INDUSTRIAL COURT OF MALAYSIA

CASE NO. : 3/4-1168/18

BETWEEN

DAVID RUSSEL SHARPE

AND

VISTA MEGALINK SDN. BHD.

AWARD NO. : 1939 OF 2019

Before : PUAN ANNA NG FUI CHOO - Chairman

(Sitting Alone)

Venue : Industrial Court Malaysia, Kuala Lumpur

Date of Reference : 5.4.2018

Dates of Mention : 6.6.2018, 11.7.2018, 25.7.2018, 10.10.2018,

16.11.2018

Dates of Hearing : 24.10.2018, 15.1.2019, 16.1.2019, 18.2.2019

Claimant's Written : 12.3.2019

Submission

Company's Written : 14.3.2019

Submission

Company's Written : 2.4.2019

Submission in Reply

Claimant's Written : 15.4.2019

Submission in Reply
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Representation : Mr. V.K. Raj

From Messrs P. Kuppusamy & Co.
Counsel for the Claimant

Datuk Selva Mookiah and Mr. Kim Kok Thai

From Messrs Selva Mookiah & Associates
Counsels for the Company

Reference

This is a reference made under section 20(3) of the Industrial

Relations Act 1967 (the Act) arising out of the dismissal of David Russel
Sharpe (hereinafter referred to as “the Claimant”) by Vista Megalink
Sdn. Bhd. (hereinafter referred to as “the Company”) on 19 January
2018.

AWARD

[1] The Ministerial reference in this case required the Court to hear
and determine the Claimant's complaint of dismissal by the Company on
19 January 2018.

Facts

[2] The Company is a private company and a subsidiary of Naim

Holdings Berhad, which has a diversified portfolio of investments. The
Claimant is a civil engineer with prior work experience in other countries
before he was employed by the Company in Malaysia.

[3] The Claimant commenced employment with the Company vide a

written contract dated 29 April 2015 with effect from 30 April 2015. It
was on a contract basis and shall be for a fixed term commencing 30

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April 2015 and expiring upon completion and / or early termination of the
project MRT in accordance with the contract entered between Naim
Group and the client unless otherwise terminated in accordance with
provisions of the agreement (page 2 of the Claimant's Bundle of
Documents 1 (CLB1)). The Claimant contends that the initial contract
was seamlessly renewed vide a second contract dated 1 October 2016
for a fixed term of one year. Clause 3.1 at page 16 of CLB1 states that,
“The appointment is on a contract basis and shall be for a fixed term of
One (1) year commencing on the 13th October 2016 and expiring
automatically on 12th October 2017 or completion of KVMRT project and
MRT Line 2 tendering process whichever commence earlier unless
otherwise terminated in accordance with the provisions of this
Agreement.”

[4] The contract was subsequently extended vide a third contract

dated 25 September 2017 for a fixed term of six (6) months
commencing on 13 October 2017 and expiring automatically on 12 April
2018 unless otherwise terminated in accordance with the provisions of
the said agreement. The Claimant contends that the fixed periods
(where specified) mentioned in his contracts of employment were
provided as in keeping with the work permit requirements for an
expatriate employee like him. The Claimant continued his employment
with the Company for an uninterrupted period from 30 April 2015 till his
dismissal on 19 January 2018.

[5] The Company averred that the Claimant was appointed by the
Company as the Director–Project for the project Klang Valley Mass
Rapid Transit (KVMRT) under the Construction Division of the Naim
Group. The Claimant's last drawn monthly remuneration package

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consisted of:

(a) basic salary of RM45,000.00;

(b) fully maintained Toyota Hilux utility vehicle; and

(c) other benefits as provided in his contract of employment.

[6] The relevant contents of the Claimant's ''Termination from

Company's Service'' letter (pages 45 and 46 of CLB1) dated 19 January
2018 are hereby reproduced:

“Dear Mr David,

Re: Termination from Company’s Service

We refer to the above subject matter and to the

Domestic Inquiry convened on 21 December 2017.

We write to inform that the Panel of Inquiry has carefully

reviewed the facts of the case and found you guilty of
the charges leveled against you namely:

“That you were negligent in the performance of your

duties as the Director - Project for Project KVMRT and
with reckless disregard to established Standard
Operating Procedure (SOP), issued five (5) final
account assessment letters to BBR Construction
Systems (M) Sdn Bhd without the prior authorization
and approval of the variation orders (VO) by the
Variation Order Committee (VOC). Your actions have
put Naim Engineering Sdn Bhd (NESB) and/or the
Group's image and interests at jeopardy, viz:-

(1) Committing NESB to an amount for final

certification without authorization;
(2) Potential of NESB being wound up as a result of

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Notice Pursuant To Section 466 of the Companies Act,

2016 dated 16th November 2017 being issued by BBR
Construction Systems (M) Sdn Bhd.”

As a result of the above findings and considering the

gravity of the charge, the management has decided that
the Company can no longer have any trust or
confidence in you to continue serving the Company, and
your service is hereby terminated with effect from the
date of this letter.

In the circumstances, you will be paid until 19 January

2018....

Should you wish to appeal against the decision of the

Company, please submit your written appeal to the
office of the Managing Director within three (3) working
days hereof.”.

The Function of the Industrial Court

[7] The function of the Industrial Court under section 20 of the Act is
as succinctly expressed in the Federal Court case of Milan Auto Sdn
Bhd v. Wong Seh Yen [1995] 4 CLJ 449, which is as follows:

“As pointed out by the Court recently in Wong Yuen Hock v.

Syarikat Hong Leong Assurance Sdn Bhd [1995] 2 MLJ 753,
the function of the Industrial Court in dismissal cases on a
reference under s. 20 is twofold, first, to determine whether
the misconduct complained of by the employer has been
established, and secondly, whether the proven misconduct
constitutes just cause or excuse for the dismissal.”.

The Company's Case

[8] The Company called the following witnesses:

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(a) Ms Denice Yong Hui Hui (COW1), the Assistant General

Manager of the Internal Audit Department;

(b) Ms Tan Teck Jong (COW2), the General Manager of the

Human Resources Department; and

(c) Ms Susan Gau (COW3), the Company's (or Group) Legal

Manager.

[9] It was the Company's case that the Claimant commenced

employment with the Company on 30 April 2015 as Director-Project for
Project KVMRT, the Construction Division of Naim Holdings Berhad (the
Group) on a contractual basis vide a contract of employment dated 29
April 2015 (the 1st Contract). Subsequently, the 1st Contract was
mutually terminated by both the Claimant and the Company vide a letter
dated 7 October 2016 (page 14 of CLB1) which was duly signed and
acknowledged receipt by the Claimant.

[10] The Claimant then continued his employment with the Company
as Director-Project for Project KVMRT vide a contract of employment
dated 1 October 2016 (the 2nd Contract) (pages 15 to 25 of CLB1) for a
fixed term of one (1) year commencing from 13 October 2016 and
expiring on 12 October 2017. Upon the expiry of the 2 nd Contract, the
Claimant continued his employment with the Company as Director-
Project for Project KVMRT vide a contract of employment dated 25
September 2017 (the 3rd Contract) (pages 26 to 36 of CLB1) for a fixed
term of six (6) months commencing from 13 October 2017.

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[11] The Human Resources Department of the Group issued to the

Claimant a show cause letter dated 5 December 2017 (pages 37 and 38
of CLB1). The Claimant was alleged to have committed acts of major
misconduct and breach of his roles and responsibility as the Director-
Project for Project KVMRT, viz:

“Did not follow the VO claim Procedure and issued the

following five Assessment Letters to BBR Construction
Systems (M) Sdn Bhd without prior authorization and approval
from Variation Order Committee (VOC)'s assessment and
approval on the subject Final Account Assessment.”

[12] The details of the five Final Account Assessment were given to
the Claimant and he was required to provide a written explanation to the
show cause letter within three working days. The Claimant was also
suspended with half pay for a period of three days. The Company was
not satisfied with the Claimant's reply vide the Claimant's response letter
dated 12 December 2017 (pages 40 to 42 of CLB1). Consequently, the
Company issued a Notice of Charge and Domestic Inquiry dated 16
December 2017 (pages 43 and 44 of CLB1) to the Claimant. The
charge against the Claimant was similar to the one he was subsequently
found guilty of and reproduced in the Claimant's dismissal letter.

[13] On 21 December 2017, a domestic inquiry (DI) was convened

wherein the Company called one witness while the Claimant had called
three (3) witnesses. The ''Report of Inquiry'' (Records of DI proceedings)
of the Claimant was produced by the Company as Tab 3 (pages 4 to 48
of the Company's Bundle of Documents 1(COB1)). On 19 January
2019, the Company informed the Claimant that he had been found guilty

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of the charge. This resulted in the termination of the Claimant's

services. The Claimant could file an appeal to the Company's Managing
Director within three (3) working days against the Company's decision
but the Claimant had not done so.

[14] COW1 testified that on or about early December 2017, she was
asked by the Group Managing Director (GMD) to investigate five (5)
letters with the subject “Final Account Assessment”. They had been
issued on behalf of Naim Engineering Sdn Bhd (NESB) to one of their
sub-contractors, BBR Construction Systems (M) Sdn Bhd (BBR) dated
15 August 2017 and 28 August 2017 (exhibited at Tab 8, pages 70 to
105 of COB1).

[15] As a result of the investigation, COW1 found that there were five
sub-packages awarded to BBR under Packages S2 and S4. On 15
August 2017, the Claimant together with COO Sivakumar Ramasamy
had signed and issued two letters with the subject “Final Account
Assessment” on behalf of NESB to BBR. On 28 August 2017, the
Claimant together with Victor Yee (signing on behalf of Sivakumar
Ramasamy) had signed and issued three letters under the subject of
“Final Account Assessment” on behalf of NESB to BBR. Based on
COW1's investigation, there were 12 variation orders that had not been
approved when the five Final Assessment Letters were issued to BBR.
This was inconsistent with the Group's Standard Operating Procedure
(SOP).

[16] COW1 explained that with effect from April 2017, by virtue of
SOP-CON 4.10 Variation Order (VO) Claim-Construction Revision No. 6
(Tab 6 of COB1), all variation orders shall be recommended by the

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Variation Order Committee (VOC) and their approval limit is only up to

RM500,000.00. However, for a variation order that was submitted more
than six (6) months from the date of completion of work, the said
variation order shall only be approved by the General Managing Director
(GMD) regardless of the value of the VO upon the recommendation of
the VOC. COW1 also highlighted the fact that this SOP was further
supported by a Memorandum FAL/ALLSTAFF/2016-1 with the subject
“FAL revision on VO approval for all contracts/projects” issued to the
entire Group's staff (including the Company's staff) on 14 July 2016
(pages 65 and 66 of Tab 6 of COB1).

[17] COW1's testimony also touched on the fifth paragraph of the five
Final Account Assessment letters which contained similar contents and
read:

“Please take note that should we not receive any

acknowledgement from you after the Fourteen (14) days'
notice from the date of this Letter, it is deemed that you have
agreed to our assessment and we shall proceed to prepare
the final certificate for your project account closure.”.

[18] COW1's conclusion based on the five letters that had been
issued to BBR was that they had served as an ultimatum to BBR
towards the final account assessment by the Company for the work
done under NESB/MRTS4/PTCB(A)12013. If the Company didn't
respond within 14 days from the date of receipt, BBR was deemed to
agree with the said assessment and a final certificate would be prepared
by the Company for payment according to the amount stated therein.
The same was applicable to the other four Final Account Assessment

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letters with reference no.NESB/MRTS2/NHA/2017-04387; NESB/

MRTS2/NHAJ2017-04385; NESB/MRTS2/NHA/2017-04386 and NESB/
MRTS4/NEA/2017-05545.

[19] In this case, BBR had replied to all the five Final Account
Assessment letters vide its five letters dated 29 August 2017, four of
which were received by Naim Engineering Sdn Bhd (MRT Project Site
Office) on 30 August 2017 and one (1) on 11 September 2017. Based
on the five letters from BBR, it accepted the outstanding amount stated
in the five Final Account Assessment letters and required a Final
Certificate to be prepared within seven days from the date of its letter.
Resulting from the five Final Account Assessment letters and the
acceptance by BBR vide its replies, the Company alleged that the
Claimant had committed Naim Engineering Sdn. Bhd. and/or the Group
to a substantive debt which had not been approved according to the
SOP and the Memorandum.

[20] COW1 referred to pages 67 to 69 of COB1 which she confirmed

was a Notice Pursuant to section 466 of the Companies Act 2016 dated
16 November 2017 (the Statutory Notice) issued by BBR to Naim
Engineering Sdn Bhd to recover a sum of RM1,915,626.59. COW1 told
the court that those were the sums demanded under the Statutory
Notice derived from the five Final Account Assessment letters.

[21] COW2 was involved in the DI as a Secretary. After the DI,

COW2 sent the DI's records of proceeding via email on 5 January 2018
for the Claimant to review and to revert by 8 January 2018. The
Claimant responded to COW2's email on 5 January 2018 and stated that
he “will not be able to return the DI report until later next week”. COW2

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then sent a follow up email to the Claimant on 12 January 2018

regarding the DI report. The Claimant then replied that “I will not be
signing the report” via email on the same day (page 49 of COB1).

[22] COW3 was the prosecuting officer for the Company in the DI.
During the DI, COW3 examined COW1 and had the opportunity to cross
examine three of the Claimant's witnesses namely Nor Ezan bin
Abdullah, Malcolm Liaw and Sivakumar Ramasamy. COW3 also
confirmed that Naim Engineering Sdn Bhd had been served a Notice
Pursuant to section 466 of the Companies Act 2016 dated 16 November
2017 for a sum of RM1,915,626.59. Once the Statutory Notice was
received by Naim Engineering Sdn Bhd, the Company and/or the
Group's personnel were directed by the management to negotiate with
BBR. In furtherance to that, Naim Engineering Sdn Bhd and/or the
Group also paid the sum demanded by BBR to avoid any winding up
proceedings to be commenced against it; albeit after the 21 days' period
stated in the Statutory Notice.

The Claimant's Case

[23] The Claimant testified for his own case and he was the sole
witness. It was the Claimant's evidence that the SOP or the
Memorandum did not provide any room for him in his capacity as the
Director-Project to approve payment of any VO. He stated that it was
not his duty to approve any VO for payment but that in his role as
Director-Project, he and his Project team received various claims. They
would go through the claims and verify all the details of the claims. The
Claimant further said he would also discuss the claims with the Chief
Operating Officer (COO) for his input. They then acted as a conduit to

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forward those verified claims to the VOC. He testified that sometimes

the VOC would revert with their ideas to re-negotiate the claims with the
sub-contractors. He further claimed that it was only after all such final
renegotiations that the recommended variations were submitted to the
VOC for their recommendations for the approval of the Group Managing
Director.

[24] The Claimant disagreed that he had breached paragraph 5.13 of

the SOP. Firstly, he justified the answer by denying that the SOP at Tab
6, pages 56 to 66 of COB1 was applicable to his case. He explained
that on every page of the SOP, it is stated there as a ''DRAFT''
document. Further, he pointed out that it is also clearly stated at every
page of the alleged draft SOP that the effective date was April 2017.
The Claimant alluded that this meant that the SOP (assuming it was
applicable), ought to apply for works commencing from April 2017. The
Claimant claimed that the works that were concerned with the five Final
Assessment letters that he had been charged with, were for works that
had commenced in 2013. He claimed that the proof was the reference
numbers of the five different works as enumerated in the table at pages
37 and 38 of CLB1 where the reference to the contract numbers ended
with “...1/2013”).

[25] Secondly, the Claimant alleged that the SOP relied on by the
Company like paragraph 5.13 at page 61 of COB1, was only applicable
where the sub contractor had made a claim through a VO that is current.
The Claimant then referred to the five Final Assessment letters that he
had co-signed with the COO Sivakumar or Victor Yee which the
Claimant alleged was clear, that they were not about assessing any VO.
He insisted that they were about validating the documents which the sub

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contractor had submitted for work done. The Claimant then referred to
page 70 of COB1 which contains a line that reads: “Any disagreement
without valid and detailed substantiation of your claim will not be
entertained.” The Claimant explained that this had to be read in the
context of the table at page 72 of COB1, where except for item 4.0
(which was pending approval of the VOC), all the other items were
finalized quantities of work done (in this regard, the Claimant asked the
court to consider that the Company never disputed that these other
items were inaccurate quantities).

[26] Therefore, the Claimant's contention was that the five Final
Assessment letters had never been intended to breach any SOP.
Moreover, it could not be seen breaching any SOP concerning approval
of the VOs. He explained that it could be further noted at page 70 of
COB1 at the final paragraph, the Claimant had written that if the
Company did not receive any acknowledgement after the 14 days notice
from the date of his letter, it would be deemed that the sub contractor
had agreed to their assessment and they shall then proceed to prepare
the final certificate for the project account closure.

[27] In relation to the five Final Assessment letters, the Claimant

alleged that the final payments to the sub contractor were always subject
to the final payment certificate being in place (as per the final paragraph
at page 70 of COB1). The Claimant further stated that this had been
confirmed by the sub contractor in its reply at page 78 of COB1, wherein
the subcontractor had stated in the final paragraph there: “In order to
avoid further excuses, kindly prepare the Final Certificate for project
account closure within seven (7) days from the date of this letter”. The
Claimant contended that it meant that the sub contractor acknowledged

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that any commitment to the outstanding sum was only subject to the
issuance of the Final Certificate by the Company. Therefore, the
Claimant concluded that the five Final Assessment letters could not be
equated to the Final Certificate, which was the actual document that
could be said to have committed the Company to any outstanding sum
to the sub contractor.

Evaluation of Evidence and Findings

[28] It is settled law that the burden is on the Company to prove the
misconduct of the Claimant and the standard required is merely on a
balance of probabilities, even when the ground complained of is one of a
dishonest act. In the Court of Appeal's case of Telekom Malaysia
Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor [2002] 3 CLJ
314, his Lordship Abdul Hamid Mohamad JCA (as his Lordship then
was) at page 327 said,

“Thus, we can see that the preponderant view is that the

Industrial Court, when hearing a claim of unjust dismissal,
even where the ground is one of dishonest act, including
“theft”, is not required to be satisfied beyond reasonable
doubt that the employee has “committed the offence”, as in a
criminal prosecution. On the other hand, we see that the
courts and learned authors have used such terms as “solid
and sensible grounds”, “sufficient to measure up to a
preponderance of the evidence”, “whether a case … has
been made out”, “on the balance of probabilities” and
“evidence of probative value”. In our view the passage
quoted from Administrative Law by H.W.R. Wade & C.F.
Forsyth offers the clearest statement on the standard of proof

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required, that is the civil standard based on the balance of

probabilities, which is flexible, so that the degree of probability
required is proportionate to the nature of gravity of the issue.”.

Was the Claimant on Genuine Fix Term Contracts?

[29] It was the Claimant's contention that his contract of employment
with the Company was on a permanent basis due to the alleged
seamless renewal of his contracts. He also alleged that the 2 nd Contract
was entered into without the termination of his 1 st Contract. When the
Claimant was cross-examined, he had admitted to the following:

(a) he had consented to the mutual termination of his 1 st

Contract;

(b) the 2nd Contract superseded the 1st Contract by virtue of

clause 22 of the 2nd Contract (both parties mutually agreed);

(c) the 3rd Contract superseded the 2nd Contract by virtue of

Recital D of the 3rd Contract;

(d) the 3rd Contract would be terminated automatically on 13

April 2018 if there was no further extension offered by the
Company; and

(e) he had read and understood the contents of the said

contracts before he signed the contracts.

[30] There was an interesting observation by the court when the

Claimant was questioned why he had alleged that “the successive

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renewals of my contract of employment with the Company amounted to

a permanent contract of employment”. It was suggested to the Claimant
by the learned Company's counsel that it was an afterthought and the
Claimant's answer was that it was merely based on his counsel's advice.
The court was urged to rule that the Claimant's contracts of employment
were genuine fixed term contracts relying on the established facts
above.

[31] The Company highlighted the fact that the Claimant's contracts of
employment with the Company were for a specific project i.e. Project
KVMRT. Upon the completion of the said project, there was no further
need for the Claimant's services so it was only reasonable for the
Company to put the Claimant's employment on fixed term contracts. It is
also noteworthy that the 3rd Contract was only extended for six months
until 12 April 2018. It is imperative to reproduce Recital D of the 3 rd
Contract which provides:

“This Agreement supersedes all previous agreements between

the Company and the Employee (if any). The Employee
confirms that the Company has made no representation that
his/her employment with the Company will continue beyond
the duration stipulated in this Agreement and in the absence
of any written agreement to the contrary, the Employee's
employment with the Company will automatically terminate in
accordance to the provisions of this agreement”.

[32] From the Claimant's answers pertaining to the nature of his three
contracts during the cross examination, it is clear to the court that the
Claimant had fully understood the nature of his contracts and that the 3 rd

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Contract was to be automatically terminated on 13 April 2018 if there

was no further extension. The court has no doubt that the Claimant was
fully aware that his employment was based on the fixed term contracts.
Further, with the Claimant's vast experience working in other countries,
the Claimant would be well informed of the fact that he had to renew his
work visa annually as an expatriate in Malaysia and he may only be
employed for a fixed period due to the requirement of annual renewal of
his work visa.

[33] The cases of Han Chiang High School / Penang Han Chiang
Associated Chinese Schools Association and National Union of
Teachers in Independent Schools, W. M'sia [1988] 2 ILR 611 (Han
Chiang's case) and Innoprise Corporation Sdn Bhd, Sabah v.
Sukumaran Vanugopal, Sabah [1993] 1 ILR 373 cited by learned
Claimant's counsel must be distinguished from the facts of the instant
case. The issue on whether there is a genuine fixed term contract or
otherwise should be construed on a case to case basis depending on
the facts and circumstances of each case. The Company's contention
finds support in the Court of Appeal case of M. Vasagam Muthusamy v.
Kesatuan Pekerja-Pekerja Resorts World, Pahang & Anor [2005] 4 CLJ
93 at page 100 which stated that “No two sets of facts are alike. Each
case is to be decided purely on its own facts before the tribunal called
upon to adjudicate on the matter.”

[34] Having perused the contracts before the court and after
considering the Claimant's testimony under cross-examination, it is
apparent that both parties had known that the Claimant's contracts were
for the Project KVMRT. The fact that the 3 rd Contract was only extended
for another six months after the expiry of the 2 nd Contract reinforced the

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Company's contention that the intention of both parties was to engage

the Claimant for the said project. The court is unable to find any
evidence that the Company had any intention of offering the Claimant a
permanent contract of employment. Hence, the Claimant's contracts in
this case were genuine fixed term contracts and in the 3 rd Contract, it
was to expire automatically on 12 April 2018 had the Claimant not been
dismissed on 19 January 2018.

Was the Misconduct Proved?

[35] The Claimant has raised the issue that the SOP produced by the
Company which appears at Tab 6 of COB1 from pages 56 to 64 is
stamped with the word “DRAFT” at the bottom left-hand corner.
Therefore, it was contended that it simply means that the SOP was not
the final copy of the document which the Company was relying on in the
charge against the Claimant.

[36] All the Company's witnesses had offered explanations why the
SOP was not merely a draft document as contended. During the re-
examination of COW1, she explained:

“Q : My next question is about the word “draft” written at

the bottom of the page 56 and the following pages,
can you explain why there are only “draft”?

COW1 : Honestly I don't know why this version was

submitted unless it was obtained from our QA, QC
department but when I look at it all is not drafts and
our SOP can found in the intranet which is
accessible for all our staffs. So all those are final
SOP inside there.”.

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[37] COW2 also explained in court by making reference to page 67 of

COB2 which was an email dated 27 April 2017 to all the Company's staff
from the Document Control section, Revision and announcement made
pertaining to the amendment of the SOP on the variation order claim.
This was made in reference to the amendment to the SOP and it was an
announcement to all staff of the Group. In the re-examination of COW3,
she explained that the SOP was not a draft and the said SOP was also
produced during the DI. Nevertheless, COW3 admitted that it was her
mistake not to have seen the “Draft” chop on it. She reiterated that the
said SOP is effective and valid and is made available on the Company's
intranet. This was also made known in the Document Revision
Announcement at page 67 of COB2.

[38] Flowing from the Claimant's argument about the alleged ''Draft''
SOP, the Company submitted that the issue on the “Draft” SOP was
never pleaded and/or raised by the Claimant in the pleadings filed before
this court. The Claimant had only raised the issue on the “Draft” SOP for
the very first time on 18 February 2019 when the court was going to
proceed with the continued hearing, by way of the Claimant's
Supplementary Questions and Answers. The Company therefore
submitted that this was clearly an afterthought to repair the Claimant's
case and it should be disregarded by the court. The court has perused
the pleadings and found that the SOP was raised and a copy of it (Tab 6
of COB1) exhibited by the Company in its Statement in Reply (SIR).
However, the Claimant never raised any issue about the SOP either in
the Statement of Case (SOC) or the Rejoinder.

[39] The court would like to reiterate the fact that parties are bound by
their pleadings and that is trite law. In the Federal Court decision in

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Ranjit Kaur a/p S Gopal Singh v. Hotel Excelsior (M) Sdn Bhd [2010] 6
MLJ 1 at page 10, it was stated:

“… s 30(5) of the Act cannot be used to override or circumvent

the basic rules of pleading. The Industrial Court, like the civil
courts must confine itself to the four corners of the pleading.
This had been held to be so by this court in Rama Chandran ...

… Pleadings in the Industrial Court are as important as in the

civil courts. The appellant must plead its case and the
Industrial Court must decide on the appellant's pleaded case.
This is important in order to prevent element of surprise and
provide room for the other party to adduce evidence once the
fact or an issue is pleaded. Thus, the Industrial Court's duty, to
act according to equity, good conscience and substantial merits
of the case without regard to technicalities and legal form under
s. 30(5), does not give the Industrial Court the right to ignore
the Industrial Court Rules 1967 made under the principal Act.”.

[40] The court has also observed that the Claimant did not seem to
object to the SOP on the ground that it was merely a draft in his witness
statement filed on 15 October 2018. It was raised for the first time on 18
February 2019 by way of insertion in the Supplementary Questions and
Answers of the Claimant after the witness statement was marked. In the
Claimant's answers in his witness statement, he clearly explained the
procedure and the VOC Committee which is identical to the process
under the SOP. The inference that can be drawn was that the Claimant
was well aware of these requirements (Q&A 27, 36, 37, 38, 39 and 40 of
his witness statement (CLWS1)). Having considered the evidence
before the court and the contention raised by the Claimant that the said

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SOP was only a draft, it is the court's opinion that it was clearly the
afterthought of the Claimant and the argument must fail. Consequently,
the SOP was valid and applicable.

[41] It was the Company's case against the Claimant that when the
Claimant co-signed the five Final Account Assessment letters with COO
Sivakumar Ramasamy and Victor Yee, the Claimant had committed the
Company to a debt to the sub-contractor BBR. On the other hand, the
Claimant had consistently argued throughout the hearing that the five
Final Account Assessment letters were not final amounts that the
Claimant and his co-signatories had committed to BBR. It had always
been the Claimant's stand that it was only by issuing a final certificate
would the Company be committed to a debt to the sub-contractor.

[42] In the Claimant's letter of explanation at pages 40 to 42 of CLB1

dated 12 December 2017, he explained at page 42 of CLB1 that after
the assessment of the claims of the sub-contractor, it would then require
the approval of the VOC Committee before any payment certificate could
be issued. Thus, the Claimant submitted that it is very clear that after
the expiry of the 14 days, after the issuance of the five Final Account
Assessment letters, the sub-contractors claims' were still subject to the
issuance of the final certificates by the VOC.

[43] It was argued for the Claimant that flowing from COW1's
testimony in court, the following facts had arose:

(a) the normal procedure before any amount outstanding to a

sub-contractor can be finalized is after the final certificate is
approved and issued by the VOC. Thereafter, the sub-

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contractor will raise an invoice to the Company for the

Company to pay the outstanding debt to the sub-contractor;

(b) on the facts of the case, there was no evidence of the final
certificates being approved and issued by the VOC against
the five final account assessment letters;

(c) however, the Company takes it that the five final account
assessment letters had committed the Company for RM1.9
million, when the final internal assessment that was done
was apparently less than RM1.9 million; and

(d) the Company was not able to produce any evidence that
the final internal assessment was actually lesser than
RM1.9 million.

[44] Therefore, the Claimant submitted that it was illogical for the
Company to have acceded to the demand of BBR for the payment of the
allegedly bigger sum of RM1.9 million, when there was no Final
Certificate issued, as per the normal procedure. Moreover, it was
alleged that the Company was unable to produce an iota of evidence
about the “lesser than RM1.9 million sum” on the final internal
assessment. The Claimant submitted that apparently, according to
COW1, this final internal assessment which showed that the actual
figure was “lesser than RM1.9 million” was done before the final
payment of RM1.9 million was made. This led the Claimant to question
if that was true, why didn't the Company challenge the section 466
Companies Act 2016 Notice?

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[45] Hence, it was argued for the Claimant that it was wrong on the
part of the Company to blame the Claimant to have committed the
Company to the sub-contractor BBR, when the Company could not
produce any evidence of any assessment of a lesser sum owed to the
sub-contractor. If it was true that the amount outstanding was a lesser
sum, the Claimant contended that the Notice of Demand pursuant to
section 466 of the Companies Act 2016 could have been easily
challenged by the Company. However, the Company chose to pay the
whole RM1.9 million whilst insisting that they did an assessment and
discovered (before paying up to the sub-contractor BBR) that the actual
sum due was lesser than RM1.9 million. Thus, the Claimant submitted
that the irresistible conclusion was that the actual amount owed was
RM1.9 million and not any lesser amount. It was further alleged that the
Claimant was made a scapegoat for the Company when it delayed
payments to the sub-contractor from 2014.

[46] The court has perused all the documentary evidence and heard
and considered the oral testimony of all the witnesses. It was clearly
stated in the Statutory Notice dated 16 November 2017 (pages 67 and
68 of COB1) “... to pay to our client the sum of RM1,915,626-59 as at
15.11.2017 being the total amount owed by you to our client as
quantified in your respective Final Account Assessments for sub
package work done for a project ... (Package S2 and S4) ...”. This was
also in the testimony of the Company's witnesses during the court
hearing.

[47] In response to the Claimant's submission, the Company

submitted that Q&A No. 42 of the Supplementary Questions and
Answers of the Claimant was the result of an afterthought. It was clear

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to the court too that the Claimant himself had admitted that the word
'SHALL' which was used in the five Final Account Assessment letters
meant “Definitive”. In the instant case, the sub contractor BBR had
accepted the offers given in the five Final Account Assessment letters
and BBR had deemed the final sum to be paid to them by NESB had
been concluded. Consequently, due to the non-payment from NESB,
BBR had issued the Statutory Notice against NESB.

[48] The Company further submitted that the Claimant's argument that
the Company need not pay the demanded sum of RM1,915,626-59
under the Statutory Notice was impetuous and self-serving. It was
clearly seen through COW3's testimony that the Company was forced to
pay to BBR the demanded sum, even under protest, due to the adverse
consequences that would have followed if NESB failed to resolve the
issue with BBR within the specified period of time. In addition, COW3
had also testified that NESB had paid the demanded sum of
RM1,915,626-59 in full to BBR under protest. The proof of payments
are shown at pages 71 and 72 of COB1.

[49] The Company's evidence before the court that the correct
procedure for getting approval for the VOs issued six (6) months or more
after work was done was a two-tier process. The VO must first be
approved by the VOC and finally approved by the GMD. The court is
satisfied that the Claimant knew the procedure and in fact, he had
admitted it himself. The Claimant had also admitted that all the 12 VOs,
except for one VO No.3 for MRT2, had not even been approved or
recommended by the VOC. Hence, none of the VO had been approved
even in the VOC stage which was the first tier. It is clear to the court
that in the instant case, the Claimant had even failed to fulfil the first tier

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i.e. to get the approval from VOC. As such, the approval from the GMD
was not possible at all.

[50] The court agrees with the Company's submission that the SOP
was to regulate the process of seeking approval of Variation Order
issued after the effective date of April 2017 and it was not used to
regulate the contract after April 2017 as alleged by the Claimant's
counsel.

Decision

[51] On the totality of the evidence before the court, the court finds
that the Company has proved the misconduct of the Claimant, on a
balance of probabilities. The court is satisfied that the reasons proffered
for the Claimant's dismissal stated in the termination letter had been
proved by the Company.

[52] Based on the findings of the DI and in the face of the gravity of
the Claimant's misconduct and the consequences that had to be borne
by the Company resulting from the Claimant's misconduct, the
Company's management decided to terminate the Claimant's service.
The Claimant's action had breached his duties as an employee under
the terms of his employment contract. It constituted a major misconduct
under Section 4.5.4 of the Employee Handbook coupled with the fact
that the Claimant had disregarded the SOP and Memorandum of the
Company. The Company also reiterated the fact that resulting from the
Claimant's action, he had not only endangered the Company and/or the
Group but he had put all the Company's employees and/or the Group at
risk to be out of jobs. This could arose as the Company and/or the

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Group were exposed to the risk of being wound up following the

issuance of the Statutory Notice against the Company/the Group. In
furtherance to this, the Company being a subsidiary of a listed company
would have had to disclose the statutory notice brought against them
and this would have had negatively affected not only the good name and
reputation of the Company and/or the Group but also the share prices
and the stakeholders of the Company and/or the Group. Obviously the
Company could no longer have any trust or confidence in the Claimant
to continue serving the Company.

[53] In Pearce v. Foster [1886] (71) QBD 536 Lord Esher, MP said of
the following duty of a servant to his master:

“The rule of law is that where a person has entered into the
position of servant, if he does anything incompatible with the
due or faithful discharge of his duty to his master, the latter has
a right to dismiss. The relation of master and servant implies
necessarily that the servant shall be in a position to perform his
duty duly and faithfully, and if by his own act he prevents himself
from doing so, the master may dismiss him. ...”.

[54] Having considered all the above, the court opines that a serious
misconduct was committed by the Claimant. The Company's decision to
dismiss the Claimant with immediate effect was warranted. Therefore,
the court finds that the Claimant's dismissal was for a just cause or
excuse. Accordingly, the Claimant's claim is dismissed.

[55] In arriving at this decision, the court has acted with equity and
good conscience and the substantial merits of the case without regard to

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technicalities and legal form as stated under section 30 (5) of the Act.

HANDED DOWN AND DATED THIS 5th DAY OF JULY 2019

Signed
( ANNA NG FUI CHOO )
CHAIRMAN
INDUSTRIAL COURT, MALAYSIA
KUALA LUMPUR

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