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BETWEEN
AND
Representation : Mr. Pang Kong Seng dan Cik Chong Shi Bin
From Messrs K. S. Pang & Co.
Counsel for the Claimant.
1
Reference :
This case is a reference under Section 20(3) of the Industrial Relations Act
1967, arising from the dismissal of Wah Keng Sen (hereinafter referred to as
on 19.01.2015.
AWARD
Facts
Claimant as per page 22 COB1. The Claimant was asked to give a written
Allegation No. 1
That on or around 19 November 2008 you had formed an
alliance and/or arrangement with one, Pang Siew Yen, My Kad
2
No. 810213-01-5180, the sole-proprietor of PN Recruitment &
Services [JM 0438681-P] with its business address at 128-02,
Jalan Ros Merah 2/17, Taman Johor Jaya, 81100 Johor Bahru,
Johor in supplying foreign workers to London Biscuits Berhad.
Allegation No. 2
That on or around 19 June 2009 you had appointed your sister-
in-law, Wong Lai Kuin, MyKad No. 640801-10-8114, who is
named as a Director of PN Recruitment Sdn. Bhd. [Company
Registration No. 861389-X] having its registered office at Bilik 201
Tingkat 2, No. 52-B, Jalan Sutera, Taman Sentosa, 80150 Johor
3
Bahru as a proxy with your ally or accomplice, Pang Siew Yen,
MyKad No. 810213-01-5180, the sole-proprietor of PN
Recruitment & Services [JM 0438681-P] w.e.f 19 th June 2009 that
was supplying foreign workers to London Biscuits Berhad.
Allegation No. 3
That on or around 4 May 2011 you have been found to have
replaced your sister-in-law, Wong Lain Kuin Mykad No. 640801-
10-8114 as a Director of PN Recruitment Sdn. Bhd. [Company
Registration No. 861389-X] having its registered office at Bilik 201
Tingkat 2, NO. 52-B, Jalan Sutera, Taman Sentosa, 80150 Johor
Bahru w.e.f 4th May 2011 and retaining, Pang Siew Yen, MyKad
No. 810213-01-5180 as a Director with whom you have formed an
alliance and/or arrangement as stated in Allegation 1.
4
dimensions of your work by not giving proper attention to the
values as contained in Articles 17 and 18 of the Code of Conduct
that may have continued to affect your decisions and actions in
the performance of your official duties as the Chief Operating
Officer of London Biscuits Berhad which is a serious misconduct.
Allegation No. 4
That on or around 23 February 2011 you, together with Pang
Siew Yen, MyKad No. 810213-01-5180, a Director of PN
Recruitment Sdn. Bhd. [Company Registration No. 861389-X]
having its registered office at Bilik 201 Tingkat 2, No. 52-B, Jalan
Sutera, Taman Sentosa, 80150 Johor Bahru with whom you have
formed an alliance and/or arrangement as stated in Allegation 1
were found to have purchased a semi detached house at No. 4,
Jalan Tegap 5, Taman Gaya, 81800 Ulu Tiram, Johor and jointly
obtained a loan (Loan Account No. 3000077037) from Citibank
Berhad, Menara Citibank, 165, Jalan Ampang, 59450 Kuala
Lumpur to finance the said purchase on or around the 23
February 2011 thus confirming your alliance and/or arrangement
with the said Director and in turn verifying the conflict of interest
situation disregarding the professional and ethical dimensions of
your work in not giving proper attention to the values as contained
in Articles 17 and 18 of the Code of Conduct thus confirming the
adverse effect of your decisions and actions whilst performing
your official duties as the Chief Operating Officer of London
Biscuits Berhad which is a serious misconduct.
5
Allegation No. 5
That on or around 16 December 2006 you have been alleged to
name one, Chan Kok Thiam, MyKad No. 601001-10-6477, a
Director of MTH Synergy Sdn. Bhd. [Company Registration No.
719358-D] having its registered office at Bilik 201 Tingkat 2, No.
52-B, Jalan Sutera, Taman Sentosa, 80150 Johor Bahru to be
your proxy in carrying out the business as a General Contractor
for the provision of services including but not limited to rubbish
disposal, rental of a 40' lorry and sales of OPP tape and pallet
stretch film to London Biscuits Berhad.
Allegation No. 6
That on or around 7 April 2005 you have appointed one, Kuan Li
Lih, MyKad No. 770906-01-6908, a Director of Modern Apex Sdn.
6
Bhd. [Company Registration No. 682930-M] having its registered
office at Bilik 201, Tingkat 2, 52-B, Jalan Sutera, Taman Sentosa,
80150 Johor Bahru as your proxy in carrying out the business of
supplying items such as polyolefin shrink film roll, forklift battery
and various repair or modification works for London Biscuits
Berhad.
Allegation No. 7
That on or around 7 April 2005 you have been alleged to name
one, Kuan Li lIh, MyKad No. 770906-01-6908, a Director of Acme
Focus Sdn. Bhd. [Company Registration No. 682931-M] having its
registered office at Bilik 201, Tingkat 2, 52-B, Jalan Sutera,
Taman Sentosa, 80150 Johor Bahru to be your proxy in carrying
7
out the business of cleaning services and general repairs of
premises and trading of cleaning equipment and chemicals with
London Biscuits Berhad. It has been disclosed that you have
verified and or approved payments to Acme Focus Sdn. Bhd. for
the above services without disclosing to your immediate superior
your involvement in Acme Focus Sdn. Bhd. thus giving rise to a
conflict of interest situation disregarding the professional and
ethical dimensions of your work by giving proper attention to the
values as contained in Articles 17 and 18 of the Code of Conduct
that has clearly affected your decisions and actions in the
performance of your official duties as the Chief Operating Officer
in London Biscuits Berhad which is serious misconduct.
3. The Claimant wrote to the Company on 06.04.2014 and answered all the
allegations as per page 26 COB1. Upon receiving the Claimant's letter of
explanation the Company did not satisfied with the Claimant's explanation and
21.04.2014. The notes of proceeding of the said inquiry are as per page 29 to 34
COB1.
4. The Domestic Inquiry panels found the Claimant guilty of the first, second,
third and forth allegation. In their findings the panels stated inter alia :
8
The Company has proven Allegation 1 by inter-relating Allegations
2, 3 & 4 that the AE, being the Chief Operating Officer (COO) of
London Biscuits Berhad (LBB) had failed to disclose his interest
with the sole proprietor of PN Recruitment Services, one Pang
Siew Wen (C Ex 3) who was supplying foreign workers to LBB
with whom he is believed to have befriended and formed a close
relationship (an alliance and or arrangement) as alleged. We
thereby find the AE guilty as alleged in Allegations Nos 1, 2, 3 and
4.
The panels made a recommendation to the Company for the dismissal of the
Lord Esher in Pearce v Foster [1886] (71) OBO 536 said that :
The rule of law is that where a person has entered into the
position of servant, if he does anything incompatible with the due
and faithful discharge of his duty to his master, the latter has a
right to dismiss.
We find the AE, being the Chief Operating Officer, should not
have placed himself in a position where he may have to
compromise on his responsibilities to his employer that is very
prejudicial to the interest of the Company.
9
The Industrial Court too takes a serious view of instances of
conflict of interest and if it can be shown that the employees did
breach the trust, the dismissal of the employee is always upheld
With this in mind we find the AE guilty of gross misconduct of as
alleged in Allegation No. 1 and as such we recommend that he be
dismissed without notice.
Issues
5. The learned counsel for the Claimant and the Company narrowed down
10
Company's Code of Conduct
Department. The allegations to the Claimant was based on his action which
contravene Articles 17 ,18 and 19 of the said Code of Conduct. Article 18 and 19
are as follows :
11
advice given;
Personal relationships with fellow employees at
staff and management level;
Dealings with a family member, relative and
friend who is also in the food industry;
Representational duties where a employee who
is representing the interest of the company is
also asked to represent the interest of a
community group on the same instance.
Private employment which may conflict with
company duties.
12
19. Duties of staff with respect to conflict of interest
19.1. Employees are required to :
Avoid conflicts of interest if possible, and avoid
creating conflicts for others.
Disclose in writing to their supervisor or HOD any
perceived or actual conflict of interest as soon they
become aware that is or where there may be a
potential conflict. Where there is a change of
supervisor, to notify that person of the conflict and the
means being used to manage it.
(With their supervisor) resolve or otherwise manage
the conflict and document the method of resolution.
Company's Case
public listed company on the main Board of Bursa Malaysia. It was incorporated
Code of Conduct. Every employees of the Company are bound by this code to
13
8. As a Chief Operation Officer, the Claimant is fully in charge of operation of
Officer. COW1 did explained the Company position on reasons for dismissing
9. During cross examination, COW1 agreed that as for the first allegation, it
was not stated that Pang Siew Yen is the Claimant's mistress. COW1 stated
inter alia :
14
Q: Allegation one (1), not stated Pang is the Claimant's
mistress?
A: Yes.
Q: No evidence, no allegation and no finding by the panel
that Pang is Claimant's girlfriend or mistress?
A: Yes.
COW1 also agreed in cross-examination that panel of domestic inquiry did not
make a finding that the Company incurred any cost as a result of Claimant's
It is also COW1 evidence that the Claimant did not benefited from the payment
to the PN Services Sdn. Bhd. by the Company. However COW1 averred that the
10. As for allegation number two (2), COW1 had surprisingly agreed with the
15
On allegation number three (3), COW1 testified that there was no business
dealing between the Company and PN Recruitment & Services in 2011. He also
Sdn. Bhd. As far as allegation number four (4) is concerned, COW1 confirmed
11. Nevertheless, COW1 insisted that the Claimant conduct was tantamount
to conflict of interest. The basis for such allegation was that the Claimant's
conduct were against the Code of Conduct of the Company. COW1 stated that
that he condone the Claimant's conduct by not taking any action against him
12. COW1 during re-examination testified that the Claimant did not inform the
agreed that the Claimant was holding directorship position in other company.
13. COW2 was the Chairman of domestic inquiry panel. In his witness
statement COW2 narrated what transpired during the domestic inquiry. COW2
emphasized that the Claimant merely denied the allegations without providing
16
any evidence to rebut those allegation against him. COW2 in cross-examination
disagreed with the proposition of the Claimant that the panel had failed to apply
Clause 20 of the Code of Conduct. COW2 also disagreed that the finding of the
Claimant's Case
14. The Claimant in his witness statement denied the allegations in the show
cause letter. As to the first allegation the Claimant said that the appointment of
the intermediary business entity, M/s PN Recruitment & Services to arrange for
the supply of foreign workers to the Company has been approved by the Chief
Executive Officer (COW1). As for second, third and fourth allegations, the
Claimant testified that there was no business dealing whatsoever between the
of interest.
In his evidence before the court, COW1 confirmed that Liew Yet Lee, one of the
domestic inquiry panels was the COW1's youngest sister and one of the
Company Directors. Leslie Loo Meng who was also in the domestic inquiry
17
15. The Claimant admitted in his evidence during cross-examination that he
had an intimate relationship with Miss Pang Siew Yen in 2011 to 2012. However,
the Claimant testified that all his denial as to the intimate relation with Miss Pang
16. The learned counsel for the Company shown page 24 and 25 of COB4 to
the Claimant. The Claimant denied those telephone calls were not non-business
related but the Claimant admitted that having known Miss Pang since June
2007, he still appointed PN Recruitment & Services which Miss Pang is the
owner of the said company, to supply foreign workers for the Company.
17. The Claimant explained why he did not disclose his relationship with Miss
18
18. The domestic inquiry note of proceeding demonstrates that the Claimant
did not disclose his relationship with Pang. It can be seen at page three (3)
Q: Did you ever inform the management of LBB that you are
having a relationship with Pang Siew Yen?
A: What kind of relationship? Everybody knows. How to inform
everyone of my friends? Dato' Seri also knows.
During the hearing, the Claimant explained his position by saying this :
The Claimant also denied that Wong Lai Kuin was his proxy in the company PN
19. He also justifying his decision not to declare his interest in PN Recruitment
19
The Law
employee must not place himself in a position which his own interest conflict
with his duty to his employer. In Pearce v. Foster and Others [1886] 17 Q.B.D.
536 Lord Esher, M. R. explained the duty of the employee to his employer to
discharge his duty faithfully. The learned judged held inter alia as follows :
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 him. 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. It is not that the
servant warrants that he will duly and faithfully perform his duty;
because, if that were so, upon breach of his duty his master might
bring an action against him on the warranty. But the question is,
whether the breach of duty is a good ground for dismissal. I have
never hitherto heard any doubt that that is the true proposition of
law. What circumstances will put a servant into the position of not
being able to perform, in a due manner, his duties, or of not being
able to perform his duty in a faithful manner, it is impossible to
enumerate. Innumerable circumstances have actually occurred
which fall within that proposition, and innumerable other
20
circumstances which never have yet occurred, will occur, which
also will fall within the proposition. But if a servant is guilty of such
a crime outside his service as to make it unsafe for a master to
keep him in his employ, the servant may be dismissed by his
master; and if the servant's conduct is so grossly immoral that
In Pearce's case the fact shows the Claimant was a clerk in a mercantile service
court found the Claimant's act was incompatible with the due and faithful
performance of his duty to the employer. Linley L.J. in this case held as follows :
21
him that in that agreement there is no provision for giving him
notice of dismissal. Such a contingency seems not to have
occurred to any of them. It was shown that this gentleman was
frequently and often consulted by the members of the firm as to
securities in which money should be invested, and it was his duty
to give his employers, when consulting him upon such matters,
his disinterested advice. Now it appears to me that he had so
conducted himself as to make his interest conflict with his duty,
that is to say, that he had a personal interest in securities of
various kinds arising out of these gambling transactions. They
were pure gambling transactions; and he had such a personal
interest as to render his advice, when consulted by his employers
upon matters within the scope of his employment, not
disinterested, but, on the contrary, interested. He had deliberately
placed himself in that position, which rendered his interest
conflicting with his duty. I do not say that he yielded to temptation,
to which, in that difficult position, he was naturally exposed; but I
do say this, that he ought not to have put himself in that position.
Further than that, it appears to me to be perfectly obvious, that if
this kind of conduct had been known to the persons who were
accustomed to deal with this firm, that very knowledge would
damage the firm. I cannot conceive myself that anybody would
have the same faith in a firm such as this, who had as their
confidential clerk a person largely gambling on the Stock
Exchange, as they would have in a firm who had a confidential
clerk who abstained from such gambling transactions. It appears
to me, therefore, that the plaintiff having habitually conducted
22
himself in such a manner as would injure the business of his
employers if his conduct were known, they might dismiss him
upon discovery of such conduct. It is not necessary for them to
prove that they have in fact suffered by reason of his conduct.
employee to serve faithfully to his employer. In Boston Deep Sea Fishing and
Ice Company v. Ansell [1888] 39 Q.B.D. 339 Cotton L.J. illustrates a position
where the employee act unfaithfully in performing his duty to his employer which
warrant him to be dismissed by his employer. Cotton L.J. at page 357 had this to
say :
23
opinion if people have got an idea that such transactions can be
properly entered into by an agent, the sooner they are disabused
of that idea the better. If a servant, or a managing director, or any
person who is authorized to act, and is acting, for another in the
matter of any contract, receives, as regards the contract, any
sum, whether by way of percentage or otherwise, from the person
with whom he is dealing on behalf of his principal, he is
committing a breach of duty. It is not an honest act, and, in my
opinion, it is a sufficient act to shew that he cannot be trusted to
perform the duties which he has undertaken as servant or agent.
He puts himself in such a position that he has a temptation not
faithfully to perform his duty to his employer. He has a temptation,
especially where he is getting a percentage on expenditure, not to
cut down the expenditure, but to let it be increased, so that his
percentage may be larger. I do not, however, rely on that, but
what I say is this, that where an agent entering into a contract on
behalf of his principal, and without the knowledge or assent of
that principal, receives money from the person with whom he is
dealing, he is doing a wrongful act, he is misconducting himself as
regards his agency, and, in my opinion, that gives to his employer,
whether a company or an individual, and whether the agent be a
servant, or a managing director, power and authority to dismiss
him from his employment as a person who by that act is shewn to
be incompetent of faithfully discharging his duty to his principal. It
was said by Mr. Justice Kekewich that this was an isolated
transaction, and, therefore, in his opinion, it did not give legal
authority or power to the company to dismiss him. But I cannot
24
accede to that view. As far as we know it may have been an
isolated transaction, but if we find at the very beginning of the
employment that this agent, whose duty it was not to receive
anything from the persons with whom he was dealing, did in fact
do so, and in fact kept the receipt secret for months after the
money was received, I am not satisfied that he did not do other
things equally inconsistent with his duty to his principals; and in
my opinion the discovery of that fact - even if it was an isolated
transaction, shewing that he would put himself in a position not
faithfully to discharge his duty, that he would put himself in a
position to regard the interest of someone else rather than that of
his employer - did justify his employers in discharging him from
the office which he held.
The same sentiment has been shared by the Industrial Court as to the basis of
the conflict of interest of the employer and objective of conflict of interest rules.
25
employee's and his employer's interests. Such actual or potential
conflicts of interest may be direct or indirect.
Upon perusing Johari Tahar's case, it is clear that the fact of that case suit the
company's code of conduct with regard to the activities in conflict with his
employment. The learned chairman in Johari's case summarize the fact of the
26
manner as it reasonably considers to be most beneficial to CVS'
(Mega TV's) interests" (CLB-B13). Quite plainly, the claimant will
find himself put in some difficulty when he is placed in position
where he, in the capacity of director of JTV, has to choose
between serving the interests of Mega TV and those of the
company in a manner consistent with his concurrent duties of
good faith and fidelity owed to both the company and Mega TV.
27
Furthermore, in Shell (M) Trading Sdn. Bhd. v. Tuan Syed Azauddin B. Syed
Bahaldin Al Jumlud [1994] 2 ILR 956 the issue of conflict of interest was
raised. The matrix facts of that case clearly show that there was a conflict of
interest of the Claimant. The Industrial Court had ruled that the failure of the
justified his dismissal by the Company. In this case, the facts of the case which
5. Family Interests
28
in-law's interest in the said Jas-Cus. COW1 had confirmed in
Court, and this had been admitted by the Claimant at the inquiry,
that he had never made a declaration of his mother-in-laws
interest in the said Jas-Cus, in the standard form as required by
the Company. In fact appendix SMT2 dated 30 June 1981 is the
only declaration ever made by him where he had written "NIL"
under the heading "Family Interest". It is also in evidence that he
had approved Jas-Cus as an authorised contractor of the
Company. Having failed to declare this state of affairs to the
Company, in the light of the surrounding circumstances it is my
considered opinion that the Claimant had committed a breach of
the Company's policy on conflict of interest by the non-disclosure
of his mother-in-law's interest in Jas-Cus.
Wanjor [1993] 2 ILR 258 the failure of the Claimant to declare to the
management that his close family's business were given jobs in the company
which place himself in the position where his personal interest came into conflict
with the interest of the Company was held as just cause and excuse for the
In short, it is the facts of the case that determine whether there is a conflict of
interest which entitled the employer to dismiss its employee. It is not a general
29
principal for the court to accept the dismissal of an employee mainly due to the
fact that the employee fails to declare his interest to his employer. The basis for
the employee to declare his conflict of interest to the Company and its
connection with his position in the Company was explained by the Canada
30
dployer pour viter les conflits d'intrts, notamment pour viter
de rechercher des avantages incompatibles avec les conditions de
son emploi. L'incompatibilit et les conflits en question s'apprcient
en fonction des conditions d'emploi et des autres rapports qui
existent entre les parties.
31
incompatibility and conflict must be measured by the terms of the
employment or other relationship between the parties.
Therefore, the court must recognize the duty of an employee to declare his
conflict of interest to the Company. The failure of this court to accept the duty of
interest from the Company. This may prejudice the interest of the employer.
employer.
In this case, the requirement for the Respondent's employees to declare their
Claimant did not deny that he failed to declare his interest in PN Recruitment
Sdn. Bhd. and his relation with Miss Pang. This is the indisputable facts before
the Court. It is beyond a shadow of doubt that the Claimant failure to declare his
21. However, the Court must also take into account the Claimant's evidence
as to the reason of his failure to declare. He claimed that he did inform his
relationship with Miss Pang to COW1. There was no written declaration by the
32
close since secondary school. Therefore, it is sufficient for the Claimant to
Based on the evidence adduced before this court it is without any doubt that the
failure of the Claimant to declare his relationship with Miss Pang to the
about the nature and extent or the conflict of interest of his employee. The
interest from his employer is way of misleading or deceiving the employer and
33
may cause harm to third party. Ethically, the Claimant who is at risk of finding
himself in a conflict of interest must take the matter seriously because of its
Therefore, the Court must consider the issue of conflict of interest between the
employer and the employee seriously. If the Court fails to do so, it will open a
floodgate for the employee choose not to declare their interest to the employer
Later, when the employer find out that his employee fails to notify the interest to
the employer, it may create a disharmonious relation between them. But, in this
case the Court has to bear in mind the difference between mere non-compliance
of Article 18 and 19 and the reason for that non-compliance stated by the
Claimant. Who should decide whether the Claimant must declare his interest or
the employee to make decision. The Company is not in the position to know
whether the Claimant had any conflict of interest to be declared to the Company.
Recruitment Sdn. Bhd. because the Company has no business dealing with PN
34
Recruitment Sdn. Bhd. So, there is no conflict of interest involving the Claimant.
Furthermore, the evidence also shown that Claimant had relationship with Miss
handle foreign workers before. Nevertheless, COW1 also testified that the PN
Recruitment Sdn. Bhd. handling of company foreign workers was proper and did
22. It is crystal clear from the evidence of the Claimant that he believes he is
not obliged to declare his interest to the Company. On the other hand, the
Company claimed that the Claimant had failed to comply with Company's Code
of Conduct. It is also the Company's submission that the Claimant has not tell
the truth as to his relationship with Miss Pang during the domestic inquiry and
In his letter to the Company on 6th April 2014 as per page 26 COB1, the
allegation one (1). He also clarified his relationship with Pang Siew Yen in the
35
domestic inquiry by saying this at page 33 of COB1.
Q4: Can you explain your relationship with Pang Siew Yen?
A4: Friendship. There is rumours she is my mistress.
able to establish the intimate relationship between the Claimant and Pang Siew
Yen. The learned counsel argued that the Claimant evidence are unreliable.
Therefore, all his statement regarding his relationship with Pang Siew Yen prior
to the evidence in Court exemplified that he is not telling the truth during the
domestic inquiry.
23. It is the Court considered view that this hearing focus on whether the
Claimant dismissal is with just cause and excuse. It is not a trial of Claimant's
morality as to his relationship with Pang Siew Yen. Instead, the main issue is
whether the failure of the Claimant to declare his interest to the Company is
24. It is indisputable fact that the Claimant failed to declare his interest in PN
Recruitment & Services and PN Recruitment Sdn. Bhd. The Company's learned
36
responsibilities of the Respondent as a public listed company on the main Board
1.4 That being the case, the Company is bound to adhere to the
strict rules and regulations imposed by the Securities
Commission Malaysia in the proper management and
operations of the Company.
37
Furthermore, the Company's learned counsel submitted that the Claimant is
Therefore, the failure of the Claimant to declare his conflict of interest to the
25. Even though, the Company is unable to show actual loss suffered by the
Company due to the Claimant failure to declare his interest, it will not prejudice
the Company case. But the Claimant's counsel referred to Malaysian Oxygen
Berhad v. Soh Tong Wah & Mahkamah Perusahaan Malaysia [2011] 1 LNS
790 which suggest that for there to be a conflict of interest, the employee
38
"What then is the nature of the interest of which the law will
compel disclosure - In Costa Rica Rly. Co. Ltd. v. Forwood, the
general principle - may generally be summed up in the rule of
equity that the interest which a director of a company -is bound to
disclose is any interest which conflicts with his duty to the
Company. In Narman v. Municipal Corporation of Bombay, it has
been held that interest-shall not be merely parental interest which
a father may take in his son's welfare but the interest must
involve some reasonable expectation of pecuniary advantage
or must at least material that is, presumably bringing some
substantial advantage to the party..." (emphasis is added)
"In the instant case it is abundantly clear that the Claimant had
39
made profits by the siphoning off, of money from the Company's
transaction with Verifone to his own Company V-fone.... in breach
of his fiduciary duty to the Company, he made this profits for
himself and went to extremely elaborate lengths to conceal the
profits".
[62] It can be deduced from the above cited authorities that for
there to be a conflict of interest, the employee concerned must
have gain financially in his personal capacity or obtained
substantial advantage. However, on the facts of this instant case,
there was no evidence whatsoever adduced by the Employer
before the Industrial Court that the Employee had gained
financially or obtained material advantage to himself when
introducing his cousin to Chou Tai Long and not disclosing that
fact to his employer nor the fact that the employee's brother was
employed by Just Brilliant Sdn. Bhd.
The decision of High Court in Malaysian Oxygen Bhd v. Soh Tong Wah and
another appeal [2011] 1 LNS 790 was confirmed by the Court of Appeal in
Malaysian Oxygen Bhd. v. Soh Tong Wah [2015] 3 MLJ 730 where the Court
40
of Appeal held as follows :
[26] The grounds of judgment of the High Court and the record of
appeal by the appellant before this court, demonstrate that the
High Court addressed the law at some length to guide it and
conducted a thorough scrutiny of the findings of fact and the
reasoning by the Industrial Court in arriving at its award, before
making its own decision to dismiss the appellant's application for
judicial review. The Industrial Court is set up for the purposes of
41
Act 177, an Act to promote and maintain industrial harmony and to
26. In order to understand the learned High Court judge findings on this issue,
it is useful for the Court to look into the Award of the Industrial Court in Soh
Tong Hwa v. Malaysian Oxygen Berhad [2008] 2 LNS 0469. In that case,
there were eight (8) charges against the Claimant which were as follows :
"Charge 1
42
whole time and attention to the service of the Company and not
(without the Company's written consent) to engage or become
interested in any other gainful trade or business.
Charge 2
Charge 3
43
shareholder (directly or indirectly), director and company
secretary of Kelington Engineering Sdn Bhd, that was awarded
substantial contracts in the years 2001 and 2002 by our
Company, which act tantamounts to a breach of your fiduciary
duty to the Company and a conflict of interest.
Charge 4
Charge 5
44
shareholder of Kelington Engineering Sdn Bhd, that was awarded
substantial contracts in the years 2001 and 2002 by our
Company, which act tantamounts to a breach of your fiduciary
duty to the Company and a conflict of interest.
Charge 6
Charge 7
45
fiduciary duty to the Company and a conflict of interest.
Charge 8
The learned Chairman held that the Company failed to prove that the Claimant
were guilty of second, third, forth, fifth and sixth charges. But, held that the
Company on balance of probabilities had proven that the Claimant was guilty for
failing to disclose his cousin was a manager of Just Brilliant Sdn. Bhd. and his
brother was an employee of the said Company. Therefore, the decision of the
High Court as regard to the failure of the employer to adduce evidence that the
employee gaining financially was in the context of seventh and eighth charges.
So, it is inaccurate to say that by mere fact that the employer unable to adduce
evidence of the employee financial gain for not declaring his conflict of interest
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will automatically caused the employer case to fail. It is pertinently important for
the Court to examine peculiar facts in this case before come into conclusion
whether the Claimant was dismissed with just cause and excuse or otherwise.
The Court must take into consideration these factors in deciding whether the
misconduct :
It is a question of fact based on evidence adduce during the trial. The Court
is reasonable for the employee to declare his interest to his employer. At the
same time, the Court must also determine whether as a reasonable employer, is
that reasonable for the employer to expect his employee to declare his interest
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to the Company. In other words, the Court must take into consideration the
the employee to declare his interest to the employer. It is due to the fact that
there are some interests that is not reasonable to expect the employee to
interest of the Company and his personal interest. Even though, the employer
may want his employee to declare that interest but the facts and circumstances
of the case may not be reasonable for the employee to do so. There also
scenario whereby the employee may refuse to declare his interest to the
employee interest with the Company because it will affect the Company dealings
with third party or will prejudice the interest of the Company. In short, that is the
employee to declare his interest to the Company, must also take into
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a) The position of the claimant in the company;
b) Is there any prejudice to the company?;
c) Did the Claimant gain any financial benefit for his failure to
declare his interest?;
d) Did the Company suffer any loss as a result of the
employee failure to declare his interest?; and
e) The Court must recognize that faithful and trust is essential
to the employer and employee relationship.
Finding
28. As to the first charge, the evidence shows that the Claimant knew one
Miss Pang Siew Yen prior the appointment of PN Recruitment to handle foreign
sole proprietor of the Company Pang Siew Yen. The Company produced
Claimant's handphone calls record marked as COB2. This record shows that the
Claimant knows Pang Siew Yen prior to the decision of the Company to appoint
evidence to suggest that the Claimant had financially gain for recommending PN
for their service rendered to the Company. As the sole proprietor, Pang Siew Yen
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will have a financial gain from this business dealing. But, is there any evidence
to show that the Claimant had any financial gain from that transaction? There
Nevertheless, the Company alleged that the Claimant failure to declare his
relationship with Pang Siew Yen had in fact affected his decision and action in
Services. COW1 admitted he signed those vouchers for payment but he only did
so after the Claimant verified on those vouchers. The evidence suggest that PN
Recruitment had done the work assigned to them by the Company. There is no
evidence to show that the PN Recruitment has failed to complete any work
Therefore, on balance of probabilities the Company has failed to prove that the
Claimant's failure to declare his relationship with Pang Siew Yen giving rise a
conflict of interest situation which affecting his decision and action in performing
his function as the Chief Operation Officer of the Company. The Company is
unable to prove that the Claimant's action had prejudice the interest of the
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29. As to second allegation, the Court satisfied that the Respondent has failed
declare it to the Company. As to the third allegation, the Court found there is no
Recruitment Sdn. Bhd. has any conflict of interest against the Company. It is due
to the fact that PN Recruitment Sdn. Bhd. has no business dealing with the
the Company. So, the involvement of Claimant in PN Recruitment Sdn. Bhd. did
Recruitment Sdn. Bhd. involves in the same industry with the Company which
30. Finally but not least, the fourth allegation had nothing to do with the
Company. This is a private arrangement between the Claimant and Pang Siew
such arrangement will prejudice the Company and caused conflict of interest of
the Claimant with the Company. It is the Court considered view that on balance
probabilities the Respondent has failed to prove allegation number one (1), two
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(2), three (3) and four (4). Therefore, the Court found that the dismissal of the
Remedy
01.10.1994. His last position with the Company was Chief Operation Officer. The
Claimant was terminated by the Company on 06.05.2014. His last drawn salary
was RM50,000.00 per month as per page 17 of CLB1 which was the notice of
salary increment for Claimant. The basic salary was clearly stated as
RM50,000.00 per month. The Court will rely on this notice of increment in
determining the basic salary because there is no other evidence as to the basic
salary of the Claimant. The Court found that it is not suitable for the Claimant to
be reinstated to his former position with the Company. It will create disharmony
to the Company because the Claimant was the Chief Operation Officer. By
reinstating Claimant as the Chief Operation Officer of the Company will not give
appropriate remedy for this case is back wages and compensation in lieu of
reinstatement.
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The Claimant in this evidence which has not been rebutted by the Company
stated that he is still unemployed after the termination. Therefore, the amount of
a) back wages
RM50,000.00 x 17 = RM850,000.00
RM50,000.00 x 19 = RM950,000.00
The payment shall be made within 60 days from the date of this Award.
t.t.
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