A COMPARATIVE APPROACH IN JUDICIAL DECISION-MAKING

A paper by

Susila Sithamparam
President
Industrial Court of Malaysia

Introduction

The focus of this paper is on the growth of industrial law in

Malaysia. There are historical reasons for a comparative approach in

judicial decision-making in Malaysia. The labour, employment and

industrial legislation are a legacy of the British colonial government 1. The

earliest decisions of the courts followed the common law tradition. This

trend has continued and decisions from the courts in the

Commonwealth are of persuasive authority.

The decisions on industrial law emanate from the Industrial Court 2

which has the jurisdiction to decide on trade disputes 3. The Industrial

1 The Federation of Malaya became independent on 31 August 1957. Malaysia was formed when the states of
Malaya, Sabah, Sarawak and Singapore joined as a federation on 16 September 1963. Singapore ceded on 9
August 1965.
2 There are twenty-six divisions of the Industrial Court in Malaysia.
3 The jurisdiction of the Industrial Court is by way of references by the Honourable Minister of Human Resources

1
Court has quasi-judicial powers and is subject to the supervisory

jurisdiction of the High Court4.

The powers of the Industrial Court were highlighted by the Federal

Court5 as follows:

“At the outset, it is we think, necessary to reflect on the

extraordinary powers conferred upon the Industrial
Court in resolving industrial disputes. They are all
encompassing. This is s.30(5) of the Industrial
Relations Act 1967 (the Act) which stipulates :

'The Court shall act according to equity good

conscience and the substantial merits of the case
without regard to technicalities and legal form.'

It has been said, quite rightly, that industrial

jurisprudence and industrial justice have a prior
obligation and adherence to social justice as
distinguished from legal justice and therefore have far
wider powers than ordinary civil courts in the
prescription, recognition and creation of rights, duties
and obligations so as to achieve industrial harmony
thereby enhancing the economic well-being of the
nation: (see Insaf Vol. XXI no.3 - The philosophy and
concept. of industrial relations in Malaysia - by Abu
Hashim bin Hj. Abu Bakar, Chairman, Industrial
Court.) In applying the powers under s. 30(5) above,
the Industrial Court has to bear in mind the
underlying objectives and purposes of the Act itself ie,
that it is a piece of legislation designed to ensure social

in respect of trade disputes pursuant to 26(2) or a complaint by a trade union of workmen pursuant to section
8(2A) or a dismissal of an individual workmen irrespective of whether or not he is a member of a trade union of
workmen pursuant to section 20(3), Industrial Relations Act 1967.
4 There are two High Courts which are the High Court of Malaya and the High Court of Sabah and Sarawak.
5 Tanjong Jara Beach Hotel Sdn Bhd v National Union of Hotel, Bar & Restaurant Workers Peninsular Malaysia
[2004] 3 ILR i at pages xiv and xv.

2
 justice to both employers and employees and to
advance the progress of industry by bringing about
harmony and cordial relationship between the parties;
to eradicate unfair labour practices; to protect
workmen victimization by employers and to ensure
termination of industrial disputes in a peaceful
manner. Clearly therefore, the raison d'etre of the
Industrial Court is to endeavour to resolve the
competing claims of employers and employees by
finding a solution which is just and fair to both parties
with the object of establishing harmony between
capital and labour and fostering good relationship.”

Legislative history

The beginnings of industrial law is a legacy of the British colonial

government6. The growth of industrial law has been in tandem with the

economic growth and the industrialisation of the country7.

The first legislation were the Industrial Courts Enactment 1940

by the Federated Malay States, Industrial Courts Ordinance 1940 for the

Straits Settlement and the Industrial Courts Enactment 1360 of Kedah.

When the Federation of Malaya was formed in 1948, these laws were

repealed and the Industrial Courts Ordinance 1948 was enacted. The

Industrial Courts Ordinance 1948 provided for the settlement of trade

6 “The Industrial Relations Law of Malaysia” by Wu Min Aun .

7 “Human Capital Transformation: 55 Years of Malaysian Experience” by the Institute of Labour Market
Information and Analysis, Ministry of Human Resources.

3
disputes by a permanent Industrial Court and ad hoc Boards of

arbitration and inquiry. It provided for a voluntary system of arbitration

of trade disputes.

The Essential (Arbitration in the Essential Services ) Regulations

1965 and the Essential (Prohibition of Strikes and Proscribed Industrial

Action) Regulations 1965 provided special provisions for certain

industries during a period of emergency. They were later repealed by the

Essential (Trade Disputes in the Essential Services) Regulations 1965.

The present Industrial Court was established under the Industrial

Relations Act 1967. The Industrial Courts Ordinance 1948 and the

Essential (Trade Disputes in the Essential Services) Regulations 1965

were repealed by the Act. The present legislation provides for the

compulsory arbitration of trade disputes if a trade dispute is referred to

the Industrial Court by the Honourable Minister of Human Resources.

The Industrial Court also has the jurisdiction to decide on the

unjust dismissal of an individual workman irrespective of whether or not

he is a member of a trade union of workmen if the matter is referred to

the Industrial Court by the Honourable Minister of Human Resources.

4
The precedents by the Privy Council

The decisions of the Federal Court were subject to appeal to the

Privy Council until the abolition of the final appeal to the Judicial

Committee of the Privy Council on 1 January 1985. The review by the

Privy Council of the decisions which emanate from the Industrial Court

are essentially on the supervisory jurisdiction of the High Court in

respect of the decisions of inferior courts.

In South East Asia Fire Bricks Sdn Bhd v Non-Metallic Mineral

Products Manufacturing Employees Union and others 8, the Privy Council

interpreted the ouster clause in section 29(3)(a), Industrial Relations Act

1967. The Privy Council held as follows:

“.....there is no doubt that the dispute between the

company and the respondents was a trade dispute
within the definition in section 2 of the Industrial
Relations Act 1967. It was therefore a dispute which
the Minister had power to remit to the Industrial Court
under section 23(2). The Industrial Court applied its
mind to the proper question for the purpose of making
its award. The award was accordingly within the
jurisdiction of that court, and neither party has
contended to the contrary. For the present purpose
their Lordships will assume, without deciding, that the
8 [1980] 3 W.L.R. 318.

5
 award contained one or more errors of law upon its
face. If so, the error or errors did not affect the
jurisdiction of the Industrial Court and their Lordships
are therefore of opinion that section 29(3)(a) effectively
ousted the jurisdiction of the High Court to quash the
decision by certiorari proceedings. Accordingly their
Lordships agree with the decision, though not with the
reasoning, of the Federal Court and they will advice
His Majesty the Yang di-Pertuan Agong that the appeal
should be dismissed.”

The decision of the Federal Court9 in the same case highlights the

inheritance of the common law on the supervisory jurisdiction of the

High Court. Raja Azlan Shah, Federal Judge (as he then was) held as

follows:

“The jurisdiction of the High Court to issue orders of

certiorari is neither an appellate nor a revisional
jurisdiction. Also from the very nature of the power
conferred under section 25 of the Courts of Judicature
Act, 1964, it is clear that in exercise of this power the
High Court exercised original jurisdiction stems from
the prerogative jurisdiction inherited from the United
Kingdom courts and its object is mainly to enable the
superior courts to keep inferior tribunals within the
bounds of their authority. The supervisory character is
essential for always in the background there is the
beguiling illusion that an inferior tribunal entrusted to
hand down awards of a final nature may hand down
awards as it likes. Therefore the jurisdiction may for
convenience be described as an extraordinary original
jurisdiction. The circumstances under which the High
Court can interfere with the decision of the Industrial

9 Non-Metallic Mineral Products Manufacturing Employees Union & Others v South East Asia Fire Bricks Sdn
Bhd [1976] 2 M.L.J. 67 per Raja Azlan Shah FJ at page 68.

6
 Court are limited. For instance, it has no jurisdiction
under section 25 of the Courts of Judicature Act to
interfere with the findings of fact reached by the
Industrial Court on the ground that the decision is
erroneous except where there is a clear error of law on
the face of the record. It cannot arrogate the powers of
a Court of Appeal by substituting its own judgment for
that of the Industrial Court on questions of fact and
cannot review the evidence.”

Subsequently, the Federal Court in R Rama Chandran v Industrial

Court of Malaysia and Another10 took a more liberal view of the

supervisory jurisdiction of the High Court. Eusoff Chin, Chief Justice

held as follows:

“Section 33B(1)(previously s.29(3)(a) of the Industrial

Relations Act provides that an award of the Industrial
Court shall be final and conclusive and shall not be
challenged, appealed against, reviewed, quashed or
called in question in any Court of law. Yet, our High
Courts and Federal Court intervene to quash the
awards of the Industrial Court in appropriate cases, all
for the cause of justice. Therefore, even when the
statute declares an award is final, the Courts can still
intervene. (See Sungai Wangi Estate v. Uni [1975] 1
MLJ 136). Similarly, in Minister of Labour, Malaysia v.
National Union of Journalists, Malaysia [1991] 1 MLJ
24, where the Minister has refused to refer a trade
dispute to the Industrial Court under s. 26(2) of the
Industrial Relations Act, the Supreme Court when
upholding the decision of the High Court granting
certiorari to quash the decision of the Minister, did not
order the Minister to reconsider the matter de novo but
instead arrogated itself the powers of the Minister and
granted the relief to the workman by directing the
Minister to refer the trade dispute to the Industrial
10 [1997] 1 CLJ 147 per Eusoff Chin CJ at pages 167, 169 and 176.

7
Court.

It is clear that the High Courts and the Federal Court

have adopted a liberal and progressive approach in
certiorari proceedings, and I find that where the
particular facts of the case warrant it the High Court
should endeavour to remedy an injustice when it is
brought to its notice rather than deny relief to an
aggrieved party on purely technical and narrow
grounds. The High Court should mould the relief in
accordance with the demands of justice.

...

I am, therefore, of the view that based on the facts on

record, this is a fit and proper case where the
jurisdiction of the Court should not end with the
quashing of the award.

The High Court jurisdiction should not be curtailed or

narrowed or constricted by mere reference to the old
historical development in which the writ of certiorari
was developed and came to be granted by the Courts in
England. Of course if the application for certiorari is
dismissed, that ends the matter. But if the application
is allowed, the Court has surely to mould the order. If
we were to merely grant certiorari to quash the award
and nothing more, this will deprive the writ of its vital
and effective meaning and may result in grave injustice
being caused to the claimant.

...

I would suggest that the intensity of the Court's review

of administrative action may vary according to the
nature of the case. The Courts in the United Kingdom
have identified particular classes of cases where the
exercise of power will be subject to rigorous
examination. To illustrate, the interference with
human rights should be subject to close scrutiny.
(See, R. v. Secretary of State for the Home Department,
ex parte, Brind [1991] I AC 696, 757).

8
Similarly when the result of an impugned decision may
put life or liberty at risk, the duty which rests on the
Court will be especially onerous. In this context, I
would refer to Bugdaycay v. Secretary of State for the
Home Department London Borough Council [1987] 1 All
ER 940 (HL) where Lord Bridge stated that Courts are
entitled within limits :

'To submit an administrative decision to a more

rigorous examination, to ensure that it is in no way
flawed, according to the gravity of the issue which
the decision determines. The most fundamental of
all human rights is the individual's right to life and
when an administrative decision under challenge is
said to be one which may put the applicant's life at
risk, the basis of the decision must surely call for the
most anxious scrutiny.'

And Lord Templeman said this :

'Where the result of a flawed decision may imperil life

or liberty a special responsibility lies on the Court in
the examination of the decision-making process.'

And, 'life' in Article 5(1) of the Constitution, as Sri Ram

JCA has said in Tan Tek Seng v. Suruhanjaya
Perkhidmatan Pendidikan [1996] 1 AMR 1617, 1654, is
wide enough to encompass the right to be engaged in
lawful and gainful employment.

The categories of such cases are, of course, not closed.

I would say that in reviewing the award of the

Industrial Court for substance and not just process, we
were amply supported by the reasoning and the
authorities cited above and, that therefore, there was a
legal basis for us to have done so.”

9
The persuasive value of decisions from the courts in the
Commonwealth

The industrial jurisprudence of Malaysia has been enriched by the

citation of cases from the Commonwealth countries.

In Re Application By Dunlop Estates Bhd v All Malayan Estates

Staff Union11, Mohamed Azmi J, High Court Judge (as he then was)

followed the decision of the Federal Court in Non-Metallic Mineral

Products Manufacturing Employees Union and others v South East Asia

Fire Bricks Sdn Bhd12 and cited the decision of the Indian Supreme

Court in M/S Hindustan Hosiery Industries v F.H. Lala and another 13

where it was held that the Indian Industrial Disputes Act 1947 was

intended to be a self-contained one which seeks to achieve social justice

on the basis of collective bargaining, conciliation and arbitration.

Abdul Hamid Mohamad, Court of Appeal Judge (as he then was)

referred to decisions of the courts in the Commonwealth in Telekom

Malaysia Kawasan Utara v Krishnan Kutty Sanguni Nair and another 14

in deciding that the standard of proof which an employer had to prove

11 [1980] 1 M.L.J 243

12 [1976] 2 M.L.J 67
13 [1974] 1 L.L.J 340
14 [2002] 3 CLJ 314

10
that an employee had committed a misconduct was on a balance of

probabilities and that the degree of probability required should be

proportionate to the nature and gravity of the issue. The Court of Appeal

overruled the decision of the High Court 15 which had applied the burden

of proof in a criminal case of beyond reasonable doubt. The Court of

Appeal also reviewed the statutory provisions in particular section 30(5),

Industrial Relations Act 1967 and local decisions and held that the

Industrial Court should not be burdened with the technicalities

regarding the standard of proof, the rules of evidence and procedure

which are applied in a court of law.

The Court of Appeal had considered the decisions of the English

Court of Appeal in Monie v Coral Racing Ltd16 , Indian Supreme Court in

Management of Balipara Tea Estate v Its Workmen 17 and the Court of

Appeal of New Zealand in Airline Stewards and Hostesses of New

Industrial Union of Workers v Air New Zealand Ltd 18 and Honda New

Zealand Ltd v New Zealand Boilmakers' etc Union 19.

The Court of Appeal held from pages 137 to 140 as follows:

15 [1996] 1 MLJ 481

16 (1981) ICR 109
17 AIR 1960 Supreme Court 191
18 [1990] 3 NZLR 549.
19 [1991] 1 NZLR 392.

11
“ Since no court in this country higher than the
High Court has made a pronouncement on this issue,
perhaps we should also look at other jurisdictions.

In Monie v. Coral Racing Ltd (1981) ICR 109, the

Court of Appeal in England had to decide an appeal by
an employee who had been dismissed for dishonesty.
Money was stolen from the employers' safe in
circumstances such that only the employee or an
assistant manager could have taken it. The employers
did not know who was responsible and dismissed them
both for dishonesty. The Court of Appeal, dismissing
the appeal by the employee held, inter alia :

'Held, dismissing the appeal, (1) that whether a

dismissal based on mere suspicion of an employee's
theft was fair depended in whether in all the
circumstances of the case the employer had acted
reasonably in treating their suspicion as a sufficient
reason for dismissing the employee: that such reason
was in the circumstances a 'reason related to the
conduct of the employee'; and that the industrial
tribunal, having asked themselves whether there
were solid and sensible grounds on which the
employers could reasonably suspect dishonesty, were
entitled to find that the employers had discharged the
onus of proof under para 6(8) of Sch 1 to the Act
(post, pp 121Dm 122G-123E, 124C-G, 126G-127A,
D-R, G-128B).'

In Employee's Misconduct As Cause for Discipline and

Dismissal in India and the Commonwealth by Alfred
Avins, (1968 Ed), the learned author, citing numerous
authorities says:

'Section 284 - Proof

The British Columbia Supreme Court has ruled that
an employer need not prove the guilt of an employee
beyond a reasonable doubt to impose disciplinary
sanctions, and hence acquittal of theft by a criminal
court is no bar to dismissal by the employer. A
fortiori, an employer need not reinstate an employee

12
 dismissed for theft because the conviction has been
set aside on appeal. As the Hyderabad High Court
has remarked: 'It is for ....(the employer) to see how
far the services of such a suspicious character can be
safely continued taking into view ... the value of the
property with which ... (he) had to deal.

The standard of proof must be sufficient to measure

up to a preponderance of the evidence, taking all
reasonable inferences into account.'

The Supreme Court of India in Management of Balipara

Tea Estate v. Its Workmen AIR 1960 Supreme Court
191, says :

'In making an award in an industrial dispute referred

to it, the tribunal has not to decide for itself whether
the charge framed against the workman concerned
(in this case falsification of accounts and
misappropriation of fund) has been established to its
satisfaction; it has only to be satisfied that the
management of a business concern was justified in
coming to the conclusion that the charge against its
workman was well founded. If there is finding by the
tribunal that the management has been actuated by
any sinister motives, or has indulged in unfair labour
practice, or that the workman has been victimised for
any activities of his in connection with the trade
unions, it may have reasons to be critical of the
enquiry held by the management.

The tribunal misdirects itself in so far as it insists

upon conclusive proof of guilt to be adduced by the
management in the inquiry before it. It is well settled
that a tribunal has to find only whether there is
justification for the management to dismiss an
employee and whether a case of misconduct has been
made out at the inquiry held by it.'

Normally, one would expect the Indian Court to be very

technical in its approach and insist of the higher
burden, but this judgment shows otherwise.

Two judgments of the Court of Appeal,

Wellington, New Zealand will also throw some light on

13
the approach of the court on the issue. In Airline
Stewards & Hostesses of New Industrial Union of
Workers v. Air New Zealand Ltd (1990) 3 NZLR 549,
four Air New Zealand Ltd cabin crew members were
believed by United States Customs to have attempted
to import into Hawaii alcohol removed from the bonded
stock in the aircraft. Air New Zealand was fined
US$500 for violation of United State Customs
Regulations. Air New Zealand, after making extensive
inquiries into the matter, dismissed them for serious
misconduct. Air New Zealand did not allege that the
employees had committed theft, but did allege that
they caused the company grave embarrassment by
being found attempting to bring on shore bonded stock
from the aircraft. The Court of Appeal, held, inter alia:

(2) The employer is required to prove, however, on

the balance of probabilities that on the facts
available to him after reasonable inquiry made
by him the dismissal has been shown to be
justifiable (see p 554 line 39).

(3) The test is whether the employer has shown

that the decision to dismiss was in the
circumstances and at the time a reasonable
and fair decision. He must show that he had
reasonable grounds to believe and did honestly
believe that there had been misconduct by the
employee of sufficient gravity to warrant
dismissal (see p 555 line 51).'

It is interesting to note that MP Jain, the learned

author of Administrative Law of Malaysia and
Singapore, as meticulous as he is, does not deem it fit
to discuss the question of standard of proof under a
specific heading or subheading. However, at p 327 of
the 3rd Ed of the book, the learned author says:

'What is needed to sustain findings of fact by an

adjudicatory body is some evidence of probative
value. A finding based on evidence of no probative
value is no good.'

14
 HWR Wade and CF Forsyth, in the 7th Ed of
Administrative Law discussed the 'Standard and
Burden of Proof' under a sub-heading. On the
standard of proof, the learned authors have this to say:

'Nearly all the cases which concern administrative

law are civil, as opposed to criminal, proceedings.
The standard of proof of facts, accordingly, is the civil
standard, based on the balance of probabilities, as
contrasted with the criminal standard which requires
proof beyond reasonable doubt. Even where, as
sometimes in disciplinary proceedings, the language
of the Act or regulations has a criminal flavour,
speaking of 'offences', 'charges' and 'punishments',
the standard of proof remains the civil standard.

But the civil standard is flexible, so that the degree

of probability required is proportionate to the nature
and gravity of the issue. Where personal liberty is at
stake, for example, the court will require a high
degree of probability before it will be satisfied as to
the facts justifying detention; and the requirement
will not be much lower in matters affecting livelihood
and professional reputation, or where there is a
charge of fraud or moral turpitude.'

It should be remembered that the question of standard

of proof is closely connected with the question of
finding of facts.”

In applying the decisions of court from outside the jurisdiction, the

courts are mindful that there are different laws prevailing and the local

statutes must be adhered to. In Viking Askim Sdn Bhd v National Union

of Employees in Companies Manufacturing Rubber Products & Anor 20,

Edgar Joseph Jr , High Court Judge (as he then was) held as follows:

20 [1991] 2 MLJ 115 per Edgar Joseph Jr J at pages 121 and 122.

15
“A final point must be made. It was argued by way of
alternative, by counsel for the union that if, contrary to
his primary submission, there was no legal basis in
employment law or under the collective agreement, for
the Industrial Court to have made the award
concerned, it was still open to the Industrial Court to
create rights and obligations which it considers
essential for keeping industrial peace. The following
passage in the judgment of Mukherjee J in Bharat
Bank Ltd Delhi v. Employees of the Bharat Bank Ltd
Delhi cited with approval by Chang Min Tat FJ in Dr. A
Dutt v. Asunta Hospital at page 312 was quoted :

'In settling disputes between employers and workmen

the function of the Tribunal is not confined to
administration of justice in accordance with law. It
can confer rights and privileges on either party which
it considers reasonable and proper, though they may
not be within the terms of any existing agreement. It
has not merely to interpret or to give effect to the
contractual rights and obligations of the parties. It
can create new rights and obligations between them
which it considers essential for keeping industrial
peace.'

In reply, counsel for the company submitted that

Chang Min Tatt FJ's approval of the passage in
Mukherjee J's judgment was only obiter and that the
learned judge had loosely adopted the reasoning in
certain Indian decisions. As for the Indian decisions,
counsel argued that an uncritical adoption of them
could be misplaced because industrial jurisprudence
in India is very much influenced by the Indian
Constitution and the statement of state policy therein,
known as the Directive Principles of State Policy
contained in Part IV of the Indian Constitution, art 36
et seq. (See Basu's Commentary (6th, Ed, 1981 (Vol E)
at p 79). To illustrate the role played by the Directive
Principles in decision making in a labour dispute,
counsel also cited the cases of State of Mysore v.
Workers at p 928 and Workman Shift In Charge v.

16
Presiding Officer Industrial Tribunal Delhi. He then
drew attention to the case of Phang Chin Hock v. PP
where Suffian LP in making a comparison between the
Indian and Malaysian Constitutions listed the Directive
Principles as one of the distinguishing features
between the two documents.

Having said that counsel acknowledged that the

Directive Principles may carry laudable concepts, but
the question was whether it should not be left to
Parliament to decide whether these principles should
infuse our labour legislation rather than for the courts
to import them vicariously by the adoption of Indian
decisions without qualification.

...

Secondly, the dicta to be found in the judgments in the

Indian cases on the functions and powers of Industrial
Tribunals referred to by the Federal Court in Dr. Dutt's
case, are based not on art 38 of the Indian
Constitution and its Directive Principles of State Policy,
as argued by counsel for the company, but on the
following statement by Ludwig Teller in his book,
entitled Labour Disputes and Collective Bargaining (Vol
1) at p 536 :

'Industrial arbitration may involve the extension of

an existing agreement, or the making of a new one or
in general the creation of new obligations or the
modifications itself with interpretation of existing
obligations and disputes relating to existing
agreements.'

On the contrary, I am satisfied that the power of the

Industrial Court to create new rights and obligations is
derived from sub-ss (4), (5) and (6) of s.30 of the
Industrial Relations Act 1967 (reproduced above),
though, it goes without saying, that this is a power
which must be exercised reasonably and not
arbitrarily.”

17
 The Industrial Court has established principles on job security.

Prior to the Minimum Retirement Age Act 2012 which came into force on

1 July 2013, the Industrial Court held that in the absence of a

retirement clause in the contract of employment, an employer could

impose a retirement age for its employees which was reasonable. In

Colgate Palmolive (M) Sdn Bhd v Yap Kok Foong 21 , Lim Heng Seng,

Chairman of the Industrial Court held at pages 854 to 855 as follows:

“In a s.20 reference a workman's complaint consists of

two elements; firstly, that he has been dismissed and
secondly that such dismissal was without just cause or
excuse. It is upon these two elements being
established that the workman can claim his relief to
wit an order for reinstatement which may be granted or
nor at the discretion of the court.

As to the first element, industrial jurisprudence as

developed in the course of industrial adjudication
readily recognises that any act which has the effect of
bringing a contract employment to an end is a
dismissal within the meaning of s.20 of the Act. The
terminology used and the means resorted to by an
employer is of little significance; thus contractual
terminations, constructive dismissals, non-renewals of
employment contracts, forced resignations and
retrenchments are all species of the same genus which
is dismissals. Retirement likewise is also a dismissal
for the purpose of industrial adjudication under s.20 of
the Act.

In this context, the term 'dismissal' carries no

implication of fault or breach of discipline, but purely a
21 [1998] 3 ILR 843

18
neutral meaning indicative of the termination of an
employment relationship at the instance or behest of
the employer. This is in contrast with its common
usage of the term in association with some justificatory
reason for the employee's termination, e.g. misconduct,
poor performance or breach of conduct.

When an employee's services have been terminated on

the grounds that he had attained his retirement age,
the just cause or excuse advanced by an employer
when the termination is challenged will invariably be a
justification based on a contractual provision. An
employer will point to the agreement signed between
the parties or to a usage or custom in a particular
trade to establish his just cause. Or, where an
employer is in the position to do so, he might rely on
an implied term. The parties to that agreement have
agreed, expressly or impliedly, that unless the
employee misconducted himself or failed to perform his
work satisfactorily, he shall be engaged in the service of
the employer until the former attains the stipulated
retirement age. Like an employee in a genuine fixed
term contract of employment who leaves at the
expiration of his fixed term, the retired employee has
completed his engagement with his employer for a
definite term on which event he gracefully retires. that
is just cause enough for an employer to formally bring
an end to their employment relationship.

In this case, however, the company is unable to rely

upon a contractual provision stipulating that the
claimant ought to retire at 55. When retired one year
and three months after he attained that age the
claimant complains that he had been dismissed
without just cause or excuse. He claims that
employees in his category normally retire at 60. The
court is of the opinion that the claimant ought to be
permitted to contend that in the absence of a
contractually agreed retirement age, he is entitled to
work up to the normal retirement age of employees in
his category. This requires a determination of what
that normal retirement age is, an issue which the court

19
 will now address.

The non-existence of a retirement clause in an

employment contract cannot mean that no employer
can ever bring an employee's service to an end by
retiring him at a certain retirement age, or that such
an action would tantamount to dismissal without just
cause or excuse. The court has to constantly remind
itself - and the parties before it - that in reference
under s.20, the true question posed to the court for
adjudication is not whether a termination of an
employee's services services is lawful in that it was
pursuant to a contractual provision or otherwise, but
whether the same was for just cause or excuse. A
justification based on contractual grounds might be a
relevant factor; however, it will certainly not be
conclusive of the matter.

A fundamental aspect of industrial adjudication is the

proposition that the function of the court is not
confined to interpreting and giving effect to the
contractual rights and duties or obligations of the
parties. The court must have the authority to
recognise and even create rights which exists
independently of the contract whenever the justice of
the matter requires were the court to meaningfully
perform the statutory function entrusted to it in the
realm of industrial relations, in particular in the
resolution of the claims arising out of the conflicting
demands, interests and aspirations of the disputing
parties.”

The Court of Appeal22 upheld the decision of the Industrial Court in

that case. Gopal Sri Ram , Court of Appeal Judge (as he then was) held

at page 16 as follows:

22 Colgate Palmolive (M) Sdn Bhd v Yap Kok Foong and another appeal [2001] 3 CLJ 9

20
“This, in my view, is a perfectly correct direction. It
has the support of the decision of the House of Lords
in Waite v. Government Communications Headquarters
[1983] ICR 653, an authority referred to be the learned
Chairman in his award. In Waite (ibid), Lord Fraser
summed up the principle applicable to a case as the
present as follows (at p. 662):

'I therefore reject the view that the contractual

retiring age conclusively fixes the normal retiring age.
I accept that where is a contractual retiring age,
applicable to all, or nearly all, the employees holding
the position which the appellant employee held, there
is a presumption that the contractual retiring age is
the normal retiring age for the group. But it is a
presumption which, in my opinion, can be rebutted
by evidence that there is in practice some higher age
at which employees holding the position are regularly
retired, and which they have reasonably come to
regard as their normal retiring age. Having regard to
the social policy which seems to underlie the Act -
namely the policy of securing fair treatment, as
regards compulsory retirement, as between different
employees holding the same position - the expression
'normal retiring age' conveys the idea of an age at
which employees in the group can reasonably expect
to be compelled to retire, unless there is some special
reason in a particular case for a different age to
apply. 'Normal' in his context is not a mere synonym
for 'usual'. The word 'usual' suggests a purely
statistical approach by ascertaining the age at which
the majority of employees actually retire, without
regard to whether some of them may have been
retained in office until a higher age for special
reasons such as a temporary shortage of employees
with a particular skill, or a temporary glut of work, or
personal consideration for an employee who has not
sufficient reckonable service to qualify for a full
pension. The proper test is in my view not merely
statistical. It is to ascertain what would be the
reasonable expectation or understanding of the
employees holding that position at the relevant time.
The contractual retiring age will prima facie be the

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 normal, but it may be displaced by evidence that it is
regularly departed from in practice.”

The future

The nature of work and employment relationships is constantly

evolving. Where the nature of work and employment relationships is

transnational, issues on the jurisdiction of the Industrial Court have

arisen23. The use of technology has also changed the landscape of work

and employment relationships. It is anticipated that new issues on the

jurisdiction of the Industrial Court will arise. There could be an

overlapping of jurisdictions in such cases.

These trends provide further impetus for a comparative approach

in judicial decision-making in Malaysia.

Dated : 2 August 2013.

23 Kathiravelu Ganesan and another v Kojasa Holdings Bhd[1997] 2 M.L.J 685 (Supreme Court). The highest
court has been renamed as the Federal Court; Nacap Asia Pacific Bhd v Jeffrey Ronald Pearce and another
[2011] 5 CLJ 791 (High Court).

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