Ireka Construction Berhad v.
[1995] 2 ILR Chantiravathan a/l Subramaniam James 11
IREKA CONSTRUCTION BERHAD a
v.
CHANTIRAVATHAN A/L SUBRAMANIAM JAMES
INDUSTRIAL COURT, KUALA LUMPUR
CHAIRMAN: SITI SALEHA BT. DATO’ SHEIKH ABU BAKAR
[CASE NO. 6/4-202/93 (18 MAY 1993)] b
4, 5, 17 & 22 MAY 1995
DISMISSAL: Whether just cause or excuse - Company claiming poor work performance by
claimant - Whether written warning given - Whether claim proved - ss. 20(3) & 30(5).
The claimant contends his dismissal is without just cause or excuse in negation to the principles c
of natural justice. The company, however, refutes the allegations. It cites inefficiency and
frequency of medical leave.
At the hearing, the company’s witnesses testified that there had been dissatisfaction with the
claimant’s performance when the workload in the lab and field testing increased. However, the
claimant’s superior conceded that no written warning had been given to the claimant.
d
In his testimony, claimant agreed there had been slight delays due partly to the shortage of
equipment. He refuted suggestions that there had been indiscipline among the staff. He
admitted having taken 8 days medical leave in sequel to injury sustained at the place of work,
but cited that he was eligible for 6 more days.
Held: e
[1] The company has not adduced evidence to show that they had taken action to find out
what were the problems with the claimant’s performance as to why he had not been performing
satisfactorily, and that they had given him an opportunity to improve.
[2] Although the claimant had testified that getting equipment was one of the causes of the
delay in testing, the company had failed to give any assistance to overcome the problem.
This clearly showed that the company had failed to assist him in his duties until the outcome f
was more satisfactory.
[3] It is not disputed that a written warning was never given to the claimant. The Court is
unable to accept the explanation that it was withheld hoping the claimant would improve
himself, but is more inclined to believe the claimant’s version that the contents were never
discussed with him. g
[4] It is perturbing to note that the claimant’s letter of termination does not cite any reason
for the dismissal. The Court doubts very much whether the reason for dismissal is poor
performance. If, indeed, the claimant had delayed in carrying out the CBR testing a few times,
he should not be blamed for whatever delay that had resulted in carrying out the said project.
[5] The company has failed to prove that the claimant was dismissed for poor performance. h
The Court finds that there is no written or verbal warning to the claimant, and what is before
the Court are mere allegations of poor performance. It is, therefore, the inevitable conclusion
that the dismissal of the claimant is without just cause or excuse.
[6] Acting in accordance to equity and good conscience in sequel to s. 30(5) of the Industrial
Relations Act, the claimant is awarded backwages. However, 20 per cent of the sum adjudicated
is to be deducted, as the claimant found another job soon after termination. i
[Unfair dismissal].
Industrial Law Reports
12 July 1995 [1995] 2 ILR
a Awards referred to:
Rooftech Sdn. Bhd. v. Holiday Inn, Penang (Award No. 166/86)
I.E. Project Sdn. Bhd. v. Tan Lee Seng (Award No. 56/87)
Cases referred to:
Taylor’s College (M.S.) Associates Sdn. Bhd. v. Puan Yang Show Foi 2 & Ors. (Civil) [1987] Appeal
No. R8-16-11 of 1987
b Hotel Jaya Puri Bhd. v. National Union of Hotel, Bar & Restaurant and Workers & Anor. [1980] 1
MLJ 109
For the claimant - S. Muhendaran; M/s. Murugavell Arumugam & Co.
For the company - Ambiga Sreenevasan (Charanjeet Kaur Kang with her); M/s. Skrine & Co.
AWARD NO. 245 OF 1995
[14 JUNE 1995]
c
The dispute is over the dismissal of the claimant who was employed by the company as a
lab supervisor on 30 March 1992.
The claimant was confirmed by a letter dated 27 June 1992. As from 1 July 1992 his basic
salary was increased to RM2,300 with a site allowance of RM200. He was dismissed by a
letter dated 21 September 1992. At the material time his last drawn basic salary was RM2,300
d plus site allowance of RM300 per month.
The claimant contends that his dismissal is without any just cause or excuse and in breach
of the principles of natural justice, an unfair labour practice and unlawful. He therefore prays
that he be reinstated in his former job without any loss of wages, allowances, service, seniority,
privileges or benefits of any kind.
e In the amended statement in reply the company avers that the claimant reported for duty on
2 April 1992 and was employed specifically for the North South Expressway; Ipoh (South) to
Simpang Pulai Project, due to be completed in January 1994. The company further avers that
the claimant’s service was terminated with just cause and excuse on grounds of poor
performance and misconduct which was the frequent taking of unjustified medical leave.
Since it is clear from the company’s pleadings that its reasons for dismissing the claimant
f was firstly, his poor performance and secondly, his frequent taking of unjustified medical
leave, it is imperative that the company adduce convincing and acceptable evidence that the
claimant committed the offences he is alleged to have committed for which he has been
dismissed.
It would be appropriate at this juncture to scrutinize and investigate the factual matrix of
g this case as disclosed in the evidence of the company’s witnesses.
The company was awarded the contract for the North-South Expressway: Ipoh (South) to
Simpang Pulai Project (hereinafter called the “project”) the value of which was over RM144
million, to be completed within 27 months, i.e., January 1994. The contract contained a penalty
clause which required the company to pay a sum of RM18,000 for every day of delay which
occured. The claimant was employed as a lab supervisor on 30 March 1992, especially for
h this project and was assigned the duties of density testing and CBR testing by Encik Yap
Beau Chuan (COW1), the project manager at the material time. The claimant was confirmed
in his appointment in July 1992 on COW1’s recommendation and given a 10% adjustment to
his salary.
i
Ireka Construction Berhad v.
[1995] 2 ILR Chantiravathan a/l Subramaniam James 13
The work at the construction site accelerated in August 1992, and simultaneously the work- a
load on lab testing and field testing increased. According to COW1, it was then that he
received a lot of complaints from various staff members that they were not getting the density
and CBR tests on time from the claimant as required. These complaints were brought at the
“alternate days” meetings that COW1 had with all the engineers at the Project site office.
As a result COW1 called the claimant to his office a few times to address these complaints
and to find out from him the reasons for the delay in producing the test results. Below is a b
relevant extract of his evidence:
I saw and spoke to the claimant I can’t recall how many times, more than twice, definitely
three or four times. I was satisfied there were delays in carrying out his work. There was a
long delay in the CBR testing. We reminded him to get the thing done - it was about one
month over. For the density tests it happened so frequently. It was so bad I had to bring it
up to the managing director of the company sometime in August. c
Later COW1 said in evidence:
Ever since facing this problem, we had on many occasions tried to get the claimant to improve,
but we did not get the results in time. When it reached critical stage, the matter was brought
up to the project and managing director. After a few discussions, instructions were given to
me to see whether there is any improvement within a certain period - about a month, August d
to September. Upon the end of the period the managing director decided to terminate his
services.
Finally COW1 said:
I called him in sometime in September 1992 and spoke to him and explained the whole thing
to him and at that time he offered to resign. He came back 2/3 days later and refused to
resign and asked company to terminate him. e
The second witness Encik Lim Him Teong (COW2) was the assistant project manager at the
relevant time. He was the claimant’s immediate supervisor to whom the claimant reported.
According to him after the claimant’s confirmation he became dissatisfied with the claimant’s
performance when the workload on lab and field testing became heavier. He testified as
follows on this issue: f
As his immediate supervisor I raised the issue of his performance with him several times.
We sit in the same office, we meet each other often and several times we discussed lab
problems and the slow testing done by our people. During the 5 to 6 times, July to September,
his response was, he explained the delay. To me the explanation was not valid. The reasons:
understaffed and not enough equipment. I investigated his complaints. I went to the lab and
found out all the equipment were there. The CBR equipment was not fully utilised. There
g
were sufficient lab assistants in the office, easily five or six.
COW2 comment was that the staff problem was not a big problem and it was up to the
claimant, to manage and organise his team and come up with a schedule. As for the
insufficiency of equipment, COW2 said this can be resolved by going to the lab near the
construction site since there were other field contracts there that were being carried out.
COW2 summed up by saying: h
I told him these were not valid excuses. After that there was no improvement.
i
Industrial Law Reports
14 July 1995 [1995] 2 ILR
a COW2 also produced a memorandum (p. 17 of Bundle “B”, hereinafter called the “memo”)
dated 1 September 1992. COW2 claimed that he had written this memo a few days after he
had a discussion with the claimant regarding the matters disclosed in it. However he admitted
this memo was never given to the claimant. COW2’s explanation as to the reason to this
was as follows:
I withheld the document hoping that he improved himself. At the discussion, all these points
b were raised with the claimant.
Subsequently COW2 said that after he spoke to the claimant there was no improvement. He
then attested further:
As far as I was concerned, I gave the claimant ample opportunity to improve, as far as this
memo until his dismissal. I gave him ample time to resolve the issue.
c
With regards to the allegation of unjustified medical leave, the evidence of COW2 was that,
the claimant had taken 8 days medical leave from July to August. This he added was too
many for this type of work which had a tight schedule for completion.
The testimony of Teyew Tian Sin (COW3), the project engineer, confirmed that the works
was in full swing in July. According to him the claimant had delayed in producing the density
d and CBR test results. He obtained the density tests a day late from the claimant while normally
this test took only a few minutes to be done. As for CBR tests, which normally took 4/5
days, COW3 sometimes never got the results. He had then complained to COW1 during the
alternate days meetings about this problem.
So much for the company’s narrative of the circumstances and events leading up to the
e claimant’s dismissal.
The claimant in his testimony vehemently denied that COW1 had told him in a discussion
that he was unhappy with his performance or that he had been given one month period to
improve his performance before being dismissed. However he agreed that prior to the date
of dismissal, COW1 held a meeting with him where he was asked to resign although COW1
did not tell him the reason why. As for the discussion with COW2, the claimant agreed that
f prior to 30 August 1992 he had a discussion with COW2, when he was asked to prepare a
schedule for CBR testing, which he did and had given it to COW2. He denied that it was as
regards the matters set down in the memo dated 1 September 1992. He further denied that he
had complained to COW2 about the staff but admitted that in the course of his conversation
with COW2 he did say he needed excavators to carry out the CBR testing.
In his cross-examination, the claimant agreed that there had been slight delays in the carrying
g
out of the testings and the reasons were firstly, that he could not get the excavators and
backhoe to obtain the CBR samplings and secondly, the surveyors had not marked the
highway at 50 metre intervals as requested by the consultant but had instead marked the
distance using chainages, and thirdly, because of several locations where the density tests
had to be carried out. However he denied he had complained about the lack of discipline
among the lab staff, or about transportation to transport the equipment. The claimant
h
maintained that COW1 had never spoken to him before September with regard to the delay
in the carrying out of the tests, and he denied that COW2 had discussion with him about
five/six times concerning the delays in the density and CBR tests by him and hence the
company’s dissatisfaction with his performance.
i
Ireka Construction Berhad v.
[1995] 2 ILR Chantiravathan a/l Subramaniam James 15
As for medical leave, the claimant agreed that he did not take any during his probation, but a
had taken 8 days after his confirmation. On one occasion he had taken medical leave for a
sprained ankle, and this injury occurred while he was working at the site. This is the gist of
the claimant’s testimony.
The company’s charge of poor performance against the claimant is essentially, the constant
delays caused by the claimant in producing the density and CBR results.
b
The learned Counsel for the claimant, Encik Muhendaran, in his submission said that it is
not in dispute that the claimant was not a member of the senior management staff and as
such the company must adhere to the three conditions set down by the Industrial Court
before an employee can be dismissed for poor performance. These are firstly, a written warning
must be given to him, secondly, the company should give him the opportunity to improve
his performance and thirdly, despite all the assistance given to him he failed to improve. He c
asserts that it is not disputed that no written warning was ever given, and although COW1
and COW2 claimed that they had discussed the matter of his performance with the claimant,
the claimant denied this was so. It is also his submission that although COW1 had claimed
that the claimant failed to carry out his tasks accordingly, the company did not produce any
evidence to show that they had found out what were the problems with his performance or
that they had given him the opportunity to improve. It is Mr. Muhendaran’s further contention d
that the memo was never prepared on 1 September but concocted up much later since the
claimant denied that the contents were ever discussed between him and COW2 before his
dismissal.
It is the submission of the learned Counsel for the company, Cik Ambiga Sreenevasan, that
COW1 had spoken to the claimant more than twice and COW2 had spoken to him about
five/six times concerning his performance. She points out that although in examination-in- e
chief his version was that he was never told about his poor performance, in cross-examination
he admitted there were delays because of some problems that were encountered such as
unavailability of equipment. She contends that in doing so the claimant has actually admitted
to the charge of poor performance which in this case is the delay in producing density and
CBR test results. It is her further submission that the claimant had indeed received ample
verbal warnings from the company through COW1 and COW2 who had discussed the delays f
with him a number of times. She urges the Court to accept their evidence considering that
they are independent witnesses having since left the services of the company. Furthermore
she points out that as explained by COW1, written warnings are not given at the worksite
because there is a lot of pressure and datelines to meet and as such an employee is usually
verbally counselled. She further submits that the claimant had been given a month to improve
but had failed to do so. She also urges the Court to accept the contents of the memo, which g
is a contemporaneous note by COW2 of what he had said to the claimant and of the facts
at that time. Since the claimant has not alleged mala fide she said there is no reason to
suggest that the document had been made up at a later date.
It is a basic principle of industrial jurisprudence that in a dismissal case the employer must
produce convincing evidence that the workman committed the offence or offences the h
workman is alleged to have committed for which he has been dismissed. The burden of proof
lies on the employer to prove that he has just cause and 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 facts of the case.
i
Industrial Law Reports
16 July 1995 [1995] 2 ILR
a In the instant case the allegations against the claimant apart from poor performance is that
of the misconduct of the frequent taking of unjustified medical leave.
The Court will deal firstly with the charge of misconduct.
The evidence of the company is that the claimant had taken 8 days medical leave from July
to August. The claimant did not dispute that he had taken this leave, medical certificates
b had been submitted by him and these certificates had been accepted and had never been
queried by the company. At the time of dismissal he was still entitled to 6 more days of
medical leave. In the circumstances there is not an ioata of evidence that the claimant had
taken unjustified medical leave. As such the Court finds the claimant not guilty of this charge
against him.
The only issue for this Court to determine now is whether the company, on a balance of
c probabilities has established the poor performance of the claimant. As far as unsatisfactory
performance is concerned the Industrial Court has laid down that in order to justify the
dismissal of the claimant on this ground, the company has to establish:
i) that the claimant was warned about his poor performance;
ii) that the claimant was accorded sufficient opportunity to improve; and
d
iii) that notwithstanding the above, the claimant failed to sufficiently improve his
performance.
In the case of Rooftech Sdn. Bhd. v. Holiday Inn, Penang, Award No. 166/86, the Court
stated:
e Inefficiency which discloses a course of negative conduct, no doubt is a sufficient ground
for termination but there must necessarily be sufficient proof that a procedure has been
followed. Ordinarily there must be sufficient written communications to the claimant in order
to establish inefficiency or poor performance before the company can rely on it to justify
dismissal. The company has failed to do so.
Further, in the later case of I.E. Project Sdn. Bhd. v. Tan Lee Seng, Award No. 56/87, the
f learned Chairman articulated:
Dismissal for unsatisfactory work or incompetency should almost invariably have been
proceeded by warnings. In the event of poor performance being the reason for the dismissal
one should always endeavour to show that the work complained of was performed subsequent
to warnings.
and later he said:
g
An employer should be very slow to dismiss upon the ground that the employee is found
to be unsatisfactory in his performance or incapable of performing the work which he is
employed to do without first just telling the employee of the respects in which he is failing
to do his job adequately, warning him of the possibility or likelihood of dismissal on this
ground and giving an opportunity of improving his performance. It is for the employer to
find out from the employee why he is performing unsatisfactorily to warn him that if he
h persists in doing so he may have to go ... There is no record of such warnings.
It would appear from the above authorities that a written warning by the company is essential
before it can dismiss the claimant on the ground of poor performance. In the instant case it
is not disputed that the claimant was never given a written warning but the company alleges
he was given oral warnings which were adequate. That being so, the burden lies on the
i company to adduce convincing and compelling evidence to prove this. The evidence of
Ireka Construction Berhad v.
[1995] 2 ILR Chantiravathan a/l Subramaniam James 17
COW1 and COW2 is that they had discussed the claimant’s poor performance with him but a
the question is, had they warned him in implicit terms that if his performance did not improve
then he might face dismissal? The claimant asserted he was never warned about his poor
performance, but he had admitted that there had been some delays in the testings due to
some factors. The company strongly denies that these were valid reasons, but if this was so
the company had not adduced evidence to show that they had taken action to find out what
were the problems with the claimant’s performance as to why he was performing b
unsatisfactorily, and that they had given him the opportunity to improve. Although COW1
testified that he had discussions with the managing director concerning the claimant’s
performance and the managing director had directed him to give the claimant a grace period
of one month to improve, COW1 admitted this was never conveyed to the claimant.
Furthermore although the claimant had complained that getting the equipment was one of
the causes of delay in the testing, the company had failed to give him any assistance to c
overcome this problem and instead had said that it was his responsibility to get the equipment
himself as early as possible. This clearly shows that the company had failed to assist him or
tried to supervise him in his duties until the outcome was more satisfactory.
As for the memo, it is not disputed that this was never given to the claimant. The Court is
unable to accept COW2’s explanation that he withheld the document hoping the claimant
d
would improve himself and is more inclined to believe the claimant’s version that the contents
of the memo was never discussed with him. The inference that can be drawn is that it had
been prepared at a much later date. As such there is no record that the company had any
discussions with the claimant concerning his performance.
It is significant to note that the claimant’s letter of termination dated 21 September 1992 did
not give any reason for the claimant’s dismissal from service. The Court finds this most e
perturbing. The fact that the reason of the claimant’s dismissal is not stated in his letter
leaves the Court in doubt as to whether he was indeed dismissed for poor performance.
Furthermore the claimant had been confirmed and at that time there had been no complaints
about his performance, but however about two and a half months later he is dismissed. If
indeed the claimant had delayed in carrying out the CBR testing for a few times the Court is
of the considered opinion that he should not be blamed for whatever delay has occured in f
carrying out the said project. It appears that the stand taken by the company is that the
claimant was to be blamed for the delay in the carrying out of the works of the project and
that everyday of delay had cost the company RM18,000. However there is no evidence before
the Court that the project had indeed been delayed causing financial loss to the company.
After a careful deliberation of the totality of the evidence and for the foregoing reasons, the
Court concludes that on a balance of probabilities the company has failed to prove that the g
claimant was dismissed for poor performance. The Court finds as a fact that there has been
no written or verbal warning to the claimant and what is before the Court are mere allegations
by COW1 and COW2 of the claimant’s poor performance or inefficiency.
In the final analysis the Court finds that the company’s allegations against the claimant have
not been proven and the evidence the company has produced in support of its reasons for h
the dismissal is unconvincing or unacceptable as basis for a justified dismissal. In all the
circumstances of this case, the evidence points to the irresistible conclusion that the dismissal
of the claimant was without just cause and excuse in violation of the rules of natural justice.
In view of the foregoing the Court hereby decides in favour of the claimant.
As for the remedy sought, the Court considers that since the project has already been
completed, it is quite inappropriate to order the reinstatement of the claimant. An award of i
compensation for loss of employment will be more justifiable.
Industrial Law Reports
18 July 1995 [1995] 2 ILR
a The claimant has stated that he has found a job after leaving the service of the company.
Since the case of the High Court in Taylor’s College (M.S.) Associates Sdn. Bhd. v. Puan
Yang Show Foi 2 & Ors. (Civil) Appeal No. R8-16-11 of 1987 which declared that the common
law principle of mitigation against loss in computing backwages is no more applicable in
industrial law, this Court has found it fit, where circumstances permit, to adopt a balanced
approach, namely, that whilst on the one hand it is bound by the ratio decidendi in the
b Taylor’s College case (supra) it has on the other hand steadfastly continued to invoke the
provisions of s. 30(5) of the Industrial Relation Act, by acting in accordance with equity and
good conscience. The Court is also mindful of the view expressed by Salleh Abas FJ (as he
then was) in the case of Hotel Jaya Puri Bhd. v. National Union of Hotel, Bar & Restaurant
and Workers & Anor. [1980] 1 MLJ p. 109, when he said:
... if there is a legal basis for paying the compensation, the amount of course is very much
c a matter of the discretion which the Industrial Court is fully empowered under s. 30 of the
Industrial Relations Act to fix ...
The Court would therefore approach the case at hand within this context. Without involving
the mitigation principle but generally on the basis that the claimant obtained employment
soon after his dismissal with similar if not better earnings, I think it is fair and reasonable to
d deduct 20 percent from the amount under backwages.
The Court hereby makes the following under:
1. The company shall pay the claimant backwages for the period from the date of dismissal
(21 September 1992) to the last date of hearing (22 May 1995) subject to the maximum
period of 24 months:
e i.e., RM2,600 x 24 = RM62,400
less 20% = RM49,920
2. The company shall pay the claimant in lieu of reinstatement one month’s salary for every
year of service from the date of joining service (30 March 1992) to the last date of hearing
(22 May 1995).
f
i.e., RM2,600 x 3 = RM7,800
The above payments (less any Income Tax & EPF contributions) shall be paid within one
month from the date of this award to the claimant through his Counsel.
