Matthias Legler v DKSH Corporate Shared Services Center Sdn Bhd
Award No. 25 of 2015; Industrial Court
Date of Judgment: 08 January 2015 | Source: Industrial Court

INDUSTRIAL COURT OF MALAYSIA

CASE NO: 22(14)/4-1030/12

BETWEEN

MATTHIAS LEGLER

AND

DKSH CORPORATE SHARED SERVICES CENTER SDN BHD

AWARD NO: 25 OF 2015

BEFORE: Y.A. PUAN TAY LEE LY - CHAIRMAN (Sitting Alone)

VENUE: Industrial Court, Kuala Lumpur

DATE OF REFERENCE: 1 August 2012

DATES OF MENTION: 24 September 2012, 19 November 2012, 11 January 2013, 15 January 2013, 22 January 2013, 16 July 2013, 27 January 2014, 10 March 2014, 3 April 2014 and 17 April 2014

DATES OF HEARING: 19 June 2013, 20 June 2013 and 21 June 2013

DATES OF CLAIMANT'S WRITTEN SUBMISSION: 24 January 2014 and 16 April 2014

DATE OF COMPANY'S WRITTEN SUBMISSION: 5 March 2014

REFERENCES:

This case is a reference under Section 20(3) of the Industrial Relations Act 1967, arising from the dismissal of Matthias Legler (hereinafter referred to as "the Claimant") by DKSH Corporate Shared Services Center Sdn. Bhd. (hereinafter referred to as "the Company") on 24 October 2011.

AWARD

[1] This reference stems from the dismissal of Matthias Legler ("the Claimant") by DKSH Corporate Shared Services Center Sdn. Bhd. ("the Company") on 24 October 2011.

[2] This reference has been transferred from Court 14 to Court 22 for the writing of the Award as the former Chairman of Court 14 has gone on transfer by the President of the Industrial Court with the consent of the Claimant's and the Company's Solicitors. This Award is now penned by the learned Chairman Court 22. The learned Chairman has been directed by the President to hand down this Award in the interest of justice. The last submission was filed on 16 April 2014 and the matter has been pending since. The Court relies on the authority of Bax Global (Malaysia) Sdn. Bhd. (now known as Schenker Logistic [Malaysia] Sdn. Bhd.) v. Sukhdev Singh s/o Pritam Singh and Anor, (R3-25- 162-09) where reference was made, inter alia to section 23(6) of the Industrial Relations Act 1967 by the learned Judicial Commissioner. It was held in the said case that in order to obviate grave hardship being caused the case need not be heard de novo. And the award written by another Chairman in similar circumstances was upheld by the appeal Court. Hence this award is written based on my reading, perusal and evaluation of the facts and evidence contained in the notes of proceedings and gleaned from the documents made available to the original Court.

Factual Matrix

[3] The Claimant commenced work for the Company on 3 May 2009 as its Vice-President, Information Technology. He had concluded 2 contracts of employment, the first dated 27 February 2009 with Swiss Holding Co. and another with the Company in Malaysia dated 27 February 2009 contract dated 27 April 2009 for a period of 3 years. The Claimant contends that he was an exemplary employee and met all his performance targets. He reported to Gonpo Tsering and Tony Woo reported to him as the General Manager, Global IT Infrastructure. The Claimant alleges that as a result of the increase in the value of the Swiss Franc over the Ringgit the Claimant informed the Company of his concerns over his salary as it had reduced and he was assured by Gonpo Tsering that it would be taken care of. The Claimant further informed the Company vide emails dated 8 August 2011, 11 August 2011 and 18 August 2011 that he wished to be transferred to Europe mid-2012 to be with his family unless his services were still needed at Kuala Lumpur and that he would be willing to stay back. The Claimant contends that sometime on 22 September 2011 Tony Woo was informed by the Company that he would be assuming the Claimant's duties from January 2012 onwards. The Claimant contends that on 22 September 2011 he met with Gonpo Tsering and Guy Woollard the Vice-President of Human Resources for Asia-Pacific Region and was offered the Company's proposal for a mutual separation as outlined in a Separation Agreement. He contends that he tabled a counter proposal to that offered by the Company as he found the terms to be unacceptable.

[4] It is the Claimant's contention that the Director of the Company, John Clare had asked to meet with him on 28 September 2011 and he met with him on 28 September 2011 at the Company's premises. He said that he was informed by John Clare that he (John) was to bring 2 security guards to the meeting who would be escorting the Claimant out from the office. He said that he was suspended by John Clare effective 28 September 2011 and was handed a Letter of Suspension dated 28 September 2011. The Claimant contends that he was escorted out of the office premises and was embarrassed and his reputation blemished by this. The Claimant was given a show cause letter dated 11 October 2011 asking him to explain why he should not be dismissed for what he had told Tony Woo that he would "make DKSH pay". He replied the said letter on 14 October 2011. The Claimant denies having made such a statement. The Claimant was terminated vide the Company's letter dated 24 October 2011 by the Company as the Company was satisfied that he had made the statement to Tony Woo. The Claimant contends that his dismissal is without just cause or excuse.

[5] The Company contended that the Claimant commenced employment with them on 1 June 2009. The Company contends that the Claimant had not been dismissed for poor performance. It was their contention that the Claimant wanted to return to Europe and had intimated this to Gonpo Tsering on 8 August 2011, 11 August 2011 and 18 August 2011. The Company commenced negotiations with the Claimant for a mutual separation on terms which were agreeable to both and they met. The Company also in order to ensure a smooth handing over of his duties and succession informed Tony Woo to assume the Claimant's duties from January 2012 onwards. The Company avers that the Claimant rejected the mutual separation agreement it had put forward as he wanted a bigger severance package. The contends that it came to know that the Claimant had spoken to Tony Woo on 23 September 2011 and told him that he would make the Company pay. The Company deemed the Claimant's words as a threat and prepared a letter dated 28 September 2011 suspending the Claimant pending investigations for 2 weeks. The Company vide its director John Clare handed over the said letter to the Claimant on 28 September 2011. In the light of the Claimant's threat 2 security officers were present and the Claimant was asked to leave the Company's premises immediately. The Company avers that the Claimant demanded that the Company give him reasons for his suspension within 48 hours. The Company through their Solicitors acceded to his request. The Claimant vide his Solicitors informed the Company that his suspension was in bad faith and demanded to be reinstated. The Company issued a show cause letter to the Claimant on 11 October 2011 according an opportunity to the Claimant to respond to the allegation against him and suspending him further. Finding the Claimant's reply unsatisfactory the Company dismissed the Claimant vide its letter dated 24 October 2011.

Issues and Law

[6] The Solicitors for both the Claimant and the Company had agreed that the principles issued to be tried emanating from their pleadings are as follows:

(1) whether the Company had terminated the Claimant's employment without just cause or excuse?

(2) whether the Claimant was employed for an unlimited term or for a fixed term under his contract of employment?

[7] The Court shall resolve these issues in accordance with the facts, evidence and principles of law.

[8] As an interlude to resolving these issues let me state that employees are protected from being unfairly dismissed. To successfully defend an unfair dismissal claim the onus of proof as we know it to be is on the employer to show that the reason for dismissing the employee falls into one of the two categories set out in section 20(3) of the Industrial Relations Act 1967. Unless an employer can prove that the employee was dismissed for a just cause or excuse the termination of the employee will be deemed to have been unjust. Even if an employer does prove that there was a reason for the dismissal of the employee it is still up to the Industrial Court to decide in accordance inter alia with equity and the substantial merits of the case (see section 30(5) of the Industrial Relations Act 1967) whether the dismissal was warranted or not. The Industrial Court will decide whether the dismissal was within the "range of reasonable responses" of that employer. In other words an employer will have the onus of showing that they have acted reasonably in treating the reason as a sufficient reason for dismissing the employee. The employer may have had grounds for dismissing the employee because of his performance or conduct but that does not mean that they had to take this step. It is for the Court to decide whether the reason/s for dismissing the Claimant was a just cause or excuse.

ISSUE: (a) Was the Claimant dismissed for a just cause or excuse?

[9] The Company's 1st witness (COW.1) testified that as Head Operations Support of the holding Company that the Claimant directly reported to him. He said that at the material time he was the Senior Executive Vice President, Operations & Business Support. It was his testimony that the Claimant was employed for a fixed term of 3 years at a monthly salary of RM81,666.00. He testified that it was a term inter alia of the Claimant's contract of employment that a local contract will be signed and that upon the signing of the same the original contract dated 27 February 2009 that was signed between the Company's management Company at Switzerland and the Claimant appointing him to the position of Vice President IT to be based in Kuala Lumpur with effect from 1 June 2009 ("the Swiss contract"), would cease to have effect by mutual written agreement between the parties. He testified that the other terms and conditions of service in the original letter of employment would however remain unchanged. COW.1 testified that the a local agreement was indeed signed between the Claimant and the Company on 27 April 2009 ("the Second Contract"). It was his testimony that the local agreement provided that the Claimant's appointment was for a period of 3 years.

[10] COW.1 further testified that the Claimant had vide his email to him dated 8 August 2011 expressed his unhappiness over his remuneration as the Swiss Franc had increased dramatically against the Ringgit which he contended had become seriously unacceptable issue. He said that the Claimant expressed his intention of returning to Europe in the long term future. He said that on 11 August 2011 the Claimant reiterated his intention of moving back to Europe in mid-2012 and suggested that they both made a common announcement. He said that this was reiterated by the Claimant again on 18 August 2011 and followed this up with an email dated 19 August 2011. COW.1 testified that the Company had planned various projects all lined up for the latter part of 2012 which included DKSH Holding Ltd's intention to go for an Initial Public Listing (IPO) which was completed by March 2012. He testified that the Company had to address the Claimant's intention to leave and the Company was compelled to take decisive action to facilitate a smooth transition to ensure a successful implementation of its impending projects. It was his testimony that the Company sought to commence negotiations with the Claimant with a view to effecting a mutual separation on terms which were agreeable to both parties.

[11] COW.1 further testified that together with Guy Wollard the Vice-President of Human Resources, Asia Pacific they forwarded to the Claimant a proposal for a mutual separation in a document entitled "Separation Agreement dated 30 September 2011". He testified that in the meantime he informed the Claimant's subordinate Tony Woo that he would be assuming the Claimant's duties from January 2012 onwards to ensure a smooth succession/handover.

[12] It was his testimony that the Claimant rejected the mutual separation proposal and put forward a counter proposal vide his email dated 25 September 2011 addressed the Guy Wollard. He testified that the Claimant did not protest or was he adverse to entering into a mutual separation with the Company. He said that the Claimant's sole objection to the Company's proposal was limited to wanting a bigger severance package.

[13] COW.1 further testified that the Claimant on 23 September 2011 spoke to Tony Woo and informed him that he would make the Company pay. He said that he was informed of this by Tony Woo. It was his evidence that the Company deemed the Claimant's aforesaid statement as a significant threat particularly in view of the importance of the position of the Vice President IT. He testified that the Company issued the letter dated 28 September 2011 suspending the Claimant. He testified that the Claimant adopted a confrontational stand and raised various baseless allegations against the Company through his Solicitors. COW.1 further testified that a show cause letter dated 11 October 2011 was issued to the Claimant. He testified that the Claimant accused the Company of forcing him to accept the Separation Agreement. It was his testimony that the Claimant was not justified making the statements he did to the Company as he was handsomely remunerated and held a high post. COW.1 denied making any statements to the Claimant's subordinates in the Company about the Claimant's suspension to the effect that he was using it as an arm twisting tactic to force him to accept the terms of the proposed separation agreement.

[14] It was COW.1's evidence that the Claimant was dismissed vide the Company's letter of 24 October 2011 as the Company found that his explanation was unacceptable. The Company felt he said that it was no longer tenable for the Claimant to continue in the Company after the confrontational stand he had taken. It was his testimony that the Claimant had made a threat against the Company to his subordinate.

[15] When he was cross-examined by the Claimant's Counsel COW.1 testified that he did sign the Claimant's Employment Contract ("the Swiss contract"). He testified that he could not recall whether he gave his approval for the subsequent contract to be signed with the Claimant on 27 April 2009 ("the Second Contract"). He nevertheless agreed when it was put to him that the Second Contract was executed for the purpose of securing the Claimant's work permit. It was his evidence that the Second Contract replaced the first contract. He disagreed that all expatriates working for the Company would have both an overseas and a local contract. He further agreed that the 3-years tenure that was incorporated into the Second Contract was to satisfy the immigration requirement.

[16] It was his evidence that the Claimant was reporting to him on a day to day management. He said that it was Tony Woo as he was based at Zurich that informed him that the Claimant had threatened the Company. He agreed that he had no personal knowledge of the same. He agreed saying that the Claimant had acted acrimoniously and with a confrontational attitude. He said that when they were working out a mutual separation the Claimant through his Solicitors sent a number of emails to the Company that led to an unacceptable situation. It was his evidence that they could not arrive at a separation agreement as his terms were unacceptable by the Company. It was also his evidence that the Company in Malaysia wanted to go listing. He testified that corporate share services were the backbone of the Company and therefore they relied on key people in the Company and the Claimant was its Vice-President wanting to go back in 2012. When asked whether it was because the Claimant was unhappy that he was considered by him to be acrimonious and confrontational he said "one of the elements". He said that it was confrontational that the Claimant was asking for salary adjustments in the middle of the year and wanted to go back to Europe. He agreed that he was not happy with the Claimant because he asked for adjustments to his pay package in the light of the fluctuation in the Swiss currency. He testified that the Claimant was dismissed because he was emotional and confrontational.

[17] COW.1 further testified that he told Tony Woo to take over from the Claimant as early as 22 September 2011. He said that because the Claimant had told Tony Woo that he will make the Company pay he was suspended. He disagreed when it was suggested to him that Tony Woo had lied about the Claimant having said that he will make the Company pay. He said that Tony Woo was a straightforward person and was with the Company before the Claimant. COW.1 agreed that because of what he said to Tony Woo a show cause letter was issued to the Claimant.

[18] COW.1 further testified during cross-examination that the discussion on the Separation Agreement took place on 22 September 2011. He agreed that the said Separation Agreement referred to the terms and conditions to be found in the Swiss contract and not the Malaysian Contract. He denied that the Claimant was dismissed to cut cost.

[19] COW.2 the Company's second witness, the Claimant's subordinate then, testified that he was not involved in the termination of the Company. He testified that on 23 September 2011 the Claimant come to see him looking very upset. He said that the Claimant had told him that he intends to give the Company a separation package and would make the Company pay. He testified that Gonpo Tsering had informed him that the Claimant had expressed his intentions of returning to Europe by mid-2012 and was unhappy with his remuneration package. He said that he was told that the Company was commencing negotiations with the Claimant with a view to effecting a mutual separation on terms which were agreeable to both parties. He testified that he was aware that he would be assuming the Claimant's duties by Gonpo Tsering. It was his evidence that he informed the Company about what the Claimant had told him.

[20] It was his evidence when cross-examined that the meeting with the Claimant on 23 September 2011 was a short meeting. He denied that he collaborated with COW.1 to get the Claimant out of the Company when it was suggested to him by the Claimant's Counsel.

[21] COW.3 the Company's third witness to testify said that as a director of the Company he knew the Claimant. He testified that he signed the Claimant's letter of termination dated 24 October 2011. He testified that the decision to terminate the Claimant was taken at the instructions of DKSH Holding Ltd. It was his evidence that the Claimant was terminated because he made a threat against the Company and had taken an acrimonious and confrontational stand against the Company and had made unfounded allegations against the Company. He said that the Company could no longer repose trust and confidence in the Claimant and could not accept his conduct as he held a senior position in the Company. COW.3 further testified that the Claimant had vide his emails to COW.1 informed COW.1 that he intended to return to Europe mid-2012 and in the light of the importance of the Global IT center and its various critical projects planned for the latter part of 2012 the Company was compelled to take immediate and decisive action in order to reduce the risks and facilitate a smooth transition to ensure successful implementation of its impending projects. He testified that accordingly the Company negotiated with the Claimant to effect a mutual separation on terms agreeable to both parties. COW.3 testified that he was not involved in the negotiations but COW.1 and Guy Wollard had met the Claimant and had put forward a Separation Agreement dated 30 September 2011 which was rejected by the Claimant. It was his testimony that the Claimant wanted a bigger severance package. He testified that the Company deemed what the Claimant had told COW.2 to be a threat and because it caused serious concerns he suspended the Claimant. He testified that the Claimant responded by taking a confrontational stand and raising various baseless allegations against the Company through his Solicitors.

[22] COW.3 further testified that he issued the Claimant a show cause letter dated 11 October 2011 to which the Claimant responded on 14 October 2011. He testified that the Company could not accept his explanations which merely confirmed that there was a serious breakdown in the relationship between them. He said that this necessitated the termination of the Claimant.

[23] It was COW.3's testimony when cross-examined that the Claimant was terminated due to a series of actions and not solely because he purportedly had made the statement to COW.2. It was his testimony that the Claimant's reply to the Company's show cause letter was viewed by the Corporate HR located in different countries and not by himself. He said that a senior member told us that there was a threat to the Company and that the Claimant had taken a confrontational attitude towards the Company.

[24] The Claimant testified that he was employed pursuant to the Swiss Contract which he signed with DKSH Switzerland to be based in the Company as its Vice-President IT based in Kuala Lumpur. He testified that he reported to COW.1. He testified further that the said contract which he signed in Switzerland provided that his tenure would be for an unlimited period in Kuala Lumpur and that the said contract will be replaced with the Second Contract signed between the Malaysian Company and himself. He testified that the Eliza Loong who was the Human Resources Manager in Kuala Lumpur with the Company had assured him that the terms of the Swiss Contract with Switzerland will be maintained and be identical with the Second Contract which was needed for the purposes of applying for his work permit in Malaysia. It was his testimony that the Company had standard contracts for all its foreign nationals working in Malaysia.

[25] He testified that the terms of the Second Contract did conform mostly with the Swiss Contract but it differed where the duration of his services in Malaysia with the Company was concerned. It was his evidence that the said Second Contract provided that the employment in Malaysia would be for 3 years whereas his Swiss Contract provided that he would work for the Company for an unlimited period of time. He testified that Eliza Loong informed him that requirement was for the purposes of his employment permit.

[26] It was his evidence that around August 2011 the Malaysian Ringgit substantially depreciated and he informed vide his emails to COW.1 that it affected his salary and bonuses that he was to earn in Malaysia as his salary which was originally agreed in Swiss Francs was converted based on the exchange rate of 1 Swiss Franc to RM3.10 then. He said that because he transferred 80% of his salary back to Switzerland this depreciation affected him. He testified that he informed COW.1 that he wished to move back to Europe but would stay on in Malaysia if his services were required by the Company. It was his testimony that he met COW.1 on 22 September 2011 together with Guy Woollard during which meeting they presented him with the separation agreement. He testified that at this said meeting they informed him that COW.2 would be taking over his responsibilities and position. It was his evidence that he could not accept the terms offered to him and therefore made a counter-proposal to Guy Woollard. He testified that on 27 September 2011 he was informed by COW.3 that he wanted to meet him and he met him on 29 September 2011. He said that COW.3 had brought 2 security guards with him and was told that the guards would escort him out of the Company's premises. He said that COW.3 had told him that he was ordered by COW.1 to suspend him. He testified that no reasons were given to him by COW.3 for his suspension and that he was shocked and embarrassed.

[27] The Claimant further testified that he received a show cause letter from the Company dated 11 October 2011 for having his purported statement to COW.2 that he would make the Company pay. It was his evidence that he did not say this to COW.2 and that it was fabricated solely to remove him from his position. He said that the Company wanted to force him to accept the separation agreement with its terms. He said that he replied the said show cause letter vide his reply dated 14 October 2011. It was his testimony that COW.2 stood to gain by his departure from the Company. He testified that after he gave adverse evidence against him his salary was raised by 37%. It was his evidence that the Company was under pressure from the headquarters in Switzerland to lower operating costs and thus it covertly terminated the employment of some of its highly paid personnel such as himself and another Christopher Walzer. The Claimant testified that on 23 September 2011 when he met COW.2 he expressed his disappointment that he had not told him that he would be taking over his position. He said that he told COW.2 about the separation agreement that was offered to him which he was not accepting. He testified that he did not tell COW.2 that he would make the Company pay. He testified that 23 September 2011 was a Friday and he was required to be in Singapore from the 26 September 2011 to 27 September 2011 for the Company's Human Resources systems project that he was invited to be involved in. He testified that COW.1 told him on 23 September 2011 that he was not allowed to travel to Singapore and sent COW.2 instead who did not not know this project well.

[28] The Claimant further testified that he did not make unreasonable demands and that he had asked for 8% increase in his salary which was the average amount that was approved by Headquarters for all the other staff in early 2011. He said that his contractual appointment was for an unlimited period as Clause 10 of his Swiss contract states that it was for an unlimited term and this contract was never terminated by mutual agreement. He testified that he was assured that the 3 year term was only to satisfy the Malaysian Authorities. It was also his testimony that the shares he was promised was to vest 1/3 in April 2012, 1/3 in April 2013 and final 1/3 in April 2014. He testified that the shares were given on the basis of his continued employment with the Company and not on a fixed term employment.

[29] It was his evidence when cross-examined that it was not told to him that his employment with the Company in Kuala Lumpur was for a period of 3 years. He agreed that when he met COW.2 on 23 September 2011 he was upset after the meeting with COW.1 and Guy Woollard. It was his evidence that his 15- minutes discussion with COW.2 was a casual conversation. He testified that he voiced out his disappointment to COW.2.

Evaluation By Court

(a) Issue (1)

[30] In Hong Leong Assurance Sdn. Bhd. v. Wong Yuen Hock [1995] 3 CLJ 449 the Federal Court held that the function of the Industrial Court inter alia in dismissal cases on a reference under section 20 of the Industrial Relations Act 1967 is firstly to determine whether the misconduct complained of by the employer has been established and secondly whether the proven misconduct constitutes just cause or excuse for the dismissal.

[31] From the facts the alleged misconduct of the Claimant is that on 23 September 2011 at around 8:45 am he had told COW.2 that he would "make DSKH pay". It is said that any breach of the express or implied duty on the part of an employee unless it be of a trifling nature would amount to misconduct. The Claimant denies having made the statement to COW.2. From the facts and evidence it seems certain that there was no other witness/es to what was allegedly said to COW.2 by the Claimant. It is the Claimant's word against that of COW.2, that is, an employee taking over the position of the Claimant which came with an increase of 37% in his salary. The Company took its believe to COW.2 who reportedly told COW.1 that the Claimant had made such a statement which the Company regarded as being abusive and threatening language against it and could no longer repose trust and confidence in the Claimant.

[32] It was COW.2's evidence in Court that the Claimant had uttered allegedly this statement before the start of the meeting and he did look upset. He testified that the Claimant talked briefly on 23 September 2011 with him and had mentioned that the management had offered him a Separation Agreement. It is his evidence that it was then that the Claimant had said that he will make the Company pay which the Claimant denied having said. Assuming that the Claimant did make the statement to COW.2, which the Court on the evidence is not at this juncture convinced that he did, it must be understood in the environment in which that person is situated and the circumstances surrounding the event that led to the use of, if at all, the threatening language. On the facts and circumstances of the case it is the considered view of the Court that the Company was wrong in concluding that his statement to COW.2 if at all made was a threat to take action against it. There is no evidence to suggest that the Company carried out their investigation during the period of suspension of the Claimant into the allegations that he had made the statement to COW.2. The facts and evidence suggest the Company believed COW.2 whole scale as he was with the Company longer than the Claimant. This is not right. The Company did not accord the Claimant an opportunity to question COW.2 in the presence of his accuser. It is the Court's view that the Claimant was not dealt with in accordance with the Rules of Natural Justice which demands that everyone has a right to be heard. Before a workman can be dismissed on grounds that he has committed some serious misconduct or had grossly misbehaved which deserves the punishment of dismissal he should adequately be informed of the accusation made against him and he should be given an opportunity to correct or contradict them for no one should be condemned unheard. And it is trite that the effect of a breach of the said Rules should benefit the workman and not the party in breach. The Company should have given the benefit of the doubt and endeavoured to ascertain in what vein if at all the Claimant had uttered those words to COW.2. The Claimant denied making it. There should be cogent evidence that show that the statement was made by the Claimant to COW.2 under such circumstances and that too it must be shown that the Claimant was abusive and threatened the Company through the words allegedly spoken by him.

[33] The Court is under a duty to determine the dismissal of the Claimant on its merits. Going through the facts and evidence the Court is not convinced that the Claimant had misconducted himself. The Court will refrain from acting on the sole evidence of COW.2 who is a serving employee who benefited from the dismissal of the Claimant. The Court is aware that the Company's burden is to prove its case on a balance of probabilities but the evidence tendered is insufficient to convince the Court that the Claimant had said to COW.2 that he would make "DSKH pay". Moreover the Court is not convinced that if at all the Claimant had made the said statement it was just cause or excuse to warrant the dismissal of the Claimant in the light of the prevailing facts and merits of the case. The Court cannot agree with the Company's views that the statement if at all made has threatened the Company. The Court reiterates that the burden of proving the misconduct lies with the Company and it would be based on the balance of probabilities. On the facts and evidence the Court finds that the Company had failed to do that.

[34] It has been held by Lord James of Hereford in Clouston & Co Ltd. v. Corry [1906] AC 122 (PC) at page 129 said:

"There is no fixed rule of law defining the degree of misconduct which will justify dismissal. Of course there maybe misconduct in a servant which will not justify the determination of the contract of service by one of the parties to it against the will of the other. On the other hand misconduct inconsistent with the fulfillment of the express or implied conditions of service will justify dismissal".

[35] Questions as to what was the exact words that the Claimant did utter to COW.2 or in what context it was said and was what his intentions and frame of mind when he did, if at all, say it to COW.2 are unanswered. COW.2 affirmed that the meeting with the Claimant was brief. Accordingly the Court does not think it to be a misconduct if at all the Claimant may have uttered the alleged words to COW.2. After all the Company was negotiating with him to sever the ties through a pay-off which they eventually did not have to make as the Claimant was dismissed.

[36] Employees are obliged to discharge their duties to their employers and where he commits gross misconduct the employer is justified in dismissing the employee after giving the employee an adequate opportunity to refute the charges framed against him. But it must be remembered that not all misconduct warrants dismissal. And in determining whether the misconduct warrants dismissal from employment an appraisal of all facts and circumstances of each individual case must be undertaken by the employer. The Court opines that the Company found a reason to sever ties with the Claimant when COW.2 carried this news to them. On the facts it seems the Company did not pay much thought to whether the Claimant indeed made such a statement and whether such a statement if at all uttered by the Claimant was abusive and threatening to the Company. And, even if it were so, whether it warranted the punishment of dismissal. The Claimant negotiating for his severance package with the management, the alleged making of the statement by the Claimant and the subsequent dismissal of the Claimant by the Company were too close in time that it throws open wide the doors for the Court to want to ask whether the dismissal was indeed done with a just cause or excuse.

[37] With the decision of Panzana Enterprise Sdn. Bhd. v. Norizan bin Bakar and Mahkamah Perusahaan Malaysia [Rayuan Sivil No. 01(f)-29-11-2012 (W)] the Court will decide whether the Claimant should have been dismissed on the facts. The question of the reasonableness of the punishment meted out arises as it is trite that the punishment must commensurate with the wrong done. Infact in Panzana Enterprise Sdn. Bhd. (supra) it was held by the Federal Court that under the scheme of the Industrial Relations Act 1967 the Industrial Court is clothed with the power to consider whether the misconduct if proved warrants the punishment of dismissal or otherwise. Hence it is a requirement that the employer consider whether the employee's misconduct could constitute sufficient cause or excuse for his dismissal. And, on the facts of the case before the Court finds that, if at all the Claimant did make the alleged statement, the punishment is irrational on the the facts and circumstances of the case. The Court reiterates that if which is denied that the statement was uttered by the Claimant to COW.2 the Company should have considered the environment in which he was situated and the circumstances surrounding the event that led to him making the statement. The facts do not suggest any similar past precedented behaviour by the Claimant to justify the harsh punishment that the Company has meted out.

[38] The Company justifies its decision to dismiss the Claimant in that it lost confidence and trust that it would otherwise repose in him. As held in the case of L. Michael & Anor v. Johnson Pumps Ltd. AIR 919750 Lab. IC. 399 loss of confidence is often a subjective feeling or individual reaction to an objective set of a facts and motivations. The Court is concerned with the latter and not with the former.

[39] Accordingly the Court finds that the Claimant has been dismissed without just cause or excuse by the Company. This is the Court's findings having considered the facts, evidence and the provisions of section 30(5) of the Industrial Relations Act 1967.

(b) Issue (2): Was the Claimant employed under a fixed term contract for 3 years?

[40] Coming to this issue whether the Claimant was employed for an unlimited period or fixed period of 3 years the Court refers to the 2 employment contracts that has been executed with the Claimant, DKSH Management Ltd. (the "Swiss Contract") and the Malaysian Company that is, the Second Contract. On the facts and evidence the Court opines that Swiss Contract was not intended to be terminated by the Second Contract, and it is obvious the Second Contract was concluded for the purpose of applying for the Claimant's work permit to satisfy the Immigration Authorities in Malaysia. The Claimant's Counsel submits that both the Swiss Holding Co. and Malaysia Co. employed him. It has been held that more than one person may be responsible for dismissing a workman without just cause or excuse. The evidence must be viewed with utmost objectivity. The evidence shows that the Claimant signed employment contracts with the Swiss holding Company as well as with the Malaysian Company. He reported to COW.1 who was the Head of Operations of the Swiss Company and all letters leading up to his termination were copied to the Swiss Company. His remuneration paid by the Malaysian Company was in accordance with the terms of his Swiss contract. The Company through its witnesses testified the decision to terminate the Claimant was at the instructions of DKSH Holding Ltd, the holding Company. On these facts the Court necessarily agrees with the Claimant's Counsel that the Swiss holding Company and the Company were joint employers of the Claimant. The Company's Counsel argues that the Malaysian Company has been wrongly brought to the Court by the Claimant. The Court disagrees with such a contention as the facts and law supports the conclusion that both were joint employers and in a triangular relationship with the Claimant. One cannot deny the fact that the work permit applied for was done by the Malaysian Company holding itself out as the employer of the Claimant. And as joint employers they are jointly and severally liable towards the Claimant.

[41] As to his tenure of employment there is here a contradiction of terms as the Swiss Contract stipulates that the Claimant would work for an unlimited period for the Company whereas the Second Contract satisfying the requirements of the Immigration authorities controlling the issuance of work permits, states that the Claimant's tenure was for 3 years. It was the Claimant's evidence that he was led to believe by the Malaysian Company that notwithstanding the 3 year fixed period in his Second Contract his position in the Company would be permanent and for an unlimited period as stipulated in his Swiss Contract. It is a known fact that for the purposes of applying for a work permit in Malaysia it is a requisite that the tenure of an expatriate wanting to work in Malaysia be for a fixed term that is a minimum period of 2 years. It is no guess that the Company drew up the Second Contract to adhere to this requirements of the Immigration Regulations 1963. On the facts before it the Court's view is that it must have been the intention of the parties, that is, the Swiss holding Company, the Malaysian Company and the Claimant, that the Claimant was to be placed on permanent employment. The Court's findings are reinforced by the fact that the Claimant was to be given 30 shares in the Malaysian Company which would have vested in him 2 years after the IPO that will go beyond the 3 years tenure of the Claimant envisaged under the Second Contract. Judging from the evidence of COW.1 about the volume of invoices churned out by the Malaysian Company it must have been the intention of the Swiss and Malaysian companies that the Claimant should be employed for a long sustainable period forming an integral part of the Company's core business operations in Malaysia. It is pertinent to note the letter dated 23 January 2011 that was handed to the Claimant by the Swiss Company viz "CLB-4".

[42] It states that the introduction of the new additional longterm incentive plan was for a selected group of key employees one of whom was the Claimant. It was to be given in recognition of the Claimant's, inter alia, "recognised important role he will have in the upcoming IPO readiness process and transformation of DSKH into a public Company". This grant was a tied up with a long term sustainable growth and surely contemplating the Claimant's long stay with the Company in Malaysia that is beyond the 3 years as contemplated by the Second Contract.

[43] It has been said to the English tribunals (see the case of Terry v. East Sussex County Council, 1976 I.C.R 536) in determining whether a contract is a fixed term or not that the "the great thing is to make sure that the case is a genuine one...". This cannot be the case here as the Second Contract that was signed by the Claimant with the Company in Malaysia was for the purpose of processing his work permit. I would venture to say that this Second Contract was never intended on the facts and circumstances of the case to be one that placed the Claimant on a fixed term of 3 years with the Company in Malaysia. In Han Chiang High School v. National Union of Teachers in Independent Schools, West Malaysia (1988) 2 ILR 611 the Court warned of the danger of employers denying their employees the important statutory protection if the former are permitted to make at will contracts which automatically expire after a certain fixed term. It was held in the said case that in genuine fixed term contracts there is this tacit understanding between the parties that the employment contract which is for a finite term will not be renewed upon expiry. The fact that the contract stipulates that it is for a fixed term is not determinative of the matter. The Court will necessarily undertake an inquiry into the question whether it is a fixed term contract or not. The locus classicus is of course for this proposition the case of Han Chiang (supra). Hence looking at the circumstances of the case and its facts the Court reiterates that the Claimant was not employed for a finite term by the Company. It is plain under the circumstances of this case that the Claimant it was intended was employed to render his services on an ongoing basis rather than for a definite term. I do not think the Claimant was meant to have his services terminated barring any eventualities that may have led to the Company terminating his services or him resigning, at the end of 3 years. The Court's findings to this effect rests on the facts discussed hitherto and the nature of the Company's core business which is far from being temporary in the given case.

[44] The Court has considered the submissions of the Company in this regard but is unfortunately unable to agree with their views. The arguments by the Claimant's Counsel seems more appealing to the Court which on the facts and law is more inclined to think that the parties namely the Swiss Company, the Claimant and the Malaysian Company did not intend from the outset of contracting that the employment contract was to be for a finite period. The facts and evidence show that the Claimant was employed in an integral part of the Company's ongoing operations in Malaysia rather than to serve in the Company in Malaysia be accorded shares in the Malaysian Company upon listing be for a fixed duration.

Relief

[45] On the facts it appears that reinstating the Claimant would not be conducive under the circumstances and to industrial harmony and therefore the Court will not order reinstatement of the Claimant. The Court makes the following orders instead:

(a) Compensation in lieu of Reinstatement

The usual practice of the Court is to give one month's salary for each completed year of service. The Claimant worked for 2 completed years. The Claimant was paid a salary RM90,720.00 per month. The Court thus awards as follows:

RM90,720.00 x 2 months = RM181,440.00

(b) Backwages

RM90,720.00 x 24 months = RM2,177,280.00

The Court has considered the facts and evidence on the Claimant's conduct leading to his termination and his position post-dismissal. The Court shall make deduction of 40% in accordance with the First Schedule of the Industrial Relations Act 1967 owing to the conduct of the Claimant that perhaps to some extent contributed to the start of the relationship between him the employer going sour. Accordingly the backwages is rescaled as follows:

RM2,537,280.00 x 60% = RM1,306,368.00

Final Order

[46] The Court orders that the Company pays the Claimant the sum of RM1,487,808.00 less any statutory deductions through his Solicitors within 30 days from the date hereof.

HANDED DOWN AND DATED THIS 8 DAY OF JANUARY 2015

Signed

DATO' MARY SHAKILA G. AZARIAH
CHAIRMAN
INDUSTRIAL COURT, MALAYSIA
KUALA LUMPUR

Encik M. Nagarajah and Encik Michael Anthony of Messrs. Shook Lin & Bok, Counsel for Claimant.

Encik N. Sivabalah and Cik E. Reena of Messrs. Shearn Delamore & Co, Counsel for Company.

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