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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 PAPPUSAM

Chairman (Sitting alone)

VENUE : Mahkamah Perusahaan Malaysia

Kuala Lumpur

DATE OF REFERENCE: 18.11.2009.

DATE OF MENTION : 28.08.2012; 11.09.2012; 15.10.2012; 09.01.2013 0

DATE OF HEARING : 04.12.2012.

REPRESENTATION 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.

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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).

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AWARD

The Claimant's claim against the Company (Re: Industrial Court Case No. 11/4-

1212/05) 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

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the amount to be paid by the Company to the Claimant in respect of:-

(A) Claimant's backwages;

(B) Compensation in lieu of reinstatement; and

(c) 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

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(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 KOPERASI

SERBAGUNA 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

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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

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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]

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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

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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

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(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) bonus is entirely at the discretion of the Company; and

(b) 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) the Claimant's basic pay was RM4,944.00 for December 2000; and

(b) 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) Other employees were also paid bonus

(i) 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 - 2 months' bonus

In 2001 - 1 month bonus

In 2002 - 1 month bonus

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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 RM5,068.00 (1 month)

For 2002 RM5,068.00 (1 month)

For 2003 RM10,136.00 (2 months)

For 2004 RM12,670.00 (2 months)

For 2005 RM12,670.00 (2 months)

For 2006 RM5,068.00 (1 month)

Remedy

Based on the above mentioned calculation for (A) backwages; (B) compensation

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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 2001- (1 month bonus) = RM5,068.00

For the year 2002- (1 month bonus) = RM5,068.00

For the year 2003- (2 months' bonus) = RM10,136.00



For the year 2006- (1 month bonus. = RM5,068.00

Since he only served

for 5 months his bonus

should be pro-rated)

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Total Bonus = RM50,680.00

(d) 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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