The Fall of Trade Union: The Kandu ak Sugang Decision [2014] 3 MLJ ciii

Malayan Law Journal Articles

THE FALL OF TRADE UNION: THE KANDU AK SUGANG DECISION

Lavaniyan Nathan Jothy

LLB (Wolverhampton), LLM (Malaya), CLP

INTRODUCTION

What are the functions and roles of trade unions? To what extent can a trade union officer perform his or her duties
without fear and favour? Is there a nexus between an act done in pursuit of trade union activities and the category
of misconduct? What is the appropriate punishment for trade union activities? What are the duties of an employer
toward its unions? This article attempts to answer these questions with reference to the decision of the Industrial
Court and High Court in the case of Kandu ak Sugang & Anor v Trienekens (Sarawak) Sdn Bhd.1

FACTUAL BACKGROUND

Kandu ak Sugang and Sahat bin Deris were the two claimants in this case who were employed by Trienekens
(Sarawak) Sdn Bhd, a company that specialises in integrated solid waste management for the State of Sarawak.
They were employed as a driver and a loader for the company’s garbage collection trucks. They also happened to
be the elected President and Secretary of a trade union described as Kesatuan Pekerja-Pekerja Trienekens
(Sarawak) Sdn Bhd.2 The issue in dispute is the dismissal of both of these claimants on the ground of misconduct
for issuing a circular that addressed all union members, rallying them to boycott (memulaukan) the Family Day
function that was organised by the company. The Industrial Court regarded this as misconduct of ‘instigation’. As a
result of this call, there was a large number of non-attendees for the Family Day function, which cost the company
RM50,000 to organise. The company conducted a domestic inquiry on both claimants for the act of writing and
distributing the circular to boycott the Family day function. The domestic inquiry came to the conclusion that the
claimants were guilty of writing the boycott circular and recommended that they be given a ‘written warning or last
warning’. Nevertheless, despite the domestic inquiry panel’s recommendation, the company considered that the
claimants’ misconduct was serious in nature and decided to dismiss them from the company. The Industrial Court
Chairman Tuan Gabriel Gumis in his written decision ruled that the act of instigation was a serious misconduct and
the company’s decision to dismiss the claimant must be maintained. Not satisfied with the decisions, the claimants
appealed to the High Court; unfortunately, the High Court dismissed the appeal stating that the Industrial Court did
not commit errors to warrant the court to interfere with the decision made.

DUTY, FUNCTION AND THE ROLE OF THE TRADE UNION

To fully appreciate the impact of the case, it is necessary to understand the role and duty of a registered trade
union. The fundamental and traditional roles of a trade union have always been to promote the welfare, social and
economic opportunities of its members. Ghosh3 identifies some important functions of a trade union as follows:
(a) to improve the working and living conditions and to represent workers’ interest in various forms;
(b) to offer responsive cooperation in improving levels of production and productivity, discipline and high
standard of quality;
(c) to secure fair wages for workers; and
(d) to enlarge opportunities for promotions and training.

Ewing4 identified five functions of a trade union: service function, representative function, regulatory function, a
government function and the public administration function. He argued that these functions represent a different
stage in the emerging maturity of the trade union. These functions coalesce into one unifying factor which defines
the role of a trade union as not only an important social unit in a progressive society but that it also plays a
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secondary level of transforming the need of the workers’ welfare into one coherent reality in addition to the existing
employer and governmental responsibilities.

Yates5 stated that the ‘fundamental goal of a union is to change the relationship between labour and management.
Again and again, when workers are asked why they support the union or what the union has meant to them , they
say that their fight for a union was a fight for dignity and respect … Legally, without a union, workers are ‘at-will’;
they can be discharged, demoted or transferred for any reason other than those privileged by law, such as race,
sex, disability, and for union activity ‘The author continues stating that what the union does is give workers a voice
in their workplace, a way to put themselves on a more equal footing with their employers’.

Maimunah6 stated that the traditional role of a trade union over the last century has not changed. The unions still
speak on behalf of the workers at an enterprise level. They provide protection at the most personal level for
individual workers. Collective bargaining for better terms and conditions of employment and assistance to individual
workers who have a grievance or problem with their employer, and disciplinary action or victimisation are still the
bread and butter activities of a trade union.

Historically, in order to obtain these benefits, the trade union usually engages in various industrial actions; the most
important tool being the act of strike and picket as a means of pressure, which in many occasions would be a
violent fare resulting to more damage than necessary. This necessitated the drastic change in labour law, especially
those related to trade union movements. Despite these changes, the core essence of trade union function ie to
protect and to advocate the welfare of its members remains intact.7

The law relating to trade unions in the present form is found in the Trade Union Act 1959 (‘TUA 1959’). The TUA
1959 defines a trade union as follows:

Trade union or union means any association or combination of workmen or employers, being workmen whose place of
work is in West Malaysia, Sabah or Sarawak as the case may be, or employers employing workmen in West Malaysia,
Sabah or Sarawak, as the case may be —
(a) Within any particular establishment trade, occupation or industry or within any similar trades, occupations or
industries: and

(b) Whether temporary or permanent; and

(c) Having among its objects one or more of the following objects —

(i) the regulation of relations between workmen and employers, for the purposes of promoting good industrial
relations between workmen and employers, improving the working conditions of workmen or enhancing their
economic and social status, or increasing productivity;
(ia) the regulation of relations between workmen and workmen, or between employers and employers;

(ii) the representation of either workmen or employers in trade disputes;

(iia) the conducting of, or dealing with trade disputes and matters related thereto; or

(iii) the promotion or organisation or financing of strikes or lock-outs is any trade or industry, or the provision of
pay or other benefits for its members during a strike or lock-out;

Paragraph (c) of the definition is of concern here. Under para (c)(i), it is stated clearly that one of the objects of a
trade union is ‘the regulation of relations between workmen and employers, for the purpose of promoting good
industrial relation between workmen and employers, improving the working condition of the workmen or enhancing
their economic and social status’. The idea of this core element of trade union function is two-fold, ie the promotion
of good industrial relations between the workmen and employers and secondly, the improvement of working
condition with respect to the employees’ economic and social status.

The object of para (c)(i) of the TUA 1959 reflects the first understanding of industrial relations where the emphasis
has been on the relationship between the workmen and employer with the union acting as the catalyst agent for
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promoting ‘good industrial relations’. The second element under the object is the role of the trade union in improving
the workers’ economic and social conditions. This is the paramount and overriding role that a union has in relation
to its members and the foundation on why a trade union is formed in the first place. With increased workmen
depending on wages or salary as a sole means of income, the union through collective bargaining mechanism,
strives for better terms and conditions of employment for its members, which individual workmen otherwise are
unable to obtain.8 This has not only resulted in a better wage system but it has also resulted in an increase in social
and health protection, and more legislation related to labour rights and employment protection.

Another important source of union role and function is found in its own rule book. Rule 2 of the union rule book
provides the purpose on why the union is formed. One of the purposes outlined under the rule is ‘to develop the
welfare of the member of union in terms of social, economic and education in any lawful manner’. The rule of trade
union is an agreement between the trade union and its officials. It provides the general constitution of the trade
union, the obligation of its members, the process of general meeting and the executive council meetings. It also
provides the manner of election of officers to be conducted and the process of secret ballots. It is basically a
contract that stipulates on what terms the union is to be operated and administrated by those who are elected in
their office.

RULE BOOK AND RESPONSIBILITY OF TRADE UNION OFFICIAL

In Kandu ak Sugang, the reason for the employer’s action against the union was because of the circular sent by the
union urging its members not to attend the Family Day function that the company was organising. The union issued
the said circular due to the failure of the employer in responding to two letters sent by the union regarding the issue
of the employee salary revision. This was the burning wick that triggered the call for the non-attendance of the
company’s Family Day function by the union. Unfortunately, the court failed to consider this and had given full
attention to the fact that by asking its members not to attend the Family Day function, the claimants had committed
a serious misconduct of instigation and created disharmony in the company. It is submitted that confined to the
facts of the case, the call by the union for its members to not attend the Family Day function, could not be construed
as a misconduct of instigation or creating disharmony in the company, but rather a collective decision of the union
to express its dissatisfaction of the company’s failure to address the grievance that they have raised in the two
letters sent by the union to their employer; a fact that is not denied by the company in this case.

What the union has done is within their rule book which provides that ‘should any member desire steps to be taken
in connection with his condition of employment or any other matter, he shall notify the Secretary, wherever
practicable in writing of his complaint. The Secretary shall refer the complaint to the Executive Council immediately.
Where the complaint is verbal, the Secretary shall reduce it into writing and shall submit a copy of it with his report
to the Executive Council’.9 What is the function of the Executive Council? Rule 12(1) of the Union Rule states that
the Executive Council is the governing body that administers and manages the union’s affairs, including trade
disputes in the period of the Annual General Meeting. Rule 12(20) is of particular importance here; it provides that
the ‘The Executive Committee may exercise all such power and perform all such act as it deem necessary for
promoting the interest of the Union by complying with these rule, the TUA 1959 and the Trade Union Regulation
1959.10 It must be remembered that the rule book of the trade union is made in pursuit of s 38 of the TUA 1959 with
reference to the provision stipulated in the First Schedule of the Act which carries legal effect and compliance. On
the facts of the case, by asking the union members to not attend and take part in the company’s Family Day
function, the applicants were merely taking an act deemed necessary to promote the interest of the union. What
was the interest of the union? It was to obtain an increase in wages as requested by them in the letters sent to the
management of the company. The reason for such non-attendance is merely a tacit manner of showing protest of
the company’s failure to discuss the union’s request for a salary revision. The union was merely a conscientious
objector11 to the attendance of the Family Day function on the account of the company’s failure to address their
welfare and grievances. Thus, the objectives set in the TUA 1959 and the Union Rule book must be consulted in
order to determine whether the trade union activities fall under the threshold of what is called as misconduct. The
view of the court is correct when it stated that ‘this court would like to express very clearly that much as a workman
has the right to be involved in legitimate union activities, his employer also has the right to demand him to perform
his duties and responsibilities with conviction and diligence. Thus, in engaging himself in union activities, the
workman must at the same time ensure that his fundamental duty as a workman to his employer is not derelicted’.12
However in this case, it could be argued that if that the conduct of the union engaging in union activities as per their
rule book in accordance with the objective of the TUA 1959 can be considered as misconduct, then by law, the
trade union cannot function in any capacity.
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The court has relied on three cases in support of the argument that what the claimant did here was in fact a breach
of their responsibility as trade union officers. First is the case of Yodoshi Malleable (M) Sdn Bhd v Rajamohan SP
Palanivell,13 where a secretary of the Union Work Committee was dismissed for instigating an employee to avoid
working overtime. On the facts of the case, the chairlady held that ‘Now it is abundantly clear that the claimant had
used his position as the Union Works Committee secretary to hurriedly hold a Union Work Committee meeting …
The claimant was the one who promoted the idea to boycott overtime against the company because his salary had
been deducted by the company due to his excessive hospital bill’. It is clearly established that the instigation was
done because of a personal reason of the Secretary concerned, unlike in Kandu ak Sugang where the alleged
instigation was done after failure of the company to discuss on the salary issue raised by them for the employee
represented by the union. Another case referred by the court is Kesatuan Pekerja-Pekerja Perusahaan Alat-Alat
Pengangkutan & Sekutu v Kilang Pembinaan Kereta-Kereta Sendirian Bhd, Johore Bahru.14 On the facts of the
case, the claimant was a chairman of the in-house committee of the union in his workplace. In bringing one of his
member’s causes to the management, the claimant was allegedly being rude by banging on the table and shouting
loudly and angrily at his department head, to whom the issue of his members were brought. Regardless of who and
what capacity the person is, such conduct is indeed insubordination which will lead to a disciplinary action.15 On the
facts of the case, it is established that the claimant used his position in the union to show total disrespect to his
superior officer; that amounted to an act of insubordination and therefore the claimant committed misconduct.16 In
Hualon Corporation (M) Sdn Bhd v Rohani Ali,17 the claimant, a Union Worksite Chairman, had a string of
misconducts before the employer decided to take action against him. It was also established that the claimant had
been given many opportunities before the dismissal action was taken against him. Here, the claimant was punished
solely for his misconduct and not for any other reason. The fact of Kandu ak Sugang differs greatly from all the facts
above. There were no elements of misconduct when the union committee as a whole decided to withdraw its
support from attending the Family Day function. Further, the act of not attending the Family Day function was not
done at the interest of any individual unionist in the committee. All they wanted to do was to show their
dissatisfaction with the company for its failure to address the issue of a salary increase. Here, if the company
believed that they are dealing with a non-recognised union, they could have said so and asked the union to set in
motion the recognition process under s 9 of the Industrial Relations Act 1967, before responding to the union’s
query or grievance.

The issue that the union is not recognised is immaterial on the facts of the case as the function played by the union
was to bring an employee’s grievance on the working condition to the attention of the employer, which was part of
the objective of the union under the TUA 1959 in improving the working conditions of its members, a very legitimate
and repetitively mention, a paramount role of the union.18 The case of Malayan Galvanised Iron Pipe Sdn Bhd v
Metal Industry Employees Union provides examples where the court has used the objective under the TUA 1959 to
allow the representation of union in trade dispute, despite the fact that the union is not recognised by the
employer.19

TRADE UNION ACTIVITIES

One of the arguments advanced by the union representative was that the call for the boycott was done by the
claimants as part of their duty as union officials citing ss 4(1), 5(1)(d)(ii) and 59(1)(d) of the Industrial Relations Act
1967. These sections are referred below:

4 Rights of workmen and employers.

(1) No person shall interfere with, restrain or coerce a workman or an employer in the exercise of his rights to form
and assist in the formation of and join a trade union and to participate in its lawful activities

5 Prohibition on employers and their trade unions in respect of certain acts.

(1) No employer or trade union of employers, and no person action on behalf of an employer or such trade union
shall —

(d) Dismiss or threaten to dismiss a workman, injure or threaten to injure him in his employment or alter or
threaten to alter his position to his prejudice by reason that the workman —

(ii) Participates in the promotion, formation or activities of a trade union;

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59 Injuring a workman on account of certain acts

(1) Subject to the provision of section 5(2), it shall be an offence to dismiss a workman or injure or threaten to injure
him in his employment, or alter or threaten to alter his position to his prejudice by reason of the circumstance that
the workman …
(d) Being a member of a trade union which is seeking to improve working condition, is dissatisfied with such
working condition

These sections under the Industrial Relations Act 1967 provide the basic but yet fundamental aspects of trade
union protection.20 Section 4(1) provides total immunity against any attempt to stifle the formation of trade unions or
restrict its members from participating in lawful activities whether by interference, restrain or by way of coercion. In
Kannan & Anor v Menteri Buruh dan Tenaga Rakyat & Ors,21 the applicant was the Division President of the
National Plantation Worker in Sungai Talam Rubber Estate. The employer had instructed all rubber tappers to scrap
the rubber tree and clean the latex cups after their normal duty hours without receiving any additional payment.
What the claimant did was instruct all the rubber tappers not to do as instructed by the employer, as the subject
matter of the instruction was being negotiated between the union and the employer’s representative. The company
on the facts of the case, dismissed the applicant on the grounds of instigation after due inquiry. It was argued that
the dismissal was because the applicant had participated in trade union activities, and therefore the dismissal was
in contravention of s 5(1)(d)(ii) of the Industrial Relations Act 1967. Syed Othman J held that the term ‘participation
in the activities of a trade union’ in this provision meant ‘taking part in the life of a trade union eg by being a member
or by holding an office in a trade union. It does not cover the activity of a worker in the matters of work to be done
and directed by his employer, condition of employment or matters affecting discipline’.

In Re Application by Sreedharan,22 the applicant was a production supervisor at the employer’s company. He also
happened to be the Secretary of the Kelang Branch of the National Union of Petroleum and Chemical Industry
Workers. On the facts of the case, several employees of the company staged a walkout over the issue of warning
letters to two union members. Being the secretary of the union, the applicant was asked by the committee members
to convey the decision of the union to the company and he did so to the works manager. As a result, the company
issued a letter of show cause to the applicant, alleging that he who had incited the worker to commit the walkout
and stoppage of work. In his defence, the applicant denied that he incited the workers but nevertheless, the
company decided to terminate his employment. When the matter was referred to the Industrial Court, the applicant
sought for an order of prohibition to prohibit the Industrial Court from hearing the case and for an order of
mandamus to direct the Minister of Labour and Manpower to consider the matter under s 49A(1)(d) of the Industrial
Relations Act 1967,23 which makes it an offence to dismiss a workman by reason that the workman, being a
member of the trade union which seeks to improve the working conditions was dissatisfied with such working
conditions. On the particular issue relating to s 5(1)(d) of the Industrial Relations Act 1967, the court held that
participation in the promotion, formation or activities of a trade union cannot be construed to include incitement of
the worker to stop work.

The view expressed by the court in both Kannan and Sreedharan may not represent the current approach of
interpreting the meaning of trade union activities. Trade union activities must be interpreted in line with the object of
the trade union itself, as defined in s 2 of the TUA and its rules. It must reflect the actual positive role and function in
relation to its members in general. In Robin Tan Pang Heng v Ketua Pengarah Kestauan Sekerja Malaysia &
Anor,24 a case where an employer appealed against the registration of a union, the Federal Court observed as
follows:

at this juncture it would be appropriate to observe that in so far as the legislation is concerned, it cannot be categorically
asserted that there is no nexus between the legislation (ie the TUA 1959 and the Industrial Relations Act 1967). If the object
of forming a trade union, inter alia, is to regulate relation between workmen and employers, then it cannot therefore be
accepted unreservedly that Act 262 (ie the TUA 1959) is not applicable to an employer … the current state of law
governing the relationship of employer and workman for the purposes of trade union activity is therefore found in both Acts
177 and 262 (ie the TUA 1959 and Industrial Relations Act 1967). There is a nexus between the two Acts. Perhaps the time
is ripe for legislation to consider consolidating the two legislations, as has been the evidence by the inception of the Trade
Union and Labour Legislation (Consolidation) Act 1992 in the United Kingdom.
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This decision shows that for the purpose of trade union activities, the current state of law is found in both the TUA
1959 and the Industrial Relations Act 1967. An isolation approach of looking at the matter therefore may not be the
right approach.

As stated above, the alleged misconduct of the claimants was to instigate the other workers from attending the
Family Day25 function. This was not done in the personal capacity of any of the union leaders, but as stated above,
in common agreement of the Union Executive Council meeting. It was done after a request by the union for
consideration of a salary revision having fallen in deaf ears of the employers. If the purpose of the Family Day
function was to appreciate the workers of the company and to promote industrial harmony, then at least they could
have responded to the union on the issue of the salary, not necessarily to agree with the union’s request but to
state their stand on the matter. This, in the author’s humble opinion, is a step to develop a long term industrial
harmony.

CONTRACT OF EMPLOYMENT V STATUTE

Another interesting aspect of the decision is the fact that instead of considering the effect of ss 4, 5 and 59 of the
Industrial Relations Act 1967, the court seems to be in reliance with the wordings of the applicant’s employment
contract to justify the dismissal. Referring to the ‘General and Confidentiality ‘clause of the term of contract which
states that the applicant would be deemed to have breached his employment terms and conditions if he:
(a) fails to faithfully and diligently perform such duties and accept such responsibility, as may from time to time
be assigned by the company, and at all times to endeavour to the utmost of his ability to promote and
advance the interest of the company; and
(b) fails to obey and comply with all orders and discretion given to him by the company and faithfully observe
all the rules and regulation procedure and arrangement of the company for the time being in force.

According to the court, ‘(the) non-attendance threat, and particularly the acts of both claimants in instigating their
union members to boycott the official function were quite clearly covered by the (above) phrase’ and these
breaches of the terms and conditions of employment shall render the employee liable for dismissal. A reference
under s 20 of the Industrial Relations Act 1967 required the Industrial Court to consider two important elements.26
First, it required the court to determine whether the misconduct or irregularity complaint by the management as a
ground of dismissal was in fact committed by the workmen; and secondly, if it was so, whether such ground
constitutes a just cause and excuse for the dismissal. On the facts of the case, the dismissal of the applicant was
from the fact that it was done in response to a direct duty arisen from the union rule book which allows the union to
raise the matter which is of concern to its members. The alleged misconduct that was committed by the claimants
was not done for any individual purpose but as a collective response from a demand made to the employer of their
interest in relation to the request for a wage consideration by the union. To say that this has resulted in the breach
of the employment term would not only be incorrect but also inequitable and against good conscience. Here, what
the court could have done was to have considered the dismissal in light of ss 4, 5 and 59 of the Industrial Relations
Act 196727 before invoking the terms of contract. Section 8 of the Employment Act 1955 provides that ‘nothing in
any contract of service28 shall in any manner restrict the right of any employee who is party to such contract (a) to
join a registered trade union; (b) to participate in the activities of a registered trade union, whether as an officer of
such union or otherwise; or (c) to associate with any other persons for the purpose of organising a trade union in
accordance with the Trade Union Act 1959’. The effect of this section is that it provides a statutory safeguard
against any term of contract which restricts the participation of any worker in trade union activities or any matter in
relation to trade union business. As such, the court approach in giving much consideration to the term of the
claimants employment contract in arriving in its decision that the dismissal of the claimants is just cause is much
regretted.

Anderman (2001) stated as follows on the conflict between the contractual term and statutory protection provision:

In the case of claims based on statute, however, the courts have experienced difficulties of a more systemic nature in
deciding what weight to give the contract of employment in interpreting statutory provisions. The root cause of these
difficulties has been a judicial tendency to refrain from treating statutory employment protections as an independent layer of
regulation subject to its own values and assumptions even when regulating contractual employment relations. Thus, even
where the protective statutory provisions call for a test in which the terms of the contract are only part of the factual matrix,
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judges have applied a ‘contractual’ test, by treating the terms of the contract as the decisive factor in interpreting the
statute.29

What is needed here is a holistic approach by looking at the aspect of the trade union’s function in symbiosis with
the employer’s obligation and acceptance that a trade union is there as a collective voice of its employee. A
balanced approach between what is stated in the employment contract and what is allowed under the union
constitution must be adopted.

To support the argument that misconduct was committed by the claimant’s act of instigating its union members to
not attend the Family Day function, the court cited four cases. The first case was the case of Mobikom Sdn Bhd &
Anor v Adammi Ahmad.30 In this case, an employee who was a senior manager of the company was dismissed for
various misconducts. One of the misconducts of the claimant was the failure to attend various company meetings,
workshop sessions and company functions without lawful excuse. On the facts of the case, it was established that
the claimant had failed to attend a total of 17 of such occasions. He also failed to attend meetings involving senior
members of management of the company on two occasions and failure to attend the company’s annual dinner
which was held in East Malaysia.31 Another case was the case of Vikay Technology Sdn Bhd v Ang Eng Sew32
where the reason of the dismissal was the performance of the claimant who was appointed as a factory manager. In
Kandu ak Sugang, the court cited this case as an example where arriving too late at a dinner organised by the
company can be held as a just cause for dismissal. It must be remembered that the claimant in Vikay Technology
Sdn Bhd was not dismissed only due to his late attendance at the company function but it was also cumulated with
other acts related to his performance such as not learning the process of work related to his job functions and
preferring to sit in his office, failing to perform his managerial role of planning, leading and organising operation of
the company’s factory and not motivating his staff members, rendered him unfit for his appointment as factory
manager. This case is hardly any comparison to that of Kandu ak Sugang. In CB Marketing Sdn Bhd & Anor v Tan
Tee Ming & Ors,33 due to an economic crisis, the company had taken cost cutting measures which included a salary
reduction and voluntary separation scheme (VSS). The claimants on the facts of the case alleged that there were
elements of forced resignation when they accepted the VSS. They alleged that asking them to work during the
company’s warehouse sale or family day sale were tantamount to force because these activities were tedious,
entailing long hours of outstation duties without being paid extra allowances.34 The court held rightly that on the
facts of the case that the warehouse/family day sale was organised to contain the difficult time that the company
had due to the economic crisis, and to allow its employees to buy company goods at a discounted price. This, on
the facts of the case of CB Marketing was correct, but to apply these facts to the case of Kandu ak Sugang is too
far fetched on the following ground. First, in CB Marketing, the real issue was whether the claimant had been
dismissed for the alleged forced resignation due to the fact that they had to accept the VSS and not for an issue of
misconduct. Secondly, on the facts of Kandu ak Sugang, the court at p 568 held as follows:

On Sunday 27 April, the Family Day was held. The Management considered it a major function whose aim was to foster
goodwill and friendship among colleagues and to promote industrial harmony between the worker and management. It was
held as an appreciation to the workers and among the programmes was the handing out of employee of the year awards for
each department of the company. It was an opportunity for family members to visit the new company office and to see its
working place in an atmosphere slightly more casual and fun.

This was clearly the intention of the family day function in the Kandu ak Sugang’s case. It was not done due to
some economic reason but as a social event for its employees. Therefore, to equate the fact of CB Marketing with
the Kandu ak Sugang in a similar nature would be wrong.

PUNISHMENT DUTY TO BE CONSCIOUS AND REASONABLE

In Kandu ak Sugang, two separate domestic inquiry panels made the recommendation that the claimants should be
given a written warning/final warning but the company decided that a more appropriate punishment would be
dismissal. In the industrial relation spectrum, punishment is seen as an employer’s inherent right to ensure that
deviant conduct within its organisation is checked and to ensure that similar conduct will not be repeated in the
organisation.35
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The punishment of dismissal is the most severe form of punishment that the employer could mete out against his
workman.36 There is no hard and fast rule on what circumstances the punishment of dismissal can be imposed by
the employer on his employee for misconduct. Nevertheless, the power of imposing punishment by the employer
must be guarded to avoid an arbitrary use of such managerial prerogative; as Lord Acton stated, ‘Absolute power
corrupts absolutely’.

Justice Faiza Thamby Chik in the case of Sunmugam Subramaniam v JG Containers (M) Sdn Bhd & Anor37 ruled
that in any event, it is necessary that the Industrial Court look at the harshness or severity of the punishment of
dismissal inflicted on the workman in relation to the misconduct committed by the workers. His Lordship’s quote in
the case of RM Parmar v Gujarat Electricity Board38 where the Indian Supreme Court provided a guideline on the
imposition of punishment is as follows:

In imposing punishment on an erring employee, an enlightened approach informed with the demands of the situation and
the philosophy and spirit of the times requires to be made. It cannot be a matter of the ipse dixit of the disciplinary authority
depending on his whim or caprice.

Be it administration of criminal law or the exercise of disciplinary jurisdiction in departmental proceedings, punishment is not
and cannot be the ’end’ in itself. Punishment for the sake of punishment cannot be the motto.

Whilst deliberating upon the jurisprudential dimension the following factors must be considered:
(1) In a disciplinary proceeding for an alleged fault of an employee, punishment is imposed not in order to seek
retribution or to give vent to feeling of wrath.

(2) The main purpose of a punishment is to correct the fault of the employee concerned by making him more alert in
the future and to hold out a warning to the other employees to be careful in the discharge of their duties, so that
they do not expose themselves to similar punishment.

And the approach to be made is the approach parents make towards an erring or misguided child.

(3) It is not expedient in the interest of the administration to visit every employee whom a fault is established with the
penalty of dismissal and to get rid of them. It would be counterproductive to do so for it would be futile to expect to
recruit employees who are so perfect that they would never commit any fault.
(4) In order not to attract the charge of arbitrariness it has to be ensured that the penalty imposed is commensurate
with the magnitude of the fault.

This decision and approach was accepted in the case of Roshamiza & Anor v Guppy Plastic Industries.39 On the
facts of the case, the workmen who were members of an in-house union were dismissed by their employer on
several grounds of misconduct including giving false information about the company, forcing other employees to be
members of the union and carrying out union activities during office hours. On this ground, the claimants were
dismissed from their employment and the dismissal was upheld by the Industrial Court. Justice Ariff in the High
Court reversed the finding of dismissal which was made by the Industrial Court appealing on the ground that the
punishments imposed were disproportionate to the alleged misconduct. On the facts of the case, it was established
that the employer did ‘go after the union’ when he decided to dismiss the workers who were all union
representatives. The court went on to put a cautionary word when Justice Ariff said that ‘on the fact of this particular
judicial review application, and bearing in mind the constitutional right to organise and to form a trade union a
component element of the freedom of association, any decision of the employer to dismiss an employee just
because an employee is a trade union office bearer should be carefully examined for legal validity under
administrative law’.40

Again, in the case of Malaysian Oxygen Berhad v Soh Tong Wah & Anor,41 the High Court appeared to suggest that
the principle of proportionality may be used to evaluate whether the imposition of punishment by the employer is too
disproportionate to the mischief at which it was aimed. The proportionality principle basically states that any
punishment imposed must be proportionate to the offence that has been committed by the offender. In Soh Tong
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Wah, Mohd Zawawi Salleh J stated that ‘proportionality required the court to judge whether the action taken was
really needed, as well as whether it was within the range of courses of action which could reasonably be followed.
Proportionality is more concerned with the aim and intention of the decision-makers and whether the decision
maker has achieved more or less the correct balance or equilibrium’.

The question of what is the role of Industrial Court in relation to the right of the employer to imposed punishment
and the extent of the Industrial Court’s right to interfere with such right was raised in the case of Panzana Enterprise
Sdn Bhd v Norizan bin Bakar. In Panzana Enterprise Sdn Bhd, the claimant was charged with four charges of
misconduct and after the domestic inquiry, the claimant was dismissed from her employment. Upon reference to the
Industrial Court, Chairman K Ramakrishnan held that the claimant was only guilty of the fourth charge but
nevertheless the misconduct committed was a minor misconduct which did not justify for the punishment of
dismissal; the claimant was awarded with monetary compensation. After failing to quash the Industrial Court’s
decision in the High Court, the employer upon appeal to the Court of Appeal42 was able to quash the said decision.
The court merely said that the High Court and Industrial Court were wrong in interfering with the punishment
imposed by the employer and that the question on what punishment is appropriate to be imposed on a delinquent
employer is best left to the good judgment of the employer. The Federal Court nevertheless on further appeal by the
employer held that the Industrial Court have the right to interfere with the punishment imposed by the employer.
Raus Sharif, PCA ruled that the Industrial Court has the jurisdiction to decide that the dismissal43 of the appellants
was without just cause or excuse by using the doctrine of proportionality of punishment and in exercing this function
they can rely to its power under s 30(5) of the Industrial Relations Act 1967 based on the question of equity, good
conscience and substantial merit of the case.

The question of what is an appropriate punishment to be imposed on a deviant employee is a question of

circumstance of the case correlates with the gravity of misconduct that the employee have committed. The problem
is to find the tangent on whether such misconduct committed by the claimant warranted such immediate dismissal
or whether in such circumstance, any other appropriate punishments ought to be given. Nevertheless, it must be
remembered that the power to impose punishment by the employer must not be arbitrarily exercised. Some of the
consideration that could be taken before punishment of dismissal is imposed including the proportionality of the
punishment with the misconduct committed as stated in the case of Panzana, the length and contribution of the
employee in the service of the employer the conduct of the employer in relation to the misconduct in that, if not for
the conduct of the employer such misconduct may not have arise especially when it involved with trade union
activities and whether such punishment in all circumstance is a fair punishment and that retaining the said claimant
would be an act detrimental not only for the company but also to the other workers in the establishment.

In Kandu ak Sugang, assuming that the misconduct of the workman had been established, the appropriateness of
the worker’s dismissal was questionable on the following ground. First, the court had failed to take into account the
claimant’s length of service. The first claimant had been employed with the organisation since 1989 and the second
claimant from 1991.44 Secondly, the facts of the case do not establish that both of the claimants had any previous
misconduct. Thirdly, the company did not show actual loss on the RM50,000 spent to organise the Family Day
function. On the facts, it was established that 26 out of 42 employees did not attend the function due to the circular.
A logical conclusion from these facts would be that the circular did not create a mass absenteeism as intended by
the union. A non-attendance of 26 employees could hardly be said to have caused a great lost to the Family Day
function. A Family Day function connotes an understanding that all employees and their families would take part in
the event. On the facts, it is not established how many employees actually attended the Family Day function, to
establish whether there was a large number of non-attendance in comparison with the total number of employees.
Fourthly, the court on the facts of the case did not consider the failure of the employer to address the issue of salary
that was raised by the union. As suggested earlier, the employer did not necessarily have to agree to the demand
but instead, the employer could have responded to such an important issue by advising the union to channel their
grievance via collective bargaining or by having the union recognised first. This is indeed a part where a good
industrial relation could be fostered and developed as envisaged by the TUA 1959. Another important consideration
is that the Industrial Relations Act 1967 does not define the word ‘instigation’ but provides a penalty for the offence
of instigation under s 47 of the Industrial Relations Act 1967. The Industrial Court took a dictionary meaning of the
word and held as follows: ‘even though it is an offence to instigate others to take part in an illegal strike, the word ‘
instigation’ is not defined in the Act, or in its relative the TUA 1959. Hence the ordinary meaning is to be given to the
term. The Concise Oxford Dictionary defines ‘instigate’ to mean ‘to bring something about or initiate; to incite
someone to do something’. Its sister word ‘incites’ mean ‘to encourage or stir up (violent or unlawful behaviour; to
urge or persuade to act in a violent or unlawful way’. If one looks at s 47 of the Industrial Relations Act 1967, to
establish an offence which will attract the penalty under this section, it must be shown that:
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(a) There must be a person or any person who instigate or incite other to take part in furtherance of, a strike or
lock-out; or
(b) Someone who instigate or incite other to withhold their labour or service knowing or believe that there is
probable consequence of such action will be to
(i) endanger human life;
(ii) effect the efficient operation of public health service;
(iii) cause serious bodily injury;
(iv) expose valuable property whether real or personal to destruction.

Looking at the whole arrangement of this section, the offence of instigation under the Industrial Relations Act 1967
is not an instigation simpliciter or to be given the wider meaning provided in a dictionary. It requires a specific
consideration as to what may constitute to an offence of instigation under the scheme of the Act. In Kandu ak
Sugang, what the court could have done was to look at the matter from the spirit of this section and decide the
case. Here the act of instigation and the consequence of such act must be sufficiently serious to warrant the
ultimate punishment of dismissal. Now looking at the misconduct that is said to be committed by the claimants, how
one can say that absenting from the Family Day function would constitute a serious misconduct when such absence
was done as part of the trade union’s activities. Here what is necessary to be proven is that the instigation by
claimants must be sufficiently serious in that their continues employment in the company is not conducive for
industrial harmony.45

OP Malhotra in his influential book46 stated as follows: ‘what act amount to instigation or incitement will depend
upon the particular fact of each case. In some circumstance, a throw of finger or a mere turning of eyes may give
rise to an inference of either incitement or instigation. In other word, even strong words, expressly used may not
mean that the person using then was stimulating or suggesting to anyone to do a particular act.’

CONCLUSION

The right to form a trade union is a formidable manifestation of the right of association which is recognised as one
of the most important fundamental human rights.47 Jayawickrama (2002) states that ‘the right to freedom of
association recognizes the basic human rights desired to unite in order to pursue or achieve a common purpose,
whether for political, religious, ideological, economic, labour …’.48

The very origin in the idea of the formation of a trade union is to give protection and to achieve a certain level of
welfare and recognition of social security for the employees’ contribution in a particular workforce. Trade union
development in Malaysia is something special as it is a potpourri of political development, a movement for fair
employment legislation, social welfare, a medium between employer and employee relations and a pressure group
on matters relating to labour and employment issues. This recognition is important as from this, other forms of
recognition can be demanded such as the recognition that an employee is entitled to fair wage for his labour, that
he is entitled to seek remedy for his loss of employment, that there is a minimum number of days that he is entitled
to work and all other benefits which one can obtain by virtues of his status as an employee.49 Justice should not
take a myopic view when dealing with issues relating to trade union; and the perception that a trade union is a
nuisance and an aggressive organisation must be cast away. The test is simple, it is whether or not the union’s
action is in accordance with the objective of the TUA 1959 and the unions rule. If it is so, then the next question is
whether the employer without any reasonable cause impend the advancement of such objective in the TUA 1959. It
is, however recognised that the mere fact that a workman becomes a member of a trade union or official of a union
does not clothe him with immunity from disciplinary action, but it also does not mean that every action that a trade
union official takes on behalf of his union and its members, should be deemed as misconduct that warrants the
punishment of dismissal. This decision may also deter members from holding responsible posts within the union’s
administration for fear of dismissal for taking matters of concern for the employees.

It must be recognised that maintaining good industrial relations is always a two-way process and to impose the
burden solely on the trade unions would not only be unfair, but also morally wrong.
1
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[2010] 4 ILR 558 (IC); [2012] 1 CLJ 986 (HC).

2 The unions rule book states that its membership is only open to employees who are employed by Trienekens (Sarawak) Sdn
Bhd. It is an establishment based union.

3 See
Ghosh, Piyali ‘The Changing Role of Trade Unions in India: A case Study of National Thermal Power Corporation (NTCP),
UNCHAHAR Asian Academy of Management Journal Vol 14 No 1 p 39.

4 See Ewing, KD ‘The Function of Trade Union’ Industrial Law Journal Vol 34 No 1 pp 1–22.

5 See Yates, Michael D ‘Why Union Matter’ Monthly Review Press Publisher 1998.

6 SeeAhmad, Maimunah ‘The Role and Responsibilities of Trade Union: What Changing, Whats Not’ MTUC/ACILS National
Workshop on MTUC-THE WAY FORWARD, 21–22 January 2008 at Awana Genting Highland Golf & Resort, Pahang, Malaysia.

7 See Gamba, Charles ‘The Origin of Trade Unionism in Malaya’, Eastern Universities Press Singapore 1962.

8 This is reflected to the 696 union in the country which translates to a membership of 889600 workers. Statistics were taken
from the Department of Trade Union at
http://jheks.mohr.gov.my/index.php?option=com_content&view=article&id=145&Itemid=101 &lang=en.

9 Refer to rule 22(1) and (2) of the union rule book. The translations are a direct translation from the Bahasa Malaysia version.

10 Thedecision of not to attend the Family Day function was made unanimously by the Executive Council on 21 April 2008, six
days before the event. It was also established on the facts that there was no objection or disagreement from any other executive
council members on the circular.

11 Conscientious objector is a human right concept which is applied in military where an individual refuses to perform his military
obligations on the grounds of religious, freedom of thought or other moral grounds.

12 At p 577.

13 [1997] 2 ILR 449.

14 [1980] 1 ILR 139.

15 For
example, see the case of SE Everlast Sdn Bhd v Tan Ley Hua [2011] ILJU 588; [2011] 3 ILR and Matinus Bangan v
Sabah Medical Centre Sdn Bhd [2006] 3 ILR 2007.

16 Despite
the misconduct, the Industrial Court still ordered as a matter of goodwill, for the claimant past service, a benefit
payment based on the collective agreement.

17 [2006] LNS 1640 (Award No 1640 of 2006).

18 Reference was also be made to the ‘Conduct of Conduct For Industrial Harmony, specifically to article 27 which states as
follows: ‘where a trade union has not secured recognition from the employer for negotiating rights, the employer should
nevertheless be prepared to consider receiving representation from the union on behalf of its member about grievances or other
matters which can be settled on an individual basis’. This principle can be used as a guide for consideration when dealing with
unions.

19 See the Industrial Court Award No 16/1971 (1970–1972 MLLR 151).

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20 See the case of Ladang Segaria Sdn Bhd (Sabah) v Napsie Ngalit .

21 [1974] 1 MLJ 90.

22 [1974] 1 MLJ 118.

23 Now s 59(1)(d) of the Industrial Relations Act 1967.

24 [2011] 2 ILJ 112; [2010] 9 CLJ 505.

25 Atpage 576 of the award, the court stated as follows: ‘The family day was an official function organized by the management
… it aims were noble — as a show of appreciation to the worker in the company, to foster goodwill and friendship among
colleagues …’

26 See Wong Yuen Hock v Syarikat Hong Leong Assurance Sdn Bhd [1995] 2 MLJ 753; [1995] 3 CLJ 344. See also the case of
Milan Auto Sdn Bhd v Wong Sen Yen [1995] 3 MLJ 537; [1995] 4 CLJ 449.

27 Even if argument were to be raised that ss 4 and 5 of the Industrial Relations Act 1957 house a different remedy via section 8,
then the court can consider the fact of the case in light of s 59(1)(d) of the Act.

28 Here a contract of service can be oral, in writing , expressed or implied. See s 2 of the Employment Act 1955.

29 See Anderman, Steve ‘The Interpretation of Protective Employment Statute and Contract of Employment’ Industrial Law
Journal 2000 Vol 29 233.

30 [2002] 2 ILR 115.

31 Besides
this, the claimant also failed to submit a medical certificate for the days that he was on medical leave and sent a
memorandum which was disrespectful to the General Manager and the Chief Executive Officer. There is no issue of instigation
here.

32 [1993] 1 ILR 90.

33 [2002] 3 ILR 798.

34 At p 805.

35 Under s 13(3)(e) of the Industrial Relations Act 1967, the power of dismissal and reinstatement is one of the powers that may
not be included by a trade union in a proposal for collective bargaining.

36 See Azlan Abdullah v Pusat Pemeriksaan Kenderaan Berkomputer Sdn Bhd (PUSPAKOM) [2012] 1 ILR 307.

37 [1998] MLJU 656; [2000] 6 CLJ 521.

38 [1983] 1 LLJ 261.

39 See Permohonan Semakan Kehakiman No R3(2)–25–234 of 2006.

40 Nevertheless, the case was overruled by the Court of Appeal arguing that the judge should not interfere with the decision of
the Industrial Court; see Guppy Plastic Industries Sdn Bhd v Roshamiza bt Muhamad & Ors [2013] 4 MLJ 924.
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41 See Permohonan Semakan Kehakiman No R2–25–131 of 2008 dan No R2–25–135 of 2008.

42 [2012] 7 CLJ 137.

43 [2013] 6 MLJ 605.

44 This was at the time when the service of the employee was with the city councils. May be due to privatiaation of the garbage
collection operation to the company, their service with the company began from the year 2000. See also the case of Hydro
Aluminium Malaysia Sdn Bhd v Zainal Abidin Pari [2012] 2 ILJ 401; [2012] 2 ILR 110 and Ramachandiran Kesavan v Calsberg
Brewe (Malaysia) Berhad [2009] ILJU 933; [2009] 4 ILR 64.

45 See Non-Metallic Mineral Product Manufacturing Employee Union & Ors v South East Asia Fire Brick Sdn Bhd [1976] 2 MLJ
67.

46 See Malhotra, OP ‘ The Law of Industrial Dispute’ Vol 2 LexisNexis Butterworth Publisher (6th Ed) 2004.

47 Article20 of the Universal Declaration of Human Right 1948 states that ‘everyone has the right to freedom of peaceful
assembly and association’. Article 23(4) specifically provides that’ everyone has the right to form and to join trade union for the
protection of his interest.

48 See
Jayawickrama, Nihal, ‘The Judicial Application of Human Right Law-National, Regional and International Jurisprudence’
Cambridge University Press 2002 at p 738.

49 This includes collective agreement, collective bargaining and safety aspect of employment. See also
http://www.epi.org/files/page/_/old/briefingpapers/143/bp143.pdf.

End of Document