INDUSTRIAL COURT MALAYSIA

CASE NO. 17/4-1743/12

BETWEEN
SOO KWOK WAH
AND
F & N BEVERAGES MANUFACTURING SDN BHD

AWARD NO: 1243/2014

BEFORE

: Y.A. TUAN DUNCAN SIKODOL

Chairman (sitting alone)

VENUE

: Mahkamah Perusahaan Malaysia, Kota Kinabalu, Sabah

DATE OF REFERENCE: 25.09.2012

DATES OF MENTION: 26.12.2012, 29.01.2013, 12.11.2013, 07.05.2014 & 16.05.2014
DATES OF HEARING: 19.12.2013, 20.12.2013, 23.12.2013, 24.12.2013, 03.03.2014,
04.03.2014,02.06.2014, 05.06.2014,16.06.2014 &17.06.2014
DATES OF CASE MANAGEMENT: 02.04.2013
REPRESENTATION:

For the Claimant Mr Vanugopal

Messrs S. Vanugopal & Partners
For the Respondent- Ram Singh
Messrs Ram Singh and Co

REFERENCE:

This is a reference by the Honourable Minister of Human Resources under Section

20(3) of the Industrial Relations Act 1967 ("the Act") arising out of the dismissal of
SOO KWOK WAH (hereinafter referred to as the Claimant) by F & N BEVERAGES
MANUFACTURING SDN. BHD. (herein referred to as the Company) on the 14th
September 2011.

Introduction

This case was initially handled by YA Tuan Haji Yusob Bin Md Tasir who was then the
Chairman of the Industrial Court, Sabah Branch from the 1 st date of mention on the
26th December 2012. After YA Tuan Hj Yusob Bin Md Tasir was transferred to the
Industrial Court Kuala Lumpur, I took over the hearing of this case on the 2 nd June
2014 after I was transferred to this Court. Tuan Haji Yusob had heard the evidence of
2 of its witnesses namely Alexander Yong (COW1) and Lily Foong Yoke Yip (COW2)
when he had to go. I took over and continued to hear the evidence of Goh Eng Hua
(COW3) as well as the Claimant CLW1 himself. In respect of the evidence in chief and
the cross examination of the earlier witnesses, I have relied on the notes of
proceedings left behind by my predecessor. I had completed the hearing of this matter
and am now handing down the award in respect of this case.

Brief Background Facts

The Claimant joined the services of Fraser & Neave (Malaya) Sdn Bhd, as the
Company was then known, on the 1st November 1982 as a Management trainee with
effect from the 1st May 1983 in terms of the letter of Employment at page 2 of CLBD.

Subsequently, the Claimant was promoted to the position of Plant Manager and was
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based in Sandakan with effect from the 1st April 1984.

With effect from the 1st March 1996, the Claimant was transferred to F&N Coca Cola
(Malaysia) Beverages Sdn Bhd, Kota Kinabalu and his position was redesignated to
Logistic and Distribution Manager. As of the 15th January 2004, the Claimant was
redesignated to the post of Plant Manager.
On the 1st October 2010, the Claimant was subsequently transferred to F&N
Beverages Manufacturing Sdn Bhd (formerly known as F&NCC Beverages Sdn Bhd)
and his position was redesignated as Production Manager. According to CLW1, as the
production Manager, his scope of duty was merely to take charge of the manufacturing
functions of the Company.
On the 4th April 2011, the Company issued the Claimant with a show cause letter
alleging that he as the Logistic and Distribution manager had failed to effectively
manage the Companys products at the warehouse resulting in ullages of the
Companys products for the months of October, November and December 2010 in
various amounts and despite not having received approval from the National Finance
Office (NFO) destroyed the ullages. Vide letter dated 18th April 2011, the Claimant
provided his explanation on the said allegations. The Company being dissatisfied with
the Claimants explanation to the Show Cause Letter decided to hold a Domestic
Inquiry from the 6th 7th July 2011.
The Company had vide letter dated 28th June 2011 preferred 6 charges against the
Claimant and the charges against him are as follows:-

Charge 1
That you, in the month of October 2010 have been grossly negligent in carrying out your
duties as Logistics & Distribution Manager in that you failed to effectively manage the
Company's products at the warehouse resulting in ullages of Company products amounting to
RM43,295.76 for the month of October 2010.
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Charge 2
That you, in the month of November 2010 have been grossly negligent in carrying out your
duties as Logistics & Distribution Manager in that you failed to effectively manage the
Company's products at the warehouse resulting in ullages of Company products amounting to
RM51,721.80 for the month of November 2010.
Charge 3
That you, in the month of December 2010 have been grossly negligent in carrying out your
duties as Logistics & Distribution Manager in that you failed to effectively manage the
Company's products at the warehouse resulting in ullages of Company products amounting to
RM32,937.57 for the month of December 2010.
Charge 4
That you had, despite clear instruction from your superiors to the contrary and/or despite the
fact that you had yet to receive any approval from the National Finance Office (NFO) for the
Request For Disposal (RFD), proceeded to dispose ullages of Company products for the
month of October 2010 amounting to RM43,295.76.
Charge 5
That you had, despite clear instructions from your superiors to the contrary and/or despite the
fact that you had yet to receive any approval from the National Finance Office (NFO) for the
Request For Disposal (RFD), proceeded to dispose ullages of Company products for the
month of November 2010 amounting to RM51,721.80.
Charge 6
That you had, despite clear instructions from your superiors to the contrary and/or despite the
fact that you had yet to receive any approval from the National Finance Office (NFO) for the
Request For Disposal (RFD), proceeded to dispose ullages of Company products for the
month of December 2010 amounting to RM32,937.57.

Based on the outcome of the DI, the Claimant was informed by letter dated 14 th
September 2011 from the Company that he had been found guilty of all the 6 charges
and he was dismissed with effect from 14th September 2011. At the time of his
dismissal the Claimant held the position of Production Manager and his last drawn
salary was RM10,168.00 per Month.

Witnesses

The following witnesses testified at the hearing of this case:

COW1 Alexander Yong, Regional Manager and his witness statement was marked
as WSCOW-1
COW2 Lily Foong Yoke Yip, Accounts Office in the Company and her witness
statement was marked as WSCOW-2
COW3 Goh Eng Hua Region Manager-South and his witness statement was marked
as WSCOW- 3.
CLW1 - Soo Kwok Wah and his witness statement was marked as WSCLW-1 (a),
WSCLW-1 (b), WSCLW1- (c).

The following bundle of documents were also used in court and marked as follows;

COB -1, COB - 2, COB - 3, EXT COB - 4 (a) & (b) - Companys Bundle of documents
CLB -1, CLB -2, CLB 3, CLB - 4, EXT CL- 5 - Claimants Bundle of Documents

The Law
In the often cited case of MILAN AUTO SDN BHD v WONG SHE YEN (1995) 4 CLJ
449, the duty of the Industrial Court in dismissal cases on a reference under s. 20 was
stated by His Lordship Mohd Azmi FCJ as follows;

As pointed out by this Court recently in Wong Yuen Hock v Hong Leong Assurance
(1995) 3 CLJ 344, the function of the Industrial in dismissal cases on a reference
under s. 20 is twofold: first, to determine whether the misconduct complained by the
employer has been established and secondly whether the proven misconduct
constitutes just cause or excuse for the dismissal.

It is trite law that the Company bears the burden to prove that the claimant had
committed the alleged misconduct and the conduct warrants the Claimants dismissal.
See Ireka Construction Bhd v Chantiravanathan a/l Subramaniam James (1995) 2
ILR 11 (Award No. 245 of 1995).

The Company needs only to prove misconduct justifying the dismissal or termination
on the balance of probabilities. See Telekom Malaysia Kawasan Utara v Krishnan
Kutty a/l Sanguni & Anor (2002) 3 CLJ 314 (CA).

Issues for determination

In this case, it is an undisputed fact that the Claimant was dismissed by the Company
on the 14th September 2011 vide letter dated the 14th September 2011. It now remains
to be considered whether the dismissal was with just cause or excuse. Since the
Company had conducted a D.I prior to the Claimants dismissal, it is therefore
necessary to examine whether the Company had complied with the rules of natural
justice when it conducted the D.I.

Before that, I shall firstly at the outset deal with some of the preliminary legal issues
raised by the learned counsel for the claimant in its submission.

Learned counsel for the Claimant contended that it was wrong in law for F& N
Beverages Manufacturing Sdn Bhd to terminate the services of the Claimant for an
alleged misconduct purportedly committed in the course of carrying out the functions
of another entity, F& N Beverages Marketing Sdn Bhd and he cited the case of Lucy
Su Pik Kwong v Minister of Human Resources & Anor (2013) 3 ILR 13 in support
of the above contention, where the Learned JC struck out the Judicial review
application of the applicant on the ground that the applicant sued the wrong party or
had failed to join her legal employer in the suit.

According to the Learned Counsel, the Claimant with effect from 20 th March 2006 was
transferred to F & N Coca-Cola (Malaysia) Sdn Bhd and redesignated as the
Logistics & Distribution Manager and that subsequently with the effect from 1 st October
2010 he was transferred to another entity, F & N Beverages Manufacturing Sdn Bhd
and redesignated as Production Manager.

Please see answer to Question 1 at

paragraphs (f) and (g) of the Claimants Witness Statement, CLWS-1(a).

This

evidence was not challenged by the Company.

The Claimant further explained at Q18 of his Witness Statement, CLWS 1 (b), that as
the logistics and distribution functions came under the legal entity of F & N Coca-Cola
(Malaysia) Sdn Bhd his legal employer when he was the Logistics and Distribution
Manager was F & N Coca-Cola (Malaysia) Sdn Bhd and that on 24 th November 2009
the name of F & N Coca-Cola (Malaysia) Sdn Bhd was changed to F & N Beverages
Marketing Sdn Bhd.

The Claimant further at Q19 of his Witness Statement, CLWS 1(b), explained that
when his position was redesignated to that of Production Manager as of 1st October
2010, his functions came under another legal entity, i.e. F & N Beverages
Manufacturing Sdn Bhd and that therefore his legal employer was F & N Beverages
Manufacturing Sdn Bhd with effect from 1st October 2010.

In support of his contention that these 2 companies are different entities the Claimant
produced and showed the Companies commission search results at pages 405 to 416
of CLB4. This evidence was also not challenged by the Company neither did he reply
to this legal point raised by the Claimants Counsel via his submission.

Having considered the legal principle and written submission by the learned counsel
for the Claimant on this preliminary legal issue, I am of the considered view that it is
not wrong in law for F&N Beverages Manufacturing Sdn Bhd to terminate the services
of the Claimant although F&N Beverages Manufacturing Sdn Bhd and F&N Beverages
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Marketing Sdn Bhd are separate entities. This is because from the facts of the case,
F&N Beverages Manufacturing Sdn Bhd and F&N Beverages Marketing Sdn Bhd are
part of a group of Companies. The facts of the case also shows that the responsibility
of Logistics with the assistance of a Logistic executive was added as part of the
Claimants function as Production Manager, a fact acknowledged by the Claimant at
page 62 CLB2 (Inquiry notes line 9 from bottom), though not in written form. Thus,
since F&N Beverages Manufacturing Sdn Bhd and F&N Beverages Marketing Sdn
Bhd are part of a group of Companies, logistics becomes part of his job. As part of a
group of Companies, there is no reason why the Claimant cannot be assigned extra
responsibility within the group by his employer, he being a very senior employee in the
Company. It is not a case where logistic is not part of his functions in his present
employment and yet he was made responsible for what took place in another
Company. This can be contrasted with the case of Lucy Su Pik Kwong v Minister of
Human Resources & Anor (2013) 3 ILR 13 where in that case, there was no link
whatsoever between the Claimants employer and the 2nd Respondent.

Having considered the above, I shall now consider whether the Claimant had been
dismissed with just cause or excuse. In this case, since the Company had conducted a
DI prior to the Claimants dismissal, it is therefore necessary to examine whether the
DI was valid in that whether the Company had complied with the rules of natural
justice when it conducted the DI.

Whether the DI held by the Company against the Claimant was valid?

It is trite law that a where DI had been conducted, the court should first consider
whether or not the DI was valid and whether the DI notes ate accurate. See
Bumiputra Commerce Bank Bhd v Mahkamah Perusahaan Malaysia & Anor
(2004) 7 CLJ 77.

Disciplinary inquiry flawed

The Claimants pleaded case is that the DI that was held in this case was flawed in
that the panel took into account irrelevant matters when it decided that the claimant
was guilty of all the 6 charges, relied on 34 documents, copies of which were never
given to him, directed the claimant to submit his written submission at the end of the
hearing but did not direct the Company to do likewise, the DI was conducted in KL
from 9-6 with only short breaks despite the Claimants complaints that he was mentally
exhausted, no reason given for decision of DI and that the charges against the
Claimant are defective especially charges no 1-3. The Companys pleaded case on
the other hand is that the DI which it held was valid and that the inquiry notes are
accurate.

I have carefully scrutinized the pleadings, the DI notes and the written submissions of
both parties in respect of the DI held and I am of the view that there are indeed
shortcomings of the DI in terms of its validity especially on the fact that no reason were
given by the panel for its decision in finding the Claimant guilty of all the 6 charges
preferred against him. As Edgar Jr J said in Rohana bte Ariffin & Anor v Universiti
Sains Malaysia (1989) 1 MLJ 487 a reasoned decision can be an additional
constituent of the concept of fairness. This fact was admitted by COW3 during cross
examination when he said that its findings recorded in Exh COB 4(a) and (b) only
states that the decision and not the reasons for its decision. To me, even if the inquiry
notes are accurate as claimed by the Company, the failure of the panel to give reasons
for its decision is a clear breach of natural justice, the right of a person to know why
he is guilty being one of the bastion of the principle natural justice. He by right should
be given the reasons why he is found guilty so that he can then properly prepare his
appeal. Based on this fact alone, I find that the DI as a whole is flawed.

Be it as it may, this does not mean that the entire DI proceedings are declared null and
void but it is safer to rely on the evidence adduced at the trial to determine whether or
9

not the Claimants dismissal was with just cause or excuse. In so doing, this court will
bear in mind the Court of Appeals decision in Hong Leong Equipment Sdn Bhd v
Liew Fook Chuan & Other Appeals (1997) 1 CLJ 665 where the Court held that :
The fact that an employer has conducted a DI against his workmen is, in my judgment,
an entirely irrelevant consideration to the issue whether the latter had been dismissed
with just cause or excuse. The findings of a DI are not binding upon the Industrial
Court which rehears the matter afresh. However, it may take into account the fact that a
DI had been held when determining whether the particular workman was justly dismissed.
Were it otherwise, the guilt or innocence of a workman upon a charge of misconduct would
be decided not by the Industrial Court, but the employer himself. That, with all respect, is
not the purpose for which parliament went through the elaborate process of legislating
the Act and setting up special machinery for the vindication of the right of workmen

Hence, in determining whether the Claimant had been dismissed with just cause or
excuse, this court would take into account the fact that a DI had been held as well as
the evidence at the trial proper as a whole.

Whether the dismissal of the Claimant was with just cause or excuse?

The main issue confronting this court in determining whether the dismissal of the
Claimant was with just cause and excuse is whether the 6 charges preferred against
the Claimant is valid in the first place.

The Claimants Counsel drew the Courts attention to O.P. Malhotra, in The Law of
Industrial Disputes, 5th ed, Vol. 2 at page 940 which states that:
before proceeding with the domestic enquiry against an offending employee,
he must be informed clearly, precisely and accurately of the charges leveled
against him.

It is the duty of the employer to indicate to the delinquent

employee not only the precise nature of the charges, but also the documents, if
any, upon which the charges are based. He went on to state that the charge10

sheet should specifically set out all charges and should also state all relevant
particulars without which he cannot defend himself.

The object of this

requirement he said is that the delinquent workman must know what he is

charged with and have the amplest opportunity to meet the charge and to
defend himself by giving a proper explanation, after knowing the nature of the
offence with which he is charged, otherwise it will amount to his being
condemned unheard. Fair hearing presupposes a precise and definite catalogue
of charges, so that the person charged may understand and effectively meet
them. If the charges are imprecise or indefinite, the person charged would not
be able to understand them and defend himself, effectively, and the resulting
enquiry would not be a fair and just enquiry.
In the case of Khiew Chee Sun and HSL Electronics Sdn Bhd (Award no 1671 of
2012) Industrial Court Chairman YA Peter Iruthayaraj a/l Pappusamy stated in his
award that The employer cannot justify his action on any grounds other than those
contained in the charge sheet and or stated in the letter of termination. If the charges
are vague and the workman has no opportunity to reply to them, and the particulars of
such charges are also not disclosed to the workman, the inquiry will not be in
conformity with the rules of natural justice.

It is the Claimants pleaded case that charges 1, 2 and 3 are defective as they lack in
particulars. Equally challenged for lacking in particulars are the charges in no. 4, 5 and
6 on the grounds that they did not state what were the alleged instructions from his
superiors, who were those superiors and when were these alleged instructions given
to the Claimant. It is therefore the Claimants learned Counsels submission that the
charges against the Claimant are void ab initio and hence should be dismissed.

Although these issues were raised by the learned Counsel for the Claimant at length in
his submission, the learned Counsel for the Company unfortunately did not in his
submission addressed to me, in reply to the above contention. This issue to me is very
11

pertinent to the issue of whether the Claimant was dismissed with just cause or
excuse.

Claimants Contention

It is the Claimants learned Counsels submission that the charges sets out in the
Companys Notice of Domestic Inquiry dated 28th June 2011 at pages 48 to 49 of
CLB1 are acutely lacking in particulars because:

(a) In respect of charges 1,2 and 3

(i)

The first 3 charges which are in respect of the Claimants alleged

misconduct of gross negligence resulting in ullages, fail to specify the
particulars of the negligence i.e. charges 1, 2 and 3 do not specify in what
ways the Claimant had failed to effectively manage his duties as the
Logistics & Distribution Manager since the term effectively manage
presupposes standard management procedures in ullages management;

(ii)

The first 3 said charges also do not provide the details of the Companys
products which were rendered ullages particularly in view of the fact that
the Company was dealing with many types of beverages which are
bottled, canned or packed in plastic bottles and come in different
volumes;

(iii)

Since gross negligence alludes to a deviation of set standards, the

Company had failed to state by how much the ullages which the Claimant
allegedly destroyed exceeded the acceptable levels;

(iv)

Since the alleged ullages were made up of 3 types of ullages, viz market
returns; secondary corrosion and excess stocks, the failure to
particularize the ullages according to these types of ullages had seriously
held liable for ullages resulting from market returns or Companys witness
confirmed at cross-examination Qs 51 and 57 that he does not know what
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was the proportion of the ullages from market returns or from corrosion of
cans. [See Cross-examination Q57 for the Companys Witness,
Alexander Yong]

(b) In respect of charges 4, 5 and 6

Charges 4, 5 and 6 are also acutely lacking in particulars because they do not
state:

(i)

What were the alleged instructions from his superiors;

(ii)

Who were those superiors; and

(iii)

When these alleged instructions were given to the Claimant.

Courts Evaluation and Findings

After analyzing the submission by the learned counsel for the Claimant on the issue
relating to the validity of the charges 1, 2 and 3, I am in total agreement with the
Claimants learned Counsel that the charges leveled against the Claimant are indeed
grossly defective based on the grounds which he had eluded thereto.

Since it is the principle of law that it is the duty of the employer to specifically set out
all charges with all relevant particulars, it is therefore incumbent upon the company in
this case to specifically specify the particulars of the negligence, the details of the
Companys products which were rendered ullages and the how much of the ullages
were destroyed which exceeded the acceptable levels. Of utmost important in my view
is the Companys failure to particularize in the 3 charges according to the type of
ullages which the claimant is alleged to have failed to effectively managed, since the
alleged ullages were made up of 3 types of ullages viz a viz market returns, secondary
corrosion and excess stocks. By not specifically particularizing the type of ullages, it
has indeed clearly prejudiced the Claimant because that would mean that he is liable
13

for all types of Companys product which are rendered ullages including ullages
resulting from market returns or through corrosions of cans, which by right he should
not be held liable.

In respect of Charges 4, 5 and 6, it is also the learned Counsel for the Claimants
contention that the said charges are defective as they are also lacking in particulars as
they do not state;
1. What were the alleged instructions from his superiors,
2. Who were those superiors and
3. When were these alleged instructions given to the Claimant?

Again, I am in total agreement with the learned Counsel that there is a need to specify
the above in the said charges as the claimant alleges that he is redesignated as
production manager in a different entity. In view of that, the question of who is the
superior who gave the instructions to him is vital to specify in the charges so as to
enable the Claimant to defend himself effectively. This is especially so because from
the facts of the case, the instructions from his superior COW1 were indeed followed.
The question is whose instruction is that he failed to follow?

In Esso Petroleum (M) Inc v Maimunah Bte Ahmad & Anor (2002) 2 MLJ 458, the
employee appeared in the employers board of inquiry on 2 charges viz receiving
RM400 from the employers contractors in return for assistance rendered in relation to
payment of that contractors invoice, in contravention of the employers gift and
entertainment policy and conflict of interest, and the concealment and failure to
disclose to the employer the existence of irregular business practices and/or violation
by the employer. Those charges did not state the date, time and place of the alleged
offences. Abdul Kadir Sulaiman JCA held that those charges were bad in law for want
of particulars and were void ab initio. In delivering the Judgment of the Court, he
stated that:

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Hence the substance relating to the two charges cannot be brushed aside as
being of no significance. Taking the words of the learned Counsel for the
appellant in his submission that the first respondent admitted and did not
dispute either during the domestic inquiry or during the proceedings before the
second respondent that she had received the money and cashed it, and there
was also in evidence that there was a statement recorded from her during the
investigation stage. At least from the purported statement surely the date, time
and place the offences alleged to have been committed would have been known
to enable proper charges be framed against her. On the two charges, the burden
is on the party that alleges to satisfy the tribunal adjudicating the matter that the
charges had been proved before the first respondent could be condemned.
They are material particulars required to be disclosed in the charges. Without
that, how would one accused upon the charges be able to prepare proper
defenses to them? Simply upon the admission and non dispute either during
the domestic inquiry or during the proceedings before the second respondent
would not entitle the learned judge of the High Court in this instant, to proceed
to consider the merits of the case? The validity or otherwise of the charges is
the threshold of the matter before the merit could be considered. Looking at the
two charges as they stood, we would not hesitate to say that they are bad and
the learned judge was therefore, correct when he said that such charges for
want of material particulars is void ab initio. With that we agree with the learned
judge that on such improper charges before the board of inquiry the finding of
guilt upon the first respondent could not stand thereby rendering the dismissal
of the first respondent by the appellant to be without just cause or excuse and
therefore unlawful. On this ground alone, this appeal of the appellant against
the decision of the learned judge ought to be dismissed.

The judgment in Esso Productions case was followed by the High court in the case of
Intrakota Consolidated Bhd v Mohamad Roslin Md Shah & Anor (2008) 8 CLJ 81
where the Learned Judge held that the material particulars as to time, place and
15

identity of persons referred to in the charge were essential to enable the employee to
know with certainty the charge leveled against him and to allow him to prepare and
conduct his defence.

The employer cannot justify its failure to specify the particulars in the charge by
claiming that particulars are within the personal knowledge of the Claimant. Her
Ladyship in such a situation held that:

What is of particular importance is the validity of the charge preferred against

the 1st respondent and therefore material particulars as to time, place and
identity of persons referred to in the charge are essential to enable the 1st
respondent to know with certainty the charge leveled against him and to allow
him to prepare and conduct his defence, as the learned chairman stated at page
8 of the impugned award, it may well be that it is also within the personal
knowledge of the claimant (1st Respondent), but it is not for the claimant to fill in
the gaps..It is for the Respondent to lay all the bare facts as the burden is
always upon the Respondent to show by evidence that the excuse or reasons
given to terminate the claimants employment has been made out or proven.

Based on the principle and line of authorities above, I find that all the 6 charges
against the Claimant could not stand as it is grossly defective and bad in law for want
of material particulars and hence it is therefore void ab initio. On this ground alone, I
find that the Claimants dismissal was without just cause or excuse without having to
consider the merits of his termination which is flawed from the beginning. See Esso
Petroleum (M) Inc v Maimunah Bte Ahmad & Anor (Supra) and Intrakota
Consolidated Bhd v Mohamad Roslin Md Shah & Anor (supra).

In the event I am found to be wrong in arriving at such a conclusion, I shall

nevertheless deal with the charges as it is framed. As the charges are similar, I shall
therefore deal with charges 1,2 and 3 together and 4,5 and 6 likewise.
16

The charges against the Claimant in 1, 2 and 3 are in respect of the Claimants
misconduct of gross negligence to effectively manage the Companys products
resulting in ullages for the month of October 2010, November 2010 and December
2010. In considering the above, the following issues shall be considered.

In what way did the Claimant failed to effectively manage the companys
products.
Companys contention

According to COW3, the claimant although he was the production Manager, he was
also in charge of Logistics and Distribution. COW1 in cross examination confirmed that
although the Claimant was the production manager, he also oversees productions and
logistic warehouse production in Sabah. This fact was acknowledged by CLW1 in
answer to Q4 of the statement of Investigation dated 10th march 2011 as follows;

Q4

Despite your lateral transfer as Production manager, were you still in charge of
Logistics and Distribution?

A.

Yes, with the assistance of a logistic Executive.

CLW1 also said that there was no black and white to that effect.

During re examination, COW3 was asked how they arrived at the decision that the
Claimant was negligent.

COW3 in reply stated that in arriving at its decision on charges of negligence under
charges 1, 2 and 3, they took into account the following matters. That the Claimant,
1. Did not use stock in transit report,
2. Did not stop the supplies from Shah Alam,
3. Did not normalize the stocks
17

4. Did not reject if there was excess and

5. Did not repack the stock when there was secondary corrosion

Claimants Contention

The Claimant denies that he was negligent in managing the Companys product
because ullages are a natural phenomena in any food and beverage manufacturing
activity and that they are a function of both inherent and external factors that are
beyond his control.

In answer to Q22 of WS-CLW1-C on what caused the ullages for the month of
October, November and December 2010, CLW1 replied as follows:
the causes of warehouse ullages for the said months were due to the limited space
and aggravated by roofs that leaked and the flooding of the warehouse both of which
caused secondary erosion to beverages in cans. Further, the slow movement of
products also resulted in the products reaching expiry dates and such products lost
their carbonation and had to be destroyed. The Claimant agreed with Edwin Thomas,
the Warehouse Manager at Shah Alam who gave evidence at the Domestic Inquiry at
page 65 CLBD that limited warehouse space could be a reason for high ullages. The
Claimant attributed the reason for the space at the warehouse to be tight during the
months of October, November and December because indents kept on coming due to
the festive and holiday seasons.

When asked in Q24 how this limited space contributes to high warehouse ullages, the
Claimant replied as follows;

When there is limited warehouse space, the goods, i.e. mainly the canned beverages
in paper trays are piled one on top of the other and are closely stacked. The Assistant
Store supervisors would not be able to detect and remove the trays which are leaking.
18

This undetected leakage would cause secondary corrosion of other cans in other
trays. All corroded cans would be classified as ullages for destruction. I will also add
that due to limited warehouse space new stocks arriving at the Kota Kinabalu Port
after customs clearance had to be kept in the open space at the port exposed to both
sun and rain. Such harsh exposure would lead to high spoilages. Further, the Claimant
also said that the leaks in the warehouses roof whereby when it rains heavily, water
will come in through the leaks and flood the area to the height of 2 feet also
contributed to high ullages. Hence, because of the flooding, secondary corrosion of
canned beverages would also take place in the trays stacked nearer to the roof and
from the trays placed on the floor of the warehouse.

As to the causes of the ullages in respect of beverages in plastic bottles which are
called PET bottles, he replied that PET ullages takes place when marketing and
distribution is not fast enough resulting in the PET bottles reaching near expiry dates
with signs of leakages at the closures (i.e. at the caps). Such bottles would also have
to be destroyed.

Evaluation and Findings

This court after considering the above contentions and weighing the evidence
presented by both parties, finds that the Company had failed to prove to the
satisfaction of this court on a balance of probability that the Claimant was negligent in
his duty which contributed to the alleged high ullages for the months of October,
November and December 2010. The finding of this court is premised on the following
evidence:
a. CLW1, as of 1st October 2010, was merely assisting F&N Beverages Marketing

Sdn Bhd which was responsible for the logistics and distribution functions. If that
is so, then it is not fair to put the blame entirely on CLW1 for the high ullages of
the Companys product for the month of October, November and December
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2010.
b. Ullages are natural phenomena in any food and beverage manufacturing activity
and these are caused both by inherent and external factors which are beyond
the control of the Claimant.
c. From the evidence adduced, the main cause of the ullages during the month of
October, November and December 2010 was the long periods of storage of the
products at the port as well as at the Kota kinabalu ware house. See CLB1 pg
14, Claimants reply to show cause letter. The supplying plant at Shah Alam kept
clearing their stocks by shipping them out to Kota Kinabalu without regard to its
warehouse problem and according to CLW1, this is beyond his control and also
within the management's knowledge.
d. As to the allegation that the Claimant failed to stop the supplies from Shah alam
coming if there is excess, again the Claimant in my view cannot be faulted for
that as he is not the person responsible for the orders.
e. On the allegation of the Claimant failing to normalize the stocks, Exhibit AE100
showed that the Claimant have requested the Regional Manager Alex Yong not
to indent further the Sprite PETI 1.5L and V Coke PETI.5L. However evidence
showed that was never done by Alex.
f. On the accusation that he mismanaged the stocks, I find that it is without basis
as the problem is due to the lack of space in the warehouse and has nothing to
with the Claimant being negligent.

Hence, as he was only asked to assist in the Logistics and Distribution of products, I
find that the charge of gross negligent against the Claimant in carrying out his duties is
most wanting. It is to be noted that he was under the supervision of Alexander Yong
(COW1), the Companys main witness in this trial before me. As the superior, he
should have monitored what CLW1 was doing and adviced him accordingly. To now
put all the blame to him which is beyond his control, I think is most unfair.

In the premises, having taken the evidence as a whole, it is my considered view that
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charges 1,2 and 3 against the Claimant has not been made out by the Company on a
balance of probability.

In respect of charges 4, 5 and 6, the Claimant was alleged to have disposed ullages of
Companys product for the months of October, November and December 2011 despite
clear instructions from his superiors to the contrary or despite the fact that he had yet
to receive any approval from the National Finance Office for the request for disposal.
In considering the above, the following issue had to be considered:

Whether the Claimant was guilty of disposing the Companys products without
authority.
Companys Contention

COW1 testified during examination in chief that the Claimant never followed the
procedure on destruction of ullages and that he had acted beyond his authority without
approval by NFO, resulting in losses to the Company.

COW3 testified that in respect of charges 4, 5 and 6, the panel find that the Claimant
did not follow the chart of authority. For the amount of more than RM2 thousand, the
Claimant must set approval from the General Manager finance before clearing the
stocks. COW3 went on to state that despite the Regional Manager saying No, the
Claimant went ahead. The Claimant also disposed the stock via a Company which has
not given the Company any quotation and issued the gate pass and signed it. The
Claimant also did not weigh the disposals before disposing it.

Claimants Contention

Claimant contended that the destruction of ullages was carried out after obtaining the
approvals and in accordance with established practice of the Company. He had on
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numerous other occasions in his capacity as the Logistics and Distribution Manager
had also destroyed the ullages after getting only the regional Managers approval
without waiting for the approval from the NFO.

The evidence in chief of the Claimant is reflected in his witness statement CLWS 1
which he testified in court on the 17th June 2014. In answer to question 7, the Claimant
states that the ullages for October 2010 were identified in the beginning of October
2010 in the warehouse and they were moved out of the warehouse and stored in the
open near the water treatment plant area waiting for approval for its destruction. The
ullages for October 2010 were destroyed at the end of October 2010 after obtaining
the approval for its destruction. In respect of the November 2010 ullages, CLW1 states
that they were identified in the beginning of November 2010 in the warehouse and
were moved out of the warehouse and stored in the same place waiting for approval
for its destruction. The November ullages were destroyed at the end of November
2010 after obtaining approvals for its destruction. Similarly in respect of the December
2010 ullages, CLW1 states that it was identified in the beginning of December 2010
and moved out and stored in the same place and were only destroyed during the first
week of December after being instructed by the said General Manager Manufacturing.
This was confirmed by Alexander Yong (COW1), the Deputy Region Manager who is
also the immediate superior of CLW1 in his answer to Q2 of the statement of
Investigation at page 380 CLSBD dated 16th March 2006 as follows;

2. Could you please explain and elaborate if there were any discussions between Soo
Kwok Wah and yourself regarding the destruction of ullages without obtaining approval
from National Finance Office?

There are 2 occasions on discussion on ullages to be destroyed pending RFD

approvals.
The 1st occasion was last year during Abdus Sani and Lee Joon Hins site visit on the
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plant project. The project team needed space desperately for placement of their
equipment and working space for civil work on the effluent waste plant. During the
project progress discussion at KKs conference room, Abdus Sani enquired about the
space and when can the ullages be cleared. We were not able to clear the ullages as
the RFD is pending for approval. Options were discussed and due to the urgency, I
contacted Phillip Chin (for finance and policy guideline), what alternative can we have.
I was advised by Phillip that we can destroy the ullages but all records and
documentation must be proper and there must be photographs to prove that such
ullages are taken out to be destroyed pending RFD approval. The same message was
briefed to Soo, in the absence of Abdus Sani and Lee Joon Hin.

That space was desperately needed and ullages from the warehouse had to be
removed was also confirmed by COW1 in answer to cross examination Q108 where
he agreed that the reason why he agreed to the destruction of the October and
November ullages was that space was urgently required by the construction of the
bottling plant.
The 2nd occasion was in January 2011. I was out of the office, Soo called me to inform
me that he is sending a truck to load ullages to be destroyed. I asked him, have the
RFD for these batches been approved. He said No. He further said the ullages are
already loaded onto the truck. I said No, dont do it, unload the ullages and we can
only destroy upon RFA approval.
That the ullages on the 2nd occasion in January 2011 were not destroyed was
confirmed by COW1 in answer to question 4 of the said statement of investigation
where he said as follows;

Q4.

Did Soo Kwok Wah proceed to destroy the ullages during the 2nd occasion when
you told him not to proceed?
(Please provide your answer)
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A.

No, he did not, the ullages was unloaded from the truck.

CLW1 went on to say in answer to Q11 of CLWS 1 that the NFO eventually sometime
in April 2001 approved for disposal the warehouse ullages. He went further to state
that this further substantiates my point raised earlier that there has never been a
single instance when the NFO had not given its approval for the destruction of the
ullages once approval had been obtained from the Region Manager or Deputy Region
Manager

This fact was confirmed by COW1 in cross examination Q78 that NFO did infact
sometime in April 2011 approve the destruction of the ullages applied for by the
Claimant for the months of October, November and December 2010.

In question 3 of the statement of investigation, he was further asked the following

question;

Q3.

Can you please explain the contradiction in your answers pertaining to the 1st
occasion where there seems to be approval granted to Soo Kwok Wah but not

on

the 2nd occasion, you told him not to do it?

A.

1st occasion, a discussion was held amongst Mr Abdus Sani, Mr Lee Joon Hin
and Mr Soo Kwok Wah onto how to vacate for space for manufacturing work to
proceed and Admin Manager was consulted on the steps to do it, pending RFDs
approval. All due to the urgency to vacate for space.
2nd occasion was not allowed as we were already pointed out and queried by
NFO on the 1st case, the destruction of ullages, even for urgency and with
proper documentations/photos, without RFD approval is not in accordance with
the SOP.

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In question 6 of the statement of investigation, COW1 was also asked if there were
any express or implied consent /authority given to Soo Kwok Wah to destroy ullages
pending approval from NFO and his answer was No, except the 1 st case where I have
consulted Finance and Admin Sabah due to the urgency for space, but with the
conditions of proper recording as advised.

From the Claimants bundle of documents, this court noted that such conditions were
satisfied by the claimant as shown at pages 374 to 376 CLB2 (documents) and pages
26 to 28 CLB1 (photographs) See Claimants witness statement in answer to Q 17.

Evaluation and Findings

From my analysis of the evidence above, there seems to be a mistaken conclusion by

the Company which made them think that the Claimant did not obtain the approvals
prior to destroying the ullages for the period stated in the above charges.

That the ullages must be destroyed is not an issue in this case as otherwise the NFO
would not have ultimately approved its destruction in April 2011. On the 1 st occasion,
when ullages were destroyed, COW1 who was guided by the advice of one Phillip
chin, the Regional Administration Manager, that the ullages can be destroyed provided
that records and documentation were proper and photographs taken, accordingly
advised the Claimant due to the urgency for space. In respect of the ullages on the 2 nd
occasion, COW1 also confirmed that the Claimant did not destroy the ullages upon his
instruction and unloaded them from the truck. From the evidence of COW1, I find that
the ullages were indeed destroyed by the Claimant based on proper instruction.
Hence, based on the following, I also find that the Company has failed to discharge its
burden of proof in respect of charges 4, 5 and 6 on a balance of probability.

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Conclusion

In the final analysis, based on the totality of evidence adduced by both parties as well
as submissions made and also having regards to equity and good conscience as well
as substantial merits of the case without regard to technicalities and legal form as
stated in s. 30(5) IRA, this court finds that the Claimants dismissal was without just
cause or excuse. Accordingly, the Claimants claim is hereby allowed. Hence I shall
now examine the remedy.

Before that, I would like to address in my award on the point raised by the Company in
para 7.11 in its submission where it said that the test to be adopted in this case in
deciding whether the Claimants dismissal was with just cause or excuse is that
adopted in Feroda Ltd v Barnes (1976) I.C.R 439.viz a viz the court should ask
whether it is satisfied that the employer had, at the time of the dismissal, grounds for
believing that the offence put against the employee was in fact committed and not
whether it is satisfied that the offence was committed.

On this point, I am in agreement with the learned Counsel for the Claimant that the
said test above is only good when the employee is dismissed for an offence which is
criminal in nature. The Company drew my attention to the Court of Appeal case of
Telekom Malaysia Kawasan Utara v Krishnan Kutty A/L Sanguni Nair & Anor
(2003) 3 MLJ 129 to illustrate its point. Here, the court of Appeal made it very clear
that if the employee is dismissed grounded on criminal misconducts as opposed to
facing criminal prosecution, the standard of proof required is on the balance of
probability. Since in this case the charges against the Claimant are not criminal in
nature, this court therefore need only be satisfied whether the Company has proved
the 6 charges against the Claimant on a balance of probability and not on the test as
suggested by the Company.

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Remedy

Based on the Courts assessment of the industrial climate between the parties, it is
certainly not conducive to reinstate the Claimant as the relationship between the
company and the Claimant has been badly strained. In the circumstances, it is
inappropriate to order the remedy of reinstatement. Instead, the Claimant will be
awarded compensation under 2 heads namely, backwages and compensation in lieu
of reinstatement.

Back wages

Back wages is calculated based on the Claimants last drawn salary but limited to 24
months. See Court practice Note 1 of 1987. From the back wages, the court is
required to make a deduction for any contributory conduct, post dismissal earnings
and delay in the hearing of the case but such a deduction need not involve a
mathematical calculation. See Dr James Alfred (Sabah) v Koperasi Serbaguna
Sanya Sdn Bhd (Sabah) & Anor (2001) 3 CLJ 541.

a. Contributory Factor

I have carefully examined the facts and evidence in this case and I am of the view that
there is no contributory factor on the part of the Claimant in respect of all the 6
charges. Hence, under this item, no deduction shall be made.

b. Delay

From an examination of the notes of proceedings, I noticed that the Claimant did not
occasion any delay in connection with the hearing of this ministerial reference. Hence,
there is also no deduction down under this head.

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c. Gainful employment

At the time of dismissal, the Claimant was 52 years and 2 months. His last drawn
salary was RM 10,168.00. On the facts of this case, there is no evidence that he was
in gainful employment after he was dismissed by the Company. Similarly, there is also
no deduction under this item

In conclusion, I hereby hand down to the Claimant a monetary award in the total sum
of RM528, 736.00, in lieu of reinstatement, which is arrived as follows:

a. Back wages for 24 months based on his last drawn salary of in the sum of
RM244,032.00.
b. Compensation in lieu of reinstatement for 28 years of service (from 1st

November 1982 to 14th September 2011) at the rate 1 month salary for each
completed year of service @ RM284, 704.00.
c. It is further ordered that the Company shall pay the total amount of
RM528,736.00 through the Claimants solicitors firm of Messrs S. Vanugopal &
Partners within 30 days from the date of this award subject to statutory
deductions, if any.

HANDED DOWN AND DATED THIS DAY OF 10Th NOVEMBER 2014.

- sgd -

(DUNCAN SIKODOL)
CHAIRMAN
INDUSTRIAL COURT MALAYSIA
SABAH BRANCH

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