29(4)/4-1005/16
INDUSTRIAL COURT OF MALAYSIA
CASE NO: 29(4)/4-1005/16
BETWEEN
QUEK YEAN NEE
AND
HANNOVER RUECK SE MALAYSIAN BRANCH
AWARD NO.: 1311 OF 2018
Before : Y.A. TUAN BERNARD JOHN KANNY
- - CHAIRMAN (Sitting Alone)
-
Venue : Industrial Court Malaysia, Kuala Lumpur
Date of Reference : 25.07.2016
Dates of Mention : 27.09.2016, 30.11.2016, 20.12.2013, 23.01.2017,
20.03.2017, 29.05.2017, 13.06.2017, 08.02.2018,
15.03.2018
Dates of Hearing : 03.04.2018, 04.04.2018
Company’s
Written Submission : 30.04.2018
Claimant’s
Written Submission : 08.05.2018
Written Submission in
Reply by Company : 25.05.2018
Written Submission in
Reply by Claimant : 01.06.2018
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Representation : Mr. Chan Kheng Hoe and
Ms. S.J. Foo
From Messrs Kheng Hoe Advocates
Counsels for the Claimant
Pn. S. Suganthi
From Messrs Shearn Delamore & Co
Counsel for the Company
AWARD
(A) Reference
[1] The reference of the Honourable Minister of Human Resources under section
20(3) of the Industrial Relations Act 1967 is regarding the dismissal of Quek Yean
Nee (hereinafter referred to as “the Claimant”) by Hannover Rueck Se Malaysian
Branch (hereinafter referred to as “the Company”) on 2.2.2016. The reference was
dated 25.7.2016 and received by the Court on 26.8.2016.
[2] The Ministerial reference in this case required the Court to hear and determine
the Claimant’s complaint of dismissal by the Company on 2.2.2016.
(B) Proceedings In The Industrial Court
[3] The matter was heard on the 3.4.2018 and 4.4.2018 during which the
following witnesses were called by the Company to testify in Court:
i) Mr. Rohan Kananathan who was then Chief Executive Officer of the
Company (“COW-1”); and
ii) Mr. Daniel Sebastian Gunawan, who is currently the Chief Executive
Officer and who then was Head of Property & Casualty of the Company
(“COW-2”).
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[4] The Claimant testified herself (“CLW-1”). The documents filed and marked
before this Court are as follows:
i) Company’s Bundle of Documents (“COB-1”);
ii) Company’s Supplementary Bundle of Documents (“COB-2”);
iii) Company’s Additional Documents comprising E-mails (“COB-3”);
iv) Company’s Additional Documents comprising E-mails (“COB-4”);
v) Company’s Witness Statement - Mr. Rohan Kananathan (“COWS-1”);
vi) Company’s Witness Statement - Mr. Daniel Sebastian Gunawan
(“COWS-2”);
vii) Claimant’s Bundle of Documents (“CLB-1”); and
viii) Claimant’s Additional Documents comprising an e-mail dated 27.3.2016
(“CLB-2”)
(C) Background Facts
[5] The Claimant had vide letter dated 5.9.2013, commenced employment on a
contract basis (2 years) with Hannover Rueck SE Malaysian Branch (hereinafter
referred to as “the Company”) as Senior Manager Personal Line in the Treaty
Division. The salient terms of the Claimant’s First Letter of Offer (“First Offer”) are as
follows:
1) Salary: RM26,400.00 per month;
2) Duration of contract: 2 years;
3) Effective date: 10.10.2013;
4) Notice period: 30 days’ notice by either party;
5) Responsibility: spearheading Company initiative into the mass personal
lines business segment; and
6) Claimant’s tasks: meeting insureds/intermediaries/insurers to assess
their needs in the segment, designing appropriate coverage, pricing
such products and conducting trainings.
[6] Subsequently the Company had vide letter dated 30.5.2014 converted the
Claimant’s original contractual contract into permanent employment as Senior
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Manager Personal Lines in the Treaty department. The salient terms of the
Claimant’s Second Letter of Offer (“Second Offer”) are as follows:
i) Salary: RM26,400.00; and
ii) Bonus: 2 months’ bonus at the end of each year upon completion of 12
months’ service, otherwise prorated according to number of months in
service. Bonus is non contractual: Additional half month non contractual
bonus based on financial performance of Malaysian Branch and Home
office.
[7] The Claimant was paid her pro-rated one month bonus amounting to
RM26,400.00 on the 23.12.2014. In addition the Claimant was given an increment of
her salary on 22.1.2015 from RM26,400.00 to RM28,400.00.
[8] On or about the 21.12.2015 the Company handed an Employee Annual
Review to the Claimant. The Employee Annual Review was dated 4.4.2015. The
annual review was purportedly prepared after the Company conducted a review with
the Claimant on the 20.3.2015. The Claimant disputes and denies the said review
and alleges that there was no review conducted by the Company on her
performance. The Company served the Employee Annual Review dated 4.4.2015 on
the Claimant on the 21.12.2015 and at the same time the Claimant was asked to
acknowledge the said review by signing the same. The Claimant refused to sign the
review. The Claimant then wrote a letter dated 28.12.2015 to the Company disputing
the review. She said the Company had failed to conduct a performance review and
the review dated 4.4.2015 was false. Thereafter, vide notice of termination dated
2.2.2016, the Claimant was informed that her employment with the Company was
terminated. The Company paid salaries in lieu of notice amounting to RM86,416.13,
unutilized leave amounting to RM13,726.67 and over deduction of season parking of
RM600.00. The net amount payable to the Claimant was RM83,962.20 after tax, EPF
and SOCSO deductions.
[9] Claimant contended that the termination was without just cause or excuse.
She therefore prayed for reinstatement with full backwages.
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[10] The Company, on the other hand, averred that the actual reasons for
terminating the Claimant’s services were that the Claimant had been found to be a
non-performer.
(D) The Issue
[11] Since the termination of the Claimant’s services was not in dispute or denied
by the Company, the sole issue to be determined by this Court is whether such
termination of the Claimant’s services was with or without just cause or excuse.
(E) The Law
[12] The law on dismissal is now well settled, the function of the Industrial Court in
a reference under s.20 of the Industrial Relations Act 1967 has been clearly stated by
the Federal Court in the case of Goon Kwee Phoy v. J & P Coats (M) Sdn Bhd
[1981] 2 MLJ 129 where his Lordship Raja Azlan Shah, CJ (Malaya) (as he then
was) stated at p. 136:
“Where representations are made and are referred to the Industrial Court for
enquiry, it is the duty of that Court to determine whether the termination or
dismissal is with or without just cause or excuse. If the employer chooses to
give a reason for the action taken by him, the duty of the Industrial Court will
be to enquire whether the excuse or reason has or has not been made out. If it
finds as a fact that it has not been proved, then the inevitable conclusion must
be the termination or dismissal was without just cause or excuse. The proper
enquiry of the Court is the reason advanced by it and that Court or the High
Court cannot go into another reason not relied on by the employer or find one
for it.”.
[13] In Wong Yuen Hock v. Syarikat Hong Leong Assurance Sdn Bhd and
Another Appeal [1995] 3 CLJ 344 at p. 352 Mohd Azmi FCJ stated as follows:
“On the authorities, we were of the view that the main and only function of the
Industrial Court in dealing with a reference under s. 20 of the Act is to
determine whether the misconduct or irregularities complained of by the
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management as the grounds of a dismissal were in fact committed by the
workman, and if so, whether such grounds constitute just cause or excuse for
the dismissal. In our opinion, there was no jurisdiction by the Industrial Court
to change the scope of reference by substituting its own reason.”.
[14] It is trite law that the burden of proof lies on the Company, as employer, to
prove on a balance of probabilities that it had just cause or excuse for dismissing the
Claimant. (See Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni
Nair & Anor [2002] 3 CLJ 314).
[15] The law regarding dismissal due to poor performance is also trite law. It is
sufficient for the Company to establish the following:
a) the poor performance of the Claimant;
b) the Claimant was warned about her poor performance;
c) the Claimant was accorded sufficient opportunity to improve; and
d) the Claimant failed to sufficiently improve her performance (See
Associated Pan Malaysia Cement Sdn Bhd v. Mohd Khairul Bahari
Mohd Jamil [1991] I ILR 318); and (IE Project Sdn Bhd v. Tan Lee
Seng (Award 56 of 1987).
(F) Evaluation Of Evidence And Findings Of Court
[16] From the pleadings it is clear that there was no dispute as to the termination of
the service of the Claimant by the Company. Therefore, this Court is to determine the
sole issue of whether the termination or dismissal of the Claimant was with or without
just cause or excuse.
[17] The Company states that the termination of the Claimant’s services by the
Company is justified as she was a non performer. The Claimant who was a Senior
Manager Personal Lines in the Treaty Division with the Company was expected to
achieve a certain sales performance target for the Personal Lines business.
According to the Company vide the testimony of COW-1 and COW-2 the Claimant’s
sales performance target was USD30,000,000.
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(G) Was The USD30,000,000 Sales Target Communicated To The Claimant?
[18] The burden of proof is on the Company to prove the case against the Claimant
for poor performance in discharging her duty on a balance of probability. Hence it is
for the Company to prove that the USD30,000,000 sales target was communicated to
the Claimant.
[19] Both COW-1 and COW-2 during examination in chief had stated that the
Company had informed the Claimant during her interview that her sales target was
USD30,000,000.00.
[20] The Claimant refuted that she was given a sales target of USD30,000,000.00
during the interview. She claims there were no targets set by the Company.
[21] The Company via COW-1 and COW-2 agreed under cross examination that
they did not have documentary proof of the USD30,000,000.00 target but they had
merely through verbal statements at the interview communicated to the Claimant her
target. In addition COW-1 and COW-2 confirmed that the said sales target was not
written in the Claimant’s Letters of Appointment.
[22] Both COW-1 and COW-2 then referred to a slide presentation found on page
59 to 66 of COB-1 presented to the home office in June 2014 to support their claim
that the Claimant was set a target of USD30,000,000.00.
[23] COW-1 the CEO of the Company referred to the slide presentation and said
the sales target was EURO21,000,000 for a period of 2 years.
[24] While COW-2 referred to the same on pages 59 to 61 of COB-1 and said that
the sales target was EURO15,400,000 for 2015 and EURO16,800,000 for 2016.
COW-2 agreed that the sales target was for 2 years and there was no specific time
frame to achieve it.
[25] COW-2 was cross examined by counsel for the Claimant. Counsel for the
Claimant put the following to COW-2:
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“Q: 15,400,000 EURO is Company target until end of 2015?
A: Yes.
Q: 15,400,000 EURO is far-far cry from USD30,000,000?
A: Yes.
Q: The individual target for sara far exceeds Company target in 2015?
A: Yes.”.
[26] This Court finds that the slide presentation on pages 59 to 61 of COB-1 does
not refer to a sales target of USD30,000,000. Further, the Claimant’s personal target
exceeded Company’s overall target.
[27] COW-2 also refers to an email dated 15th of December 2015 found on page 25
of COB-1 to support their claim that the Claimant was set a target of USD30,000,000.
In the said email the Company refers to a target of RM120,000,000.
[28] COW-2 had confirmed during cross examination that the RM120,000,000
target (on page 25 of COB-1) was not formally imposed as an individual target in
writing. He goes on to say that this is the only mention of a target. He further confirms
that this is the only written communication relating to individual performance targets
in terms of premium which was issued 2 months before termination.
[29] The Court finds from the testimony of COW-1 and COW-2 that there was lack
of believable documentary and oral evidence to show that the Claimant was set a
sales target was USD30,000,000.
(H) Was There A Performance Review Of The Claimant’s Performance?
[30] Both COW-1 and COW-2 claim they conducted a performance review of the
Claimant with the Claimant on the 20.3.2015.
[31] COW-1 during his examination in chief stated that he together with COW-2,
and the Claimant had the performance review in his office. In the review the
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discussion was regarding her (Claimant) performance and lack of business
generated on behalf of the Company.
[32] COW-2 during his examination in chief confirmed that after the performance
review with the Claimant he prepared the Employee Annual Review dated 4.4.2015
found on page 4 of COB-1. Both COW-1 and COW-2 confirmed signing the said
review. There was no signature of the Claimant on the Employee Annual Review.
[33] The Claimant refuted that she was evaluated by COW-1 and COW-2 on the
20.3.2015. She stated categorically that she had no knowledge of this document until
Ms. Judy Lim of the HR Department served her the Employee Annual Review on the
21.12.2015.
[34] There was no indication on the face of the document (Employee Annual
Review dated 4.4.2015) by a signature or some such acknowledgement of the
Claimant having actually seen it or been briefed on it by COW-1 or COW-2 or
participated in it.
[35] The Claimant had vide her letter dated 28.12.2015 notified the Company that
she declined to sign off the review as the Claimant claims the review was not
organized accordingly.
[36] Under the circumstances, it is the view of this Court that this piece of evidence
seems to be something in the nature of an afterthought.
[37] This is so particularly in view that COW-2 during cross examination had
confirmed that they COW-1 & COW-2 had not told the Claimant that she was going to
be terminated before meeting her on the 29.12.2015.
[38] The Court also finds that the purported Employee Annual Review was not
regular and fair appraisal when the Claimant was terminated on ground of poor
performance. The Company allegedly held a review on the 20.3.2015. A written
review was prepared by COW-2 on the 4.4.2015 and the Company choose to keep
the written review in abeyance for a period of 8 months plus until the 21.12.2015
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when Ms. Judy Lim served the Employee Annual Review on the Claimant. COW-2
stated the Company similarly served Employee Annual Reviews on all employees at
the same time in December 2015. However the Company failed to produce such
evidence to corroborate the evidence of COW-2. From these facts the Court is of the
view that the Company’s actions were actuated by mala fide.
[39] Both COW-1 and COW-2 during cross examination agreed that there were no
documents expressly stating Company dissatisfaction about Claimant’s performance.
In addition COW-1 confirmed there were no warning letters issued, the Claimant was
not put on any Performance Improvement Plan (PIP), no counselling or retraining
was offered to the Claimant and there was no written documents to the Claimant
requesting for improvement.
[40] The targets referred by the Company in the presentation to the Home office in
June 2014 was for a period of 2 years ending end 2016. This was confirmed by
COW-2. The conduct of the Company is deemed to be in bad faith when it held the
alleged performance appraisal on 20.3.2015 when time of completion was at the end
of 2016.
[41] The email dated 25.12.2015 on page 25 COB-1 regarding the RM120,000,000
target was only communicated to the Claimant after her alleged performance
appraisal on 20.3.2015 and 2 months before her termination.
[42] From the evidence adduced, it is a fact that no evidence of any warnings,
advice, counselling, etc, if any, was given to the Claimant for any alleged non-
performance or poor/unsatisfactory performance. Further the Company had not
communicated any sales targets to the Claimant.
[43] Further, the Claimant had established via her testimony that it was due to her
letter dated 28.12.2015 requesting for her 2 months’ “contractual” bonus that could
have angered COW-1 and been the catalyst for her dismissal.
[44] Apart from the general sweeping statement of COW-2 that the Company did
not close prospects and thus was not meeting its target solely due to the Claimant’s
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performance, no hard evidence was produced to show the same. No relevant
documents showing the same were produced. The Company’s profit & loss accounts
were also not shown.
[45] The factual evidence by the Company also did not support COW-1 and COW-
2’s poor opinion of the Claimant’s performance. The facts reveals that her contractual
employment was converted into a permanent employment by letter of offer dated
30.5.2014. In December 2014 she was paid a prorated bonus of 1 month amounting
to RM26,400.00. Subsequently on 22.1.2015 the Company gave the Claimant an
increment from RM26,400.00 to RM28,400.00. Indeed her achievements can hardly
be said to be that of a poor performer. Equally the Claimant cannot suddenly become
a poor performer or have her performance deteriorate barely 2 months (20.3.2015
when the Company alleged conducted Performance Review) after her pay rise.
[46] COW-2 had also agreed during cross examination that Company had not
decided that Claimant was a non-performer when it decided to pay bonus and give
an increment to the Claimant. Bonus was non contractual as stipulated by the
Company in their second offer letter. However Company paid pro-rated bonus
amounting to RM26,400.00 surely based on performance on the 23.12.2014.
Claimant’s salary was increased in the 22.1.2015.
[47] Further, COW-2 during cross examination had confirmed that performance
was a major factor in considering bonus and increments for an employee.
[48] The Court’s view is fortified by COW-1 and COW-2’s admission that they
never counselled the Claimant or cautioned or ever issued the Claimant with any
warning letters concerning her performance. In the absence of any of the same, the
reasonable inference is that there was no occasion or the need to issue such caution
or warning as the Claimant’s performance was not an issue with the Company.
[49] In addition, COW-2 also confirmed that the Company did not specifically
address in its correspondence to the Claimant about Claimant’s lack of business
acumen and leadership.
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[50] On a balance of probability, the Court finds there was lack of evidence to show
that the Company had conducted a bona fide performance review of the Claimant.
(I) Conclusion
[51] In conclusion, from all the evidence of this case as a whole, this Court finds on
a balance of probability that the Company has failed to establish the poor
performance of the Claimant.
[52] This Court also finds that the respondent had not complied with the due
process by informing the Claimant of her poor performance and giving her sufficient
time to improve and notifying the Claimant that if she failed to improve, she would be
dismissed. This Court, on a balance of probabilities, finds the Claimant’s evidence
and explanation to be reasonable and more probable. Consequently, this Court holds
that in equity, good conscience and the substantial merits of the case, the termination
of service of the Claimant by the Company on 2.2.2016 was not fair and without just
cause or excuse.
(J) Remedy & Award
[53] Claimant had pleaded for the remedy of reinstatement with full backwages.
From the circumstances of the case the Court’s opinion is that as relationship
between the Company and the Claimant has been broken an order of reinstatement
would not be conducive to both the Claimant as well as the Company. Especially,
when COW-1 and COW-2’s relationship with the Claimant have deteriorated.
Claimant also stated that she was currently doing consultancy and earning a sizeable
amount of earnings. This Court finds that in the circumstances, reinstatement is
inappropriate in this case and will thus consider compensation to be the appropriate
award for the Claimant.
[54] On the backwages, from the evidence presented to the Court, the Claimant at
the time of dismissal was drawing a salary of RM28,400.00.
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[55] The Claimant gave evidence in Court that she was involved in consultancy
work and earned RM1,000.000.00 since her dismissal. However at submissions
solicitors for the Claimant stated that the Claimant’s evidence on her post dismissal
earnings was erroneous and that she actually earned RM136,400.00 and
RM56,284.00 (her 30% share of profits in Commcare Resources Sdn Bhd) totalling
RM192,684.00 for 2017. Reference is made to her e-filing returns with Inland
Revenue Board of Malaysia (IRB) and audited accounts of Commcare Resources
Sdn Bhd in the submissions.
[56] In this regard the Court is agreeable with solicitors for the Company that the
Company has not had the benefit of any further cross examination on this as it had
only surfaced at the stage of submissions. This Court’s view is that the evidence of
the Claimant that she earned RM1,000,000.00 during trial remains unrebutted.
[57] In line with the principle of law laid down by the Federal Court in Dr. James
Alfred (Sabah) v. Koperasi Serbaguna Sanya Bhd (Sabah) & Anor [2001] 3 CLJ
541, this Court will take into account these post dismissal earnings in assessing the
quantum of award of backwages to the Claimant.
[58] Having considered all factors and facts and circumstances of this case, this
Court awards the Claimant the following:
a) Backwages with the Claimant’s last drawn salary at the time of her
termination of service at RM28,400.00 per month multiplied by 24
months but with a deduction of 70% having taken into account the post
dismissal earning of the Claimant, calculated as follows:
RM28,400.00 X 24 - 70% = RM204,480.00
b) Since the Claimant commenced employment with the Company from
10.10.2013 and had worked till 2.2.2016 when her service was
terminated which was two years and 4 months this Court awards 2
months wages as compensation in lieu of reinstatement pursuant to
Practice Note No. 1 of 1987, calculated as follows:
RM28,400.00 X 2 = RM56,800.00
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c) As bonus was non contractual and discretionary the Court will not allow
an award for bonus.
[59] In arriving at this decision, the Court has acted with equity and good
conscience and the substantial merits of the case without regard to technicalities and
legal form as stated under section 30(5) Industrial Relations Act 1967.
[60] The Court therefore orders the Company to pay the Claimant through the
Claimant’s solicitors, Messrs Kheng Hoe Advocates in the sum of RM261,280.00 less
statutory deductions if any within 30 days from the date of this award.
HANDED DOWN AND DATED 7 JUNE 2018
Signed
(BERNARD JOHN KANNY)
CHAIRMAN
INDUSTRIAL COURT, MALAYSIA
KUALA LUMPUR
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