agreement - Article 17 on Efficiency and Discipline governing punishment for serious misconduct - Workmen alleged to have aided, abetted, initiated or conducted mock funeral rites for respondent’s branch manager - Punishment of suspension of annual increment in salary for two years - Whether punishment harsh and disproportionate to gravity of misconduct - Performance of mock funeral rites - Whether contravention of s 40, Industrial Relations Act 1967 - Principles of equity and good conscience - Embodiment of s 30(5) - Proportionality of punishment to misconduct - Whether must be reconciled with test of reasonableness affirmed in Southern Bank Bhd v. Kamarudin Othman and Anor - Whether punishment proportionate to misconduct - Whether punishment imposed ought to be substituted

This case emanated from two orders of reference pursuant to s 26(2), Industrial Relations Act 1967 (‘Act’) that arose from a trade dispute between Kesatuan Kebangsaan Pekerja-Pekerja Bank Semenanjung Malaysia (‘the union’) and Malayan Banking Bhd (‘respondent’) on the punishment that was meted out by the respondent on three of its workmen (‘affected workmen’) who were officials of the union, for allegedly participating in mock funeral rites for RW1, a branch manager of the respondent. As a result of a trade dispute between the union and the respondent on the terms of a collective agreement, the affected workmen had decided to attend a picket together with other union officials. The picket was organised by the union at the respondent's branch situated at Taman Sri Selayang Sales and Service Centre (‘the said venue’). The picket had been ongoing for several days since 6 September 2007. After the affected workmen had arrived at the picket, mock funeral rites in accordance with Chinese custom were performed for RW1 at the said venue. RW1 was aware of the mock funeral rites being performed for him. He consequently felt embarrassed, threatened, intimidated and thereafter lodged a police report on the matter. Subsequently, show cause letters dated 6 November 2007 were issued by the respondent to the affected workmen for their alleged participation in the mock funeral rites. The charge against the affected workman was that they had ‘aided and/or abetted and/or conspired in initiating and conducting and/or participating and/or being a party in mock funeral rites for RW1 between 12pm and 2pm on the material date at the said venue’. At the conclusion of the disciplinary proceedings, the affected workmen were punished whereby their annual increment in salary

Kesatuan Kebangsaan Pekerja-Pekerja BankSemenanjung Malaysia

v.Malayan Banking Berhad

470 [2012] 1 MELR

was suspended for a period of two years based on art 17(b) on Efficiency and Discipline of the governing collective agreement. The issues that arose for adjudication were whether (1) the affected workmen’s presence at the picket was sufficient to link them to the mock funeral rites; (2) the mock funeral rites were a serious misconduct; (3) the affected workmen were liable for the misconduct, and (4) whether the punishment that was imposed on them was reasonable in the circumstances.

Findings of the Industrial Court

(1) The affected workmen had participated in the mock funeral rites which were performed as part of the picket since they were present at the picket and had supported the union members in the picket. The misconduct which they had committed was their participation in the mock funeral rites by being present at the said venue on the material date. However, the affected workmen had not aided, abetted, initiated or conducted the mock funeral rites, nor were they parties in the mock funeral rites. (para 21)

(2) The right to picket is governed by s 40 of the Act. The essence of that provision is that the picket must be peaceful. There is an express prohibition in the said section for any action that is calculated to intimidate any person. (para 22)

(3) The performance of the mock funeral rites, while being an act of intimidation, did not make the entire picket illegal. It was the performance of the mock funeral rites which was a contravention of s 40 of the Act. (para 24)

(4) The basis of industrial adjudication are the principles of equity and good conscience which are embodied in s 30(5) of the Act. Further, the Industrial Court has wide powers to decide the relief and remedy in a trade dispute as provided by s 30(6) of the Act. The principle of proportionality of punishment must be reconciled with the test of reasonableness which was affirmed by the High Court in Southern Bank Bhd v. Kamarudin Othman and Anor. In this instance, the test was whether the respondent acted reasonably in imposing a punishment whereby the annual increment in salary of the affected workmen was suspended for a period of two years. (paras 26 & 32)

(5) The participation of the affected workmen in the mock funeral rites was a serious misconduct. In deciding whether the punishment which was imposed was reasonable, the gravity of the misconduct was considered including the fact that the affected workmen were passive participants in the mock funeral rites. The affected workmen did not organise the mock funeral rites nor did they perform any of the said rites. Further, their employment record was a relevant factor. There was no evidence as to whether any disciplinary action had been taken by the respondent against the affected workmen in the past. (para 39)

(6) Whilst there was a band of reasonableness where an employer may decide on the type of punishment, the respondent here had acted unreasonably



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when it imposed such a harsh, unjust and disproportionate punishment and it ‘disturbed the conscience’ of the court. The case of Southern Bank Bhd v. Kamarudin Othman and Anor had held that the Industrial Court had the power to review the punishment imposed by an employer under s 30(5) of the Act, provided that that power was exercised reasonably and not arbitrarily. Thus, the principle of proportionality of punishment which was based on the test of reasonableness was part of industrial adjudication. (para 41)

(7) The punishment imposed by the respondent was substituted with a lesser punishment in accordance with art 17(b) of the said collective agreement by the imposition of seven days with no pay, that was deemed more reasonable to commensurate with the misconduct committed by the affected workmen. The affected workmen had already carried out this punishment when they were suspended with half-pay for a period of fourteen days pending their disciplinary proceedings at the material time. (para 44)

Case decided in favour of affected workmen. Respondent ordered to pay all arrears of salary including salary adjustments, salary increments, annual bonuses, overtime, monetary benefits and ex-gratia payments that were withheld for a period of two years from 1 January 2008 to affected workmen.

Case Commentaries

• Where an employer takes disciplinary action against one or more employees, if they belong to a trade union they may be represented by the union which may demand that the punishment be revoked or lessened. If the union and the employer cannot reach an agreement, a trade dispute may come into existence.

• Trade disputes, whether caused by a breakdown in collective bargaining or because of a failure to settle the grievances of one or more employees, are referred to the Department of Industrial Relations, Ministry of Human Resources for conciliation meetings to be held and to determine whether the dispute can be settled. If it cannot, the dispute is referred to the Industrial Court for arbitration.

• Parties to a trade dispute have the right under the Industrial Relations Act 1967 to take industrial action, including the right to picket, providing the requirements of the law are complied with.

• Parties who, while picketing, block the entrance or exit to a workplace have violated the Industrial Relations Act 1967. Similarly, putting coffins at the scene of a picket may be considered criminal intimidation.

• Trade union members who participate in a picket, amongst other requirements, may not carry out any action which intimidates any party. Conducting Chinese funeral rites in public for a manager who had not died could be considered intimidating to that manager, according to the Industrial Court. The Court used words such as “despicable” and “reprehensible” to



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describe such behaviour.

• The Industrial Court may, in a trade dispute relating to a penalty meted out to workers, examine whether the punishment was commensurate with the misconduct committed. The Court has wide powers to create rights and obligations but is required to make decisions based on equity, good conscience and the merits of the case. This power, according to the Court, must be exercised reasonably and not arbitrarily.

• Many collective agreements, or other documentary sources of employees’ terms and conditions of service such as employee handbooks, often include a list of penalties which may be imposed by the employer concerned on his employees if they commit acts of misconduct.

• When choosing a suitable punishment for an employee guilty of misconduct, the employer should look at the seriousness of the misconduct as well as the previous work record of the employee concerned.

Case(s) referred to:

Asrul Ismail and others v. Sinora Sdn Bhd [2009] 1 ILR 203 (refd)

Bolton v. Law Society [1994]1 WLR 512 (refd)

Coates and another v. Modern Methods and Materials Ltd [1982] 3 WLR 764 (refd)

Milan Auto Sdn Bhd v. Wong Seh Yen [1995] 4 CLJ 449 (refd)

Mahindra and Mahindra Ltd v. N B Naravade AIR (SC) [2005] 1129 (refd)

New Straits Times Press (M) Bhd v. Ravichandran Marimuthu and others [1999] 3 ILR 588 (refd)

Ng Hock Cheng v. Pengarah Am Penjara & Ors [1998] 1 CLJ 405 (refd)

Panzana Enterprise Sdn Bhd v. Norizan Bakar (refd)

Southern Bank Bhd v. Kamarudin Othman and another [2005] 6 CLJ 379 (dist)

Tan Tek Seng v. Surunhanjaya Perkhidmatan Pendidikan and another [1996] 2 CLJ 771 (refd)

Viking Askim Sdn Bhd v. National Union of Employees in Companies Manufactuing Rubber Products and another [1991] 2 MLJ 115 (refd)

Legislation referred to:

Criminal Procedure Code, s 173A

Industrial Relations Act 1967, ss 20(3), 26(2), 30(5), (6), 40

Penal Code, s 409



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Industrial Disputes Act 1947 [India], s 11A

Counsel:

For the union: Anand Ponnudurai; M/s Bodipalar Ponnudurai De Silva

For the respondent: Steven Thiru (Janice Leo with him); M/s Shook Lin & Bok

AWARD

Susila Sithamparam:

[1] There are two orders of reference both dated 26 February 2010 by the Honourable Minister of Human Resources pursuant to s 26(2), Industrial Relations Act 1967 (hereinafter referred to as "the said Act") arising from a trade dispute between Kesatuan Kebangsaan Pekerja-Pekerja Bank Semenanjung Malaysia (hereinafter referred to as "the union") and Malayan Banking Bhd (hereinafter referred to as "the respondent") on the punishment which was meted out by the respondent on three of its workmen who were also officials of the union for allegedly participating in a mock funeral rites for RW1, a Branch Manager of the respondent.

[2] The two orders of reference were registered as case 1/3-230/10 and case l(10)(l)/3-232/10 and were consolidated vide award 30 of 2011. The affected workman in case 1/3-230/10 is Gursatvinder Singh s/o Mahinder Singh who appeared as UW3. The affected workmen in case l(10)(l)/3-232/10 are Narenthra Rao s/o T G Samantha Rao and Chen Ka Fatt who appeared as UW2 and UW1 respectively.

[3] UW1 is the Secretary of the Ipoh branch of the union and the Vice President of the union at the national level. UW2 is the Treasurer of the Ipoh branch of the union and a member of the National Executive Council of the union. UW3 is the Secretary of the Seremban Branch of the union and a member of the National Executive Council.

[4] On 19 September 2007 (hereinafter referred to as "the material date"), the three affected workmen attended a meeting of the National Executive Council of the union at the headquarters of the union in Kuala Lumpur. The meeting was scheduled for two days. The three affected workmen were from different branches of the respondent outside Kuala Lumpur on the material date.

[5] During the meeting on the material date, they decided to attend a picket together with other union officials which was organised by the Kuala Lumpur branch of the union at the respondent's branch at the Taman Sri Selayang Sales and Service Centre (hereinafter referred to as "the said venue").



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[6] They testified that there was a trade dispute between the union and the respondent on the terms of a collective agreement. The respondent had proposed that performance bonus be included in the collective agreement. They alleged that the Branch Managers of the respondent had acted mala fide by refusing to resolve grievances at the branch level as provided under the collective agreement. The picket was organised as there was a deadlock in the negotiations between the union and the respondent.

[7] When they arrived at the venue on the material date, there was a heavy police presence. There were union members present who were holding placards, singing songs and someone was beating a "kompang" (drum). A video recording which was tendered and played in court showed the picket vide R-5. Several people were seen entering and leaving the premises at the said venue while the picket was on as seen in the video. There were no visible signs of any unruliness.

[8] After the three affected workmen had arrived at the said venue, mock funeral rites which was in accordance with Chinese custom was performed for RW1 who was the Branch Manager of the respondent at the said venue. A photograph of RW1 with a garland around it was placed on the road at the pavement in a parking lot at the said venue. Joss sticks and candles were lit. There were two goblets placed in front of the photograph. Paper money which is known as "hell money" to the Chinese were burnt in a brown metal receptacle which was placed on the ground and strewn on the ground. Several photographs were tendered which showed the mock funeral rites vide Bundle RBI, pp 1 to 4 and Bundle RB2, pp 1 to 4.

[9] RW1 became aware that mock funeral rites were being performed for him at the said venue on the material date when a customer of the respondent came into his office and showed him an obituary note with his photograph on it bearing the words "condolence" on the top and "our heartfelt condolences to Maybank Tmn Sri Serdang" at the bottom vide R-2a. He felt embarrassed, threatened and intimidated by the incident. On 20 September 2007, he lodged a police report vide R-2. The picket had been going on for several days since 6 September 2007.

[10] The three affected workmen denied strenuously that they had participated in the mock funeral rites. The photographs show UW3 in the front of the picket line holding a placard with the words "Bank robs bonus. We support" vide Bundle RBI, p 3. UW1 and UW2 were at the back of the picket line and they were standing along the corridor at the said venue vide Bundle RB2, p 3. UW1 and UW2 were aware that those were funeral rites being performed but they did not know for whom it was for as they did not know the person in the photograph. UW1 was shocked that funeral rites were being performed. UW3 was not aware that there were funeral rites being performed as being a Sikh he was not aware of the nature of the ceremony.



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[11] The three affected workmen testified that the respondent had retaliated against the union by taking disciplinary action against them for allegedly participating in the mock funeral rites on the material date at the said venue as they had participated in a national picket which was organised by the union on 3 November 2007 at the headquarters of the respondent at Menara Maybank, Kuala Lumpur. The show cause letters dated 6 November 2007 was for their alleged participation in the mock funeral rites at the said venue on the material date which was three days after the national picket on 3 November 2007.

[12] RW2, the Industrial Relations, Group Human Capital of the respondent denied that allegation. He testified that the respondent had not taken immediate action soon after the mock funeral rites as the management of the respondent had to deliberate on several matters which had arisen. Hence, the lengthy time taken in issuing the show cause letters against the three affected workmen.

[13] The charge against the three affected workmen was that they had "aided and/or abetted and/or conspired in initiating and conducting and/or participating and/or being a party in a mock funeral rites" for RW1 between 12.00 p.m and 2.00 p.m on the material date at the said venue. Show cause letters dated 6 November 2007 were sent to them vide Bundle RBI, p 5; and Bundle RB2, pp 5 and 10.

[14] The three affected workmen requested for further particulars of their alleged misconduct. The respondent provided further particulars which were that they had lit joss sticks and red candles; and offered hell money together with a plate of food and a pair of red goblets in front of a photograph of RW1, the Manager of the Taman Sri Serdang branch of the respondent vide Bundle RBI, p 7; and Bundle RB2, pp 7 and 12.

[15] There were no issues raised in the show cause letters or in the statements in reply on the legality or otherwise of the picket on the material date at the said venue; that the three affected workmen had not picketed near their respective workplaces and the abuse by the three affected workmen of the trade union leave which the respondent had given permission to them to attend the National Executive Council meeting of the union on the material date.

[16] There was no dispute that mock funeral rites in accordance with Chinese custom were performed in front of a photograph of RW1 at the said venue on the material date. The three affected workmen were present during the picket at the said venue on the material date.

[17] The issues arising are whether their presence at the picket was sufficient to link them to the mock funeral rites; whether the mock funeral rites which was performed for RW1 was a serious misconduct; and if the three affected workmen were liable for the misconduct, whether the punishment which was imposed on them was reasonable in the circumstances.



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[18] The court found that the three affected workmen had not organised the picket or the mock funeral rites on the material date at the said venue. They were present at the picket to support the union members who were from the Kuala Lumpur branch of the union. They did not perform any funeral rites such as lighting joss sticks and candles; offering food and hell money; and placing goblets in front of a photograph of RWl at the said venue on the material date.

[19] The meaning of the phrase "to take part in a strike" was considered by English Court of Appeal in Coates and another v. Modern Methods and Materials Ltd [1982] 3 WLR 764. The court held that an employee who had stayed away from work on the ground that she was sick had taken part in a strike which had taken place at her workplace.

[20] In Asrul Ismail and others v. Sinora Sdn Bhd [2009] 1 ILR 203, the Industrial Court held that the dismissal of two workmen was with just cause and excuse as inter alia they had participated in an unlawful picket contrary to s 40 of the said Act. The workmen had failed to show that they had picketed in furtherance of a trade dispute and that they had commenced negotiations with the employer on their grievances. They had obstructed the free passage at the workplace as the persons who had picketed had assembled in large numbers and had behaved in an unruly manner by shouting, booing and cursing those who had entered the premises. The two coffins at the picket scene was an act of criminal intimidation.

[21] The court found that the three affected workmen had participated in the mock funeral rites which was performed as part of the picket as they were present at the picket and had supported the union members in the picket. The misconduct which they had committed was their participation in the mock funeral rites by being present at the said venue on the material date to lend support to the union members who were on picket. The court found that the three affected workmen had not aided, abetted, initiated or conducted the mock funeral rites nor were they parties in the mock funeral rites.

[22] The right to picket is governed by s 40 of the said Act. The essence of that provision is that the picket must be peaceful. There is an express prohibition for any action which is calculated to intimidate any person.

Section 40 reads:

"40. Picketing.

(1) Without prejudice to section 39, it shall be unlawful for one or more persons acting on his or their behalf or on behalf of a trade union or of an employer in furtherance of a trade dispute to attend at or near any place:

Provided that it shall not be unlawful for one or more workmen to attend at or near the place where the workman works and where a trade dispute involving such workman exists only for the purpose of peacefully:



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(i) obtaining or communicating information; or

(ii) persuading or including any workman to work or abstain from working.

and subject to such attendance being not in such members or otherwise in such manner as to be calculated:

(a) to intimidate any person;

(b) to obstruct the approach thereto or egress therefrom; or

(c) to lead to a breach of the peace."

[23] The court held that the mock funeral rites which were performed by the union members at the said venue on the material date for RWl was calculated to intimidate him. RWl had testified that he was intimidated, humiliated and embarrassed when he was informed by a customer of the respondent on the material date at the said venue that funeral rites were being performed for him. The mock funeral rites for a living person was utterly despicable and totally reprehensible. It was an affront to the dignity of RWl. Although there was no imminent danger of any physical injury to RWl as he was inside the premises of the respondent's branch at the said venue while the union members who were performing the mock funeral rites were outside the said premises, nevertheless, the mock funeral rites was an act which was calculated to intimidate RWl.

[24] The picket had been ongoing for several days since 6 September 2007. There was a trade dispute between the union and the Malaysian Commercial Banks Association on the proposal to include performance bonus in the collective agreement which was being negotiated between the union and the Malaysian Commercial Banks Association. The performance of the mock funeral rites whilst being an act of intimidation did not make the entire picket illegal. It was the performance of the mock funeral rites which was a contravention of s 40 of the said Act.

[25] The power of the respondent to impose punishment for a serious misconduct by a workman is governed by art 17(b) of the Collective Agreement between the union and the Malayan Commercial Banks Association for the period commencing 1 January 2006 and ending 31 December 2008 (hereinafter referred as "the said collective agreement") which read:

"ARTICLE 17 - EFFICIENCY AND DISCIPLINE

(1) This Bank may take disciplinary action in the event of inefficiency, misconduct, or indiscipline as follows:

.....

(b) Serious Misconduct or Indiscipline

Depending on the seriousness of the misconduct or indiscipline, the Bank may either:



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(i) give the employee a written warning; or

(ii) suspend the employee without pay for a period not exceeding seven (7) working days; or

(iii) defer increment for a period not exceeding six (6) months; or

(iv) stop increment for which the employee is eligible not exceeding two (2) years; or

(v) terminate the services of the employee by giving one (1) month's notice or pay in lieu; or

(vi) dismiss the employee summarily."

[26] The next issue which arises is whether the Industrial Court has the power to review the punishment imposed by the respondent on the three affected workmen. The basis of industrial adjudication are the principles of equity and good conscience which are embodied in s 30(5) of the said Act which read:

"Section 30(5). The Court shall act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal form."

[27] The Industrial Court has wide powers to decide the relief and remedy in a trade dispute as provided by s 30(6) of the said Act which read:

"(6) In making its award, the Court shall not be restricted to the specific relief claimed by the parties or to the demands made by the parties in the course of the trade dispute or in the matter of the reference to it under s 20(3) but may include in the award any matter or thing which it thinks necessary or expedient for the purpose of settling the trade dispute or the reference to it under s 20(3)."

[28] In Viking Askim Sdn Bhd v. National Union of Employees in Companies Manufacturing Rubber Products and another [1991] 2 MLJ 115, the High Court held at p 122 as follows:

"Secondly, the dicta to be found in the judgments in the Indian cases on the functions and powers of Industrial Tribunals referred to by the Federal Court in Dr. Dutt's case, are based not on art 38 of the Indian Constitution and its Directive Principles of State Policy, as argued by counsel for the company, but on the following statement by Ludwig Teller in his book, entitled Labour Disputes and Collective Bargaining (Vol.1) at p 536:

'Industrial arbitration may involve the extension of an existing agreement, or the making of a new one or in general the creation of new obligations or the modification of old ones, while commercial arbitration generally concerns itself with interpretation of existing obligations and disputes relating to existing agreements.'

On the contrary, I am satisfied that the power of the Industrial Court to create new rights and obligations is derived from sub-ss (4), (5) and (6) of s 30 of the Industrial Relations Act 1967 (reproduced above), though, it goes



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without saying, that this is a power which must be exercised reasonably and not arbitrarily."

[29] In a reference pursuant to s 20(3) of the said Act, the Industrial Court must decide whether the dismissal of a workman is with just cause or excuse. The principle of proportionality of punishment is implicit in the dicta of the Federal Court in Milan Auto Sdn Bhd v. Wong Seh Yen [1995] 4 CLJ 449 where the Federal Court stated at pp 454 and 455 as follows:

"As pointed out by this court recently in Hong Leong Assurance Sdn. Bhd. v. Wong Yuen Hock [1995] 2 MLJ 753, the function of the Industial Court in dismissal cases on a reference under s 20 is two-fold, firstly, to determine whether the misconduct complained of by the employer has been established, and secondly whether the proven misconduct constitutes just cause or excuse for the dismissal. Failure to determine these issues on the merits would be a jurisdictional error which would merit interference by certiorari by the High Court."

[30] In a recent newspaper report in the New Straits Times on Saturday 11 February 2012, it was reported that the Court of Appeal had decided in Panzana Enterprise Sdn Bhd v. Norizan Bakar that the Industrial Court could not review the punishment of dismissal in a reference pursuant to s 20(3) of the said Act after a workman had been found guilty of a misconduct.

[31] In New Straits Times Press (M) Bhd v. Ravichandran Marimuthu and others [1999] 3 ILR 588, the Industrial Court reviewed the punishment of dismissal which was imposed by the employer in respect of 13 workmen who had been dismissed for taking part in a picket. The Industrial Court held that the dismissal of the workmen was without just cause or excuse. The Industrial Court held at p 597 as follows:

"It is also the law that before the punishment of dismissal is meted out employers ought to take into account the seriousness of the misconduct and the past record of the employees. In the case before the court the claimants were away for a period of approximately 30 minutes. Evidence was given that the company did not have a strict policy on leaving the place of work for tea or meal break. The court accepts that some of the claimants used their 'unofficial' tea or meal break for the purpose of picketing. However looked at it in another way with or without these claimants who should be at work the picketing would still take place.

There was no need for the company to make examples of the claimants. They did not cause the press to be stopped.

Insofar as the previous record of the claimants were concerned they have worked for long time for the company. They had not committed any misconduct in the past. There are ample authorities to support this view. Learned counsel for the claimants quoted Dunstan Ayadurai on 'Industrial Relations in Malaysia: Law and Practice (pp 211 & 212) and the cases of Goodycar Malaysia Berhad v. National Union of Employees in Companies Manufacturing Rubber Products [1996] 2 ILR 522, Saudagar Berlian Poh Yit [1984] ILR 604 Secure Guards Sdn. Bhd. v. Ramakrishnan Kendasamy [1998] 2 ILR 327 and UAC



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Berhad v. Ahmad Ariffin Abdul Manaf [1996] 2 ILR 1567.

Learned counsel for the company remind the court on the seriousness of the misconduct of 'leaving the work earlier without permission'. However the misconduct committed by the claimants in this case is not really leaving work earlier. Even B.R. Ghaiye which the learned counsel quoted did not suggest that it must be punished by dismissal.

The court is also mindful of the need to enforce discipline. In the case before the court, the problems started with the company's unreasonable and unfair attitude towards the union. Had there been no picketing the claimants would not have joined it.

In the court's opinion the punishment of dismissal meted out to the claimants was in the circumstances harsh. It was tainted by vindictiveness on the part of the company and not in accordance with principles of industrial relations and good conscience and equity. Therefore the court would say that the claimants from the circulation department also were dismissed without just cause."

[32] Counsel for the respondent cited the decision of the High Court in Southern Bank Bhd v. Kamarudin Othman and another [2005] 6 CLJ 379 which had followed the decision of the Federal Court in Ng Hock Cheng v. Pengarah Am Penjara & Ors [1998] 1 CLJ 405.

The learned judge held at pp 387 and 388 as follows:

"He (counsel) further submitted that in order for an interference with the decision of the employer to dismiss the employee, the essential question the court must ask itself is: whether a reasonable employer would have dismissed the employee, on the facts of the case. Reference was made to the common law position in the case of British Leyland UK Ltd v. Swift [1981] IRLR 91 which held as follows:

'... The correct test is: Was it reasonable for the employers to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view; another quite reasonably take a different view. One would quite reasonably dismiss the man. The other would quite reasonably keep him on. Both views may be quite reasonable. If it was quite reasonable to dismiss him, then the dismissal must be upheld as fair: even though some other employers may not have dismissed him.'

He submitted that the common law position was adopted by the Court of Appeal in the case of Tan Tek Seng v. Suruhanjaya Perkhidmatan Pendidikan & Anor [1996] 2 CLJ 771 where NH Chan JCA (dissenting) postulated the following pinciple:

'The correct test was to determine whether it was reasonable for the appellant's employers to dismiss him on those facts. When considering the reasonableness of what is reasonable employer would have done, the Court (whether it be the High Court, Court of Appeal or the Industrial Court) must not substitute its own views as to what the appropriate



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penalty (for the employee's misconduct) for the view of the particular employer concerned.'

Mr. Thiru reiterated that the said principle was subsequently approved by the Federal Court in the case of Ng Hock Cheng v. Pengarah Am Penjara & Ors [1998] 1 CLJ 405 where Pen Swee Chin FCJ held as follows:

'To repeat, a court intervenes only on the nature and manner of accusation against a public officer as distinct from a consequential punishment as explained above. Just like a professional body being the best tribunal to judge the seriousness of misconduct of the manners, in a similar vein, an employer including a government, is the best person to judge similarly the seriousness of misconduct of an employee. Thus, we are of the opinion that on the narrow point in question, the majority judgment in Tan Tek Seng cannot stand though we express our agreement with the minority judgment on the same narrow point.'

Based on the above judgment, Mr. Thiru pointed that the recognition by the Federal Court of the non-interference principle confirms the common law position in the British Leyland's case as part of our law.

Wherein the present case, since the Industrial Court had not ask itself whether the decision of the applicant to dismiss the first respondent was reasonable on the facts of this case, counsel for the applicant claimed that the Industrial Court had flawed its process of reasoning, hence the Industrial Court's decision to set aside the dismissal and award compensation cannot be sustained.

It was further argued that the Industrial Court compounded the error when it failed to heed to numerous other awards of the Industrial Court that have considerably held that a bank is a custodian of public funds and any breach of procedure by an employee would entitle the employer to dismiss the employee. Various awards pertaining to the same case were cited by the applicant's counsel. As such the inconsistent stand made by the Industrial Court in its Award in the present case is viewed as irrational or unreasonable in Wednesbury sense."

......

"I now turn to the issue for determination before me. I am inclined to agree with the counsel for the applicant that the test as envisaged in the British Leyland's case ought to be applied in determining whether the Industrial Court could intervene with the punishment imposed by the employer. In other words, the Industrial Court had to ask itself the question as to whether the decision of the applicant to dismiss the first respondent was reasonable on the facts of the case."

I am also agreeable that the guidelines for the court with regard to the issue of intervention in the punishment was as propounded in the dissenting judgment of NH Chan JCA in the case of Tan Tek Seng v. Suruhanjaya Perkhidmatan & Anor. It is obvious to me that, this narrow point on the test for punishment was approved by the Federal Court in Ng Hock Cheng v. Pengarah Am Penjara & Ors. Nonetheless, I concede that the facts of Tan Tek Seng's case concerns the intervention of the High Court in respect of punishment of a public servant. However, it is pertinent to note that NH Chan JCA specifically



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made reference to the Industrial Court when he said 'Industrial Court must not substitute its own view as to what was the appropriate penalty for the employee's misconduct'. In fact, the learned judge granted with approval the dicta of Lord Denning MR in the British Leyland's case."

......

"I now refer to principle (2) submitted by counsel for first respondent, that the Industrial Court has the power under s 30(5) of the IRA 1967 to substitute the decision of the applicant. I concede that the Industrial Court has the general power under s 30(5) to create new rights and obligations.

However I must indeed stress that this is a power which must be exercised reasonably and not arbitrarily. In short, the Industrial Court cannot invoke the power of s 30(5), in the face of established pinciples of labour law governing the banking employment industry." (emphasis added)

[33] In Ng Hock Cheng's case, the appellant was a Chief Store Keeper who was employed by the Government of Malaysia and he was stationed at the Prison Department at Kemunting, Taiping. He was dismissed by the Public Services Commission as he had incurred heavy debts while assisting his father in his bicycle business. The Federal Court approved the dissenting judgment of the Court of Appeal in Tan Tek Seng's case and referred to the decision of the English court in Bolton v. Law Society [1994] 1 WLR 512 where the disciplining authority had struck off a solicitor from the rolls.

[34] The principle of proportionality of punishment in respect of the dismissal of a public servant was enunciated by the Court of Appeal in Tan Tek Seng v. Surunhanjaya Perkhidmatan Pendidikan and another [1996] 2 CLJ 771 at p 811 as follows:

"In undertaking these two separate and distinct tasks, it need not afford the public servant an opportunity to be heard: for, as the learned Judge in the present case correctly concluded, that right is lost to the servant by the operations of para (a) of the proviso to art 135(2). But it must, when deciding what punishment it ought to impose on the particular public servant, act reasonably and fairly.

If it acts arbitrarily or unfairly or imposes a punishment that is disproportionate to the misconduct, then its decision, to this extent, becomes liable to be quashed or set aside. As to whether our court must, in all such cases, direct reinstatement or may grant some other appropriate relief in an action for declaratory relief, by, for example, imposing a lesser punishment, is a question that I shall return to later.

It follows from what I have said, that the doctrine of procedural fairness, which is a product of the combined effect of arts 8(1) and 5(1), does not require that a public servant be afforded the right to make representations upon the issue of punishment in a case to which proviso (a) of art 135(2) applies. I therefore unhesitatingly reject the argument of counsel on this point."

[35] In Tan Tek Seng's case, the appellant was a Senior Assistant of a primary



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school who had been entrusted with the salary of the school gardener in the sum of RM3,179.00. He did not return that sum of money to the Johor Education Department and lied that he had done so. Later, he returned the money. He was charged under s 409, Penal Code and found guilty and bound over under s 173A, Criminal Procedure Code. Disciplinary proceedings were instituted against him. The Johor Education Department recommended that he be reduced in rank. The Education Commission decided to dismiss him. He filed an action in court. The Court of Appeal held that the punishment of dismissal was too severe and substituted the punishment with a reduction in rank.

[36] In India, there is an express power in s 11A, Industrial Disputes Act 1947 which gives the power to the Industrial Tribunal to review the punishment of dismissal of the workman and to impose a lesser punishment. In Mahindra and Mahindra Ltd v. N B Naravade AIR (SC) [2005] 1129, the Indian Supreme Court held that the Labour Court or the Industrial Tribunal should only interfere with the quantum of punishment imposed by the employer on a workman who had been found guilty of a misconduct only when the punishment was disproportionate to the gravity of the misconduct so as to "disturb the conscience of the court".

Section 11A, Industrial Disputes Act 1947 read:

"Powers of Labour Courts, Tribunals and National Tibunals to workmen. Where an industrial dispute relating to the discharge of dismissal of a workman has been referred to a Labour Court, Tribunal of National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct reinstatement of the workman on such terms and conditions, if any, as it thinks it, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge of dismissal as the circumstances of the case may require:

Provided that in any proceeding under this section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter."

[37] The principle of proportionality of punishment must be reconciled with the test of reasonableness which was affirmed by the learned judge in the Southern Bank Bhd case. The test is whether the respondent acted reasonably in imposing a punishment whereby the annual increment in salary of the three affected workmen was suspended for a period of two years.

[38] In the Southern Bank Bhd case, the High Court held that the Industrial Court had erred in law as it failed to ask itself whether the employer which was a bank had acted reasonably in dismissing its workman. The employee in that case had failed to comply with banking procedures which had caused a loss of RM100,000.00 to the bank. The High Court set aside the decision of the



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Industrial Court which had held that the misconduct of the workman did not warrant a dismissal and granted compensation to the workman for dismissal without just cause or excuse.

[39] The participation of the three affected workmen in the mock funeral rites was a serious misconduct. In deciding whether the punishment which was imposed was reasonable, the court took into consideration the gravity of the misconduct and that the three affected workmen were passive participants in the mock funeral rites. The three affected workmen did not organise the mock funeral rites nor did they perform any of the mock funeral rites.

[40] The employment record is a relevant factor. There was no evidence before the court as to whether any disciplinary action had been taken by the respondent against the three affected workmen in the past.

[41] The court found that the punishment of suspension of annual increment for two years was harsh, unjust and disproportionate. Whilst there is a band of reasonableness where an employer may decide on the type of punishment, the respondent had acted unreasonably when it imposed such a harsh punishment on the three affected workmen in the circumstances of the case and it "disturbed the conscience" of the court.

[42] The facts in the Southern Bank Bhd case may be distinguished. In that case, the workman had caused a loss of RM100,000.00 to the employer which being a bank was a custodian of public funds.

[43] The learned judge in that case held that the Industrial Court had the power to review the punishment imposed by an employer under s 30(5) of the said Act provided that that power was exercised reasonably and not arbitrarily. Thus, the principle of proportionality of punishment which is based on the test of reasonableness is part of industrial adjudication.

[44] The court substituted the punishment which was imposed with a lesser punishment in accordance with art 17(b) of the said collective agreement. The court imposed a punishment of suspension of seven days with no pay which was reasonable and commensurate with the misconduct committed by the three affected workmen. They are deemed to have carried that punishment as they were suspended with half pay for a period of fourteen days pending the disciplinary proceedings.

[45] The court ordered the respondent to pay all arrears of salary including salary adjustment, salary increment, annual bonus, overtime, monetary benefits and ex-gratia payments which were withheld for a period of two years from 1 January 2008 to the three affected workmen within three months from the date of the award.



Documents

KESATUAN KEBANGSAAN PEKERJA-PEKERJA BANK SEMENANJUNG ... · PDF file[2012] 1 MELR 469 KESATUAN KEBANGSAAN PEKERJA-PEKERJA BANK SEMENANJUNG MALAYSIA v. MALAYAN BANKING BERHAD Industrial