INDUSTRIAL COURT OF MALAYSIA

CASE NO. : 16/4-202/20

BETWEEN

DEDI BIN AJIS

AND

MHG DESARU HOTEL SDN. BHD.

AWARD NO: 1610 OF YEAR 2020

Before : Y. A. PUAN SUMATHI MURUGIAH

- CHAIRMAN

Venue : Industrial Court of Malaysia

Johor Branch

Date of Reference : 19.12.2019.

Dates of Mention : 12.02.2020; 04.03.2020; 16.07.2020.

Dates of Hearing : 28.07.2020.

Representation : Mr. A. Sivananthan

From Malaysian Trades Union Congress (MTUC)
Representative for the Claimant

Mr. Mathews George

From Messrs Mathews George & Co
Counsel for the Respondent.

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Reference :

This case is a reference under Section 20(3) of the Industrial Relations Act

1967 , arising from the dismissal of Dedi bin Ajis (hereinafter referred to as the

“Claimant”) by MHG Desaru Sdn. Bhd. (hereinafter referred to as the

“Company”) on 14.10.2019. The Claimant's case is referred by the Honourable

Minister of Human Resources on 24.12.2019.

AWARD

Brief Background

1. The Claimant commenced employment as a Restaurant Manager with the

Company trading as Anantara Desaru Coast Resort & Villas on 03.09.2019.

2. In the letter of appointment issued by the Company to the Claimant dated

05.07.2019, the Claimant was placed under probation for six (6) months from

the date of commencement before he can be confirmed.

3. Based on a verbal information received from the Kota Tinggi Police Station

upon a vetting process carried out by the Company, the Company was told that

the Claimant was on the police’s ‘wanted’ list.

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4. The Company’s Human Resources Manager, Emmi Lee had inquired for

clarification from the Claimant regarding his “wanted” status with the police on

04.10.2019 and when no favourable reply was received from the Claimant, the

Company issued a letter of suspension on 09.10.2019 for a period of seven (7)

days i.e. 07.10.2019 to 11.10.2019 as shown below:

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5. The Claimant was unable to resolve the matter with the police and as such,

the Company had issued a letter of termination of contract dated 14.10.2019

terminating the Claimant’s employment with the Company with immediate effect

on the basis that the Claimant had violated Item 14 of the Company’s Business

Code of Conduct and due to the Claimant’s matter with the police was not in the

best interest of the Company’s image and policies.

The Company's Case

6. Due to the Claimant’s newly appointed position with the Company as a

Restaurant Manager, it was the Company’s policy to carry out a vetting process

on the Claimant. Upon the vetting process being carried out, the Company

received a verbal information from the Kota Tinggi Police Station that the

Claimant was on police’s ‘wanted’ list.

7. The Company had sought for explanation from the Claimant about the

information they had received from the police station and was informed by the

Claimant that he was ‘wanted by the police’ in connection with a scam case

relating to his account with Maybank.

8. The Claimant had failed to declare his involvement in the scam case to the

Company when he had filled up the application form for the purpose of

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employment with the Company. In fact, in the job application form, the Claimant

had answered ‘No’ when being asked if he had been involved in or convicted of

any criminal offence.

9. On 10.10.2019, the Claimant was arrested by the police at the Dang

Wangi District Police Headquarters in Kuala Lumpur and was subsequently

released on Police Bail. According to the ‘Borang Hak-Hak Orang di Tangkap’

and ‘Surat Jaminan PDRM’ given by the Claimant to the Company, the Claimant

was arrested under Section 420 Penal Code which relates to the offence of

cheating and dishonesty inducing delivery of property.

10. Taking into consideration that the Claimant was still a probationer

(commenced work on 03.09.2019) and also the fact that the Claimant did not

declare his involvement in a criminal case, the Company viewed that the

Claimant’s issue with the police as not being in the best interest of the

Company’s image and policies. Considering the Claimant’s position as the

Company’s Restaurant Manager, the Company was of the view that the

Claimant’s service ought to be terminated with immediate effect due to lack of

trust and confidence in the Claimant.

11. As such, the Company via its letter dated 14.10.2019 had terminated the

Claimant’s employment contract with the Company with immediate effect with a

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payment of RM13,000.00 being two (2) months’ salary as compensation in lieu

of notice.

12. The Company had called the Human Resources Manager, Emmi Lee

(COW-1) as the only witness to give evidence for this case.

The Claimant’s Case

13. The Claimant contends that he was on the police’s ‘wanted’ list not for any

criminal act but only for the scam case relating to his account with Maybank.

Although the Company had wanted him to resolve the matter with the police by

Monday (07.10.2019), the procedure with the police took longer than the given

time.

14. Although the Claimant was arrested on 10.10.2019, he was also released

on Police Bail on the same day and he was not charged in any court for any

criminal offences.

15. The Claimant was told by one Sargent Ridzuan of IPD Dang Wangi

(Sargent Ridzuan) that he was initially needed as a witness but he was no

longer needed as a witness. Although the Claimant was told by the Tampoi

Police Station that he was no longer on the police’s ‘wanted’ list as it was

cancelled but the Bukit Aman Police Headquarters did not respond to his letter
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dated 16.07.2020 to confirm his position.

16. The Claimant was the only witness for his case.

The Issues

17. Based on both the parties' case as stated above, it is apparent that the two

(2) questions which the court has to ask itself are:

(i) was there a dismissal; and

(ii) if the answer to (i) is in the affirmative, was the dismissal with or

without just cause or excuse.

18. As stated in the case of Wong Chee Hong v. Cathay Organisation (M)

Sdn. Bhd. [1988] 1 CLJ 45; [1988] 1 CLJ (Rep) 298 by the then Supreme

Court as follows:

“On the authorities, we were of the view that the main and only
function of the Industrial Court is dealing with a reference under
section 20 of the Act (unless otherwise lawfully provided by the
terms of the reference), is to determine whether the misconduct or
irregularities complained of by the Management as the grounds of
dismissal were in fact committed by the workman, and if so,
whether such grounds constitute just cause or excuse for the
dismissal.”

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19. In this case, the fact of dismissal is not disputed. Therefore, the only issue

which is left to be deliberated before this court is whether the dismissal of the

Claimant by the Respondent was with just cause or excuse.

The Law

20. It is trite law that the Company bears the burden to prove that the Claimant

had committed the alleged misconduct and that the misconduct warrants the

Claimant's dismissal. In Ireka Construction Berhad v. Chantiravathan

Subramaniam James [1995] 2 ILR 11 (Award No. 245 of 1995) it was stated

as follows:

“It is the basic principle of industrial jurisprudence that in a dis-

missal case, the employer must produce convincing evidence that
the workman committed that offence of which the workman is al-
leged to have been dismissed. The burden of proof is on the em-
ployer to prove that he has just cause or excuse for taking the de-
cision to impose the disciplinary measure of dismissal upon the
employee. The just cause must be,either a misconduct, negli-
gence or poor performance based on the case.”

21. The Company needs only to prove misconduct justifying the dismissal or

termination on a balance of probabilities (see Telekom Malaysia Kawasan

Utara v. Krishnan Kutty Sanguni Nair & Anor [2002] 3 CLJ 314)

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22. In terms of whether the Industrial Court has jurisdiction to hear a matter in-

volving a probationer, the status of a probationer is explained by the Court of

Appeal in the case of Khaliah Abbas v. Pesaka Capital Corporation Sdn Bhd

[1997] 3 CLJ 827 that an employee on probation enjoys the same rights as a

permanent or confirmed employee and his services cannot be terminated with-

out just cause or excuse. His Lordship Shaik Daud Ismail JCA at p. 831 ex-

pressed:

“It is our view that an employee on probation enjoys the same

right as a permanent or confirmed employee and his or her ser-
vices cannot be terminated without just cause or excuse. The re-
quirement of bona fide is essential in the dismissal of an employ-
ee on probation but if the dismissal or termination is found to be a
colourable exercise of the power to dismiss or as a result of dis-
crimination or unfair labour practice, the Industrial Court has the
jurisdiction to interfere and to set aside such dismissal.”

23. In the case of Equatorial Timber Moulding Sdn Bhd, Kuching v. John

Michael Crosskey [1986] 2 ILR 1666 (Award No. 387 of 1986), the learned

Chairman describes the legal character of probationary employment and the re-

spective rights and obligations of the employee and employer. The learned

Chairman propounded:

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 “Being a probationer, he has no substantive right to the post. He
holds no lien on the post. He is on trial to prove his fitness for the
post for which he offers his service. His character, suitability and
capacity as an employee is to be tested during the probationary
period and his employment on probation comes to an end if dur-
ing or at the end of the probationary period he is found to be un-
suitable and his employer can terminate his probation by virtue or
otherwise as provided in the terms of the appointment... Also
there is an abundance of authorities to support the view that an
employer has a contractual right to terminate the services of a
probationer without notice and without assigning any reasons
whatsoever. And no enquiry need to be held for such purpose, for
termination of service of the probationer during the probationary
period is not punishment or dismissal but simply of termination.
However, when the validity of such a termination is challenged,
the court must be satisfied that such termination was a bone fide
exercise of the power conferred by the contract. And when there
is suspicion of unfair labour practice, then the court will not hesi-
tate to interfere with the termination and the employee should be
afforded proper relief.”

Evaluation and Findings

24. On the issue of the Claimant failing to have declared in the Application

Form his involvement in a criminal case, it seems that the Company had failed

to show to the court that the Claimant was aware of his involvement in the said

criminal case. Although COW-1 had stated that the Claimant had admitted to
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her of his awareness of the scam involving his Maybank Account, the Claimant

had denied the same. In fact, it is the Claimant’s evidence that he was only

aware of the scam involving six (6) Maybank Accounts of which one being his

account when he was told by one Sargent Ridzuan (Sargent Ridzuan) on

10.10.2019 regarding this. Furthermore, no where in the Suspension Letter dat-

ed 09.10.2019 which was signed by COW-1 herself, the Claimant’s admission

regarding the scam involving his Maybank Account was mentioned. As such,

the issue of the Claimant having breached Item 14 of the Company’s Business

Code of Conduct does not arise in this case. This is because, if the Claimant

was not aware of his involvement in the said criminal case, then how could he

have reported it to the Company.

25. Be that as it may, based on the facts of this case, there is no denial that

the Claimant was found to be in the police’s ‘wanted’ list. In fact, the Claimant

was arrested on 10.10.2019 by the police when he attempted to clear his name

as required by the Company. Although the Claimant had argued that he was not

charged by that arrest and that he was released on Police Bail within hours of

being arrested, this does not indicate that he was no longer involved in the crim-

inal case for which he was arrested for in the first place i.e. Section 420 Penal

Code. It was also undeniable that the Claimant was required to report back at

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the Dang Wangi Police Headquarters (where he was arrested) on the following

month from the date of arrest and bail i.e. on 10.11.2019.

26. Looking at the fact that the Claimant’s suspension period issued by the

Company in order to give him the opportunity to resolve this matter with the po-

lice was from 07.10.2019 till 11.10.2019, the requirement for him to report back

at the Dang Wangi Police Headquarters only indicates that his matter with the

police was still ongoing.

27. There is also no evidence given by the Claimant to prove that he was only

involved in the scam involving his Maybank Account as a witness and not as a

perpetrator. The fact that he was arrested under Section 420 Penal Code con-

tradicts his claim that he was only wanted as a witness and not otherwise. The

Claimant had also not produced any evidence to support his claim that he was

no longer in the police’s ‘wanted’ list even at the time the hearing of this case

was held, what more prior to his termination by the Company.

28. Therefore, taking into consideration that the Claimant was a probationer, it

is thus the Company’s prerogative to assess the Claimant both in his perfor-

mance and his trustworthiness. In this case, the Claimant’s involvement in a

criminal case whether it was declared or not prior to his employment would still

effect the Company’s assessment of him as an employee. The court cannot

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overlook the fact that the Company had indeed given the Claimant time to re-

solve the issue that implicated his involvement in the criminal offence but the

Claimant had failed to free himself from such an implication. By this, the Com-

pany had not been hasty in taking a decision to terminate the employment con-

tract with the Claimant since the Claimant had failed to show to the Company

that he had resolved the matter and that he was no longer involved in the crimi-

nal case.

29. In the case of Azhari Shahrom & Anor v. Associated Pan Malaysia

Cement Sdn. Bhd [2010] 1 ILR 423, the court held as follows:

“ It is trite the association between employer and employee out of necessi-

ty is fiduciary in nature. There has to be mutual trust and confidence that

one would deal with the other in all fairness and rectitude over the rights

and obligations flowing between the parties under the employment agree-

ment. If one does an act or commits an omission which is inconsistent

with that fiduciary relationship then that act or omission will be mala fide.

This principle has equal application as against the employer and the em-

ployee is their respective position viz. employment relationship between

them.”

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30. It is thus the court’s view that the Company had in this case acted in good

faith and had no choice but to terminate the Claimant’s contract given the situa-

tion that the Claimant was holding the position of a Restaurant Manager in the

Company and the Claimant’s failure to resolve the matter to clear his name with

the police as it was not in the best interest of the Company.

31. Based on equity and good conscience and the substantial merit of the

case without regard to technicality and legal form legal form under Section 30(5)

of the Industrial Relations Act 1967, the court finds that the Claimant's termina-

tion was carried out with just cause or excuse. The Claimant's claim is hereby

dismissed.

HANDED DOWN AND DATED THIS 26th DAY OF OCTOBER 2020.

-SIGNED-
( SUMATHI MURUGIAH )
CHAIRMAN
INDUSTRIAL COURT OF MALAYSIA
JOHOR

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