IN THE INDUSTRIAL COURT OF MALAYSIA

CASE NO. 21/2-852/20

BETWEEN

KESATUAN PEKERJA-PEKERJA PLUSLINER SDN. BHD.

AND

PLUSLINER SDN. BHD.

AWARD NO: 1216 OF 2021

Coram : Y.A. TUAN SYED NOH BIN SAID NAZIR @ SYED NADZIR
Chairman

ENCIK MOHAMAD FARID BIN MOHAMAD DAUD

Employee’s Panel Member

ENCIK MUHAMMAD SYAFIQ SOH BIN ABDULLAH

Employer’s Panel Member

Venue : Industrial Court of Malaysia, Kuala Lumpur

Date of Reference : 03.07.2020

Date of Mention : 11.08.2020, 22.09.2020, 06.10.2020, 13.10.2020,

10.02.2021, 28.04.2021 & 19.05.2021
Date of Hearing : 14.04.2021
Representation : Mr. Peter Kandiah
Kongres Kesatuan Sekerja Malaysia ( MTUC )
Representative for the Union

The Company was absent

Reference:
This is a trade dispute reference made under Section 26(2) of the Industrial
Relations Act, 1967 between Kesatuan Pekerja-Pekerja Plusliner Sdn. Bhd.
(hereinafter referred to as “the Union”) and Plusliner Sdn. Bhd. (hereinafter
referred to as “the Company”).
 Case No. 21/2-852/20

EX-PARTE AWARD

PREFACE

[1] This is a Ministerial reference made under section 26(2) of the Industrial
Relation Act 1967 (Act 177) dated 03 July 2020 arising out of the trade dispute
between KESATUAN PEKERJA-PEKERJA PLUSLINER SDN. BHD. (hereinafter
referred to as “the Union”) and PLUSLINER SDN. BHD. (hereinafter referred to as
“the Company”).

[2] The dispute is over the proposals submitted by the Union relating to the
terms and conditions for the fifth Collective Agreement that is for the period from 1
January 2018 to 31 January 2021 (the Collective Agreement). The Union wrote to
the Industrial Relation Department pursuant to section 18 of the Industrial Relation
Act 1967 on 26 February 2020 and reported that a trade dispute had arisen
between the parties over the proposed amendment to the Collective Agreement.
The Company did not propose any Counter proposals for the Collective Agreement
as can be seen from the Statement In Reply.

THE UNION’S PLEADED CASE

[3] The Union averred that the Company and the Union had failed to agree on
the following four (4) clauses:
i. Clause 4 : Scope of Membership
ii. Clause 12 : Safe Driving Allowance
iii. Clause 18 : Trip Allowance; and
iv. Clause 19 : Payment of Bonus

[4] It was contended that following a long delay both the Union and the
Company began negotiations after the Union had lodged a complaint with the
Industrial Relations Department. Despite several clauses in the proposals for the
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Collective Agreement being agreed upon the Company, the four clauses above
mentioned remained disputed by the Company refusal of which contended by the
Union as a deprivation of its members decent livelihood.

COMPANY’S PLEADED CASE

[5] The Company averred that the proposal by the Union were irrelevant and
beyond the financial means of the Company. It was averred that the proposals by
the union had failed to take into consideration the current economic situation as this
is pertinent in order to maintain a harmonious relations between the Company and
the Union and the Company’s business continuity.

Article 4- Recognition and Scope of Membership

[6] In response to the Union’s proposal for the Collective Agreement be made
to cover all employees in the Company on the basis that the Company had for
many years recognized the Union’s Constitution that covers membership of all
employees of the Company without exception and as such any restriction against
any category of employees should be taken out so as to include all employees, the
Company contended that the Company on its own accords that all employee
including permanent employees, whether members of the Union or otherwise, or
contract employees are entitled to the benefits as stipulated in the Collective
Agreement. The Company’s position was to maintain the Status Quo of the
Collective Agreement.

Article 12 – Safe Driving Allowance

[7] For this item, it was pleaded by the Company that the union had proposed
for an increment of Safe Driving Allowance from RM160.00 per month to RM200.00
per month to which the Company contended as unsustainable. During negotiation
at the Industrial Relation Department, the Company had put in place several pre-
conditions for improvement of Article 12 which were not agreed upon by the Union
as follows:

i. at least fifteen(15) working days not inclusive of “standby” days,

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ii. calculation of safe driving allowance on weekly basis at the rate

of RM40.00 per week,
iii. drivers must not have been involved in the finding of guilt with
an accident,
iv. the drivers must be free from any issuance of summons by the
Authorities such as JPJ, PDRM, SPAD, Local Authorities or the
management of Bus Terminals; and
v. the drivers driving speed must not exceed 90km per hour for a
duration of more than three(3) minutes in more than five(5)
occasions per week.

[8] The Company pointed out that the abovesaid pre conditions proposed by
the Company were not agreeable by the Union nevertheless it was evident that the
Company had in pact responded to the Union’s proposal for agreement and efforts
were made by the Company to resolve the However dispute between the parties
herein. The Company’s position is therefore for the rate of RM160.00 for this article
be maintained.

Article 18 - Trip Allowance

[9] The Company contended that under the collective agreement it had been
agreed as follows :

TABLE “A”
Curent rate Proposed new rate Increase in cost
by percentage

Plusliner Driver 5 cents per KM 15 cents per KM 200 %

Plusliner Extreme 6.5 cents per 20 cents per KM 207%

Driver KM

Nice Driver 6.5 cents per 23.5 cents per KM 361%

KM

[10] The Company highlighted that the above adjustments if approved would
have severely impacted the Company’s operational cost aggravated by travel
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limitations imposed by the Authorities under the Movement Control Order (MCO)
which is still in force. It was further pleaded that the fare rate of the public transport
industry had not been revised by the Government since 2009 and hence the public
transport operators had to absorb the increase in operational costs incurred from
time to time.

Article 19 – Annual Bonus

[11] The Union had proposed that in Article 19 the employees of the Company
be given contractual bonus at the end of the year. No proposal was given by the
Union in its Pleadings to counter the rate proposed as contractual bonus. However,
it was alleged by the Company that the Union had asked for three(3) month salary
being paid as contractual bonus to which the Company contended as being
excessive and devoid of the Company’s financial reality. The Company averred that
its financial performance since 2014 until 2019 has not shown any profit and as
such it is incapable of paying bonus let alone one of contractual to the employees.
(Statement of Case Paragraph 26 and 27).

LAW ON EX-PARTY HEARINGS

[12] Despite having filed the Statement in Reply, and attended Case
Managements the Company had failed to be present in Court, on the hearing date
fixed for 14.04.2021. Nevertheless hearing had proceeded Ex Parte. The role of the
Court in ex-parte hearings was succinctly set out in the case of WONG
BROTHERS' BUILDING CONSTRUCTION V. CHOO CHEE SIAM [2005] 2 ILR
356. In this case, the company was absent during the date of the hearing. The
Court continued to hear the case on an ex-parte basis, wherein the court held inter
alia, as follows:

“The Court is mindful of the role in ex parte hearing by referring to the

case of Ike Video Distributors Sdn. Bhd. v. Chan Chee Bin [2004] 2
ILR 687 where the Learned Chairman quoted from the book “The Law
of Industrial Disputes” by 0.P. Malhotra Vol. 3rd Edn. At p 716:

“A rule empowering the tribunal to proceed EX-PARTE if a

party is absent and sufficient cause is not shown for his

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absence, would not enable it either to do away with the

inquiry or straight away pass on an Award without giving
finding on the merits of the disputes. In other words, the
absence of a party does not entail the consequence that
an Award will straightaway be made against him”
[Emphasis added]

[13] In the case of MANIMARAN KARUVANAN v. TAV FACILITY SOLUTION

(M) SDN BHD [2020] 2 LNS 1374 wherein the Industrial Court had proceeded with
an ex-parte hearing pursuant to section 29(d) of the IRA 1967. It was held as
follows:

“As such, both parties had been sufficiently informed of the

hearing dates fixed for this case. However, the Company failed to
turn up in Court on the Hearing date. Hence, the hearing was
ordered to proceed Ex-Parte pursuant to section 29(d) of the IRA
1967. In relation to this, the Court is guided by the case of Lee Mei
Wan v. Ultimate Media Group Pte Ltd [2017] 2 LNS 1668. It was
observed that:

Ex-parte Hearing
[4] Subsection 29(d) of Act 177 provides for an ex-parte
hearing without the presence of one of the parties to the
dispute as follows:
"The Court may, in any proceedings before it:
(a)...
(d) hear and determine the matter before it
notwithstanding the failure of any party to submit any
written statement whether of case or reply to the Court
within such time as maybe prescribed by the President or
in the absence of any party to the proceedings who has
been served with a notice or summons to appear”.
…
[6] Therefore, the Court was of the view that in the
circumstances of this case, an ex-parte hearing was
warranted due to the Company’s failure to attend Court
although the Notice of Hearing and the earlier Notice of
Mention had been served on it as stated above.

THE GUIDING PRINCIPLES

[14] This Court is guided by established principles in adjudicating trade

disputes. In the case of Kesatuan Kebangsaan Pekerja-Pekerja Hotel, Bar Dan

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Restoran Semenanjung Malaysia v. Hotel Equatorial (M) Sdn Bhd [2010] 2 ILR
463 at page 474 the Industrial Court had followed the principles enunciated in the
case of Penfibre Sdn. Bhd. Penang v. Penang & Prai Textile Garment
Industries Employees' Union [1986] 1ILR 323 @ 329 as follows:

“It is well established in Industrial Law that in deciding on the question

of wage structure and wage increases, the court has to take into
account the following factors:

(a) Wages and salaries prevailing in comparable

establishments in the same region;

(b) Any rise in the cost of living since the existing wages
or salaries were last revised; and

(c) The financial capacity of the company to pay the

higher wages/increases. "

Of all the three factors stated above, the Company's financial capacity
to pay is really the limiting factor in dealing with wage increases and
with other employees' benefits, because when other factors may
provide prima facie justification, increased wages will normally be
awarded only within the limits of the Company's financial capacity. If,
despite the shaky financial position of the Company, an award is
made to increase the wages in accordance with the Union's claim, it
may well be a possibility that the Company might have to close its
business resulting in the loss of jobs for the employees.”

[15] In the the case of Kesatuan Pekerja-Pekerja Perkilangan Perusahaan

Makanan v. Network Food Industries Sdn Bhd [2013] 4 ILR 644 at page 663
cited with approval by learned Chairman (as he then was) Y.A. Tuan Eddie Yeoh
Soon Chye in Kesatuan Eksekutif Kelab Semenanjung Malaysia V Royal

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Selangor Club [2014] 4 ILR 195 the Industrial Court had followed the High Court
decision in the case of Sarawak Commercial Banks Association v. Sarawak
Bank Employees' Union [1990] 1LNS 19; [1990] 2 MLJ 315 at page 319 as
follows:

“It is to be noted that the Act does not specify the formula for the
computation on the rates of pay and the legislature thought it best to
leave it to the Industrial Court to find the basis for such computation as
can be seen from s. 30 (4) and (5) which read:

(4) In making its award in respect of a trade dispute, the court shall
have regard to the public interest, the financial implications and
the effect of the award on the economy of the country, and on the
industry concerned, and also to the probable effect in related or
similar industries.

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

Disputed Articles
Articles 4 : Scope of Agreement
[16] In a broad understanding, a Collective Agreement is intended for
employees who are with the Company to encourage the employees to continue in
their employment. Benefits accorded in the Collective Agreement to such
employees are discretionary and prerogative of the Company as opposed to one of
contractual in particular having due regards to the financial restraints of the
Company.

[17] As the company did not send any representative to be present of the
hearing in Court on 14.04.2021 whereupon the hearing had proceeded Ex-Parte,
no shred of evidence was before the Court as to the financial capabilities of the

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Company in order to determine whether to open the scope of the Collective

Agreement to the non-union member and contract employees of the Company
would be consistent with the statutory requirement for this Court to have regard to
the financial implication and the effect of the award on the economy of the country
and on the industry concerned and also to the probable effect in related or similar
industries. (See S.30(4), IRA 1967).

[18] In this respect, Justice K.C. Vohrah in of Aero Manufacturing Sdn Bhd v.
Kesatuan Kebangsaan Pekerja-Pekerja Syarikat-Syarikat Pembuatan
Keluaran Getah & Anor [2001] 5 CLJ 1 made his observations as follows :

“There are several matters in s. 30(4) to consider and they should all
have been taken into account when the Industrial Court made its
award. And failure to do so is an error of law which justifies this court
in quashing that part of the award relating to salary structure and
increase in wages.

In connection with this it is pertinent to bear in mind the case of

Mersing Omnibus Co Sdn Bhd v. Kesatuan Pekerja-Pekerja
Pengangkutan Semenanjung Malaysia & Anor [1998] 2 CLJ Supp 53
where the importance of taking into account the said provision s.30(4)
was stressed and that the failure to adhere to its provisions renders an
impugned award erroneous in law. At pp. 58 and 59 His Lordship Nik
Hashim J had this to say:

...the issue of financial incapacity is sufficiently raised ...

Therefore, the question whether the company has the capacity
to pay is relevant. It is a question of fact for the Industrial
Court ....

The finding of the Industrial Court that the increase was

needed in order to keep up with the level of wages in similar
companies and to offset the increase in the cost of living, even
if taken to mean that the Industrial Court had taken into
account the third element of s.30 (4), without regard to the
other two, i.e., public interest and the financial implications of
the company to meet the claims, to my mind, is still insufficient
to satisfy the requirements of s.30 (4). Since the disputed
award was founded in and mandatory provision of s.30 (4), the
award given is arbitrary and erroneous not made in
accordance with law.

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Bearing in mind the indefensible position that the Industrial Court took
in relation to making a company other than the applicant company in
effect responsible for the increases in the wages structure and it
ignored evidence of the financial incapacity of the company and
therefore did not take into account the full impact of the mandatory
provision of s. 30(4) of the Act, the Industrial Court had come to an
award in relation to the wage structure under art. 21 of the collective
agreement which was clearly unreasonable it ought to be quashed.”

[19] Guided by the abovesaid authority, this Court is of the view that to extend
the scope of the collective agreement to include all employees of the Company was
not justified by the union. The Company’s pleadings at Paragraph 9 of the
Statement In Reply went undisputed by the Union in that there were no restriction
imposed on any employees of the Company be them permanent non-members or
members of the Union or contract employees from the benefits of the collective
agreement. This Court is with the Company in respect of Article 4 and as such
found that this Clause should be maintained.

Article 19 – Annual Contractual Bonus

[20] The Union's proposal is to make the Company contractually bound to give
bonuses equivalent to 3 months of the employee's last drawn basic salary. The
Company took the position that annual bonus may be paid at the sole discretion of
the Company, depending on the Company's financial status and immediate past
performance of the Company as well as that of the individual employee. The Court
agrees with the Company’s pleadings that the Union's demand for a fixed
contractual bonus is untenable as it defeats the whole purpose of awarding
gratuitous payments to deserving employees subject to the Company’s financial
performance. This Court has considered the evidence of the Union that the
Company had never paid any bonus to the employees. As much as this Court
sympathizes with the predicaments faced by the company’s employees without
financial assistance in the form of annual bonus, what remains to be followed is the
established principles. The nature of bonus is one of discretionary reflective of the
Company’s appreciation to deserving employees. In Kumpulan O'Connor's (M)
Bhd v. Mahkamah Perusahaan Malaysia & Kesatuan Kebangsaan Pekerja-

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Pekerja Perdagangan [2010] 1LNS 1242 at page 17 the High Court decided as
follows:

“[24] Since bonus is a form of gratuitous payment of a discretionary

nature it is therefore not accorded as of right. Further its quantum and
payment is linked to profits and productivity.”

[21] Bound by the abovesaid decision, this Court is unable to agree to the
Union’s proposal to make it contractual thus obligatory for the Company to pay
annual bonus rather than the position as provided in the Collective Agreement i.e.
at the discretion of the Company.

Article 12 – Safe Driving Allowance and Article 18 – Trip Allowance

[22] As it has been mentioned at Paragraph [10] and as illustrated in Table “A”
(Supra) the current and the proposed new rate of the drivers’ trip allowance in three
different categories, the Company further emphasized that the proposed new rate
of trip allowance would involve an increase in the allowance ranging from 200% to
361%. In the 3 page Written Submission filed by, the Union, it was made clear that
it is seeking an overall increase of 10 cents per kilometre for each bus driver and 2
drivers for each trip covering trips of more than 300 kilometres.

[23] The case of Kesatuan Kebangsaan Pekerja-Pekerja Hotel Bar dan

Restoran Semenanjung Malaysia v. Hotel Equatorial (M) Sdn. Bhd. (Supra) and
Penfibre Sdn. Bhd. v. Penang & S. Prai Textile & Gorment Industries Employees’
Union (Supra) which held inter-alia that the Company’s financial capacity to pay is
really the limiting factor in dealing with wage increases and with other employers
benefits is to be followed. This Court takes cognisance that with the Movement
Control Order still enforceable since 18.03.2020 and the lifting of which is no where
to be seen, Public transport industry obviously is one of the most severely impacted
industries resulting from the restrictions in inter-state travels imposed by the
relevant authorities. Judicial Notice must be had to the fact that public transport
operators are facing potential business closure during this period of uncertainty
aggravated by the current health pandemic and time of crisis. Like wise, an

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increase in the safe driving allowance attracts similar issues on financial impact on
the transport industry. As such, this Court is with the Company in respect of Article
12 and 18 of the Collective Agreement.

CONCLUSION

[24] In conclusion, the Court in handing down the Award is unanimous in its
decision having taken into account the totality of the submissions by both parties
and bearing in mind section 30(5) of the Industrial Relations Act 1967 to act
according to equity, good conscience and the substantial merits of the case without
regard to technicalities and legal form. The Court in making its decision has been
guided by the principles in section 30(4) of the Industrial Relations Act 1967 having
regard to the public interest, the financial implication and the effect of the Award on
the economy of the country. The union’s case is hereby dismissed.

HANDED DOWN AND DATED THIS 16 AUGUST 2021

~Signed~

(SYED NOH BIN SAID NAZIR @ SYED NADZIR)

CHAIRMAN
INDUSTRIAL COURT OF MALAYSIA
KUALA LUMPUR

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