INDUSTRIAL COURT MALAYSIA CASE NO : 24/4-1662/05 ENCIK CHEW KIM SEONG AND TAN CHONG HENG CONSTRUCTION SDN.

BHD. NO. AWARD : 274 OF 2011 BEFORE VENUE DATE OF REFERENCE DATES OF MENTION : : : : Y. A PUAN YAMUNA MENON CHAIRMAN (Sitting Alone) Industrial Court, Kuala Lumpur 24.11.2005 06.01.2006, 17.02.2006, 12.04.2006, 23.05.2006, 03.07.2006, 04.08.2006, 02.11.2006, 14.12.2006, 18.11.2007, 01.08.2007, 17.04.2007, 09.05.2007, 24.05.2007, 12.07.2007, 19.09.2007, 24.10.2007, 06.12.2007, 26.09.2008, 09.02.2009, 13.02.2009, 30.03.2009, 16.04.2009. 24.08.2007, 22.07.2008, 06.08.2008, 12.09.2008. 22.06.2009 Mr. Magesan from Messrs A. Sivanesan & Co. representing the Claimant. Mr. Joseph Yeong together with Mr. Manian Raju from Messrs S.S. Yeong & Co. representing the Company.

DATES OF HEARING DATE OF LAST SUBMISSION REPRESENTION

: : :

REFERENCE: This is a reference made under Section 20(3) of the Industrial Relations Act 1967 pertaining to the dismissal of Chew Kim Seong (the Claimant) by Tan Chong Heng Construction Sdn. Bhd. (the Respondent).

AWARD
This is a dispute pertaining to the dismissal of Chew Kim Seong (the Claimant) by Tan Chong Heng Construction Sdn. Bhd. (the Respondent, to be referred to as the Company).

Some Preliminary Facts The Claimant was employed as a Site Coordinator with the Company effective 1.6.1994, on a monthly basic salary of RM2,600 on commencement. Beginning in 2003, he received, in

addition to this a fixed allowance of RM300.00 per month. His service was terminated in December 2004. The Claimant was initially posted to the Company's Construction site near Rawang in 1994, and in 2001 he was moved to its construction site in Klang, where he worked until October 2004. He was then transferred to Seremban, to the Company's Seremban construction site, where he worked until the termination of his service in December 2004. The Claimant was dismissed by the Company on 22.12.2004.

The Claimant's job functions The Claimant's job functions were as follows:a) Responsible for all aspects incur from the construction site, trouble shooting and coordinating Project Manager on site; b) project Material scheduling and planning, utilizing Just in time system inmaterial ordering; c) arrange the set up of construction site and utilizing space for material and site office as well as worker's hostel; d) basic forecast of concreting, whether and working days for construction site is necessary; e) f) g) h) certifying sub-contractor progress claim; monitoring work in progress; preparing all kind of necessary paper works regarding construction site; stand by on site for any unexpected incidents. (Local authorities inspection, main contractor, workers problem); and i) settlement of project, after sales services.

The Dismissal The Claimant was dismissed by the Company on 22.12.2004. The Dismissal letter states as follows:

Dear Mr Chew Kim Seong (0575217) Re: Termination of employment I regret to inform you that your employment with TAN CHONG HENG CONSTRUCTION SDN. BHD. will be terminated effective 22nd December 2004 for the following reason(s): - Your physical body and health does not suitable for the job as a site coordinator, we advise you to concentrate your life schedule in your medical treatment. - We would also like to thank you for your service contribute to company and hereby compensate you with one month salary. Your severance package will be administered according to company policy, and you will receive a statement detailing accrued benefits. Mr. Tan Soon Lin is available to discuss with you these details as well as any other questions or concerns you may have. Please contact him/her at your earliest convenience, and he/she will arrange termination matters with you. I sincerely regret that this action is necessary, and wish you success in your future employment endeavors. Yours truly, Signed Director Mr. Tan Soon Lin 22nd December 2004 It is to be noted that the letter of termination does not specifically state poor performance as the reason for the dismissal. The reason given for the dismissal was that his coordinator. physical body and health was not suitable for the job as a site

It is to be borne in mind that it is incumbent on the Company to prove that body and health was not suitable for the job as a site coordinator. 4

his physical

The general principle of law as stated in the case of Goon Kwee Phoy v J & P Coats (M) (Bhd) [1981] 2 MLJ, is that Where representations are made and are referred to the Industrial Court for enquiry, it is the duty of the 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 or reason has or has not been made out. If it finds as a fact that it has not been proved, then the inevitable conclusion must be that the termination or dismissal was without just cause or excuse. The proper inquiry 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. It is indeed trite law that the burden of proof is on the Company to satisfy the Court that the dismissal of the employee is with just cause and excuse

In the case of Bata (M) Bhd Kelang v Ch'ng Soon Poh [1994] ILR 227, (this case was submitted by Claimant's Counsel) the learned President of the Industrial Court, Mr. Justice Harun, prescribed the test to be applied in a dismissal case at page 229 of Award as follows: We are in no doubt that the duty of the Court is to make a finding whether the dismissal was without just cause or excuse as it is clearly so stated in section 20(1) of the Act. In arriving at its finding, the Court must first identify the employer's reason for the dismissal. The next issue, which the Court must consider, is whether in the circumstances that dismissal was fair or unfair. This issue is determined by applying the following test:-

a) b) c)

Did the employer act reasonably in forming his view of the facts? Did the employer adopt a reasonable procedure? Did the employer act reasonably in concluding that the dismissal was warranted in the circumstances?

The Pleadings It is pertinent to consider the averments in the the Statement of Case (SOC), pertaining to the events leading to his dismissal and compare this with the response of the Company in the Statement of Reply(SIR) . The SOC states : i) Sometime in October 2004, Mr. Tan Soon Lin (COW4), the Company Human resource Manager, and Mr. Tan Chong Heng, the Managing Director, came to the Klang site and informed the Claimant that the Company needed people urgently in Seremban project site; ii) iii) In November 2004, the Claimant was transferred to the Seremban site. On 22.12.2004, Mr. Tan Soon Lin, the Company Human Resource Manager came to the Seremban site and handed over a termination letter dated 22.12.2004 to the Claimant. iv) The Company terminated the Claimant's services stating that: Your physical body health does not suitable for the job as site coordinator...

v)

The Claimant's services with the Company was terminated with immediate effect;

vi)

the Claimant then called Mr. Tan Chong Heng, the Managing Director to confirm the contents of the termination letter on the same day. The Managing Director confirmed the contents of the said termination letter;

vii)

One week later, the Claimant was informed by Ms. Ku Tsui Choo from the Account Department that his salary has been deposited into his bank account.

The Court noted that there was no specific denial in the the Statement of Reply (SIR), of the averment in the Statement of Case that Sometime in October 2004, Mr. Tan Soon Lin(COW4), the Company Human resource Manager, and Mr. Tan Chong Heng, the Managing Director, came to the Klang site and informed the Claimant that the Company needed people urgently in Seremban project site . The Company stated the following in the Statement of Reply (SIR) as follows:i) Since May 2004, the Company received numerous complaints from COW2 Mr. Ho Chee On, the Project Manager of Klang Project Site, that the Claimant was unable to perform his duties due his health problem. ii) The Claimant had admitted to COW2 and COW4, Mr. Tan Soon Lin, the HR Manager, that he suffered from diabetes. iii) The Company decided to transfer the Claimant to Seremban where the Claimant resided. The Claimant was transferred to Seremban site in November 2004.

iv)

In November 2004, the Company was informed by COW3, Mr. Wong Chee Yew, the Project Manager of Seremban site, that the Claimant was unfit and unable to carry out his duties as Site Coordinator due to his deteriorating health and serious diabetes problem.

v)

The Claimant had admitted to COW4, Mr. Tan Soon Lin, that he could not wear safety boots and could not carry any work on site.

vi)

The Company stated that out of good will, the Company had discharged the Claimant vide a termination letter dated 22-12-2004.

The Legal Principles-Incapability Dunston Ayadurai, in Industrial Relations In Malaysia Law and Practice, Lexis Nexis, 3rd Edition 2003, at p376 states the following: Incompetence sometimes referred to as 'incapability' or 'inefficiency' or, more mundanely, 'unsatisfactory performance', 'poor performance' etc is suggestive of some shortfall or shortcoming in the employee vis-a-vis his job, ie the duties or tasks assigned or allocated him by his employer. The Industrial Court has held that incompetence is not

misconduct per se, and that therefore the domestic inquiry apparently required of the employer prior to dismissal for misconduct is not necessary prior to termination for incompetence.

The author goes on to state at p377: But as incompetence can and often does have the same consequence as misconduct for him, viz discharge from service, the employee remains entitled to natural justice prior to his termination for incompetence, just as he would be prior to dismissal for misconduct. However, 'natural justice' has a broader connotation in the context of dismissal for incompetence than it has in the context of dismissal for misconduct. In the case of termination for incompetence, 'natural justice' means essentially 'due process' or a 'fair procedure' i.e a procedure which the employer is expected to follow before terminating the employee, and which is fair in the sense that it incorporates the following elements:(a) (b) (c) informing the employee of the respects in which he is failing to do his job properly; warning him of the possibility or likelihood of his termination on this ground; and giving him sufficient time and opportunity to improve his performance on the job.

In the case of

Ginder Singh Transport Co. Sdn. Bhd. v. Bijir Singh (Award 136 of the learned Chairman of the Industrial

1995), to be referred to as Ginder Singh Case,

Court,(since retired), Mr Lim Heng Seng, made the following pertinent observations: ....there is ample authority for the proposition that in the realm of dismissal for unsatisfactory performance, which is often referred to as 'incompetence' or 'incapability', the requirement of 'due process' may not be quite strictly congruent with that of the requirement of a 'due inquiry' in a dismissal for misconduct. (See p7 of the Award).

He went on to state at p11 : Industrial jurisprudence as developed by the Industrial Court points unequivocally to the requirement of a fair process which an employer ought generally to follow before he can come to a considered decision that, due to an employee's poor or unsatisfactory performance, the latter's services can no longer be retained.

The crux of the matter before the Court, as pointed out in Ginder Singh Case, is the issue whether the Company had complied with the basic requirements of fairness when it decided to dismiss the Claimant on the grounds of his unsatisfactory performance.

These principles are echoed in Smith and Woods, Industrial Law 7th Edition, IT Smith GH Thomas, Butterworths, where the following observations were made:At page 474: In the realm of dismissal for incapability, it is important that the employer's business should not have to suffer, to the detriment of all concerned, through the ineptitude or inefficiency of a particular employee. However, it is also important that the employee whose work is causing dissatisfaction should be treated fairly. The question for the tribunal is whether the employer has satisfied them that he genuinely believed on reasonable grounds that the employee was incapable.

And further, at pages 474 and 475): The requirement of reasonable grounds means that the employer should make a proper and full investigation into the facts of the case, and give

10

careful consideration to the decision to dismiss.(See Cook v. Thomas Linnell & Sons Ltd. [1977] ICR 770, [1977] IRLR 132. )

Smith and Woods goes on to state in p475 : Of course, warnings are not essential in every case, and may perhaps be irrelevant where it is clear that the employee is completely incapable of improvement or where he already clearly knows that is expected of him .(See James v. Waltham Holy Cross UDC [1973] ICR 398, [1973] IRLR 202).

And further (in the same page): That apart, however, the importance of a fair procedure in this area should not be underestimated, and lack of it (particularly if it leads to inadequate investigation by the employer) may make dismissal of an incompetent employee unfair..

Sickness In our case there is a further aspect, ie the issue of sickness. Smith and Woods states at page 475:One particular aspect of incapability which has given rise to much litigation is where the employee is incapable of performing his work due to prolonged and/or frequent illness.

And at p476 the legal principles are touched upon as follows: ...it is well established by leading cases such as East Lindsey District Council v. Daubney [1977] ICR 566, [1977] IRLR 181, (this long-standing approach was reaffirmed and said to be in line with the leading case on procedure generally, Polkey v. A E Dayton Services Ltd. [1988] ICR142, [1987]

11

IRLR 503, HL) in A Links & Co Ltd v. Rose [1991] IRLR 353, Ct of Sess), that the approach of the tribunal in assessing the reasonableness of the employer's decision to dismiss should be to consider whether it was reasonable to expect the employer to wait any longer before dismissing, in the light of such factors as the nature of the illness, the actual and potential length of the absence, the circumstances of the individual employee, the urgency of the need to fill the employee's job and the size and nature of the employer's undertaking. The procedural steps to be taken by the employer will vary widely according to the facts of the case but, although a 'warning' as such is hardly appropriate, in most cases the employer will be expected to consult the employee and discuss the nature of his illness and his future prospects bearing in mind the employer's need to have the work done(See Spencer v. Paragon Wallpapers Ltd [1977] ICR 301, [1976] IRLR 373).

And further

on in

page 476: The employer may also be expected to make such

investigations as are necessary to establish the true facts of the case, which may mean taking further medical advice on the nature of the illness.

And at p477 :It will be clear from the above that the obtaining of reliable medical evidence on the sick employee is of great importance. Medical confidentiality could be a problem since the employer may not simply demand a report from the employee's own doctor. He may of course invite the employee to allow such a report to be compiled and released to him; if the employee agrees, that covers the matter of confidentiality.

12

In the local case of Aylwin Llewelyn Marsh v. Sovage Sdn. Bhd. [2006] ILR p809 the Industrial Court had to deal with these issues. The claimant in this case contended that his dismissal was founded upon the company's wrong perception that he was unable to work

due to ill-health. The Industrial Court observed :For an employee who is sick dismissal is not an automatic matter. It is incumbent upon the employer to consider whether it is necessary to dismiss the employee. An employer should make all necessary enquiries from the

employee, his doctor and if possible obtain an opinion from the company's medical advice. The purpose for consultation with the employee about his health and condition is to weigh up the situation balancing the need of the employer to get the work done against the employee's need for time to recover his health.

The learned Chairman in the above case emphasized that the employer should approach the situation with sympathy, understanding and compassion. The employer should take into

account, inter alia, the nature of the illness or injury and the need of the employer to have the work done by the said employee. So these are the relevant principles.

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The Trial Coming now to the trial, at the trial the following witnesses were called: For the Company: 1) COW1-Lee Min Teck, Customer Service Executive of the Developer, Labur Bina Management Sdn Bhd. 2) 3) 4) COW2-Mr. Ho Chee On, Project Manager, in the Respondent Company COW3-Wong Chee Yew, Project Manager in the Respondent Company COW4-Tan Soon Lin,the Human Resource ( HR ) Manager in the Respondent Company at the material time (he was Director of the Respondent Company at the time of the trial)

For the Claimant: The Claimant himself.

The following Bundles were referred to: For the Company: COB 1,2 and 3. For the Claimant: CLB1 and 2.

The Company's Case The Company's case was that the Claimant was unfit to work as Site Coordinator due to his illness. (The Statement in Reply stated that the Claimant was unfit to work as a Site Coordinator due to his illness).

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The Evidence of Company Witnesses COW1 Mr. Lee Min Teck 1) COW1 Mr. Lee Min Teck, was the Customer Service Executive of Labur Sdn Bhd,the Developer. (The Respondent Company was one of its Contractors). His job was mainly to receive complaints from the purchasers, for example house defects complained by the purchasers after handing over vacant possession of the house, and to inform the Contractor to rectify the defects.

He described the Claimant in his witness statement as follows: A6: He was assigned by Tan Chong Heng Construction Sdn. Bhd. to handle defects complained by purchasers. Q7: A7: How did he perform his job? He was not cooperative. When we handed customers' complaints to him, he would

come back and say that the house was under renovation or that the house owner's complaint was beyond the scope of work, and so on. In short, he gave many excuses. Q8: A8: Did the Claimant fulfil his duties? No, he could not handle the complaints and all the rectification works were actually done by other people of Tan Chong Heng Construction Sdn. Bhd. Q9: A9: What did you do when the Claimant could not rectify the defects? I had to call Mr. Ho Chee On to rectify defects because the Claimant did not rectify them.

15

COW2 Ho Chee On (Project Manager) COW2 confirmed the evidence of COW1 that he had called him (COW2) to rectify defects. COW1 was the Project Manager in charge of the Klang site for the Company, with about 24 years of experience in the construction line. The Claimant had worked in Klang for 3 years. He testified in his witness statement (COWS2), that the Claimant's daily scope of works as as a Project Sit Coordinator required that he be stationed on site, to schedule material delivery to site, to arrange the setting up of construction site, to monitor work progress according to master programme, to certify subcontractors' progress claim, to control quality of works done on site, to coordinate with subcontractors, to solve workers' problems on site, to forecast concrete casting date and to standby on site for any unexpected incidents. COWS2 Q and A4). (See

2)

COW2 testified that he received complaints from the Developer ie COW1-Lee Min TeckCustomer Service Executive of the Developer, Labur Bina Management Sdn Bhd.

He said:Mr. Lee complained to me that the Claimant never did his job concerning the complaint forms from the owners of the houses pertaining to defects. When I received the complaints from Mr.Lee I had to go to check myself. I found that complaints were within the scope of works.. 3) COW2 said that he discovered that the Claimant had diabetes and that upon such discovery, the Claimant was given lighter duty. those

16

His evidence was as follows: Q5: How did you discover that the Claimant had diabetes? A5: I found that he was slow in his work and I also spotted him wearing slippers when he came to work. So, I approached him and asked him why. He told me that he got diabetes. Under cross-examination (to be referred to as cross) COW2 was asked: Q:When did you find him to be slow in his work?, to which his response was that it was in 2003. When asked:what do you mean by slow in work?, he elaborated: What I mean is that in his working there is no spirit. He never went to the job site. He testified :I saw him very seldom go down to the site to check. I saw this since 2003.

The Court noted that the SIR only referred to poor performance for the period beginning May 2004, and not 2003.

Since May 2004, the Company received numerous complaints from COW2 Mr. Ho Chee On, the Project Manager of Klang Project Site, that the Claimant was unable to perform his duties due his health problem. Nevertheless it is evident that there were performance issues relating to the Claimant.

He was then asked: Did the Company send the Claimant for medical check-up?, to which he replied: I don't know. And further:Did the Company ask for the

17

Claimant's medical report, whether he had any medical report?, to which he replied :I don't know.

COW2 said that he found the Claimant unfit to carry out his duty as Site Coordinator at that point of time. (i.e year 2004).

Under cross, COW2 was also asked as to whether he knew how serious the illness was, to which he replied that he did not know. He was asked : Has he complained to you that because of his diabetes he cannot perform his job?, to which he replied in the negative.

So the nature of the illness,which includes how serious it was, was never really investigated.

4)

According to COW2, after the discovery of the health problem, COW2 informed COW4, Mr. Tan Soon Lin, the HR Manager and they had a discussion with the Claimant at the Klang site.

The Court noted that that there is no reference to this discussion in the SIR. COW2 testified in Q and A7: A7: During the discussion, the Claimant was still wearing slippers. We discussed his

health. He told us that he couldn't wear safety boots because he felt numb in his legs. We tried to help. So we decided to give him some lighter job with the same pay.

18

Under cross COW2 elaborated further as follows: After the discussion between the Claimant, myself, and Mr.Tan, due to the Claimant's health problem, if the Claimant's leg felt numb, we allowed him to rest in the office when he reported for duty.

COW2 said that the said discussion was in 2003. His evidence was that light duty was assigned to the Claimant.

He testified: Q8: What kind of lighter job did you assign to the Claimant? A8: I assigned him to check housing defects for the Developer.

COW2 went on to say that the Claimant was unable to do the work: Q9: Was he able to do the work you assigned to him? A9: No. He could not check the defects properly.

Q10: How did you know that the Claimant could not check properly? A10: I had to check the defects myself because the maintenance department told me that the remedial works were not done. There were many complaints from the Developer. I informed the Management about this.

5)

As regards the Claimant's position that he hardly took medical leave, COW2's evidence was as follows: Q12: In Para 9 of the Statement of Case, the Claimant stated that he never took any

19

medical leave during his service with the Company. How do you explain this? A12: In fact, after knowing that he got diabetes problem, the Company allowed him to take rest in the office when he reported for duty. The Company even assigned him to do a lighter job by attending to defects complained by purchasers only.

COW2 then said that the Company wanted to give the Claimant another chance: He testified in Q and A11:What did the Management tell you? A11: Mr. Tan Soon Lin said that he could give him another chance and let him work at his home town so that his family could take care of his health. Hence the Claimant was transferred to Seremban

COW3-Wong Chee Yew COW3-Wong Chee Yew,was Project Manager in the Respondent Company. The Claimant was transferred to Seremban. COW3 who was the Project Manager in the Company, in his Witness statement testified that the Claimant was given lighter duties as follows: Q6: What did the Management tell you when he was transferred to the Seremban site? A6: The Management informed me that he had got diabetes and asked me to assign him some lighter job. Q7: A7: About his diabetes, did anyone else know about this? Yes, all the senior staff in the Company knew that he suffered from diabetes.

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Q8: A8:

What kind of lighter job did you assign to him? I gave him supervisory duties, I asked him to supervise, to inspect and to coordinate with the subcontractors.

Q9: A9:

Did he refuse? In the beginning, he said no problem. However, whenever he came to work he did not wear safety shoes. And when I asked him to do site work, he was quite reluctant. He seldom came out from the car when he was on site. He made his rounds in the car.

Q10: Why wasn't he wearing his safety shoes? A10: He complained to me that his feet became numb when he wore his boots. Q11: Was he fit as a Site Coordinator at the time of his termination? A11: No, he was not fit as a Site Coordinator. If he could solve the problems, the workers wouldn't have come to me. Workers came to me for technical problems, eg drawing discrepancies. You need to go down to the site to have a look and come out with a decision. He also could not wear safety shoes. If found by the safety office of the main-contractor (I.e Road Builders of Seremban Two), the Company would get a warning and a fine. The main-contractor's standard is ISO. We had to comply with the safety requirements. They called it basic PPE (Personal Protection Equipment). Wearing safety shoes and safety helmets were basic. The claimant could not work on site. Q12: Did you ask him to do any paper work? A12: We did not have much paper work. All the paper work were done by me. The only paper work be to certify progress claims. The progress claims were handled by me.

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In order to certify the claim, you need to view the site. Q13: Did the Claimant take any medical leave? A13: No. In fact the company never stopped him from resting at the Site Office. Q14: Did you tell the Management about this? A14: Yes, I did complain to the Management. Q15: Why you do not think he was not fit to carry out his duty as the Site Coordinator? A15: He could not work on site. He could not wear safety shoes. His health was

deteriorating due to diabetes. Further, he was 57 years old at that time.

He was then asked: Did the Company send the Claimant for medical check-up?, to which he replied: I don't know.And further:Did the Company ask for the Claimant's medical report, whether he had any medical report?, to which he replied :I don't know. COW2 said that he found the Claimant unfit to carry out his duty as Site Coordinator at that point of time. (i.e year 2004). Under cross COW3 was asked: How could you determine the Claimant was unfit to work,without a medical report?. His response is indeed unacceptable. He said; It did not matter to me if my subordinates are sick or not. If he cannot perform then he is not fit. It goes without saying that this is not the right approach.

22

COW4, Mr.Tan Soon Lin COW4, Mr.Tan Soon Lin, who was the HR manager at the material time (presently a Director in the Company) testified as follows: Q13: Did the Company discuss with the Claimant before his transfer? A13: Yes. Before we transferred him, I had a discussion with him. I told him: Mr. Chew, the Company decided to transfer you back to Seremban. May be your family can take care of you. However, you have to improve

because there are many complaints against you.

The Court noted that there was no reference to the above at all in the SIR. In fact the Claimant's version as stated in the SOC as to what was communicated to him prior to his transfer to Seremban, has not been specifically denied in the SIR.

In his further examination in chief, COW4 testified that after COW2 complained about the Claimant, he decided to have a discussion with the Claimant and Mr. Ho together. He went on to say that during the discussion he asked the Claimant what was exactly his problem, and the Claimant told him he had diabetes. He could not perform such a heavy job. COW4 went on to say: Then I asked him what he wanted to do. His answer to me was that he was thinking of retiring. COW4 went on to say that he then gave him an option of a lighter job or maybe a transfer back to Seremban he went on to say that he assigned him to a lighter job in Klang before he was transferred back to Seremban.

23

The Court noted that all this was not mentioned in the SIR. COW4 testified as follows: Q16: After the Claimant was transferred to Seremban site, what happened? A16: The Company asked him to do supervising and inspection work only. However, I was later informed by Mr. Wong Chee Yew, the Project Manager at the Seremban site that the Claimant could not carry out his job as a Site Coordinator due to his deteriorating health. Initially, we thought it would be better if he came back to Seremban, but it did not work. The Company then decided to terminate his service. And further: Q18: Did you ever ask the Claimant to go for any medical treatment? A18: Yes, I did.

Under cross COW4 was asked and answered as follows: Q: Did you send the Claimant for any medical check-up to find out if he was ill and unfit to continue to work before terminating him? A: No.

Q:

What did you do when the Claimant did not fulfill his scope of work as you say?To which COW4 said :The first action was the Company had a discussion with him. When asked further as to when was the discussion, he said it would be few months before his termination, and mentioned August or Spotmember2004, but he was not sure.

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During the cross-examination by the Claimant's Counsel, COW4 was asked as to what was the actual reason for issuing the letter of dismissal. COW4 testified that, the reason for dismissal was based on his poor performance and he given me a reason he suffered from diabetes. Being respect him as my uncle, I advise him to seek medical treatment.

On the question as to why no warning letter was issued to the Claimant, COW4 has explained as follows: Yes but not to my uncle. He has been working since my father's time The Claimant has been working with my Dad even before I graduated from secondary school. This is my father's Company i.e my father is the major shareholder of the Company. He is holding 60% shares. This is a family run Company. Even before I joined the Company, I called him uncle and I think verbal warning also serve as a form of warning.

It was clear from the evidence before this Court, that there was indeed no mala fide intent on the part of the Company as alleged on behalf of the Claimant. Having heard the Company witnesses, the Court is satisfied that there were indeed performance issues in this case. The Company was not satisfied with the performance of the Claimant.

25

The Company's Submissions 1) The Company's position was that it had given the Claimant a trial period to carry out his duties as Site Coordinator upon discovery of his illness, but the Claimant has failed to do so.

It was submitted that the refusal, unwillingness and/or unfitness of the Claimant to work at site contravenes the practice in construction line.

It was submitted on behalf of the Company that as regards the sickness issue, the Claimant himself, had admitted that he suffered from diabetes during re-examination by the Claimant's Counsel. It was further submitted that in fact, the question whether the Claimant had diabetes is irrelevant, and that what is pertinent is whether he could perform his duties under his contract of employment.

The Court noted that this last submission is not a correct statement of the law. As stated earlier,the legal principles are as follows: ...it is well established by leading cases such as East Lindsey District Council v. Daubney [1977] ICR 566, [1977] IRLR 181, (this long-standing approach was reaffirmed and said to be in line with the leading case on procedure generally, Polkey v. A E Dayton Services Ltd. [1988] ICR142, [1987] IRLR 503, HL) in A Links & Co Ltd v. Rose [1991] IRLR 353, Ct of Sess), that the approach of the tribunal in assessing the reasonableness of the employer's decision to dismiss should be to consider whether it was reasonable to expect the employer to wait

26

any longer before dismissing, in the light of such factors as the nature of the illness, the actual and potential length of the absence, the circumstances of the individual employee, the urgency of the need to fill the employee's job and the size and nature of the employer's undertaking. The procedural steps to be taken by the employer will vary widely according to the facts of the case but, although a 'warning' as such is hardly appropriate, in most cases the employer will be expected to consult the employee and discuss the nature of his illness and his future prospects bearing in mind the employer's need to have the work done(See Spencer v. Paragon Wallpapers Ltd [1977] ICR 301, [1976] IRLR 373).

2)

It was submitted that the Claimant was assigned to do lighter job functions by attending to the defects in the construction of houses owing to his failure to attend to the defects, the Claimant was eventually transferred to his home town in Seremban.

As regards the Meeting among COW2, COW4 and the Claimant, the Company submitted that the Claimant bluntly denied having met with COW2 and COW3 at the Klang site about his transfer. Instead, he alleged that it was Mr. Tan Chong Heng who had met him at Klang site and requested him to go to the Seremban site. It was submitted on behalf of the Company that Mr. Tan Chong Heng was not called by the Claimant to give evidence, and that he who asserts must prove.

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As regards the submission that the Claimant hardly took medical leave,the explanation given by the Company's Witnesses COW3 and COW4, was that the Claimant was treated like an uncle by COW4, as a senior worker of the Company. The Management allowed the Claimant to rest at the site office during office hours.

On the issue of Poor Performance, it was pointed out that COW1 had testified that the Claimant always gave excuses that the complaints by home buyers were not within his scope of work. This was reflected in the Defect Complaint Forms exhibited in COB-2 from page to page 7. As such, the Developer was compelled to ask Mr. Ho (COW2) to look into and rectify all the defects. COW2 also testified that the Claimant failed to rectify the defects complained by the Purchasers. After the transfer from Klang site to the Seremban site, the Claimant was found not able to perform his duty. COW3 testified that the Claimant seldom went to the working site and could not perform his daily duties. COW3 also testified that the Claimant was found seated in his car and hardly went down to the site.

The Claimant's case The Claimant confirmed that he was 56 years old, at the time of his dismissal, and that his last drawn salary was RM2,900.00 inclusive of a RM300,000 fixed monthly allowance.

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The events leading to his dismissal, according to the Claimant were as follows: i) Sometime in October 2004, COW4 , Mr. Tan Soon Lin the Company HR Manager, and Mr. Tan Chong Heng, the Managing Director, came to the Klang site and informed the Claimant that the Company needed people urgently in Seremban project site; (This fact has not been specifically denied by the Company in its SIR) ii) iii) In November 2004, the Claimant was transferred to the Seremban site. On 22.12.2004, Mr. Tan Soon Lin, the Company Human Resource Manager came to the Seremban site and handed over a termination letter dated 22.12.2004 to the Claimant. iv) The Company terminated the Claimant's services stating that: Your physical body health does not suitable for the job as site coordinator... v) The Claimant's services with the Company was terminated with immediate effect; vi) the Claimant then called Mr. Tan Chong Heng, the Managing Director to confirm the contents of the termination letter on the same day. The Managing Director confirmed the contents of the said termination letter; vii) One week later, the Claimant was informed by Ms. Ku Tsui Choo from the Account Department that his salary has been deposited into his bank account.

The Claimant's Evidence In this case the Claimant's version was diagonally opposite to the Company's version. Although the Claimant acknowledged that he did have a health problem, his version was that

29

it was not that serious and that it did not affect his work. He also denied much of what was stated by the Company witnesses. The Claimant in his evidence by way of witness statement (CLWS) stated the following: i) Q: Is it true, as alleged in para 4(i), that since May 2004 the Project Manager at the Klang Project site made many complaints about you to the Company? A: The Company did not inform me about any such complaints allegedly made by the Project Manager iii) Q: A: Did you have a health problem? Yes. I was diagnosed to be suffering from mild diabetes, but it was only a border line case of diabetes. Not acute or serious enough to affect my work. v) Q: A: vi) Q: A: Were you on treatment? Since it was not a serious case of diabetes, I was only taking pills. How often did you take medical leave? Since it was not a serious illness, it did not affect my work, I had no reason to take medical leave; and so I never took any medical leave citing my sickness. viii) Q: Refer to para 4(iv) is it true that the Project Manager at the Seremban site, Wong Chee Yew, informed the Company that you were unfit and unable to perform your duties? A: xi) Q: A: I was not aware of that. In November 2004 then, you had no problem working at the Seremban site? None, I was working as normal.

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xii)

Q:

Is it true as alleged in para 4(v) that you told the Human Resource Manager, Tan Soon Lin you could not wear safety boots and could not carry out work at the work site?

A:

That's not true. At no time did I say that I could not carry out any work at the site.

xiii)

Q: A:

What about the allegation that you were unable to wear safety boots? Not true. What has suffering from diabetes to do with not wearing safety boots? Because of my illness all the more reason that I take precautions and wear safety boots to ensure that I do not suffer any injury to my feet.

xiv)

Q:

How did Wong Chee Yew come to the conclusion that your health was deteriorating and that you were suffering from serious diabetes problem?

A: xv) Q:

I do not know how he came to that conclusion. Since the Company was allegedly informed by Wong Chee Yew of your purportedly serious health problem, did the Company send your for Medical check up?

A:

I was not told by the Company to go for any medical check-up. It had no reason to send me for a medical check-up because I was never on medical leave and I never ever complained about my health to the Company.

10.

Q:

In the absence of a medical report how did the Company come to the conclusion that your health was deteriorating due to your allegedly suffering from serious diabetes?

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A:

Never once the Company indicated to me that it was concerned about my allegedly deteriorating health.

13.

Q: A:

The reason for your dismissal was your allegedly deteriorating health problem? Yes, it was the first time that the Company ever made any reference to my allegedly poor health.

The Claimant submitted that he was never issued any warning neither oral or written, prior to his termination. The Claimant also contended that he had never taken any medical leave throughout his employment with the Company.

It was pointed out that the Company decided to terminate his employment with effect from 22.12.2004 citing his health problem as the reason even though there was no medical proof to show that he was ill and unfit to work.

Claimant's Written Submissions The Claimant contends that the first time ever that the Company made any reference to his allegedly poor health was via the above mentioned letter of dismissal.

The events leading to his dismissal briefly were: a) It was alleged that since May 2004 there were many complaints made by the Project Manager at the Klang Project site about the Claimant to the Company but the

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Company had never informed the Claimant about my such complaints. b) The Claimant contends that he was diagnosed for mild diabetes, some time in 2001 but this sickness has never affected his job performance. Furthermore, the Claimant had not taken any medical leave citing his sickness during his employment with the Company. c) It was alleged that the Project Manager at the Seremban site, Wong Chee Yew, informed the Company that he was unfit and unable to perform his duties which the Claimant is not aware of. d) It was also alleged that the Claimant had told the Human Resource Manager, Tan Soon Lin that he could not wear safety boots and could not carry out work at the work site which the Claimant vehemently denies. e) The Claimant contends that the Company did not send the Claimant for any medical check-up. f) The Claimant contends that never once the Company indicated to him that it was concerned about his allegedly deteriorating health. g) However the Claimant was terminated from his service purportedly for his health problems via letter dismissal dated 22.12.2004. h) The Claimant contends that until the dismissal letter, the subject of his allegedly poor health was never ever raised by the Company.

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The Claimant in the submissions filed on his behalf,pointed to the following: a) COW-2 in his Cross Examination had testified that he did not know how serious the Claimant's diabetes; b) COW-2 in his testimony stated that the Claimant had never told him that he could not perform his job because of diabetes: c) COW-2 testified that he did not know whether the Company had sent the Claimant for any medical check up (eventhough he is in charge of the Claimant at the Klang site); d) Mr. Wong Chee Yew, Project Manager in charge of the Seremban site (COW3) in his cross examination had testified that the Claimant did not take medical leave while he was working at the Seremban site; e) Mr. Tan Soon Lin, Director of the Company (COW-4) in his cross examination had testified that the Claimant had not taken any medical leave during his employment with the Company. f) COW-4 testified that the Company did not send the Claimant for any medical check up to find out whether he is ill and unfit to continue to work before terminating his services; and g) The Claimant in his Witness Statement (CLWS1(a)) has stated that he was diagnosed for mild diabetes and it has never affected his job performance. He testified he has not taken any medical leave and he has turned to work without fail and that he has never complained about his health to the Company. The Claimant contends that until the dismissal letter dated 22.12.2004, the subject of his allegedly poor health was never ever raised by the Company.

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It was submitted that the medical ground is the only reason cited in the dismissal letter dated 22.12.2004 and it was submitted that a careful study of the case suggests that the allegation that the Claimant was unfit and unable to carry out his duties as Site Coordinator due to his deteriorating health and serious diabetes problem was not proven by the Company.

Applying the legal principles Applying legal principles to the facts of our case, the following is to be noted. It is to be noted that the letter of termination does not specifically state poor performance as the reason for the dismissal. The reason given for the dismissal was that his physical body and health was not suitable for the job as a site coordinator.

It is to be borne in mind that it is incumbent on the Company to prove that

his physical

body and health was not suitable for the job as a site coordinator. In other words that he was physically unfit for the job as a site coordinator. In this case there was no investigation as to the true nature of his sickness or as to how serious his health problem was. This fact was not verified.

The general principle of law as stated in the case of Goon Kwee Phoy v J & P Coats (M) (Bhd)[1981] 2 MLJ, is thatWhere representations are made and are referred to the Industrial Court for enquiry, it is the duty of the 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

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excuse or reason has or has not been made out. If it finds as a fact that it has not been proved, then the inevitable conclusion must be that the termination or dismissal was without just cause or excuse. Bearing in mind also the legal principles as stated in Dunston Ayadurai, in Industrial Relations In Malaysia Law and Practice: But as incompetence can and often does have the same consequence as misconduct for him, viz discharge from service,the employee remains entitled to natural justice prior to his termination for incompetence, just as he would be prior to dismissal for misconduct. However, 'natural justice' has a broader connotation in the context of dismissal for incompetence than it has in the context of dismissal for misconduct. In the case of termination for incompetence, 'natural justice' means essentially 'due process' or a 'fair procedure' i.e a procedure which the employer is expected to follow before terminating the employee, and which is fair in the sense that it incorporates the following elements:(a) (b) (c) informing the employee of the respects in which he is failing to do his job properly; warning him of the possibility or likelihood of his termination on this ground; and giving him sufficient time and opportunity to improve his performance on the job.

And as held in the case of Ginder Singh at p11 : Industrial jurisprudence as developed by the Industrial Court points unequivocally to the requirement of a fair process which an employer ought generally to follow before he can come to a considered decision that, due to an employee's poor or unsatisfactory performance, the latter's services can no longer be retained.

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Applying these principles,and particularly in a case where the allegation is that the Claimant was a sick employee whose performance is said to have been poor,and bearing in mind the principles as stated in Smith and Woods at p476: ...it is well established by leading cases such as East Lindsey District Council v. Daubney [1977] ICR 566, [1977] IRLR 181, (this long-standing approach was reaffirmed and said to be in line with the leading case on procedure generally, Polkey v. A E Dayton Services Ltd. [1988] ICR142, [1987] IRLR 503, HL) in A Links & Co Ltd v. Rose [1991] IRLR 353, Ct of Sess), that the approach of the tribunal in assessing the reasonableness of the employer's decision to dismiss should be to consider whether it was reasonable to expect the employer to wait any longer before dismissing, in the light of such factors as the nature of the illness, the actual and potential length of the absence, the circumstances of the individual employee, the urgency of the need to fill the employee's job and the size and nature of the employer's undertaking. The procedural steps to be taken by the employer will vary widely according to the facts of the case but, although a 'warning' as such is hardly appropriate, in most cases the employer will be expected to consult the employee and discuss the nature of his illness and his future prospects bearing in mind the employer's need to have the work done (See Spencer v. Paragon Wallpapers Ltd [1977] ICR 301, [1976] IRLR 373.

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Decision The Court has carefully and meticulously considered and evaluated the totality of the evidence before it on a balance of probabilities, bearing in mind s30(5) of the IRA 1967. Having considered and evaluated all the facts, the totality of the evidence both oral and documentary and the submissions, being guided by the principles of equity and good conscience and the substantial merits of the case, without regard to technicalities and legal form this Court finds that the dismissal was without just cause and excuse.

Having considered the totality of the evidence the Court finds that the Company has not proven its case on a balance of probabilities and hence the dismissal was clearly without just cause and excuse.

Remedy As regards the remedy, having carefully considered all the relevant factors this Court is of the view that reinstatement is not the appropriate remedy in this case. In the circumstances of this case reinstatement is clearly not appropriate or viable.

As regards quantum, this Court takes approach taken by the Industrial Court in the Ginder Singh Case.

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In Ginder Singh Transport Co. Sdn. Bhd Case the learned Chairman found on the facts of that case that the dismissal was without just cause and excuse.

The learned Chairman observed that The Court must delicately and sensitively balance the interests of the Company with that of the Claimant, and held:In all the circumstances of this case the Court thinks that the only possible award that the Court can make is a compensatory award which is moderate and not overly exorbitant. The Court directs that the Company do pay to the Claimant the sum of RM10,000, such sum to be paid to the Claimant within 3 weeks of the service of this Award.

As regards quantum, this Court takes approach taken by the Industrial Court in the Ginder Singh Case, following the principle laid down in Hotel Jaya Puri Berhad v National Union of Hotel Bar and Restaurant Workers and Anor [1980] 1 MLJ at p 109, as per Salleh Abbas FJ (as he then was):...if there is a legal basis for paying the compensation, the amount of course is very much a matter of the discretion which the Industrial Court is fully empowered under section 30 of the Industrial Relations Act to fix.

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Having considered all the relevant factors, the Court awards a global sum of RM30,000.00 as compensation. The said sum of RM30,000.00 is to be paid by the Company to the

Claimant within 30 days of service of this award subject to statutory deductions if any.

HANDED DOWN AND DATED THIS DAY OF 28TH FEBRUARY 2011

( YAMUNA MENON ) CHAIRMAN INDUSTRIAL COURT, MALAYSIA KUALA LUMPUR

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