INDUSTRIAL COURT OF MALAYSIA

CASE NO. 13/4 - 1386/2007

BETWEEN

PUAN CHUAH GEE SEE

AND

FUJI XEROX ASIA PACIFIC PTE. LTD.

AWARD NO. 383 OF 2010

BEFORE : TUAN EDDIE YEO SOON CHYE – CHAIRMAN

VENUE : Industrial Court Malaysia, Kuala Lumpur

DATE OF REFERENCE : 08.05.2007

DATES OF MENTION : 03.08.2007; 17.10.2007; 04.12.2007; 19.12.2007;

03.03.2008; 17.03.2008; 12.12.2008; 20.07.2009;
01.09.2009; 16.11.2009; 28.01.2010; 04.03.2010

DATES OF HEARING : 14.09.2009; 15.09.2009

DATE OF CLAIMANT'S
SUBMISSIONS RECEIVED : 27.01.2010

DATE OF COMPANY'S
SUBMISSIONS RECEIVED : 11.02.2010

DATE OF CLAIMANT'S
REPLY RECEIVED : 04.03.2010

REPRESENTATION : Puan Jaishree Sadhwani of Messrs Lee

Ong & Kandiah,
Counsel for the Claimant.

Dato' Thavalingam Thavarajah of Messrs

Zaid Ibrahim & Co,
Counsel for the Respondent.

REFERENCE : This is a reference by the Honourable Minister of Human

Resource under section 20(3) of the Industrial Relations Act 1967 on 8 May
2007 arising out of the dismissal of Puan Chuah Gee See (hereinafter
referred to as the “Claimant”) on 25 September 2006 by Fuji Xerox
Asia Pacific Pte. Ltd. (hereinafter referred to as the “Respondent”).

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 AWARD

1. This is a ministerial reference to the Industrial Court under

section 20(3) of the Industrial Relations Act 1967 (Act 177) for an award in

respect of the dismissal of Chuah Gee See (“the Claimant”) by Fuji Xerox

Asia Pacific Pte. Ltd. (“the Respondent”) on 25 September 2006.

2. The hearing of this case was duly completed on 15 September 2009.

The Claimant's solicitors, Messrs Lee Ong & Kandiah filed the Written

Submissions on 27 January 2010 and Submissions In Reply on 4 March

2010. The Respondent's solicitors, Messrs Zaid Ibrahim & Co filed their

Written Submissions on 11 February 2010.

BRIEF FACTS

3. The Claimant commenced employment with the Respondent's

Company as a Sales Executive on 29 April 2002. The Claimant's duties as a

Sales Executive are briefly, to promote and market the Respondent's

Company products, services and solutions in assigned territory, to approach

and penetrate into new and potential accounts and maintained and expand

the Respondent's current users base within her assigned territory in the

Klang Valley.

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4. The Respondent is a sales and marketing company providing a wide

range of office equipments with multi functions device and document

management system. The Respondent also deal with a wide range of

photocopy machines and provides outsourcing of management services.

5. Vide Termination of Employment letter dated 25 September 2006, the

Respondent Company terminated the services of the Claimant on the ground

of “severance”. The said letter (exhibit CLB, page 21) is reproduced as

follows:

“ THE DOCUMENT COMPANY

FUJI XEROX
Our ref: PD/FXM-6566/09-06/JC/fh

STRICTLY PRIVATE AND CONFIDENTIAL

25 September 2006

CHUAH GEE SEE

218 Block J, Pangsa Murni
Seksyen 6, Wangsa Maju
Setapak
53300 Kuala Lumpur

Dear Ms. Chuah,

TERMINATION OF EMPLOYMENT

The various discussions held between yourself and your superior as

well as the Human Resources Department refers. Based on the
discussions, it has been concluded that you are in a position that
may be in breach or violate both the implied and expressed terms of
our Company's policies governing the areas of proprietary

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 information, confidentiality, conflict of interest and professional
conduct.

Due to the nature of your position, your continuous employment

with the Company will certainly put the organization in a vulnerable
position, especially where the interests of maintaining confidentiality
and safeguarding of proprietary information are concerned.

In view of this, we wish to advise that your employment with

the Company is hereby terminated effective 25 September
2006 on the ground of “severance”. In compliance with our
employment legislations and our severance practices, we are also
providing you with the relevant termination benefits payment as
applicable to your years of service with the Company.

Kindly arrange to return all items belonging to the Company to your

immediate superior before your actual departure from the Company.

Thank you.

Yours faithfully
FUJI XEROX ASIA PACIFIC PTE LTD

Sgd.
PAUL LIM
Deputy General Manager
Human Resources ”
[Emphasis added]

ISSUES

6. The crux issues to be deliberated and determined by this Court are as

follows:

(i) whether the Claimant was dismissed;

(ii) was the Claimant's dismissal with just cause or excuse.

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THE RESPONDENT'S CASE AND SUBMISSIONS

7. The Respondent called two witnesses to testify in this Court:

(i) COW-1 - Lim Paul, General Manager, Human Resources;

(ii) COW-2 - Loh Soo Meng, Deputy General Manager.

8. COW-1 in his evidence-in-chief testified as follows:

Q: Why do you say that due to the Claimant's position, her

continuous employment would put the Company in a

vulnerable position?

A: A meeting was held between the Company and the Claimant

on 25/09/2006. During the meeting, the Company had asked

the Claimant whether the Claimant was planning to wed one

Mr. K.T. Lee. The Claimant had steadfastly denied such plans

to wed the said Mr. K.T. Lee. However, it came to the

Company's knowledge that a mere 12 days after the said

meeting, i.e. on 07/10/2006, the Claimant had wed the said

Mr. K.T. Lee.

Q: How did the Claimant's marriage to Mr. K.T. Lee affect her

employment relationship with the Company?

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 A: We were of the view that the Claimant had placed herself in a

position in conflict of interest with regards to her

relationships with Mr. K.T. Lee whilst holding the position as

Sales Executive, Business Operations with the Company.

Mr. K.T. Lee was a former employee of the Company who

thereafter held the position of Director of Sales and Operations

in a competitor company named Continuus Consulting Sdn

Bhd.

In cross-examination, COW-1 stated as follows:

Q: What relationship are you referring to when you say Claimant

had placed herself in a position of conflict of interest with

Mr. K.T. Lee?

A: During that time it was a boyfriend-girlfriend relationship. She

was not married at the time when Claimant was terminated of

her service. K.T. Lee was from the Company.

9. COW-2 was asked this question in cross-examination:

Q: You are aware that K.T. Lee and Claimant was having a

relationship since 2003?

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 A: Yes, I am aware eventually that Claimant and K.T. Lee were

courting. I am aware that K.T. Lee resigned in September

2005.

According to COW-2, the documents found in the Claimant's notebook were

sensitive in nature and had no relevance to Claimant and therefore were not

necessary to be kept by the Claimant.

10. Learned counsel for the Respondent, Dato' Thavalingam Thavarajah

submitted inter alia as follows:

(i) the Claimant was engaged in a relationship with a member of

staff from one of the Respondent's Company competitors;

(ii) due to the sensitive nature of the Claimant's job, the

Respondent could not afford to retain the Claimant and thus

dismissed her;

(iii) the Respondent's action was justified based on the evidence

discovered from the Claimant's notebook computer i.e. invoices

from the competitor company and computer print outs;

(iv) the Claimant failed to produce any of the person's the Claimant

named in cross-examination i.e. Jessica Chan, Jason Ng, Apple

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 Lim, Lim Meng Chiat that also had relationships with staff from

competitor companies but had no action taken against them.

THE CLAIMANT'S CASE AND SUBMISSIONS

11. The Claimant testified in this case and her evidence-in-chief is

produced and marked as CLWS-1. The relevant evidence of the Claimant

are as follows:

Q: What happened sometime at the end of August or early

September, 2006?

A: I was called for a meeting with the Human Resource Executive,

Jess Lim & Human Resources Manager, Janet Chow. There

were only 3 of us at that meeting. Janet Chow asked me a

couple of work related questions such as, how I am doing in

my job, the areas I cover and the manner I close the sales.

At that time, I did ask them the objective of the meeting, and

Janet's reply was to get to know me better. Then, they started

to ask a lot of non-work related questions such as how is

Lee Kim Thay (KT Lee) (my boy friend then, and now my

husband) doing, relationship with him, any plans for marriage.

Basically, it was more personal questions rather than work

related.

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Q: What happened after the meeting?

A: On 25th September 2006, at around 9am, I received a call from

Jess Lim, the Human Resources Executive to meet her and

Paul Lim, the Human Resource Deputy General Manager who

joined the Company just before I was terminated. At 10 a.m.,

Paul started the conversation by saying that because of my

relationship with KT Lee, he has got no choice but to follow the

instructions from the top management to ask me to leave the

Company. Paul tried to persuade me to put in my resignation

letter and assured me that whatever outstanding claims,

contest or commission for all my sales will be paid to me.

Then he told me that if I am agreeable to his request of

tendering my letter of resignation now, I will be given a

cheque amounting RM 13, 336.82 immediately by him.

Q: Did you resign?

A: I refused to resign. I did not breach any of the Company's

policies plus I had a very high track record of sales. My

husband's (at that time my boyfriend) business is based on his

own contacts with big & key establishments in Malaysia.

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 Q: What was the consequence of your refusal to resign?

A: Paul immediately gave me the letter of 25.9.2006 terminating

me from the Company (“letter of termination”) [at page 21 of

the Claimant's Bundle of Documents]. I had no chance at all

to defend myself and was asked to leave immediately on that

day.

12. Learned counsel for the Claimant, Jaishree Sadhwani submitted inter

alia as follows:

(i) the Respondent failed to prove that the Claimant was

terminated lawfully on the balance of probabilities. The

Claimant was terminated without just cause or excuse;

(ii) the allegation by the Respondent of the existence of an implied

policy for conflict of interest situations is untrue and without

any basis;

(iii) the Respondent failed to establish that the Claimant had put

herself in a position that breached or violated the Respondent's

Company policies governing the areas of proprietary

information, confidentiality, conflict of interest and professional

conduct.

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COURT'S EVALUATION AND FINDINGS

13. It is settled law that for dismissal cases the burden of proof rests on

the Company as employer to prove on a balance of probabilities that the

dismissal of the Claimant as employee was with just cause or excuse. see

Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair &

Anor [2002] 3 CLJ 314.

14. In adjudicating this reference, this Court is guided by the principles of

law enunciated in Wong Chee Hong v. Cathay Organisation (M) Sdn

Bhd [1988] 1 CLJ 45 which states as follows:

“When the Industrial Court is dealing with a reference under

section 20 the first thing that the Court will have to do is to ask itself
the question whether there was a dismissal.”

15. The function of the Industrial Court is succinctly explained in the case

of Goon Kwee Phoy v. J. & P. Coats (M) Bhd [1981] 2 MLJ 129 at

page 136 where the Federal Court decided inter alia as follows:

“Where representations are made and are referred to the Industrial

Court for enquiry, it is the duty to 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 or reason has or has not been made out. If it
finds as a fact that it has not been proved, the inevitable conclusion
must be that the termination or dismissal was without just cause or
excuse. The proper inquiry of the court is the reason advanced by it

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 and that court or the High Court cannot go into another reason not
relied on by the employer or find one for it.”
[Emphasis supplied]

16. It was an undisputed fact that the Claimant's services with the

Respondent Company was terminated on 25 September 2006. It is the

Court's duty now to determine whether the Claimant has committed any act

of misconduct inconsistent with her duties and whether such misconduct

warrants the punishment of dismissal.

17. In the Letter of Termination of Employment, the Respondent outlined

its reasons for the action taken in dismissing the Claimant:

“... you are in a positions that may be in breach or violate both the
implied and expressed terns if our Company's policies governing the
areas of proprietary information, confidentiality, conflict of interest
and professional conduct.”

“Due to the nature of your position, your continuous employment

with the Company will certainly put the organisation in a vulnerable
position, especially where the interests of maintaining confidentiality
and safeguarding of proprietary information are concerned.”

Conflict of Interest

18. The Respondent Company viewed that the Claimant had placed

herself in a position in conflict of interest with regards to her relationship

with K.T. Lee whilst holding the position of Sales Executive, Business

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Operations. According to COW-1, it was a boyfriend-girlfriend relationship

between the Claimant and K.T. Lee.

19. Regrettably the Court finds the Respondent Company through their

witnesses and documentary evidence failed to prove evidence that the

Claimant was in a position that may breach or violate both the implied and

express terms of the Respondent's Company polices governing conflict of

interest.

20. The Court is inclined to agree with the submissions of the learned

counsel for the Claimant pertaining to the Respondent's action. If the

Respondent indeed felt it was crucial that Claimant's impending marriage

with K.T. Lee would possibly breach or violate both the implied and express

terms of the Respondent's Company policies governing the realm of conflict

of interest in particular, the Respondent at the said meeting prior to the

Claimant's dismissal could have informed the Claimant of the same which

the Respondent failed to do so. Further, no memorandums or minutes of

the said meeting was issued to the Claimant subsequent to the meeting

prior to the termination. The Claimant was never informed or warned at all

that her impending marriage might prove prejudicial to the Respondent's

best interest.

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21. There was not an iota of evidence produced and adduced by the

Respondent to substantiate proof that the Claimant had breached the terms

of employment pertaining to Conflict of Interest as reflected in Clause 6 of

the Claimant's Letter of Employment dated 23 April 2002 exhibited in CLB,

pages 1 and 2.

Confidentiality of Information

22. The subsequent reason advanced by the Respondent for dismissing

the Claimant was “due to the nature of her position and continuous

employment with the Company will certainly put the Company in a

vulnerable position, especially where interests of maintaining confidentiality

and safeguarding of proprietary information are concerned.” The

submissions of the Respondent's counsel that the Respondent's action was

justified based on the evidence discovered from the Claimant's notebook

computer i.e. invoices from the competitor company and computer

print-outs (Supply and Demand Worksheets) in pages 12-34 of COB is

devoid of any merits.

23. The existence of the two invoices in the Claimant's notebook

computer is not indicative of any information confidentiality and does not

indicate any conflict of interest. The products reflected in the two invoices

do not concern products supplied directly by the Respondent Company. It

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was also evident that the Supply and Demand Worksheets were not

password protected and therefore does not reflect any element of

information confidentiality.

24. The Court asked COW-1 the following question:

Q: How and when was this information detected in the Claimant's

notebook?

A: After Claimant's termination, the Claimant's notebook

(Company's asset) was returned and notebook was given to

the Claimant's immediate superior Sales Manager,

Ravichandran, for him to see whether there was any

Company's information. The information is not supposed to be

downloaded into the individual's notebook.

25. The Respondent had created a lacuna in the Company's case when

Ravichandran was not called to explain on the information found in the

Claimant's notebook. Instead COW-2 who gave evidence stated that he has

no personal knowledge that the documents (invoices and the Supply and

Demand Worksheets) were downloaded from the Claimant's notebook. This

is clearly a case where the Company after the Claimant's dismissal set about

new grounds against the Claimant in order to embellish its case against her.

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Obviously, such grounds were hatched at some subsequent point in time as

an afterthought.

26. In the case of Panpac Media (M) Sdn. Bhd. v. Goh Chiang Beng

(Award No. 1498 of 2006) at pages 27 and 28, the learned Chairman,

Franklin Goonting decided inter alia as follows:

“In its statement in reply the company also alleges that the Claimant
had placed himself in a conflict of interest position during his
employment in the company by having undisclosed dealings and
taking confidential information belonging to the company for his
personal use.”

“This complaint i.e. the claimant alleged complicity in undisclosed

dealings, etc, was not one of the grounds for which the Claimant was
dismissed and therefore it cannot now be raised in this court as
justification for his dismissal.”
[Emphasis added]

ABSENCE OF DOMESTIC INQUIRY

27. The Claimant in the Written Submissions submitted that the letter of

termination was given to the Claimant without any domestic inquiry or any

chance to explain. Mere failure to accord a domestic inquiry hearing does

not necessarily result in an invalid dismissal of the employee. In the case of

Redzuan Abdul Samad v. Mahkamah Perusahaan Malaysia and Anor

[2009] 1 LNS 893, the High Court inter alia decided as follows:

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 “Even in the absence of a domestic inquiry, the Industrial Court
should proceed to consider on the basis of its very broad statutory
jurisdiction under section 30(5), whether the dismissal is with just
cause or excuse.”

see also case of Dynamic Telecommunication v. Yap Kem Fung [2009]

4 ILR 629.

28. In the case of Wong Yuen Hock v. Syarikat Hong Leong

Assurance Sdn. Bhd. & Another Appeal [1995] 3 CLJ 344 at page 356

where the Federal Court decided inter alia:

“The Industrial Court was not competent to declare the

dismissal void for failure to comply with the rule of natural
justice. The very purpose of the inquiry before the Industrial Court
was to give both parties to the dispute an opportunity to be heard
irrespective of whether there was a need for the employer to hold a
contractual or statutory inquiry. We were confident that the
Industrial Court as constituted at present was capable of arriving at
fair result by fair means on all matters referred to it.”
[Emphasis added]

29. On the totality of the evidence adduced and having read all the

written submissions of both parties, it is the finding of this Court based on

the facts and circumstances of this case, that the reasons or excuses

advanced by the Respondent that the Claimant committed breaches or

violations of the Respondent's Company policies and putting the Respondent

in a vulnerable position were not proven on the balance of probabilities.

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30. Based on the totality of evidence, written submissions of both parties

bearing in mind section 30(5) of the Industrial Relations Act 1967 to act

according to equity, good conscience and substantial merits of the case

without regard to technicalities and legal form, it is the Court's finding that

the Claimant's dismissal was without just cause or excuse.

REMEDIES

31. This Court is of the view that reinstatement of the Claimant in the

Respondent Company is not the appropriate remedy in the circumstances

and facts of this case. The order for the Claimant's reinstatement on the

facts and circumstances of this case would not be conducive to industrial

harmony. The Claimant had pleaded for reinstatement in the Statement of

Case.

32. In the case of Koperasi Serbaguna Sanya Bhd (Sabah) v. Dr

James Alfred And Anor [2000] 3 CLJ 758 at page 766, the Court of

Appeal decided inter alia as follows:

“In industrial law, the usual remedy for unjustified dismissal is an

order of reinstatement. It is only in rare cases that reinstatement is
refused. For example, as here, where the relationship between
the parties had broken down so badly that it would not be
conducive to industrial harmony to return the workman to
his place of work. In such a case, the Industrial Court may
award monetary compensation. Such an award is usually in two
parts. First, there is the usual award for the arrears of wages, or

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 back wages, as it is sometimes called. It is to compensate the
workman for the period that he has been unemployed because of the
unjustified act of dismissal. Second, there is an award of
compensation in lieu of reinstatement.

However in the instant case, the court is of the view that such order
of reinstatement is not conducive to industrial harmony and in any
event the claimant is currently gainfully employed elsewhere.”
[Emphasis added]

33. It must be noted that the Claimant had received severance payment

amounting to RM 13,336.82 from the Respondent when the Claimant was

terminated from her services. This amount shall be deducted from the final

order to be made herein below.

Other Claims

34. The Claimant's counsel in the Written Submissions claimed for the

following:

(i) RM 13,171.27 per month as the average commission earned

and added with the basic salary for computation of backwages

and compensation in lieu of reinstatement;

(ii) RM 10,238.46 as the outstanding commissions, incentive trip

and contractual bonuses.

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It was crystal clear from the letter of employment dated 23 April 2002

(exhibit CLB, page 1) the Claimant will be paid a basic salary at a rate

of RM 1,300.00 per month for her services and a guaranteed RM 600.00 for

the first 3 months of the Claimant's appointment. In a letter signed by

COW-1 vide letter dated 1 April 2006 (exhibit CLB, page 19), the Claimant's

basic salary was adjusted to RM 1,926.00 per month. The Court hence

disallowed the calculation of backwages and compensation in lieu of

reinstatement to be based on the amount of RM 13,171.27 per month. The

claims for outstanding commissions, incentive trip and contractual

bonuses of RM 10,238.46 is dismissed.

BACKWAGES

35. In awarding backwages, such backwages shall not exceed 24 months

backwages based on the last drawn salary of the Claimant who has been

dismissed without just cause or excuse. Where there is post-dismissal

earnings, a percentage of such earnings, to be decided by the court, shall be

deducted from the backwages. The Claimant told the Court that after the

termination of her employment, she was gainfully employed in a Company,

Cuscapi with a salary of RM 4,000.00 per month. In the circumstances, the

Court orders the Respondent Company to pay the Claimant backwages of

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24 months based on the Claimant's last drawn salary of RM 1,926.00 and

20% is to be deducted from the said backwages:

24 months x RM 1,926.00 – 20% = RM 36,979.20

COMPENSATION IN LIEU OF REINSTATEMENT

36. It is the practice of the Court to grant compensation in lieu of

reinstatement based on the formula of 1 month's salary for every completed

year of service with the company. Since the Claimant had served the

Respondent Company for a period of 4 years (29 April 2002 to

25 September 2006), the Court orders the Respondent to pay the Claimant

compensation in lieu of reinstatement the amount of:

4 years x RM 1,926.00 = RM 7,704.00

37. The Court now orders the Respondent the following amount

calculated as follows:

Backwages RM 36,979.20
Compensation in lieu of reinstatement RM 7,704.00
Less severage payment RM 13,336.82
----------------
Total RM 31,346.38
=========

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FINAL ORDER

38. The Court orders that the total sum of RM 31,346.38 (less statutory

deduction if any) shall be paid by the Respondent to the Claimant through

the Claimant's solicitors, Messrs Lee Ong & Kandiah within 45 days from the

date of this Award.

HANDED DOWN AND DATED THIS 29TH MARCH 2010.

( EDDIE YEO SOON CHYE )

CHAIRMAN
INDUSTRIAL COURT MALAYSIA
KUALA LUMPUR

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