INDUSTRIAL COURT MALAYSIA CASE NO.

4/4-992/12 BETWEEN LOW YOOK MENG AND SHANGRI-LA HOTEL (KUALA LUMPUR) AWARD NO. 163 OF 2013 BEFORE : Y.A. TUAN P IRUTHAYARAJ A/L D PAPPUSAMY Chairman (Sitting alone) : Mahkamah Perusahaan Malaysia Kuala Lumpur 18.11.2009. 28.08.2012; 11.09.2012; 15.10.2012; 09.01.2013 0 04.12.2012. Dato' B. S. Sidhu and Ms Sharon Sidhu from Messrs B. S. Sidhu & Co , represented the Claimant. Encik Puvarasan from Messrs The Chambers Of R Sivagnanam & Associates, represented the Company.

VENUE

DATE OF REFERENCE: DATE OF MENTION : DATE OF HEARING : REPRESENTATION

REFERENCE

This is a reference by the Honourable Minister of Human Resources under Section 20(3) of the Industrial Relations Act 1967 for an award in respect of a dispute arising out of the dismissal of LOW YOOK MENG (hereinafter referred to as the Claimant) by SHANGRI-LA HOTEL (KUALA LUMPUR) (hereinafter referred to as the Respondent).

AWARD The Claimant's claim against the Company (Re: Industrial Court Case No. 11/41212/05) was heard by the Industrial Court before the Learned Chairman Y.A. Puan Zura Yahya (as she then was) on 20.07.2006 and 21.07.2006 respectively. Subsequently, the Learned Chairman handed down Award No. 845 of 2007 dismissing the Claimant's claim.

The Claimant then filed an Application for Judicial Review to the Kuala Lumpur High Court. The said Application was allowed with costs on 18.11.2009. The High Court quashed the Award No. 845 of 2007 of the Industrial Court. The Order of the High Court dated 18.11.2009 ( the Order) states in paragraph 3 at page 3 as follows:Bahawa tuntutan Pemohon untuk digaji semula tidak dibenarkan dan Responden akan membayar kepada Pemohon arrears of wages (backwages) dan pampasan compensation in lieu of reinstatement dan bonus. [Emphasis added] The High Court then remitted the matter back to the Industrial Court to assess

the amount to be paid by the Company to the Claimant in respect of:(A) (B) (c) Claimant's backwages; Compensation in lieu of reinstatement; and Bonus

Let me now deal with each of these items. (A) Backwages

In determining backwages the following matters must be taken into account:(1) The Claimant's last drawn salary in the Company was RM5,068.00 per

month. While this reference pre-dates the amendments to the Industrial Relations Act 1967, this Court takes into consideration the existing law i.e the law in force at the time the award is made which is in any event a codification of the guideline stated in Practice Note No 1 of 1987 which is a reflection of the established practice in the Industrial Court since 1980 to limit backwages to 24 months only. (see Islamic Financial Services Board v Marlin Fairol Mohd & Anor [2010] 4 ILR; and Chuah Lee Heng v Hong Leong Property management Co Sdn bhd & Ors [2010] 2 ILR 340). Therefore the Claimant's calculation for backwages is in the instant case is RM5,068.00 X 24 months= RM121,632.00

(2)

Whether contributory misconduct should be taken into account from the

backwages? The High Court did not make any finding as to whether the Claimant has committed any contributory misconduct. Therefore this Court will not deduct any quantum for contributory misconduct.

(3)

Whether in assessing backwages the post dismissal earning factor should

be taken into account? The answer to this question is in the affirmative. In the Federal Court case of DR.JAMES ALFRED, (SABAH) v SERBAGUNA KOPERASI

SANYA BHD. (SABAH) & ANOR [2001]3 CLJ 541 His

Lordship Steve Shim CJ (Sabah & Sarawak) held: On appeal to the Federal Court in Dr. James Alfred, (Sabah) v. Koperasi Serbaguna Sanya Bhd. (Sabah) & Anor [2001]3 CLJ 541, ruled;

In the view, it is in line with equity and good conscience that the Industrial Court, in assessing the quantum of backwages, should take into account the fact, if established by evidence or admitted that the workman has been gainfully employed elsewhere after his dismissal. Failure to do so constitutes a jurisdictional error of law. Certiorari will therefore lie to rectify it. Of course, taking into account such

employment after dismissal does not necessarily mean that the Industrial court has to conduct a mathematical exercise in deduction. What is important is that the Industrial Court, in the exercise of its discretion in assessing the quantum of backwages should take into account all relevant matters, including the fact, where it exists that the workman has been gainfully employed elsewhere after his dismissal. In the instant case there was evidence relating to the Claimants' post dismissal earning which is as follows:(a) After his dismissal on 28.2.2001, he was unemployed until 1.6.2001 (i.e

he was unemployed for 3 months) where he was employed as a Maintenance Manager at Admiral Marina and Leisure Club (Admiral Marina) which is located in Port Dickson, Negeri Sembilan. In Admiral Marina he was paid a salary of RM4,500.00 per month and his last drawn salary was RM4,050.00 due to pay cut. His employment here lasted until April 2002. He was earning RM1,000.00 per month less than what he would have earned at Shangri-La Hotel. (b) He subsequently held the position of Assistant Chief Engineer in the

Pacific Regency Hotel Apartment from 1.5.2002 till 3.10.2003. He earned a basic monthly salary of RM4,000.00 and his last drawn salary was RM4,300.00. He was still earning about RM800.00 per month less than what he would have earned at Shangri-La Hotel. (c) His last position was as Chief Engineer at SDB Properties Sdn. Bhd from 1.11.2003 until to date. Here he was earning a basic salary of RM5,500.00 and his salary at the last date of hearing in this Company was RM6,300.00.

In assessing what quantum is to be deducted for gainful employment after his dismissal I am guided by Dr. James Alfred's decision where the Federal Court stated:..Of course, taking into account such employment after dismissal does not necessarily mean that the Industrial Court has to conduct a mathematical exercise in deduction. What is important is that the Industrial Court, in the exercise of its discretion is accessing the quantum of backwages should take into account all relevant matters, including the fact, where it exists that the workman has been gainfully employed elsewhere after his dismissal. [Emphasis Added]

Based on his post dismissal earnings, I am of the view a deduction of 30% from his backwages is considered reasonable and equitable. (4) Whether the sum of RM1,169.54 which was deducted from the Claimant due to his suspension from work from 15.2.2001 to 28.2.2001 should be

paid back to the Claimant in view of the fact that the High Court had quashed the Industrial Court Award No. 845 of 2007?. Since the High Court had quashed the Industrial Court Award the Claimant is therefore entitled to the said RM1,169.54. (B) Compensation in Lieu of Reinstatement

The Claimant in his Statement of Case (the SOC) dated 10.02.2006 at paragraph 34 (iii) had pleaded An award of compensation in lieu of reinstatement for unlawful dismissal without just cause and excuse of two (2) months' salary in the sum of RM10,136.00 per month for each year of service (the Claimant's last drawn salary was in the sum of RM5,068.00 per month).

However at paragraph 34 (iv) of the SOC the Claimant had pleaded Further and /or in the alternative, an award of compensation in lieu of reinstatement for unlawful

dismissal without just cause or excuse in the sum of RM of 5,068.00 per month for each year of service (the Claimant's last drawn salary was in the sum of RM5,068.00). In my view the High Court in its Order did not make any finding of punitive compensation to be awarded based on reasons and circumstances that will enable this Court to consider whether or not to allow the Claimant's compensation in lieu of reinstatement at two (2) months' salary for each year of completed service as claimed by the Claimant. In the circumstances, the Court will grant the usual practice of awarding 1 months' salary for each year of completed service in respect of compensation in lieu of reinstatement.

The Claimant commenced work with the Company on 01.04.1985 and was dismissed on 28.02.2001. This amounts to 15 years of completed service. Therefore the Compensation in lieu of reinstatement awarded to the Claimant by this Court is as follows:RM5,068.00 X 15 years= 76,020.00

(C)

Bonus

The High Court on 18.11.2009 ordered that the Hotel pay the Claimant his bonus. The Company had submitted that the Claimant is not entitled for the bonus as:(a) (b) bonus is entirely at the discretion of the Company; and bonus is based on assessed performance and not capable of being reliably determined. In any event the Company states that if the Court were to award bonus at best a nominal sum can be claimed. The Company however did not qualify what amounts to a nominal sum. The Claimant on the other hand had inter alia submitted that:(a) The Claimant received bonuses every year during the course of his employment with the Company. The Claimant CLW-1 gave evidence in cross-examination as follows: Q: Question no.49 and its Answer in CLS-1 referred do you agree that bonus is not your contractual entitlement? A: It is not a contractual entitlement but usually all employees would be

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paid bonus. Q: Quantum of bonus based on hotel performance and performance of employees and not a standard rate? A: I do not know but I got full bonuses from the day I joined the Hotel.

(b)

In the year 2000 the Claimant received 2 months' bonus

According to the Claimant's pay slip dated 30.12.2000: (a) (b) the Claimant's basic pay was RM4,944.00 for December 2000; and the Claimant was paid a bonus of RM9,888.00 for the year 2000 which is equivalent to 2 month's salary. This fact was confirmed by COW-1 Christopher Raj during cross-examination in Court on 20.7.2006. In this regard COW-1 gave evidence that CLB-2 page 1 referred this payslip is in respect of the pay and bonus paid by the Hotel to the Claimant and the date of pay was 30.12.2000. Stated here that the Claimant's pay was RM4,944.00. The Claimant was given a bonus of RM9,888.00 for that year. This bonus is equivalent to the 2 month's salary in the year 2000.

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(c) (i)

Other employees were also paid bonus The Company does not pay a fixed bonus to its employees. The bonus depends on the financial performance of the Hotel. This fact was confirmed by COW-1 Christopher Raj during cross examination in Court on 20.7.2006. COW-1 gave evidence that The Hotel does not pay a fixed bonus to its employees, it depended on the financial performance of the Hotel. In the year 2000 the Claimant was paid 2 months' salary as a bonus....

(ii)

COW-4 Ng Eng Hooi (an employee of the Hotel) gave evidence that he received a bonus every year from the Hotel. In this regard COW-4 gave evidence that For the year 2000, I did not receive bonus from the Hotel. I think if I am not mistaken the bonus paid to me was one month's salary. For

the year 2001, I got my bonus. Also for the years 2002, 2003,2004 and 2005, I did receive bonus. (iii) The bonus paid was based on the Claimant's salary at the time. The Claimant in his Witness Statement CLS-1 gave uncontradicted evidence that: (a) his bonus for the year 2000 was 2 months' pay;

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(b)

his bonus for 2001 would have been based on his last-drawn salary of RM5,068.00;

(c)

his pay increment was between 2% to 3% per year depending on performance. Had the Claimant continued working for the Hotel, his yearly bonuses would have been based on the increased pay he would have received from year to year (i.e. higher than his last-drawn salary of RM5,068.00);

(d)

There

is

ample

documentary

evidence

that

the

Applicant's

performance merits the payment of bonus. This can be seen from pages 20 to 24 of the Claimant's Submission dated 29.10.2012; (e) The Company has given detailed evidence that the Claimant's replacement received bonuses in that on 21.7.2006, the parties agreed in the Industrial Court that the bonuses paid by the Company to the person occupying the Applicant's designation were: In 2000 In 2001 In 2002 2 months' bonus 1 month bonus 1 month bonus

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In 2003 In 2004 In 2005

2 months' bonus 2 months' bonus 2 months' bonus

Courts' Analysis on the issue of bonus Based on the above factors and evidence the Court's view is that the Claimant is entitled to loss of bonus based on his last drawn salary of RM5,668.00 per month with effect from 28.2.2001 to 21.7 2006( for a period of 5 years and 5 months ) calculated as follows:For 2001 For 2002 For 2003 For 2004 For 2005 For 2006 Remedy Based on the above mentioned calculation for (A) backwages; (B) compensation RM5,068.00 RM5,068.00 RM10,136.00 RM12,670.00 RM12,670.00 RM5,068.00 (1 month) (1 month) (2 months) (2 months) (2 months) (1 month)

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in lieu of reinstatement and (C) bonus the Court hereby orders as follows:(a) Backwages up to a maximum of 24 months RM 5,068.00 per month x 24 months = RM121,632.00 less 30% for post dismissal gainful employment=RM85,142.40 (b) Compensation in lieu of reinstatement i.e. one month of salary for every completed year of service (from 01.04.1985) to the date of dismissal (28.02.2001)= 15 years and 10 months. RM5,068.00 X 15 months = RM76,020.00 (c) Bonus entitlement based on the last drawn basic salary of RM5,068.00 the following years:For the year 2001For the year 2002For the year 2003For the year 2004For the year 2005For the year 2006(1 month bonus) (1 month bonus) (2 months' bonus) = = = RM5,068.00 RM5,068.00 RM10,136.00 RM12,670.00 RM12,670.00 RM5,068.00

(2 months' bonus) = (2 months' bonus) = (1 month bonus. = Since he only served for 5 months his bonus should be pro-rated)
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Total Bonus (d)

RM50,680.00

Refund of the deducted sum of RM1,169.54 to the Claimant due to his suspension from work from 15.2.2001 to 28.2.2001 as he was on half pay during that period.

Therefore, based on items (a), (b), (c) and (d) under Remedy the total sum payable by the Company to the Claimant is RM213,011.94. The Company is hereby ordered to pay the sum of RM213,011.94 less income tax deduction, if any, to the Claimant through his Solicitors, Messrs B. S. Sidhu & Co within 30 days from the date of this Award.

HANDED DOWN AND DATED THIS DAY 18th JANUARY 2013

(P IRUTHAYARAJ A/L D PAPPUSAMY) PENGERUSI MAHKAMAH PERUSAHAAN MALAYSIA KUALA LUMPUR

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