INDUSTRIAL COURT OF MALAYSIA [CASE NO: 11/4-1110/16] BETWEEN BALA SANDRAN A/L KRISHNASAMY AND BEAUTY LAND ENTERPRISE Before : Y.A. Dato’ Mohd Dusuki Bin Mokhtar — Chairman. (Sitting alone) Venue Industrial Court Malaysia, Kuala Lumpur Date Of Reference 15.08.2016 Date Of Mention + 13.10.2016; 22.11.2016; 22.12.2016; 09.01.2017; 20.03.2017; 13.11.2017; 27.11.2017; 04.12.2017; 22.01.2018; 05.02.2018 and 06.03.2018 Date of Mediation ; 18.05.2017 Date Of Hearing 14.12.2017 Representation Mr Gavin Jayapal From Messrs. Rajandran Domnic & Co Counsel for the Claimant Mr. W.S Hee, From Messrs. Hee, Chong & Partners Counsel for the Company. Reference: This is a reference dated 15 August 2016 by the Honourable Minister of Human Resource under Section 20(3) of the Industrial Relation Act 1967 arising out of the dismissal of Bala Sandran AJL Krishnasamy (hereinafter called “the Claimants") by Beauty Land Enterprise (hereinafter called “the Company") which was received by this Court on 5 September 2016.AWARD Background Facts: [1] The Claimant was employed as a Supervisor beginning October 2011 and was confirmed to the post vide a letter dated 1 February 2012 with the initial salary of RM3000.00 together with the allowance of RM500.00 per month. His salary remained but the allowance was raised to RM1000.00 at the time of his dismissal. The Claimant maintained his clean service record and averred that he was never subjected to any disciplinary proceedings during his employment tenure as a Supervisor with the Company. [2] The event which prompted the Claimant to initiate with his case against the Company and thus the Award herein penned started on 24 August 2015 where on 23 March 2013, he had gone to work as usual. Approximately at 10.38 am on the same day, the Claimant received a message through WhatsApp from one Goh Soo Chian (‘GSC’) telling him to look for a new job. Apart from that, the Claimant also received an instruction from GSC to retum the Company's car, a Toyota Hilux bearing registration no. CCC 6179 to the Company's office in Kuala Lumpur by the middle of September 2015. However, there was no letter of termination. In another occasion, GSC met the Claimant in Cameron Highlands and again informed the latter that he was terminated and asked him to look for another job. Upon the request of the Claimant to issue him the termination letter before he could comply with the instruction, GSC responded by stating that it cannot be given [3] Nevertheless, when the Claimant retumed the Company's car to its office in Kuala Lumpur, he was issued with the termination latter dated 1 October 2015 from 2a company known as Sistem Tunggal Sdn Bhd. (‘Sistem Tunggal’). The Claimant maintained that he was at all material time under the employment of the Company and not Sistem Tunggal and further claimed that it was GSC who gave all the instructions. It was also alleged that upon the Claimant's termination, he later found out that both the Company and Sistem Tunggal were operated by the same management where he had no knowledge about it. The Claimant averred that whilst working for the Company, he was also at the same time instructed by the said GSC to operate a sand mining quarry belonging to a company known as Cemara Makmur Sdn. Bhd. (‘Cemara Makmur’) for about one and half years preceding his termination. [41 In this respect, it was alleged that the operations of Cemara Makmur was still ongoing during his termination of employment and he also worked at the quarry on the instruction of the Company. However, the Claimant's wages were paid by the Company. When the Claimant was dismissed by the Company, there was no domestic inquiry held and he was not informed of any wrongdoing (to which he denied). The Claimant contended that, amongst others, the dismissal was without just cause and excuse where the act of the Company was motivated by mala-fide, as well as a manifest abuse of management prerogative was against all notions of equity and good conscience. [5] On the contrary, the Company stated that the Claimant was employed by the Company as a Site Supervisor to supervise the construction site of the golf course project in Cameron Highlands. After the said project was completed in full on 29 October 2014, the Company was unable to secure any new construction project inCameron Highlands. Hence, the Company left with no other choice but to close down the construction site and terminated the employment of the Claimant. In the spirit of goodwill, the Company managed to find alternative employment for the Claimant and had recommended him to work with Sistem Tunggal. It was contended that the Claimant was aware of the situation of the Company where he accepted the termination from the Company without any dispute. The Company, amongst other, denied that the Toyota Hilux car belonged to the Company as the Claimant was not provided with any vehicle in the course of his employment. The Company also claimed that the dealing between the Claimant and GSC as narrated by the latter was their private dealing and not relevant to the Company after his dismissal. [6] The Company averred that at all material time, the alleged Claimant's dismissal was in reference to Sistem Tunggal and not relevant to the Company. Furthermore, the Claimant's employment with the Company had ended on 31 December 2014 due to the closure of the construction site in Cameron Highlands. The dismissal of the Claimant from his employment was with just cause and excuse. It was further contended that the dispute should be between the Claimant and Sistem Tunggal [7] The relevant cause papers before this Court are as follows: a) The Claimant's Statement of Case ("SOC’) dated 7 October 2016; b) The Company's Statement in Reply or Defence ("SIR") dated 22 December 2016; ©) Rejoinder dated 4 January 2017; d) The Company's Bundle of Documents (“COB1 €) The Claimant's Bundle of Documents (‘CLB1”); f) The Company's Witness Statement by Encik Goh Su Kun (‘COWS1”); and g) The Claimant's Witness Statement (“CLWS1”);e Company’s Cas: [8] The Company called Encik Goh Su Kun or COW1, who was the co-partner in the Company to give evidence in this case on 11 December 2017. According to COW1, the Claimant was one of the workers employed by the Company who worked as Site Supervisor in Cameron Highlands. About the end of 2014, the Claimant was no longer in the employment with the Company. The Company entered into a joint: venture agreement with Purnama Base Sdn. Bhd. on 15 August 2011 to do a construction work for “Projek Menaiktarafkan Padang Golf Kelab Sultan Ahmad Shah” (“KGSAS") in Cameron Highlands (‘COB pages 5-15"). The initial construction work started in September 2011. For easiness, the Company employed the Claimant, a local, to manage the local affairs in the said project. Hence, on 1 October 2011, the Claimant was appointed as a Site Supervisor at the construction site of KGSAS (“COB pages 16-18"). Amongst the duties of the Claimant were to deal with the foreign worker's matter at the construction site of KGSAS and to look after the machinery. [8] The said project was finally finished and ended on 2 August 2012. Although the construction was finished and ended, the Claimant was still given the salary by the Company although there was no work for him at the construction site. COW1 stated that the Claimant was still given a salary because the Company was still hoping to get other construction works in Cameron Highlands. After failing to secure any construction work for about a year, the Company finally secured the same construction work at KGSAS for Phase 2. Thus, the Company joined a joint-venture agreement with Purnama Base Sdn. Bhd. for a construction work ‘Projek Menaiktarafkan Padang Golf KGSAS (Reka & Bina) Phase 2 (‘COB pages 19-32")[10] Therefore, the Claimant continued to work as Site Supervisor at KGSAS for that purpose. The said construction work finally finished on 29 October 2014. After that. the Company thought that it was difficult to get other construction work in Cameron Highlands. After series of discussions between the partners of the Company, it was decided that the Company cease operation in Cameron Highland and closed down all the construction site in the same area. The Claimant was terminated in his employment with the Company as the Site Supervisor. The Company had also discussed with the Claimant on the situation that happened and he refused to be transferred to Kajang, Selangor as he lived in Cameron Highlands. The notice of termination was issued on the Claimant on 1 December 2014 (“COB page 13"). The Claimant accepted the termination and he received his last salary on 31 December 2014 where his last day of work with the Company was also on 31 December 2014 (‘COB page 34”) [11] At the time the Claimant was terminated in his employment, the Company recommended him to work with other company known as Sistem Tunggal. As far as COW1's knowledge, the Claimant commenced his employment with Sistem Tunggal on 1 January 2015. It was alleged that the Claimant did not complain of him being terminated by the Company. The Company maintained that the termination was with just cause and excuse and it was illogical that the Company terminated the Claimant ‘on 24 August 2015. Apart from that, the Company did not own any vehicle (Toyota Hilux registration no. CCC 6179) what more the Claimant was no longer in the employment of the Company in September 2015.[12] As regards GSC, COW1 admitted that he knew him as he is his elder brother and GSC was one of the partners of the Company (“Managing Partner’). GSC was said to have opened few other companies which were operating separately with the Company including Sistem Tunggal. It was contended by COW/ that the termination on 24 August 2016 was between the Claimant and Sistem Tunggal and there was no connection with the Company. The Company's entity was different with Sistem Tunggal and COW did not involve with Sistem Tunggal at all. On the matter of Cemara Makmur Sdn. Bhd, ("Cemara Makmur’), COW1 claimed that the Company never instructed the Claimant to work there and the said company was one of the companies which supplied sands to the Company for the construction of the golf course in Cameron Highlands. Cemara Makmur was not co-managed by the Company and it was a different entity. The Claimant's Case: [13] The Claimant gave evidence before this Court on the same day as the Company's case i.e on 11 December 2017. The Claimant stated in his evidence that he commenced his employment as a Supervisor with the Company in October 2011 Vide a letter dated 1 February 2012 ("CLB 1 page 1"), the Claimant was confirmed of his employment with a basic salary of RM3,000.00 per month and fixed allowance of RM500.00. The Claimant stated that he was terminated by Sistem Tunggal without just cause and excuse on 1 October 2012 (“CLB 1 page 2"). The Claimant was assigned to complete the upgrading of the golf course at KGSAS in Cameron Highland where, amongst other, he was tasked as a supervisor. The Claimant contended that although the said project was later completed, he was still working on the said project until late of May 2015 by doing repair works under the instruction of the Company. At the same time, he was also instructed by GSC to deal with the 7sand quarry owned by a company known as Cemara Makmur for a period of one (1) to one year and a half (1 %) before he was terminated of his employment. [14] The operation of the sand quarry by Cemara Makmur was ongoing when the Claimant was terminated from his employment and his salary was paid by the Company in his bank account or received in cash, The Claimant alleged that he was promised with a new assignment in the telecom tower project in Kedah and he always brought the soil samples for analysis ("CLB 1 pages 10-14"). The Claimant strenuously contended that he was employed by the Company during the termination as shown in CLB 1 pages 6-8. However, the Claimant stated that he was unaware at the time when the Company changed his employment to Sistem Tunggal where the EPF statement as reflected in CLB 1 page 9 showed that his employer was different. He denied that he was employed by Sistem Tunggal. Apart from working on the golf course project, the Claimant was also assigned to work in the sand quarry. The Claimant claimed that GSC was the owner and shareholder of Cemara Makmur ("CLB 1 pages 14-18") [15] The Claimant alleged that GSC was the co-partner in the Company as evidenced in CLB 1 pages 19-21 and he worked under the instruction of GSC. The Claimant reiterated that Sistem Tunggal had nothing to do with GSC as the latter was not a director or shareholder of Sistem Tunggal (“CLB 1 pages 22-27"). As seen in CLB 1 pages 28-31, GSC was the one who gave instructions and he did so until August 2015. The Claimant humbly prays that the Court will order his reinstatement with other consequential orders without losing his seniority or on thealtemative, he prays for back wages payment and compensation in lieu of reinstatement. The Law And Burden Of Proof: [16] The function of the Industrial Court under section 20 of the Industrial Relations Act 1967 was clearly stated in the Federal Court case of Milan Auto Sdn Bhd v. Wong Seh Yen [1995] 4 CLJ 449, as follows: “As pointed out by the Court recently in Wong Yuen Hock v. Syarikat Hong Leong Assurance Sdn Bhd & Anor Appeal [1995] 3 MLJ 344, the function of the Industrial Court in dismissal cases on a reference under s. 20 is twofold, first, 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.” [17] It is a trite law that the Company bears the burden to prove that the Claimant had committed the alleged misconducts and that the misconducts warrant the Claimant's dismissal. In Ireka Construction Berhad v. Chantiravathan Subramaniam James [1995] 2 ILR 11 (Award No. 245 of 1995) it was stated as follows: “It is the basic principle of industrial jurisprudence that in a dismissal case, the employer must produce convincing evidence that the workman committed that offence of which the workman is alleged to have been dismissed. The burden of proof is on the employer to prove that he has just cause or excuse for taking the decision to impose the disciplinary measure of dismissal upon the employee. The just cause must be, either a misconduct, negligence or poor performance based on the case.”[18] The standard of proof needed to be met by the Company is on a balance of probabilities which is the civil standard. (See Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor [2002] 3 CLJ 314). This approach was reaffirmed in K A Sanduran Nehru Ratnam v. 1-Berhad [2007] 1 CLJ 347 at p. 362CA. Issues: [19] First Issue: It is not disputed that the Company vide its letter dated 1 December 2014 (‘COB 1 page 33") had dismissed the Claimant, The reason for the Claimant's dismissal was that the golf course project in Cameron Highlands had finished and the Company was unable to continue with any projects in Cameron Highlands. Second Issue: As evidenced by the SOC, the Claimant disputed the dismissal with effect from 24 August 2015 where he received a message through WhatsApp from GSC telling him to look for a new job and he also received an instruction from GSC to return the Company's car, a Toyota Hilux bearing registration no. CCC 6179 to the Company's office in Kuala Lumpur by the middle of September 2015. It was also alleged that Claimant met GSC in Cameron Highlands in the middle of September 2015 where the latter again informed him that he was terminated and asked him to look for another job. Finally, the Claimant was given a termination letter dated 1 October 2015 (*CLB1 page 2") issued by a company known as Sistem Tunggal Sdn. Bhd. stating that the project operated by the said company had finished and it did not have any new project for the time being. The Claimant will be working with the said company until 31 October 2015. The letter was signed by GSC. 10[20] The case of Goon Kwee Phoy v. J & P Coats (M) Bhd [1981] 1 LNS 30; [1981] 2 MLJ 129 is authority for the proposition that the Court is restricted in its inquiry into the veracity of the reason chosen by an employer for the dismissal. Raja Azlan Shah CJ (as His Highness then was) speaking for the Federal Court ruled: “Where representations are made and are referred to the Industrial Court for enquiry it is the duty of that court to determine whether the termination or dismissal is with or without just cause or excuse. If the employer chooses to give a reason for the action taken by him the duty of the Industrial Court will be to enquire whether that excuse has or has not been made out. If it finds as a fact that it has not been proved then the inevitable conclusion must be that the termination or dismissal was without just cause or excuse. The proper enquiry of the court is the reason advanced by it and that court or the High court cannot go into another reason not relied on by the employer or find one for it. [Emphasis added] [21] Since the first issue was not disputed, it is the duty of this Court to determine whether the Company on a balance of probabilities with the reason aforementioned justified in dismissing the Claimant vide a letter dated 1 October 2015 [CLB 1 page 2]. If the Court makes a finding of fact that the said reason stated in CLB 1 page 2 was justified, then the Court must determine whether his dismissal was with just cause or excuse. Nevertheless, before the Court decides on the matter, it is pertinent to arrive into a conclusion whether Sistem Tunggal had employed the Claimant since 1 January 2015 as the Claimant claimed that the dispute was concerning the unfair dismissal of the Claimant by the Company with effect from 24 August 2015 1Evaluat ings Of Cour [22] First Issue: As stated in para.19, the first issue which has to be dealt with was as regards the dismissal of the Claimant by the Company on 1 December 2014. This was clearly stated at para. 2 of the SOC. Furthermore, from the evidence adduced in this case, it was undisputed that the Company vide its letter dated 1 December 2014 (“COB 1 page 33") had dismissed the Claimant. The reason for the Claimant's dismissal was that the golf course project in Cameron Highlands had finished and the Company was unable to continue with any projects in Cameron Highlands. As aforementioned, it was also not disputed that the crux of the Claimant's case was pertaining to the alleged unfair dismissal by the Company which effect from 24 August 2015. However, the Company through COW denied that the Claimant was dismissed from the Company as the Claimant's employment with the Company had ended as early as 31 December 2014. Thus, the second issue was then challenged by the Company. [23] Second Issue: From the analysis as evidenced by para. 2 of the SOC and the evidence which was given by the Claimant in Court (“CLWS 1”), the alleged termination which was the central issue in this case took effect from 24 August 2015. ‘As aforementioned, the Company through COW1 rejected such a claim that the Claimant was dismissed from the Company as the Claimant's employment with the Company had ended as early as 31 December 2014. As claimed by the Company, the evidence given by them has revealed that the Company are not Sistem Tunggal. The Claimant's employment with the Company ended on 31 December 2014 as reflected in the Letter of Termination dated 1 December 2014 ("COB 1 page 33") and also the salary voucher dated 31 December 2014 ("COB 1 page 34”), 12[24] In reference to the Letter of Termination dated 1 October 2015 (“CLB 1 page 2"), it was issued by a company known as Sistem Tunggal. On the same note, the EPF Statements for the year 2012 until December 2014 ("CLB 1 page 6-8") clearly showed that the Claimant's Nombor Majikan was 012174543. Nevertheless, from January 2015 until November 2015 ("CLB 1 page 9"), the EPF contribution was paid by another Nombor Majikan 012682620. Hence, the Company contended that beginning January 2015, the Claimant was employed by a new employer. In support of this reasoning, the Claimant himself during the cross-examination admitted as follows: 182 Q: Rujuk ms 6; no majikan: 012174543 A; Betul 183 Q: Rujuk ms 7; no majikan adalah juga sama A:Ya 184 Q: Rujuk ms 8; no majikan sama AYa 185 Q: No majikan adalah : 012682620 iaitu no majikan yang berlainan A:Ya 186 Q:Jika ikut dengan penyata ini, majikan pada tahun 2015 adalah berbeza dengan majikan tahun 2012-2014 A: Berdasarkan dokumen ini saya bersetuju 190 Q: No majikan adalah : 012682620 iaitu no majikan yang berlainan A:Ya 191 QvJika ikut dengan penyata ini, majikan pada tahun 2015 adalah berbeza dengan majikan tahun 2012-2014 A; Berdasarkan dokumen ini saya bersetuju 192 Q: Majikan tahun 2015 adalah bukan majikan tahun 2014 A: Kalau ikut dokumen ini, saya bersetuju 193 Q: Maksudnya mulai 2015, kamu tidak lagi bekerja untuk majikan tahun 2014 berdasarkan dokumen ini A: Ya betul 13It is apparent that the Letter of Termination dated 1 October 2015 (“CLB 1 page 2") which was the subject matter of this case was issued under the letterhead of Sistem Tunggal and acknowledged by the Claimant himself. It was the contention of the Company that Sistem Tunggal had employed the Claimant since 1 January 2015. [25] In relation to this issue, the Claimant, however, contended that he was deceived by the Company in a web of inter-related Companies. It was alleged that the Company, Cemara Makmur and Sistem Tunggal are one and the same. This can be seen in COW1's evidence in Q and A no, 18 where he did not deny that the Claimant was working for Cemara Makmur although he stated that it was part of his dealings for the golf course project. COW1 was said to distance himself with Cemara Makmur. In fact, GSC was a shareholder and director in Cemara Makmur. Thus, it was submitted that there was a corroboration in the Claimant's evidence that he was instructed by GSC to work in the quarry as the sand was supplied to the golf course. In this regards, it was further submitted that there was no reason whatsoever for the Claimant to believe that the Company was deceiving him. The Claimant enjoyed receiving his salary regularly and he was doing the same job in the golf club project as the site supervisor and he was receiving instructions from GSC pertaining to the said project. [26] Another contention was on the assignment in the quarry where it was said that the Company never produced any evidence that the Claimant was in the employment of Cemara Makmur during that time. This can be easily done since GSC was the shareholder and director. The Company was claimed to have failed in showing through COW/1 that the Claimant was under the employment of Sistem Tunggal although the other partner known as Oh Siew Lan was also a shareholder in 14Sistem Tunggal. The content of the letter of CLB 2 which was signed by GSC as the partner of the Company speaks for itself: “As you know our project in Cameron Highland, Pahang has finished and we do not have any new project for the time being. The Company has to reduce and cut the cost to prevent further loss, and so we are sorry to inform you that you will be working with us until 31% October 2015" [27] The Claimant contended that the abovesaid admission was a clear proof that the Claimant was working for the Company at the material time. The said letter was said to demolish any contention that the Claimant was not the employee of the Company at the material time. It was alleged that the absence of GSC in Court to testify for the Company has attracted the provision of adverse inference as stipulated under section 114(g) of the Evidence Act 1950 as he is a material witness and the same goes to the absence of Oh Siew Lan. More importantly, the Company failed to challenge the WhatsApp messages contained in CLB 1 pages 28-31. Another point of submission was pertaining to the reason for the lack of work in terminating the employment of the Claimant. The evidence contained in COWS1 at Q and A no. 20 contradicted CLB 2 where the Claimant was still working and he was never retrenched. [28] In response to the said contention put up by the Claimant, the Company, amongst other replied by stating the contemporaneous documentary evidence i.e the Letter of Termination speaks for itself. It was argued that if Sistem Tunggal was not, the employer of the Claimant, the latter should not have signed and acknowledged the said letter. Therefore, the Company contended that the Claimant was dismissed 15by Sistem Tunggal and not the Company. It would be impossible as argued by the Company that they dismissed the Claimant twice. [29] In submitting that the Company was not the same with Sistem Tunggal, the SSM search has shown that both companies had two (2) different business address and the nature of business was also different. In addition, there are also no common director or partner between the companies. The only common name appears in both SSM search is the name of Oh Siew Lan who is the previous partner of Beauty Land Enterprise who is also the shareholder of Sistem Tunggal. COW1 who testified in Court stated that he was not involved in any dealing with Sistem Tunggal and he only knew GSC (another partner of the Company) running other different companies where one of the Companies was Sistem Tunggal. [30] The Company produced a decision from the Court of Appeal ie Alcatel-Lucent (M) Sdn Bhd (formerly known as Alcatel Network Systems (M) Sdn Bhd v Solid Investments Ltd and another appeal [2012] 4 MLJ 72 which laid down the principle of corporate veil of a company. In this case, the Court of Appeal held that: [13] Itis settled law that the corporate veil of a company should not be lifted lightly as the concept of separate legal entity is a comerstone of company law in Malaysia. (See: Hotel Jaya Puri Bhd v. National Union of Hotel, Bar & Restaurant Workers & Anor [1979] 1 LNS 32; [1980] 1 MLJ 109). [14] The leamed judge in his grounds of judgment (at p. 38 of the records of appeal) indicated that the court was prepared to pierce the corporate veil ‘in the interest of justice to prevent associated companies of Alcatel Group including the defendant (the appellant) from darting in and out with the corporate labyrinth before this court’ 16