Joni Matakin

[2021] 1 LNS 1695 Legal Network Series
MALAYSIA
IN THE HIGH COURT OF SABAH AND SARAWAK
AT KOTA KINABALU
[CIVIL APPEAL NO. BKI-16-8/7-2021]
BETWEEN
SUNLIGHT INNO SEAFOOD SDN BHD

(COMPANY NO. 960126-P) … APPELLANT
AND
JONI MATAKIN
[NRIC NO. 900116-12-6159] … 1 ST RESPONDENT
JUANA ELIS
[NRIC NO. 860331-49-5002] … 2 ND RESPONDENT
JANDERY JAMARI
[NRIC NO. 821031-12-6123] … 3 RD RESPONDENT
MOHD AZZERY HANAFIAH AHMAD

[NRIC NO. 860501-49-5647] ... 4 TH RESPONDENT
MUZAIMI ROGER
MASALIN @ HOMLEE MAJUNGKIT

ZULFIKAR HIKAR
EMILIA MACRING
RUBI SIDIK
1
NAJRI LISEH
JUNAIN RONTOBON
ROSDIN UNDOK
NUR AZMAN NOOR

MOHD ZAILANI AHMAD

BIBIH RUDOT @ ZULKEFLI

MOHAMMAD FAISALE JARMASAH

DEFELY AMAT
LAUNLIS JELIM
JUMAT JILI
DORISAH GOLUBI
MARK GEVINS GENEVICES

[NRIC NO. 960410-05-5281] ... 21 ST RESPONDENT
MAJAN ABDUL
[NRIC NO. 710513-65-5069] ... 22 ND RESPONDENT
2
JULITAH MANAN
[NRIC NO. 890704-12-5838] ... 23 RD RESPONDENT
MOHAMMAD SAFRI USUP

ROSNAH UNAU
ABDUL SANI DAMSAH

NIZAM ASMAT
SUHANAH UNDOK
NINING ZULKIFLI @ RUDOT

ROGER SEBONGBONG
JAIDI AMBING
MAHADIR MATUSIN
MARALI MUNISAH
TEDDY RAHIM
LINSIN RUMINTAL
3
MEKLON YOUKIUN
MOHD FAIZAL OLONG

MOHD BANIR SAID

LOWRENCE DEK
ABDUL MALIK ALUK

NICKYLIN JUPILIN
AZMI HUSSIN
JUNAIDI HUSSIN
ABDUL AZIS EYAH

DINO HARUN
HENRY RAHIM
MOHD ASRI MAJON

HARLLEYSON GONJEBIN
4
ROSLIE SABO
ASRILAN TATAGON
LEEUAS MODIN
[IN THE MATTER OF DIRECTOR OF LABOUR

[CIVIL SUIT NO. JTK.H.KK KBR-21214/2020/0032]
IN THE LABOUR COURT AT KOTA MARUDU]
BETWEEN
JONI MATAKIN & 50 ORS

[NRIC NO. 900116-12-6159] … PLAINTIFFS
AND
SUNLIGHT INNO SEAFOOD SDN BHD

(COMPANY NO. 960126-P) … DEFENDANT
GROUNDS OF DECISION
INTRODUCTION
[1] This is an appeal by the employer/Defendant against the decision of

the Director of Labour (hereinafter referred to as “Labour Court”) at Kota
Marudu, Sabah given on 28.05.2021.
[2] The parties shall be referred to as “the Appellant” (the employer)

and “the Respondents” (the employees).
BRIEF FACTS
[3] The Appellant is a company whose primary business is shrimp/prawn

farming in the District of Pitas. Most of the shrimp/prawn produced by the
Appellant is exported.
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[4] The Malaysian Government imposed a nationwide mandatory
lockdown (“Movement Control Oder”) on 18 th March 2020. The Appellant
was required under law to suspend operations for a few months.
[5] Taking measures to reduce the losses as result of the MCO, the
Appellant issued a memo dated 20.03.2020 addressed to all its employees
imposing salary/wage cuts as the Appellant was facing seri ous cash flow
problems. Alternatively, the employees were given the option of taking no
pay leave until a further date to be determined. The implementation of the
said wage cuts was to commence from the month of April 2020 onwards.
[Please see: Page 388 of the Record of Appeal].
[6] The Appellant issued a further letter to all employees dated

30.03.2020 stating that it was delaying the payment of all allowances
including overtime allowances.
[Please see: Page 381 of the Record of Appeal].
[7] The Respondents in this appeal opted to take up the 6 months no pay
leave hoping that they would resume work from the month October 2020
onwards. As the Appellant did not call the Respondents back to work in
the month of October 2020 due to further negotiations, the Respondents
filed this claim in the Labour Court seeking Termination Benefits as well
as other benefits and allowances.
[Please see: Opening Statement of the Plaintiff at Exhibit C -1 found on

page 40 of the Record of Appeal]
[8] The following is a summary of the Respondents’ claim against the

Appellant: -
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a) Faedah Penamatan (Termination Benefits): RM 102,558.51
b) Elaun Motor (Motor Allowance): RM 2,400.00
c) Elaun makan (Food allowance): RM 400.00
d) Elaun bersalin (Maternity RM 3,300.00

allowance):
e) Elaun Tetap (Fixed Allowance): RM 800.00
f) Tunggakan gaji (20%): RM 16,450.00
g) Insentif: RM 79,965.90
h) Elaun RM600: RM 32,400.00
i) Tuntutan gaji: RM 831.71
Total: RM 235,106.2
[Please see: Page 227 of the Supplementary Record of Appeal]
FINDINGS OF THE OF LABOUR COURT
[9] On 28.05.2021, the Labour Court decided in favour of the

Respondents and awarded the Respondents the following heads of claim.
a) Faedah Penamatan (Termination Benefits): RM 100,552.30
b) Elaun makan (Food allowance): RM 400.00
c) Elaun bersalin (Maternity allowance): RM 3,300.00
d) Elaun Tetap (Fixed Allowance): RM 800.00
7
g) Tunggakan gaji (20%): RM 16,450.00
e) Tuntutan gaji: RM 180.63
MOMORANDUM OF APPEAL
[10] The grounds as stated in the Memorandum of Appeal are as follows:
(1) The Senior Officer of Labour erred in law and in fact when
he failed to take sufficient account of the evidence before him in
calculating the termination benefits payable to the
Plaintiffs/Respondents pursuant to the Labour Ordinance (Sabah
Cap. 67) and the Labour (Termination and Lay -Off Benefits)
(Sabah) Rules 2008.
(2) The Senior Officer of Labour erred in law and in fact when
he failed to take sufficient and/or any account of the evidence
before him when he awarded the Plaintiffs/Respondents food
allowance, maternity leave allowance, fixed allowance, 20%
arears in wages and unpaid wages.
ANALYSIS AND FINDINGS
[11] The claims by the Respondents were made under section 7H of the
Labour Ordinance (Sabah Cap. 67) (hereinafter referred to as “the
Ordinance”) which states:
Joinder of several complaints in one complaint.
7H. Where it appears to the Director in any proceedings under

this Chapter that there are more employees than one
having a common cause for complaint against the same
employer or person liable, it shall not be necessary for
each employee to make a separate complaint under this
Chapter, but the Director may, if he thinks fit, permit one
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or more of them to make a complaint and to attend and
act on behalf of and generally to represent the others, and
the Director may proceed to a decision on the joint
complaint or complaints of each and all such employees:
Provided that, where the Director is of the opinion that

the interests of the employer or person liable are likely to
be prejudiced by the non-attendance of any employee, he
shall require the personal attendance of such employee.
[12] In the present case, the 1 st Respondent, Joni Bin Matakin [NRIC No.
900116-12-6159], appears for himself and on behalf of 50 other
Respondents during the proceedings before the Director of Labour as well
during this appeal.
[13] Initially there were altogether 51 Respondents. Perusing the grounds

of judgment of the Labour Court, during the mention of the case on
22.12.2020, the 1 st Respondent informed that one Nur Azman Bin Noor
[NRIC No. 910108-12-5175] (13 th Respondent) and Harlleyson Gonjebin
[NRIC NO. 901222-12-5027] (48 th Respondent) do not wish to continue
with their claims. Hence, the proceeding proceeded with the remaining 49
Respondents.
[14] As stated at paragraph [9] above, the findings of the Labour Court
consist the followings heads of claim i.e. a) Faedah Penamatan
(Termination Benefits); b) Elaun makan (Food allowance); c) Elaun
bersalin (Maternity allowance); d) Elaun Tetap (Fixed Allowance); g)
Tunggakan gaji (20%); and e) Tuntutan gaji.
[15] However, from my reading of the Appellant’s written submission,

the Appellant are focusing on the following heads of claim awarded to the
Respondents namely: -
a) Faedah penamatan (Termination Benefits);
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b) Elaun makan (Food allowance); and
c) Elaun bersalin (Maternity allowance).
[16] The Appeal is under section 7M of the Ordinance which provides: -
Appeal against Director’s order to High Court .
7M. (1) If any person whose financial interests are affected is

dissatisfied with the decision or order of the Director
under section 7A, 7C, 7D or 7I, such person may
appeal to the High Court.
(2) Subject to any rules made under section 4 of the

Subordinate Courts Rules Act 1955 [Act 55], the
procedure in an appeal to the High Court shall be the
procedure in a civil appeal from a Sessions Court
with such modifications as the circumstances may
require.
[17] Hence the provisions of Order 55 of the Rules of Court 2012

becomes relevant:-
Appeal to be by re-hearing on notice (O. 55, r. 2 )
2. All appeals to the High Court shall be by way of re -hearing

and shall be brought by giving a notice of appeal within
fourteen days from the date of the decision appealed from.
[18] I have read the Record of Appeal, the Memorandum of Appeal,

Supplementary Record of Appeal and the submissions filed. I have also
heard counsel for the Appellant and the 1 st Respondent on their
submissions.
[19] In order to be entitled to Termination Benefits, Food allowance and

Maternity allowance, the Labour Court relied on the following legal
provisions: -
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(i) Section 13A(1) of the Sabah Ordinance (Sabah Cap.
67)
When contract is deemed to be broken by employer

and employee.
13A. (1) An employer shall be deemed to have

broken his contract of service with the employee if he
fails to pay wages in accordance with this Ordinance
(ii) Rule 3(1) of Labour (Termination and Lay-off

Benefits) (Sabah) Rules 2008, which I shall hereinafter
refer to as the said Rules.
(iii) Interpretation provision in Section 2 of the Ordinance

which defined: -
"wages" means basic wages and all other payments in

cash payable to an employee for work done in res pect
of his contract of service but does not include –
(a) the value of any house accommodation or the

supply of any food, fuel, light or water or
medical attendance, or of any approved
amenity or approved service;
(b) any contribution paid by the employer on his

own account to any pension fund, provident
fund, superannuation scheme, retrenchment,
termination, lay-off or retirement scheme,
thrift scheme, or any other fund or scheme
established for the benefit or welfare of the
employee;
(c) any travelling allowance or the value of any

travelling concession;
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(d) any sum payable to the employee to defray
special expenses entailed on him by the nature
of his employment;
(e) any gratuity payable on discharge or

retirement; or
(f) any annual bonus or any part of any annual

bonus;
(iv) Section 113. (1) of the Ordinance: Lawful deductions.
113. (1) No deductions shall be made by an employer

from the wages of an employee otherwise
than in accordance with the provisions of this
Ordinance.
[20] I shall now consider the 3 main heads submitted by the Appellan t.
Food Allowance
[21] There were 3 claimants who had submitted their claims for food
allowance for the month of March, April and June 2020. They are Roger
Sebongbong (30 th Respondent) Joni Matakin (1 st Respondent) and Nizam
Bin Asmat (27 th Respondent).
[22] The main issue under this head of claim was whether the food
allowance was part of their wages as defined by s. 2 of the Labour
Ordinance.
[23] Counsel for the Appellant submits that the Labour Court had erred
when it awarded RM400.00 for food allowance to the Respond ents.
[24] Firstly, there is nothing in the employment contracts of Roger

Sebongbong [Page 197 Record of Appeal], Joni Matakin [Page 223 Record
of Appeal] and Nizam Bin Asmat [Page 251 Record of Appeal] which
specifically states they are entitled to food allowa nce.
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[25] Further, the Appellant is entitled to cancel any previously given food
allowance as food allowance does not fall within the definition of “wages”
as defined under Section 2 of the Labour Ordinance which provides as
follows: -
"2. Interpretation "wages" means basic wages and all other

payments in cash payable to an employee for work done in
respect of his contract of service but does not include - (a)
the value of any house accommodation or the supply of any
food, fuel, light or water or medical attendance, or of any
approved amenity or approved service;”
[26] Therefore it was submitted that the Labour Court had erred when it
held the following in the written grounds of decision: -
“Dalam kes ini, elaun makan adalah elaun yang diberi secara
bulanan kepada pengadu-pengadu sepertimana dalam slip gaji
dalam Exhibit “C28” iaitu Meal Allowance dan ianya tidak
termasuk dalam kategori (a) hingga (f) dalam peruntukan seksyen
ini. Oleh itu elaun makan adalah dikira sebagai upah”.
[Please see: Page 239-240 of the Supplementary Record of

Appeal]
[27] It appears to me that the words used in the definition of wages in s. 2

of the Ordinance are clear and unambiguous i.e. “basic wages and all other
payments in cash payable to an employee for work do ne in respect of his
contract of service”.
[28] Section 2 defined "contract of service" to means any agreement,

whether oral or in writing and whether express or implied, whereby one
person agrees to employ another as an employee and that other agrees to
serve his employer as an employee and includes an apprenticeship
contract.
[29] Though there is nothing in the employment contracts of Roger

Sebongbong, Joni Matakin and Nizam Bin Asmat which specifically states
13
they are entitled to food allowance, they were give n food/meal allowance
as evidence in the pay slips Exhibit “C28” being part and parcel of the
contract of service. By doing so it is implied in the contract of service of
their entitlement of food/meal allowance as part of the wages.
[30] The operative words are 'for work done in respect of his contract of
service' and as long as payments to the Respondents related to their work,
those payments are part of the wages. Hence, this Court of the view that
the Labour Court is not wrong in finding that meal allowance payments
come within the definition of the word ‘wages’.
[31] In the case of Port View Seafood Village v. Rocelyn Tubal Raneses
[2011] 4 CLJ 959 David Wong Dak Wah J (as His Lordship then was) in
determining the word wages states: -
"[13] Reverting to the issue at hand and applying the

established principle of constructing legislation of giving
the words their natural meaning and bearing in mind that
there was no amendment to the Employment Act after the
Pereira case, I concur with the interpretation given by the
learned Chairman. The pivotal words in my view are
“work done in respect of his contract of service” and as
long payments are made because of that service, it is
caught by the definition of wages. In this case there
cannot be any denial that the ‘service charg e’ is payment
made for ‘work done in respect of his contract of
service’. My view is of course fortified by the decision of
the Privy Council.”
[32] The Appellant further submits that it had no choice but to cut the
operating costs beginning April 2020 (including certain deductible
allowances) because of the Government imposed lockdown as a result of
the Covid pandemic. The Appellant suffered heavy losses for the financial
year 2020 amounting to more than RM42 million.
14
[Please see: Appellant’s Profit and Loss st atement for the Year 2020 at
page 394 of the Record of Appeal]
[33] This issue had been duly considered by the Labour Court where
reference was made to section 113 (1) of the Ordinance which states:
No deduction shall be made by an employer from the wages of an

employee otherwise than in accordance with the provision of this
Ordinance.
[34] The award sum of RM400.00 for the food/meal allowanced is hereby
affirmed.
Elaun Bersalin “Maternity Allowance”
[35] As for the maternity allowance, the Labour Court awarded Puan
Julitah Manan (23 rd Respondent) the sum of RM3300.00 amounting to 3
months of monthly wages.
[Please see: Page 241 of the Supplementary Record of Appeal for the
reasoning behind the award]
[36] Section 83 of the Ordinance, provides the following: -
“83. Length of eligible period and entitlement to maternity

allowance (1) Every female employee shall be entitled to
maternity leave for a period of not less than sixty
consecutive days (also referred to in this Chapter as the
"eligible period") in respect of each con finement and,
subject to this Chapter, she shall be entitled to receive from
her employer a maternity allowance to be calculated or
prescribed as provided in subsection (2) in respect of the
eligible period.”
[Please see: Tab 5 of the ABOA]
[37] The Appellant concedes that Puan Julitah Manan is entitled to

maternity allowance. It was submitted however that the Appellant is
15
entitled to the maternity leave at sixty days (2 months) by virtue of
Section 83 of the Ordinance and therefore only be liable to pay 2 month s
of maternity allowance.
[38] It was further submitted that in view of the pandemic, and the
increasingly dire financial situation of the Appellant, the Appellant was
gracious enough to be willing to reduce the 3 months maternity allowance
by merely 20%.
[39] In view of Section 83 of the Ordinance, the Appellant submitted that

the award of RM3,300.00 to Puan Julitah Manan (23 rd Respondent) should
be reduced by 20% to RM2,640.00.
[40] In awarding the sum of RM3,300, the Labour Court again rely on
section 113 (1) of the Ordinance that no deduction shall be made by an
employer from the wages of an employee otherwise than in accordance
with the provision of this Ordinance. Thus, the Labour Court had not erred
in the finding that warrant intervention. The award of RM3,300.00 for
maternity allowance is affirmed.
Termination And Lay-Off Benefits
[41] Section 6. (1) of the Labour (Termination and Lay -Off Benefits)
(Sabah) Rules 2008 states: -
“Amount of termination or lay-off benefits payment
6.(1) Subject to the provisions of these Rules, the amount of

termination or lay-off benefits payment to which an
employee is entitled in any case shall not be less than –
(a) ten days’ wages for every year of employment under

a continuous contract of service with the employer if
he has been employed by that employer for a period
of less than two years; or (b) fifteen days’ wages for
every year of employment under a continuous
contract of service with the employer if he has been
16
employed by that employer for two years or more but
less than five years; or
(c) twenty days’ wages for every year of employment

under a continuous contract of service with the
employer if he has been employed by that employer
for five years or more, and pro rata in respect of an
incomplete year, calculated to the nearest month.”
[42] The Appellant disputes the Labour Court decision to award of

RM100,552.30 to the Respondents being the termination and lay -off
benefits on the following grounds: -
a) The Respondents’ employment with the Appellant was

never terminated.
b) As there was no termination or lay-off, the respondents

are not entitled to any termination or lay -off benefits. In
order to claim for termination and lay off benefit, the
respondents must prove that there was termination in the
first place. It is only if there was termi nation that the
Court can consider whether the termination was done
unlawfully.
[43] The Appellant submitted that there was no evidence (either oral or
writing) that the Appellant intended to terminate the employment of the
Respondents at that material time. The Respondents had agreed to a 6
months no pay leave. Following which the parties were still in
negotiations on how to move forward in view of the restrictions imposed
as a result of the pandemic. The Appellant never had any intention of
terminating the employment contracts of the Respondents and had merely
wanted more time to restructure the operations of the company.
[44] Reference were made to the Industrial Court in the case of Lim Ban
Leong v. Gold Bridge Engineering & Construction & Construction Bhd
[2017] 2 LNS 0370 which held that, traditionally, any salary cut to an
17
employee's pay can be used as a ground by the employee to plead
constructive dismissal. However, if the company is facing losses and is
trying to fight off closure of its business or retrenchm ent of its employees,
the company can appeal to the employees to ride through the rough times
with it and take a salary cut which can then be reinstated and increased
when the business picks up again [Please see: para 23].
The Industrial Court further notes that there should have been much more
engagement by the company with its employees in order to maintain
industrial harmony.
[45] Further, the Industrial Court in the case of Penas Realty Sdn Bhd v.
Chee Yew Kong [2001] 3 ILR 13 took cognisance of the economic
situation at the material time and found that the company had to adopt a
proactive stand to create a win-win situation for the company and the
employees. The Court held that the reduction of salary of the claimant and
the other relevant employees is bona fide and justified in view of the
financial situation of the respondent company and the predicament it is in
and that it was intended to be a win-win for both the employees and the
respondent instead of retrenching the employees or dismissing them.
[46] Therefore, based on Lim Ban Leong (supra) and Penas Realty Sdn
Bhd (supra), the Appellant submit that it is arguable that a salary
deduction or pay cut may be permissible under certain circumstances
especially when it is the only option to prevent terminat ion or
retrenchment of employees. While it is good practice for employers to
obtain consent from the employees before imposing pay cut or deduction
of wages, it is arguable that employers may impose pay cut or deduction of
wages on the employees during the enforcement of the MCO which
commenced on 18 March 2020.
[47] It was submitted that the entire premise of the Respondent’s claim
against the Appellants revolves around constructive dismissal.
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[48] The Appellant cited the case of Bayer (M) Sdn Bhd v. Anwar Bin Abd
Rahim [1996] 2 CLJ 49 pp 52 and 53 where Low Hop Bing JC (as he then
was) held as follows:
“In my judgment in order to succeed in a claim for constructive

dismissal the employee must prove to the satisfaction of the
Court that the employer is guilty of a breach which goes to the
root of the contract or if the employer has evinced an intention
no longer to be bound by it. ..... Thus, it is settled law that the
test applicable is a constructive dismissal case is the “contract
test‟ and not the test of “reasonableness‟. To claim constructive
dismissal, four conditions must be fulfilled. These conditions
are: -
(i) there must be a breach of contract by the employer;
(ii) the breach must be sufficiently important to justify the

employee resigning;
(iii) the employee must leave in response to the breach and

not for any other unconnected reasons; and
(iv) he must not occasion any undue delay in terminating

the contract, otherwise he will be deemed to have
waived the breach and agreed to vary the contract.”
[49] In the present case, having examined the facts of case and the
evidence adduced by both the Appellant and the Respondents, the Labour
Court of the findings that there was termination when the Appellant failed
to call back the Respondents to resume their duties after the 30.09.2020 or
after the 6 months no pay leave. To this reference was made to the
testimonies of the 1 st Respondent being the leader of the other
Respondents:
S: Bilakah bermula tempoh cuti tanpa gaji tersebut?
J: 03.04.2020
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S: Sehingga bila tempoh cuti tanpa gaji tersebut?
J: September, sebab tempoh cuti tanpa gaji 6 bulan.
S: Adakah kamu bersetuju dengan cuti tanpa gaji tersebut?
J: Setuju
S: Adakah kamu menandatangani surat cuti tanpa gaji tersebut?
J: Ya ada.
S: Selepas tempoh cuti tanpa gaji berakhir, adakah kamu

dipanggil semula oleh pihak syarikat untuk bekerja semula?
J: Tiada.
S: Adakah apa-apa makluman dari syarikat selepas tempoh cuti

tanpa gaji berakhir?
J: Ada secara lisan dari Puan Sandra, itu pun yang bulan 11,
2020.
S: Apakah makluman tersebut?
J: Dibagitau apabila syarikat sudah buka balik, kami dipanggil

kerja balik.
S: Adakah kamu ada dipanggil kerja balik bila-bila masa selepas

makluman tersebut?
J: Tiada.
S: Adakah gaji kamu dibayar oleh syarikat selepas tempoh cuti

tanpa gaji tersebut?
J: Tiada.
S: Adakah kamu pernah bertanya dengan syarikat tentang status

bekerja selepas tamat tempoh cuti tanpa gaji?
20
J: Selain dari datang bertanya, saya ada buat secara bertulis
sebanyak 2 kali 05.11.2020 dan 17.11.2020.
S: Adakah apa-apa jawapan kepada surat kamu itu?
J: Jawapan secara lisan dari Encik Affendi dan Puan Sandra,

mengenai kami macam mana, jawapannya lebih kurang sama
saja dengan sebelum ini, nanti akan dibagitahu dan diambil
semula apabila beroperasi, tapi syarikat pun tidak tahu bila.
S: Bilakah gaji terakhir yang kamu terima dari syarikat?
J: Pada 31.03.2020
S: Berapa bayaran gaji yang kamu terima pada waktu itu?
J: Gaji pokok RM1,100, tapi ada potongan 20 peratus, jadi baki

tinggal RM800.
[50] In his grounds of decision, the Labour Court further said that: -
“Berdasarkan kepada keterangan semasa dalam perbicaraan,
defendant tidak menafikan perkara tersebut dan bersandarkan kepada
tindakan defendant tersebut, saya berpandangan bahawa defendant telah
menamatkan perkhidmatan pengadu-pengadu.
Selain itu, saya juga merujuk kepada peruntukan seksyen 13A

(1), Ordinan Buruh (Sabah Bab 67) seperti berikut:
When contract is deemed to be broken by employer and

employee
An employer shall be deemed to have broken his contract of

service with the employee if he fails to pay wages in
accordance with this Ordinance.”
Dalam kes ini, defendant telah gagal membayar gaji pengadu -

pengadu pada bulan Oktober 2020 iaitu selapas tamat tempoh
cuti tanpa gaji 6 bulan yang berakhir pada bulan September
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2020. Oleh yang demikian, defendant telah melanggar kontrak
perkhidmatannya dengan pengadu-pengadu sepertimana dalam
peruntukan ini yang mana menyebabkan pengadu -pengadu layak
kepada bayaran faedah penamatan.”
[51] Having perusing the notes of evidence, nowhere stated that the
Appellant had much more engagement with the Respondents herein in
order to maintain industrial harmony apart from the oral statement which
1 st Respondent stated that: -
“Encik Affendi dan Puan Sandra, mengenai kami macam mana,

jawapannya lebih kurang sama saja dengan sebelum ini, nanti
akan dibagitahu dan diambil semula apabila beroperasi, tapi
syarikat pun tidak tahu bila”
[52] As the evidence shows, the Appellant issued a memo dated

20.03.2020 addressed to all its employees imposing salary/wage cuts as
the Appellant was facing serious cash flow problems. Alternatively, the
employees were given the option of taking no pay leave until a further date
to be determined. The implementation of th e said wage cuts was to
commence from the month of April 2020 onwards. The Respondents herein
opted for 6 months no pay leave from April to September 2020.
[53] Though it was submitted that the Appellant never had any intention
of terminating the employment contracts of the Respondents and had
merely wanted more time to restructure the operations of the company, the
Respondents does not agree/consented to the extension of no pay leave by
the Appellant until March 2021. It is clear in evidence that after the no
pay leave ended on 30.09.2020, 1 st Respondent did inquire when can they
resume duty and had also written in by the letter dated 05.11.2020 and
17.11.2020. In the written statement of 1 st Respondent marked as C-1
stated that: -
“Kumpulan pertama start cuti pada bulan 4, kumpulan ke-2

bulan 5 dan kumpulan ke-3 bulan 6. Kami diberi cuti tanpa gaji
selama 6 bulan. Malangnya, selepas dari cuti yang diberikan
22
sehingga kini kami tiada lagi dipanggil untuk bekerja semula
dan kami juga tidak dimaklumkan apa-apa dari majikan. Oleh
itu, kami menuntut faedah penamatan.”
[54] The Appellant’s Memo dated 20 Mac 2020 clearly stated that: -
“4. Sila ambil maklum bahawa walaupun Syarikat telah

memberikan 2 pilihan seperti berikut diatas, namun begitu,
jika kedudukan kewangan Syarikat masih tidak
menunjukkan perubahan kearah positif dan keadaan
ekonomi masih terus meleset, maka pihak Syarikat
mengambil tindakan untuk mengurangkan bilangan
kakitangan di semua peringkat.
Langkah ini (jika diambil) akan merupakan langkah

terakhir yang terpaksa diambil demi menjamin
kesinambungan operasi Syarikat ini, dan apa-apa juga
kelayakan pampasan Pekerja akan dibuat, tertakluk kepada
peraturan-peraturan terpakai yang sedia ada.’
[55] Clearly the Appellant had not acted bona fide and had put the
Respondents in uncertainty as to their employment status. The Appellant
had not adopted a proactive stand to create a win -win situation with the
employees, the Respondents herein, of any benefit that the Appellant could
afford.
[56] In the case of Kilang Beras Ban Eng Thye Sdn Bhd v. Yacob Bin
Noor [1997] LNS 201, the dispute arises between the appellant and the
respondents regarding termination benefits payment began in early April
1994 with the non-payment by the appellant of the salary of its employees
for the month of March 1994. According to section 19 of the Employment
Act, the salary for the month of March had to be paid latest by the 7 th of
April. This section stipulates.
19. Time of payment of wages.
23
Every employer shall pay to each of his employees not
later than the seventh day after the last day of any wage
period the wages, less lawful deduction, earned by such
employee during such wage period:
The only issue in this appeal is purely on the question as whether the
Labour Officer was right in awarding termination benefits payment to the
respondents. High Court held that: -
“In the present case, it is to my mind clear (indeed, it is not

denied by the appellant) that there had been a breach of the
provision regarding payment of wages (section 19) by the
appellant. But it is to be observed that section 13(2) speaks of a
breach of a condition of the contract of service. However, a
breach of section 19 is not merely a breach of the condition of
the contract of service. It is more than that: by the operation of
section 15(2) such a breach is also deemed to be a breach of the
contract of service. Section 15(2) states:
15. When contract is deemed to be broken by employer and

employee.
(1) An employer shall be deemed to have broken his

contract of service with the employee if he fails to
pay wages in accordance with Part III (which
includes section 19).
In conclusion, I hold -
(a) that by reason of the breach of section 19 itself,

there was, prima facie, a wilful breach of a
condition of the contract of service on the part
of the appellant;
[10] (b) that by reason of (a) above, the appellant is

deemed by section 15(2) to have committed a
breach of the contract of service;
24
(c) that the appellant had failed to adduce
satisfactory evidence to rebut the inference (or
prima facie case) of wilful breach;
(d) that the respondents had the right to terminate

the contract of service without notice pursuant
to section 13(2); and
(e) that the respondents were entitled to

termination benefits payment as provided for
under regulations 3 and 4 of the Employment
Regulations.
I therefore dismiss this appeal with costs.”
[57] Reverting back to the present case, after perusing through all the
evidence, the Labour Court was correct in referring to section 13A (1) of
the Ordinance that the Appellant shall be deemed to have broken the
contract of service with the Respondents when the Appellant fails to pay
wages in accordance with the Ordinance after the no pay leave have ended
in September 2020. This is a fundamental breach going to the root or
foundation of the contract.
[58] Therefore, the Respondents were entitled to termination benefits

payment as provided for under Rule 3(1) of Labour (Termination and Lay -
off Benefits) (Sabah) Rules 2008.
[59] It has been submitted by the Appellant that in the event this court
does agree with the Labour Court and confirms the award of
RM100,552.30 in termination benefits to the Respondents, the Appellant
appeal for the said award to be reduced. Reasons forwarded were: -
i. The upstream and downstream of the Defendant’s shrimp

farming was devastated by the Government MCO and the
Appellant was forced to suspend their operations.
25
ii. To further exacerbate matters, all international tourism
into Sabah was immediately suspended and continues to
be suspended even up to this very day, resulting in the
sharp drop in demand for prawns/shrimps by local sea
food restaurants. Further, many local sea food restaurants
had closed permanently as their primary source of
business i.e. international tourists were prohibited from
entering the State of Sabah.
iii. As a result of these abovementioned factors, the

Defendant suffered losses amounting to –
RM42,809,705.56 for the year 2020.
[Please see: Appellant’s Profit and Loss statement for the Ye ar

2020 at page 394 of the Record of Appeal]
[60] In this respect, the reasons forwarded by the Appellant for reduction
could not be entertained as in awarding the termination benefits payment,
the Labour Court has rightly referred to rule 6. (1) of the Rules i n the
benefits calculation and no reasons for intervention by this court.
CONCLUSION
[61] Having considered the 3 heads of claim awarded to the Respondents,

it is the finding of this court that the Labour Court is not wrong in finding
that meal allowance payments come within the definition of the word
‘wages’. By virtue of section 113 (1) of the Ordinance, there shall be no
deduction be made by an employer from the wages of an employee i.e.
Roger Sebongbong (30 th Respondent), Joni Matakin (1 st Respondent) and
Nizam Bin Asmat (27 th Respondent) otherwise than in accordance with the
provision of this Ordinance.
[62] Similarly, in awarding the maternity allowance in the sum of

RM3,300 to Puan Julitah Manan (23 rd Respondent), she is entitled to such
allowance pursuant to section 83 of the Ordinance. The Labour Court
again rely on section 113 (1) of the Ordinance that no deduction shall be
26
made by an employer from the wages of an employee otherwise than in
accordance with the provision of this Ordinance. Thus , the Labour Court
had not erred in the finding that warrant intervention. The award of
RM3,300 for maternity allowance is affirmed.
[63] As to termination or lay-off benefits payment, the Labour Court was

correct in referring to section 13A (1) of the Ordinanc e that the Appellant
shall be deemed to have broken the contract of service with the
Respondents when the Appellant fails to pay wages in accordance with the
Ordinance after the no pay leave have ended in September 2020. This is a
fundamental breach going to the root or foundation of the contract. Thus,
the Respondents were entitled to termination benefits payment as provided
for under Rule 3(1) of Labour (Termination and Lay -off Benefits) (Sabah)
Rules 2008.
[64] In this respect, the reasons forwarded by the Ap pellant for reduction
could not be entertained as in awarding the termination benefits payment,
the Labour Court has rightly referred to rule 6. (1) of the Rules in the
benefits calculation and no reasons for intervention by this court.
[65] I therefore dismiss this appeal. The decision of the Labour Court is
affirmed with cost of RM5,000 in aggregate to the Respondents.
(AMELATI PARNELL)
Judicial Commissioner
High Court Kota Kinabalu
Sabah
Dated: 31 MARCH 2022
Counsel:
For the appellant - Mortimer Romould Ewanjilus Malu; M/s Shelley Yap
Advocates and Solicitors;
Kota Kinabalu, Sabah
For the respondents - Joni Matakin
27

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[2021] 1 LNS 1695 Legal Network Series

SUNLIGHT INNO SEAFOOD SDN BHD

MOHD AZZERY HANAFIAH AHMAD

MASALIN @ HOMLEE MAJUNGKIT

NUR AZMAN NOOR

MOHD ZAILANI AHMAD

BIBIH RUDOT @ ZULKEFLI

MOHAMMAD FAISALE JARMASAH

MARK GEVINS GENEVICES

MOHAMMAD SAFRI USUP

ABDUL SANI DAMSAH

NINING ZULKIFLI @ RUDOT

MOHD FAIZAL OLONG

MOHD BANIR SAID

ABDUL MALIK ALUK

ABDUL AZIS EYAH

MOHD ASRI MAJON

[IN THE MATTER OF DIRECTOR OF LABOUR

JONI MATAKIN & 50 ORS

SUNLIGHT INNO SEAFOOD SDN BHD

[1] This is an appeal by the employer/Defendant against the decision of

[2] The parties shall be referred to as “the Appellant” (the employer)

[3] The Appellant is a company whose primary business is shrimp/prawn

[Please see: Page 388 of the Record of Appeal].

[6] The Appellant issued a further letter to all employees dated

[Please see: Page 381 of the Record of Appeal].

[Please see: Opening Statement of the Plaintiff at Exhibit C -1 found on

[8] The following is a summary of the Respondents’ claim against the

a) Faedah Penamatan (Termination Benefits): RM 102,558.51

b) Elaun Motor (Motor Allowance): RM 2,400.00

c) Elaun makan (Food allowance): RM 400.00

d) Elaun bersalin (Maternity RM 3,300.00

e) Elaun Tetap (Fixed Allowance): RM 800.00

f) Tunggakan gaji (20%): RM 16,450.00

h) Elaun RM600: RM 32,400.00

i) Tuntutan gaji: RM 831.71

[Please see: Page 227 of the Supplementary Record of Appeal]

FINDINGS OF THE OF LABOUR COURT

[9] On 28.05.2021, the Labour Court decided in favour of the

a) Faedah Penamatan (Termination Benefits): RM 100,552.30

b) Elaun makan (Food allowance): RM 400.00

c) Elaun bersalin (Maternity allowance): RM 3,300.00

d) Elaun Tetap (Fixed Allowance): RM 800.00

g) Tunggakan gaji (20%): RM 16,450.00

e) Tuntutan gaji: RM 180.63

[Please see: Page 246 of the Supplementary Record of Appeal]

[10] The grounds as stated in the Memorandum of Appeal are as follows:

ANALYSIS AND FINDINGS

Joinder of several complaints in one complaint.

7H. Where it appears to the Director in any proceedings under

Provided that, where the Director is of the opinion that

[13] Initially there were altogether 51 Respondents. Perusing the grounds

[Please see: Page 225 of the Supplementary Record of Appeal]

[15] However, from my reading of the Appellant’s written submission,

a) Faedah penamatan (Termination Benefits);

c) Elaun bersalin (Maternity allowance).

[16] The Appeal is under section 7M of the Ordinance which provides: -

Appeal against Director’s order to High Court .