INDUSTRIAL COURT MALAYSIA CASE NO.

4/4-2131/07 BETWEEN ENCIK KHEW CHEE SUN AND HSL ELECTRICAL & ELECTRONICS SDN. BHD. AWARD NO. 1671 OF 2012 BEFORE : Y.A. TUAN P IRUTHAYARAJ A/L D PAPPUSAMY Chairman (Sitting alone) Mahkamah Perusahaan Malaysia Kuala Lumpur 08.10.2007. 03.01.2008; 10.03.2008; 01.04.2008; 13.10.2008; 17.10.2008; 24.10.2008; 10.03.2009; 02.04.2009; 11.03.2010; 13.05.2010; 24.05.2010; 13.07.2010; 19.07.2010; 20.10.2010 29.09.2010; 28.10.2010; 04.04.2011; 05.04.2011; 02.08.2011; 03.08.2011; 04.08.2011; 08.11.2011; 09.11.2011; 29.03.2011

VENUE:

DATE OF REFERENCE: DATES OF MENTION :

DATES OF HEARING :

DATES OF WRITTEN SUBMISSION: Claimant filed his Written Submission on 30.05.2012

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Company filed its Written Submission on 13.07.2012; and Claimant filed his Written Submission in Reply on 13.08.2012. REPRESENTATION : Mr. Ganesh Perumal of Messrs Ganesh & Co represented the Claimant. En Mahadi Bin Muhammad Mahadi Redzuan & Co represented the Company.

REFERENCE

This is a reference by the Honourable Minister of Human Resources under Section 20(3) of the Industrial Relations Act 1967 for an award in respect of a dispute arising out of the dismissal of ENCIK KHEW CHEE SUN (hereinafter referred to as the Claimant) by HSL ELECTRICAL & ELECTRONICS SDN.BHD.(hereinafter referred to as the Respondent).

AWARD

The parties to the dispute are Encik Khew Chee Sun (the Claimant) and HSL Electrical & Electronics Sdn. Bhd. (the Respondent)(the Company).The dispute which has been referred to the Industrial Court by way of a Ministerial Reference under Section 20(3) of the Industrial Relations Act 1967 (the Act) is over the dismissal of the Claimant by the Company on 28.02.2007.

Brief Background Facts The Claimant commenced employment with the Company in his position as a General Manager, Retail Operations on 01.09.2006 with a monthly salary of RM11,000.00 and a car allowance of RM1000.00, thus making it a total of RM12,000.00 per month. The detailed terms of his contract of employment are stipulated in his letter of appointment dated 01.09.2006.

The Company had vide letter dated 31.01.2007 handed a show cause letter (the show cause letter) to the Claimant which alleged that the Claimant had committed an act of sexual harassment against one of the Company's
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employee ,one Nooraziella Jalaludin (Nooraziella) who was the cashier at the Ampang Point outlet at the material time As a result of the show cause letter, the Claimant was suspended for a period of 2 weeks. Vide letter dated 01.02.2007, the Claimant vehemently denied the alleged sexual harassment charge and provided the Company with a detailed explanation on that matter.

However, the Company being dissatisfied with the Claimant's explanation formally charged him and held a Domestic Inquiry (D.I.) on 14.02.2007 and at the end of the D.I.,the D.I. panel found him guilty of the alleged Charge on sexual harassment and accordingly the Company dismissed the Claimant on 28.02.2007. Witnesses The following witnesses for the Company testified at the hearing of the case:(1) Nooraziella Jalaludin (COW-1) was the cashier at the Ampang Point outlet at the material time. Her witness statement is marked as COWS-1; (2) Natasha Bainun Binti Halidi(COW-2) is the younger sister of COW-1. Her witness statement is marked as COWS-2;

(3)

Kent Ng Futt Kong (COW-3) is the Supervisor at the Ampang Point outlet and is also COW-1's immediate superior. His witness statement is marked as COWS-3;

(4)

Michael Ang Lii Chuan (COW-4) is the Penolong Pengurus Management Information System (MIS),of the Company. His witness statement is marked as COWS-4;

(5)

Camie Tang Yoke Fong (COW-5) is the Human Resource Manager of the Company. Her witness statement is marked as COWS-5.

In respect of the Claimant only he testified.

Counsel for the respective parties had at the early stage of the hearing confirmed that they would not be relying on the evidence adduced at the D.I. since the D.I. notes were not given to the Claimant at the end of the D.I. for his verification. In the circumstances they had agreed to rely on the evidence adduced at the hearing of this case. In the circumstances the need to determine the validity of the D.I. as well as the accuracy of Notes of the D.I. does not arise. The Court will rely solely on the evidence adduced at the hearing in respect of

this case. Issues The issues for determination are as follows:(a) (b) Whether the Claimant was dismissed by the Company; If so, whether the dismissal of the Claimant by the Company was with just cause or excuse. The Law The function of the Industrial Court has been propounded by Mohd. Azmi FCJ in the Federal Court case of Milan Auto Sdn. Bhd. v Wong She Yen [1995] 4 CLJ 449 (Milan case) which is as follows:As pointed out by this Court recently in Wong Yuen Hock v Hong Leong Assurance [1995] 3 CLJ 344, the function of the Industrial Court in dismissal cases on a reference under s 20 is twofold: first, 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.

In the case of Goon Kwee Phoy v. J & P Coats (M) Sdn.Bhd. [1981] 2 MLJ 129 (Goons case) the Federal Court enunciated the following principle:-

.. Where representations are made and are referred to the Industrial Court for enquiry it is the duty of that Court to determine whether the termination or dismissal is with or without just cause or excuse. 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 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. [Emphasis added]

It is trite law that the Company bears the burden to prove that the Claimant had committed the alleged misconduct and that the misconduct warrants the Claimants dismissal [see Ireka Construction Berhad v. Chantiravathan a/l Subramaniam James [1995] 2 ILR 11 (Award No. 245 of 1995)].

The Company need only to prove misconduct justifying the dismissal or termination on the balance of probabilities [see Telekom Malaysia Kawasan Utara v Krishnan Kutty a/l Sanguni Nair & Anor [2002] 3 CLJ 314 (CA)]

Let me now deal with the Issues. (a) Whether the Claimant was dismissed by the Company?

The answer to this question is in the affirmative since the Company vide letter dated 28.02.2007 found the Claimant guilty of the Charge of sexual harassment against Miss Noorraziella Binti Jalaludin, and had dismissed him. (b) Whether the dismissal of the Claimant by the Company was with just cause or excuse.

The Charge made against the Claimant is as stated in the Company's letter dated 07.02.2007 and it reads as follows:The charge against you that is between mid November 2006 to January 2007, you have been alleged to sexually harassed Miss Nooraziella Binti Jalaludin, the cashier from 82* Ampany Point outlet.

Before proceeding any further the first issue to be determined is: Is the Charge valid in law in the first place? With regard to the validity of charges and in so far as leveling of charges against a delinquent employee is concerned, the principle is that it is the duty of the employer to specifically set out all charges with all relevant particulars without which he cannot defend himself.
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The

object of this requirement is that the delinquent workman must know what he is charged for and have the amplest opportunity to meet the charge and to defend himself by giving a proper explanation, after knowing the nature of the offence with which he is charged, otherwise it will amount to him being condemned unheard. Fair hearing presupposes a precise and definite catalogue of charges, so that the person charged may understand and effectively meet them. If the charges are imprecise or indefinite the person charged would not be able to understand them and defend himself effectively, and the resulting inquiry would not be a fair and just inquiry.

The employer cannot justify his action on any grounds other than those contained in the charge-sheet and or stated in the letter of termination. If the charges are vague and the workman has no opportunity to reply to them, and the particulars of such charges are also not disclosed to the workman, the inquiry will not be in conformity with the rules of natural justice.

In the Court of Appeal case of Esso Production (M) Inc v Maimunah bte Ahmad

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& Anor [2002] 2 MLJ 458 (Esso Production) the employee appeared in the employers board of inquiry on two charges viz receiving RM400 from the employers contractors in return for assistance rendered in relation to payment of that contractors invoice, in contravention of the employers Gift and Entertainment Policy and Conflict of Interest Policy; and the concealment and failure to disclose to the employer the existence of irregular business practices and/or violation by the employer. Those charges which were criminal or at least semi-criminal in nature did not state the material particulars viz. the date, time and place of the alleged offences. At pp 248 f-g; 249 and 250a, Abdul Kadir Sulaiman JCA (later FCJ) held, inter alia, that those charges were bad in law for want of particulars and were void ab initio. In this regard His Lordship Abdul Kadir Sulaiman JCA in delivering the judgment of the Court, stated: Hence the substance relating to the two charges cannot be brushed aside as being of no significance. Taking the words of the learned counsel for the appellant in his submission that the first respondent admitted and did not dispute either during the domestic inquiry or during the proceedings before the second respondent that she had received the money and cashed it, and there was also in the evidence that there was a statement recorded from her during the investigation stage. At least from the purported statement surely the date , time and place the offences alleged to have been committed would have been known to enable proper charges be framed against her. On the two charges, the burden is on the party that alleges to satisfy the tribunal adjudicating the matter that
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the charges had been proved before the first respondent could be condemned. They are material particulars required to be disclosed in the charges. Without that, how would one accused upon the charges be able to prepare proper defences to them. Simply upon the admission and non-dispute either during the domestic inquiry or during the proceedings before the second respondent would not entitle the learned judge of the High Court in this instant, to proceed to

The validity or otherwise of the charges is the threshold of the matter before the merit could be considered. Looking
consider the merits of the case.

at the two charges as they stood, we would not hesitate to say that they are bad and the learned judge was therefore, correct when he said that such charges for want of material particulars is void ab initio. With that we agree with the learned judge that on such improper charges before the board of inquiry the finding of guilt upon the first respondent could not stand thereby rendering the dismissal of the first respondent by the appellant to be without
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just cause or excuse and therefore, unlawful. On this ground alone, this appeal of the appellant against
the decision of the learned judge ought to be dismissed. [Emphasis Added] The judgment of Esso Productions case of the Court of Appeal was followed in a recent High Court case of Intrakota Consolidated Bhd v Mohamad Roslin Md Shah & Anor [2008] 8 CLJ 81 ( Intrakota case ) where the High Court held that there was nothing perverse in the rationale of the award nor did the Learned Chairman act in excess of jurisdiction when he found that it was not necessary to look into the merits of the Respondents termination. The material particulars as to time, place and identity of persons referred to in the charge were essential to enable the employee to know with certainty the charge levelled against him and to allow him to prepare and conduct his defence. For such reasons, the Respondents substantive application for judicial review was dismissed.

Justice Lan Bee Lan in particular strongly emphasized the following at page 92 and 93 of her judgment which is as follows:13

 What is of particular importance is the validity of the charge preferred against the 1st respondent and therefore material particulars as to time, place and identity of persons referred to in the charge are essential to enable the 1 st respondent to know with certainty the charge levelled against him and to allow him to prepare and conduct his defence; as the learned Chairman stated at p.8 of the impugned award, It may well be that it is also within the personal knowledge of the claimant (1 st respondent), but it is not for the claimant to fill in the gaps It is for the Respondent to lay all the bare facts as the burden is always upon the Respondent to show by evidence that the excuse or reasons given to terminate the claimants employment has been made out or proven. This approach is in accordance with the legal principles enunciated in the offcited cases of Goon Kwee Phoy (supra), Hong Leong Assurance (supra) and Milan Auto Sdn Bhd (supra). In addition it is interesting to note the following note at p. 460 G in Esso Production (M) Inc. (supra) [Editorial Note: The appellants application for leave to appeal to the Federal Court (before Ahmad Fairuz Chief Judge (Malaya), Siti Normah Yaakob and Mokhtar Abdullah FCJJ) was dismissed with costs on 22 April 2002]. What can be inferred is that the principles enunciated in Esso Production (M) Inc. (supra) is still good law. [Emphasis added]

Company's contention The Company had submitted that the charge against the Claimant is not defective for the following reasons:(a) the period of the commission of the offence had already been stated in the charge; (b) the Claimant had never pleaded in his Statement of Case and /or the Rejoinder that the charge was defective (R Rama Chandran v The

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Industrial Court of malaysia & anor [1997] 1 MLJ 145); (c) D.I. had been conducted based on the charge against the Claimant and the Claimant could not be said to have been oblivious to the nature and materials of the charge against him. The Company had already pleaded with sufficient clarity all the material ingredients and the nature of the charge against the Claimant inter alia in paragraphs 16 to 16.6 of its Statement in Reply; (d) the charge is NOT of criminal or quasi-criminal in nature. Gestural and psychological sexual harassment are not offences under the penal code it is a wrongdoing or misconduct under the definition and purview of the Code of Practice on the Prevention and Eradication of Sexual Harassment in the Workplace; (e) based on the above factors the cases of Esso Production and Intrakota can be distinguished and therefore the charge against the Claimant cannot be regarded as void ab initio The Claimant's contention The Claimant had rebutted the Company's contention and submitted the said

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charge is defective for the following reasons:(a) the Company had blatantly disregarded the fundamental principles of relating to the clarity of the charge for failing to state the time, date and place; (b) the allegation that the Claimant failed to plead that the charge is defective is totally misconceived as what needs to be pleaded are material facts and not law and as far as the issue of law is concerned it can be raised at any stage of the proceedings. (c) based on the above the Charge levelled against the Claimant in the instant case is bad in law and is therefore void ab initio.

Court's Evaluation After having analysed the submissions of both parties on the issue relating to the validity of the charge, I am of the firm view that the charge is indeed grossly defective based on the following:(i) Since it is the principle of law that the validity of the charge is the threshold of the matter before the merit could be considered, it is

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incumbent upon the Company to have clearly stated the specific time, specific dates and place to enable the Claimant to defend himself adequately bearing in mind that in the instant case the allegation of sexual harassment is a very complex, sensitive and serious matter and it involves the employee's honour and reputation. I agree with the Claimant's submission that in the instant case the charge which states that the offence of sexual harassment took place between mid November 2006 to January 2007 is rather ambiguous in so far as the dates are concerned. (ii) The charge also failed to state the time of the alleged offence for the Court to consider whether the alleged offence, if any, took place during working hours or outside working hours. In this regard, COW-3 during cross examination stated as follows:Q.15: Please refer to your answer in Q8 in the witness statement (COW-3). Do you agree that you started working in the Ampang outlet on 2011-2006? Yes, I agree I put it to you that Noor first joined the Ampang outlet on 20-11-2006? I disagree Can you please tell the Court when was Noor placed at the Ampang outlet? I don't know exactly, but it could be on the 20th, 24th or 25th of
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A: Q.15.1: A: Q.15.2.2: A:

Q.15.3: A: Q.15.4: A:

November When did you first see Noor in the Ampang outlet? 20-11-2006 When did you see the Claimant for the first time in the Ampang outlet? Lepas 2 atau 3 hari selepas 25 atau 26 November 2006.

Based on the responses of COW-3 in cross examination I am in agreement with the Claimant's submission that if the Complainant (COW-1) was first present at the Ampang outlet on the 20-11-2006 and the Claimant was seen for the first time at the Ampang outlet 2 or 3 days after 25 th or 26th of November 2006, then the question that arises is how then could the Claimant commit the alleged offence of sexual harassment from mid November 2006? This evidence on the dates adduced in Court during cross examination of COW-3 was unchallenged and never explained during re-examination. In my view the Company's failure to state the precise date and time of the alleged offence of sexual harassment is fatal and this has fundamentally flawed the nature of the charge since it is grossly defective.

There is another reason why the stipulation of the specific dates and time must be precise more so when the charge involves nature of sexual harassment
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against the Claimant. An offence of sexual harassment cannot be committed for 24 hours a day and 7 days a week, especially when the Claimant and COW-1 do not work or have their work station under the same premises. Based on the Company's vague and ambiguous charge, it would appear that the Claimant has been committing the alleged offence of sexual offence from mid November 2006 until November 2007 every day and 24 hours a day. Furthermore, mid November as referred to in the charge in plain English can only mean the middle of the month and the date that is associated with the middle of the month can precisely be the 15th and even if one were to use the term mid loosely it could be 1 day earlier or 1 day after the 15 th. We do not refer to the 20th, 24th or the 28th as the middle of the month.

(iii)

The Company's argument that in view of the fact that a domestic inquiry

had been conducted against the Claimant in respect of the said charge the Claimant could not have been said to be oblivious to the nature and materials of the charge against him. and therefore he should have known what he is being charged for is also without merit. This is because firstly, the domestic inquiry

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which was conducted earlier was based on a defective charge and hence it is invalid and void ab initio. Secondly, to say that the Claimant ought to have knowledge of the nature of the charge is not an adequate justification to endorse a defective charge. In this regard Justice Lau Bee Lan in the Intrakota's case supported the Learned Chairman's Award by stating that It may well be that it is also within the personal knowledge of the claimant (1 st respondent), but it is not for the claimant to fill in the gaps It is for the Respondent to lay all the bare facts as the burden is always upon the Respondent to show by evidence that the excuse or reasons given to terminate the claimants employment has been made out or proven. This approach is in accordance with the legal

principles enunciated in the off-cited cases of Goon Kwee Phoy (supra), Hong Leong Assurance (supra) and Milan Auto Sdn Bhd (supra). I am in full agreement with this view. It is the duty of the Company to frame the charge properly for the Claimant to adequately defend himself and it not the duty of the Claimant to fill in the gaps in a defective charge.

(iv)

The learned Counsel for the Company had submitted that the charge

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against the Claimant in the present case cannot be regarded as void ab initio as the misconducts complained of against the Claimant (i.e. gestural and psychological sexual harassment) are NOT of criminal or quasi-criminal in nature. According to the Company's submission gestural and psychological sexual harassments are not offences under the penal code but it is a wrongdoing or misconducts under the definition and the purview of the Code of Practice on the Prevention and Eradication of Sexual Harassment in the Workplace. Therefore the Company had submitted that the Court of Appeal's case in Esso Production and the High Court case of Intrakota can be clearly distinguished. In my view the submission by the learned Counsel for the Company in this regard is totally misconceived for the following reasons:(a) the charge in the present case did not contain the phrase gestural and psychological sexual harassment but only stated sexual harassment; (b) the words gestural and psychological sexual harassment appeared for the first time in paragraphs 15 of the Company's Statement In reply. The said Paragraph 15 states: In relation to 15 of the Statement of case, the Company avers that the panel of inquiry had found that there were sufficient

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and cogent evidence of misconducts of sexual harassment against the Claimant. The Company also avers that upon the evaluation of all the evidence, the Claimant was found guilty of gestural and psychological sexual harassment against Noor. The Company used the words also avers which means

to say that the gestural and psychological sexual harassment is an additional finding to the charge of sexual harassment i.e. it appears to be an additional charge which is invalid ; (c) without condoning this additional charge for purposes of argument even though Paragraph 15 of the Statement In Reply uses the words gestural and psychological sexual harassment it does not state the material particulars as to what misconduct of the Claimant amounts to gestural sexual harassment and what misconduct amounts to psychological sexual harassment. (d) in my view the phrase gestural and psychological sexual harassment is an attempt by the Company to particularize and improve the charge knowing fully well that the charge as it stands is grossly defective. This is wrong and unacceptable;

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(e)

sexual harassment can be classified as a criminal offence depending on its type and nature and therefore the principles enunciated Esso Production and Intrakota cases in respect of charges are applicable. Even assuming that certain type of sexual harassment cases are not criminal or quasi criminal in nature then the question is does the principles enunciated in the Esso Production and Intrakota cases which involved criminal or quasi-criminal charges becomes applicable in non- criminal or non quasicriminal charges?

In my view the principle applicable is still the same whether it is in noncriminal or non-quasi criminal charges to the extent that the charges must be clear and contain material particulars which must not be vague. Though the material particulars such as time, place and identity are vital elements that must be present in criminal or quasi criminal charges but in non criminal charges the requirement applicable with equal force is the precise nature of the charges with material particulars must be present particularly when the alleged charges involves sexual harassment like in the instant case. This

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principle was applied in the Industrial Court Case No: 17/4-1046/03 (Award No: 1687/2008) between Lim Ean Choo & 12 Others And Tadika Tzu Yu (Tzu Yu Kindergarten) where the charges were non criminal nor non quasi-criminal in nature. Conclusion I have considered this case very carefully and it is my finding that the Charge against the Claimant is grossly defective and bad in law for want of material particulars and for its highly prejudicial nature to the defence of the Claimant bearing in mind that the Charge against him involves sexual harassment. I therefore rule that in view of the fact that the Charge is defective and bad in law, it is therefore void ab initio. Accordingly, following the ratio decidendi in the cases of Esso Production and Intrakota, I need not delve into the merits of his termination as the basis of the Claimant's termination is fundamentally flawed from the beginning due to the grossly defective nature of the Charge. In the circumstances, I hold that the Claimant's dismissal is without just cause or excuse. Let me now deal with the issue of remedy.

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The Claimant prayed for reinstatement in this case. In my view based on the Courts assessment of the poor industrial relations climate between the Claimant and the Company it is certainly not appropriate or expedient to grant the Claimant the relief of reinstatement. The Court will therefore award the Claimant the following monetary compensations which involves awarding of backwages and compensation in lieu of reinstatement (if any) which is fair and reasonable. Backwages The Second Schedule of the Industrial Relations Act 1967 [Ins. Act A1322] specifically states in item 1. In the event that backwages are to be given, such backwages shall not exceed twenty-four months' backwages from the date of dismissal based on the last-drawn salary of the person who has been dismissed without just cause or excuse. [Emphasis added]

The words shall not exceed twenty-four months' backwages clearly connotes that the Court after considering all the relevant factors of the case can grant

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backwages at any range between 1 month to 24 months but the maximum range cannot exceed 24 months. The factors that the Court has taken into account in the instant case in deriving at the the quantum of backwages are:(i) The Claimant has been employed as a confirmed employee right from from commencement of employment where in Clause 3 of his letter of appointment as a General Manager-Retail Operations the requirement for the Claimant to undergo probationary period had been waived by the Management of the Company; (ii) (iii) He has been employed in a very senior position as a General Manager; He has worked for 5 months but this does not mean that the Claimant must be awarded 5 months compensation in mathematical terms ; (iv) Some deductions will be made on his post-dismissal earnings since he was paid for 2 projects; (v) The issue of contributory misconduct is irrelevant here since the Court did delve into the merits of the case due to the ruling that the charge is defective and therefore void ab initio. After having considered and applied the above mentioned factors it is my

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considered view that a fair quantum of backwages to be awarded to the Claimant in the circumstances would be 14 months based on the last drawn salary (i.e. RM12,000.00 per month which is inclusive of RM1000.00 for car allowance per month). This works out to be RM12,000.00 x 14 months= RM168,000.00. The Court will also make some deductions for post-dismissal earnings since the Claimant had testified that he was earning about RM6,000.00 for 2 projects. The deduction for post-dismissal earnings will be 10%. Since the Claimant had only worked for 5 months he will not be awarded compensation in lieu of reinstatement whereby the usual practice is to grant one month's salary for each completed year of service besides awarding backwages. The Court therefore makes the following order :(a) Backwages RM12,000.00 x 14 months = RM168,000.00

less 10% deduction for post dismissal earnings = RM151,200.00 (b) Compensation in lieu of reinstatement Total compensation to be paid to the Claimant = Nil =RM151,200.00

It is further ordered that the Company pay the total sum payable amounting to

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RM151,200.00 (Ringgit Malaysia: One Hundred Fifty One Thousand Two Hundred Only) in respect of the Claimant's claim less income tax deductions through the Claimant's Solicitors firm Messrs Ganesh & Co within 30 days from the date of this Award.

HANDED DOWN AND DATED THIS DAY 5 DECEMBER 2012

(P IRUTHAYARAJ A/L D PAPPUSAMY) PENGERUSI MAHKAMAH PERUSAHAAN MALAYSIA KUALA LUMPUR

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