INDUSTRIAL COURT AWARD - AWARD NO : 767 OF 2003 : DESARU IMPIAN RESORT / GHAHAS (M) SDN. BHD. [In Liquidation] (Substituted as a Party by Order of Court dated 21 May 2003) AND MALKIT SINGH A/L RAM SINGH

INDUSTRIAL COURT OF MALAYSIA

CASE NO. 14/4-164/01

BETWEEN

DESARU IMPIAN RESORT /

GHAHAS (M) SDN. BHD. [In Liquidation]

(Substituted as a Party by Order of Court dated 21 May 2003)

AND

MALKIT SINGH A/L RAM SINGH

AWARD NO : 767 OF 2003

Before : PUAN SOO AI LIN - CHAIRMAN

Venue : Industrial Court, Malaysia

Kuala Lumpur

Date of Reference : 16 January 2001

Dates of Mention : 23 April 2001, 21 May 2001, 26 November 2001, 9 August 2002, 10 February 2003,
                             24 February 2003 & 7 July 2003

Dates of Hearing of Application : 2 May 2003 & 31 July 2003

Date of Hearing : 10 September 2003

Date of receipt of Written Submission : Nil

Representation : Liquidators for Company - absent

                         Claimant in person

Reference : This is a reference under section 20(3) of the Industrial Relations Act 1967 arising

out of the dismissal of Malkit Singh a/l Ram Singh (“the Claimant”) by Desaru Impian Resort/Ghahas (M) Sdn. Bhd. [In Liquidation] (“the Company”)

AWARD

The parties to the dispute are Desaru Impian Resort/Ghahas (M) Sdn. Bhd. (In Liquidation) (“the Company”) and Malkit Singh a/l Ram Singh (“the Claimant”). The Claimant alleges that he was

constructively dismissed by the Company on 10 July 2000 without just cause or excuse.

The reference before this Court had proceeded on an ex-parte basis because the liquidators for Ghahas (M) Sdn. Bhd. which owns Desaru Impian Resort had elected not to defend the matter. They had discharged Messrs Allen & Gledhill from representing them as solicitors in the morning of 10 September 2003 just before the commencement of hearing for the reason that the Company had been wound up and was not in a financial position to incur legal costs. They stood by their averment in the Amended Statement in Reply that they do not admit the Claimant’s claim and that the Claimant is put to strict proof thereof.

The Claimant was also not legally represented and had appeared in person.

Facts and Evidence

The facts of the case are primarily derived from the documentary evidence as adduced before the Court by the Claimant. They are as follows. The Claimant commenced employment with the Company effective 15 November 1999 as its Executive Western Chef Grade C-II in the Preparation Department of the Resort at a monthly salary of RM6,000.00 vide letter of appointment dated 5 November 1999 (CLB p.18 – 23). He was placed on probation for a period of 6 months which was to expire on 15 May 2000.

Three months into the probationary period, the Company, vide a letter dated 10 February 2000 (CLB p.12), informed the Claimant that it was happy with his performance and thereby promoted him to the position of Chef Patron Grade C-II effective 15 February 2000. In his new position he was to cover also the Food & Beverage Department. With the promotion came a salary adjustment from RM6,000.00 to RM7,500.00 with all other expressed and implied conditions of employment in CLB p.18-23 remaining the same. But the promotion was a conditional promotion. In the later part of the second paragraph of CLB p.12 the Company had stated –

“ In this regard, your performance will be evaluated three (3) months later for a confirmation in this new position. Likewise, if you fail to meet the company’s expectation for this new position, you will be reverted to your former position with the same terms and conditions attached thereto. ”. (Emphasis added).

It is evident from the above that the Company had placed the Claimant on probation as Chef Patron from 15 February 2000 to 15 May 2000. On 5 June 2000, the Company through the Resort’s Resident Manager Mr. Daniel Ra carried out a performance appraisal on the Claimant. In consequence thereof his probationary period was extended for a further period of one month as from 15 May 2000. At the end of the extended probationary period on 15 June 2000, the Company, vide a letter of even date (CLB p.11), informed

the Claimant that it was unable to confirm him in his promoted position because of a lack of improvement on his part in areas highlighted by the Company. CLB p.11 went on to state :

“ Therefore, you will be reverted to your former position, Executive Western Chef, with former terms and

conditions of employment as of Friday, 16th June 2000. Respectively, your basic salary shall be reverted to

RM6,000.00 per month as of 16th June 2000. ”.

The Company also stated vide its letter dated 16 June 2000 (CLB p.7) that “as promised verbally” the Claimant’s basic salary had been revised from RM6,000.00 per month to RM6,500.00 effective the same day. This was stated to be in reply to the Claimant’s inquiry with regards to his confirmation increment as Executive Western Chef. The Claimant, needless to say, was extremely displeased and refused to accept the Company’s decision as per CLB p.11. He responded by issuing CLB p.10 and CLB p.9 dated 16 June 2000 and 17 June 2000 respectively wherein he expressed his dissatisfaction over his non-confirmation as Chef Patron. In CLB p.9 he raised the following issues :

“ 1. Tidak ada surat rasmi dari pihak majikan yang menyatakan saya dilanjutkan tempoh percubaan atau
       jawatan saya yang disahkan oleh pihak majikan.

2. Pemotongan gaji sebanyak RM1,500.00 dan penurunan pangkat kepada jawatan asal.

3. Adanya sesuatu yang dirancang oleh pihak majikan agar saya secara tidak langsung berhenti kerja
    mengikut akta Seksyen 20 (Constructive Dismissal).”.

The Company vide its reply dated 20 June 2000 (CLB p.6) denied the aforesaid and clarified its position. To facilitate a consideration of the case on its substantial merits, it is pertinent to reproduce CLB p.6 whose contents are instructive. It reads as follows :

PRIVATE & CONFIDENTIAL

Date : 20th June 2000

Our Ref : DIR-EXEC/MALKIT/03

Mr. Malkit Singh a/l Ram Singh

Executive Western Chef

Food Preparation Department

Employee No. 104203

Dear Mr Malkit,

RE : NON CONFIRMATION OF PROMOTION AS CHEF PATRON

We refer to your letters dated 16th and 17th June 2000 concerning the above mentioned matter and regret to inform you that our decision on the subject is final. In reply to your letter dated 17th June 2000, please refer to the following:-

1. The Appraisal was made by Mr. Daniel Ra, the Resident Manager on 5th June 2000 in your presence,
    whereby you were informed that your probation period is extended for another one (1) month and the
    appraisal had indicated the weaknesses in the areas that need further improvement. The appraisal was
    acknowledged and signed by your good self on the same day and this is deemed as official although a
    follow up letter was not extended to you.

2. As per our letter of promotion dated 10th February 2000, we had clearly indicated that your promotion

    is subject to your performance. Should you fail to meet the company’s expectation for the new position,
    you will be reverted to your former position as Executive Western Chef with the same terms and
    conditions. As such, this non-confirmation of promotion as Chef Patron is not a demotion and neither was
    your salary deducted.

3. We wish to confirm that it was never an intention of the company to make you resign by reverting you to
    your former position. Instead, you were confirmed in your former position as Executive Western Chef as
    of 16th June 2000 with an increment as promised.

We hope the above clarifies the entire situation. Please continue to extend us your fullest cooperation.

Thank you.

Yours faithfully,

DESARU IMPIAN RESORT,

THIRY CAMILLE

General Manager

s.k : Pengarah Jabatan Perhubungan Perusahaan Johor. ”.

As the Company remained firm in its decision, the Claimant vide letter dated 10 July 2000 (CLB p.4) tendered his resignation to take effect within twenty-four (24) hours. He stated that by reverting him to his previous position with salary deduction the Company had breached his contract of employment vide CLB p.18-23. He claimed constructive dismissal but nevertheless intimated that he was prepared to leave his options open should the management change its mind and reinstate him to the position of Chef Patron.

The Company once again responded and vide its reply dated 14 July 2000 (CLB p.3) maintained that it had not breached any of the terms and conditions of the Claimant’s contract of employment. Rather it was the Claimant who decided to leave by giving 24 hours notice. The Company stated that since it did not terminate his service, the Company was prepared to reinstate the Claimant to his previous position as Executive Western Chef and that he was to report for work on 24 July 2000. Failing that, the Claimant would be deemed to be not interested in which case he was to indemnify the Company for 2 months wages in lieu of notice.

This offer of the Company was unacceptable to the Claimant. Vide his letter dated 21 July 2000 (CLB p.1) he counter offered by saying that he would report for work only if he was reinstated as Chef Patron with existing salary of RM7,500.00 and an increment of RM500.00 as promised; alternatively, as Executive Western Chef but on the same pay as Chef Patron; or lastly the Company to make an outright payment to him of RM40,000.00 or five months salary. The Company appears to have rejected the counter offer. Before this Court the Claimant confirmed that he wanted to be reinstated in his former position as Chef Patron.

The Claimant’s contentions which constitute the very issues before this Court and which he also submitted at the hearing are clearly identified when he clarified to the Company in CLB p.1 his stand as follows :

“ 1. I have been confirmed as Chef Patron position according to my letter of appointment under clause 3. 

I have checked the clause very carefully with the Director of Jabatan Perhubungan Industri and my lawyers, which clearly states that not later than my probationary period, i.e. 14th May 2000, I shall be informed by writing should there be any extension of my probation otherwise, it is deemed to be confirmed. In this case I was not informed of any extension and instead was given good recommendation for confirmation.

2. My parting from your office is strictly a constructive termination due to reason best known to you.

3. By reverting me to my previous position as Executive Western Chef and salary deduction, you have clear
    intentions to demote my position and such actions are totally contradicting and breaching my letter of
    appointment, as a confirmed staff.

4. With reference made to my letter dated 10th. June 2000, the word re-instate refers to my present
    position, i.e. Chef Patron. ”.

The Issues, the Law and Findings

In light of the facts and evidence as elicited above and the contentions raised by the Claimant, the Court is called to determine two main issues –

(1) whether the Claimant in his position as Chef Patron was a confirmed employee or otherwise; and

(2) whether the Claimant had been constructively dismissed or did he resign voluntarily. The ensuing question
      would be if the Claimant had been constructively dismissed, is the dismissal with a just cause or excuse?

The Court now deals with issue (1). It is clear from the Claimant’s contention in paragraph 1 of CLB p.1 that his premise for deeming himself confirmed as Chef Patron at the end of his 3 month probationary period is the Company’s purported failure to comply with clause 3 of his letter of employment (see CLB p.18-23). Under the heading “Confirmation of Employment” clause 3 states :

“ Not later than the end of the probationary period, initial or extended as the case may be, you will be notified in writing whether or not you are confirmed to be a permanent staff of the establishment. ”.

It is the Claimant’s evidence that at the end of the probationary period of 3 months there was no letter to extend his probationary period by another one month. Neither was he given a letter of confirmation by the Company. It is his submission that paragraph 1 of CLB p.6 does not apply because Mr. Daniel Ra did not mention in the performance appraisal of 5 June 2000 itself that his probation period had been extended by another one month. The Resident Manager had only told him verbally on 26 May 2000 (see CLB p.1) that he was considering extending his probation period for another one month. As such, in accordance with clause 3 he had considered himself confirmed as Chef Patron on 14 May 2000.

With respect to the Claimant, his submission that the performance appraisal did not disclose the further extended probation period of one month is not correct. This Court had scrutinized the Employee Performance Appraisal of 5 June 2000 exhibited as CLB p.13 in his bundle of documents. The figure “1” was clearly inserted in the space provided as against the box “probation period be extended for another – month(s)” in the portion under “RECOMMENDATION”. And CLB p.13 had borne the signatures of Mr. Daniel Ra as the Resident Manager and Mr. Camille F Thiry as the General Manager of the Company. It would appear on the evidence that the Claimant had knowledge of his extended probationary period of one month. His grievance was that it was not communicated to him officially in writing in accordance with clause 3 of his letter of employment.

In any event, irrespective of the Claimant’s contention, the law is clear i.e without an express confirmation from his employer, a probationer remains on probation even after his probationary period has expired. See the case of Soon Seng Industrial Products Sdn. Bhd. v. Metal Industry Employees Union [1998] 2 ILR 219; K.C. Mathews v. Kumpulan Guthrie Sdn. Bhd. [1981] 2 MLJ 320 (Federal Court); and V. Subramaniam & Ors. v. Craigielea Estate [1982] 1 MLJ 317 (Federal Court). Applying these authorities in the case of Azmi & Company Sdn. Bhd. v. Firdaus Musa [2000] 2 ILR 510, the Industrial Court held as follows :

“ Employees cannot assume confirmation in the absence of an express confirmation from his employer. Until he is expressly confirmed and if no action is taken by the employer, either by way of confirmation or by way of termination, he is assumed to continue in service as a probationer. ”.

The Claimant in the present case therefore cannot assume that he had been confirmed as Chef patron on 14 May 2000. This is all the more so in light of the discretionary powers conferred on the Company by clause 3 to extend his probationary period as evident from the words “initial or extended.”.

Notwithstanding the Company’s omission to issue him a letter extending his probation by another one month as from 15 May 2000, in the absence of an express confirmation by the Company, the Claimant remained a probationer in his position as Chef Patron throughout his initial and extended probationary period until the

confirmation of his non-confirmation by the Company vide CLB p.11. It is also in evidence vide the Company’s letters in CLB p.7 and CLB p.6, in particular paragraph 3 thereof, that the Company had

confirmed the Claimant as Executive Western Chef effective 16 June 2000 when it reverted him back to his former position. But based on the decision of the Court of Appeal in Abdul Majid Hj. Nazardin & Ors. v. Paari Perumal [2002] 3 CLJ 133, this Court finds that the Claimant had been confirmed much earlier on 14 February 2000 when the Company chose to promote him to the position of Chef Patron when he was serving his probationary period as Executive Western Chef. For by such promotion, the reasonable inference was that the Company was taking a position or must be deemed to have taken the position that the Claimant was confirmed. In Abdul Majid’s case, the defendants were deemed to have taken the position that the plaintiff was a confirmed employee when they granted him annual leave on six occasions after the expiry of his probation period which annual leave he would be entitled to only if he were a confirmed employee. The Court of Appeal had distinguished the cases of K.C. Mathews v. Kumpulan Guthrie Sdn. Bhd. (supra) and

V. Subramaniam & Ors. v. Craigielea Estate (supra) on the facts and circumstances of that case.

It is this Court’s finding that at the date of his alleged dismissal on 10 July 2000, the Claimant was a confirmed employee in the position of Executive Western Chef and not as Chef Patron. As Chef Patron, he was but a probationer.

As for issue (2), as evident from paragraph 3 of CLB p.1, the Claimant’s claim of constructive dismissal is based purely on the fact of his non-confirmation as Chef Patron. It is his submission that he suffered a demotion in job status when he was reverted back to his original position as Executive Western Chef coupled with a salary deduction of some RM1,500.00 a month. These, he submitted, amounted to a breach of his contract of employment. In the case of Anwar bin Abdul Rahim v. Bayer (M) Sdn. Bhd.

[1998] 2 MLJ 599 the Court of Appeal at p.605 stated –

“ It has been repeatedly held by our courts that the proper approach in deciding whether constructive dismissal has taken place is not to ask oneself whether the employer’s conduct was unfair or unreasonable (the unreasonableness test) but whether ‘the conduct of the employer was such that the employer was guilty of a breach going to the root of the contract or whether he has evinced an intention no longer to be bound by the contract’. (See Holiday Inn, Kuching v Elizabeth Lee Chai Siok [1992] 1 CLJ 141 and Wong Chee Hong v Cathay Organisation (M) Sdn. Bhd. [1988] 1 MLJ 92 at p 94). ”.

The Industrial Court in the case of Hotel Malaya v. Goh Hock Fong @ Goo Hak Pong [1994] 2 ILR 810 had spelt out at p. 814 the proper approach to be taken in a claim for constructive dismissal as

follows :

“ The basic starting point in this inquiry is to ask what are the terms which the employer is alleged to have

breached. Having identified the terms, the next issue to consider is whether the said terms were essential terms of the contract of employment. The Court will then have to assess the evidence adduced before it to determine whether or not the Hotel had by its conduct committed such a breach of the contract as to entitle the Claimant to consider that he had been dismissed. ”.

It is trite law that in a claim of constructive dismissal, it is incumbent upon the employee to establish on a balance of probabilities that the employer’s conduct amounts to a fundamental breach which went to the very root of his contract, or that by such conduct the employer had evinced an intention no longer to be

bound by the contract, thereby entitling him to resign. (See Tan Cheng Hing v. Federal Metal Printing Sdn. Bhd. & Anor [1999] 3 MLJ 564 at p.573; DCB Bank Berhad v. Lim Siew Wai [1998] 1 ILR 63 at p.69).

In line with the aforesaid authorities, in determining whether the Claimant was dismissed albeit constructively, this Court will have to ask itself what is or are the terms which the Company is alleged to have breached in the instant case. With due respect to the Claimant, bearing in mind his status as a probationer in the post of

Chef Patron, this Court could fine none in the circumstances of the case.

The documentary evidence adduced before the Court clearly speak for themselves. The Claimant’s promotion to the position of Chef Patron was a conditional promotion as stipulated in CLB p.12. It was subject to his good performance and for that reason he was placed on probation. Having failed to meet the Company’s expectation for this new position, the Claimant cannot complain if he was not confirmed and had to to revert back to his former position as Executive Western Chef with the same terms and conditions

attached thereto. For all these are perfectly in consonance with the terms and conditions contained in CLB p.12. It is this Court’s opinion that the Company was justified to state as it did in paragraph 2 of CLB p.6 when refuting the Claimant’s allegation of constructive dismissal. To reiterate, the Company had rightfully

maintained the following :

“ 2. As per our letter of promotion dated 10th February 2000, we had clearly indicated that your promotion is subject to your performance. Should you fail to meet the company’s expectation for the new position, you will be reverted to your former position as Executive Western Chef with the same terms and conditions. As such, this non-confirmation of promotion as Chef Patron is not a demotion and neither was your salary deducted. ”.

This Court finds as a fact that there was no breach by the Company of CLB p.12 and in the final analysis, no breach of the contract of employment in CLB p.18 – 23. It would appear from the Claimant’s oral submission before the Court that he was unable to accept the Company’s poor assessment of his performance. He maintained that he had done well as Chef Patron and believed that he should be confirmed. He referred the Court to CLB p.4 in respect of his conversation with the Resident Manager on 26 May 2000 and with the General Manager on 12 June 2000 where he claimed he was given the assurance that he would be confirmed. With respect, it is not for this Court to determine whether the Claimant ought or ought not to be confirmed as Chef Patron. That is a matter solely within the purview of the Company as the Claimant’s employer. Under the circumstances, this Court is satisfied that the Claimant had failed to prove on a balance of probabilities that he had been constructively dismissed by the Company. The Court finds as a fact that there was no dismissal of the Claimant by the Company. It follows that the issue of whether he had been dismissed with just cause or excuse too does not arise at all.

Conclusion

Having come to a finding of fact that there was no dismissal in the present case, it is patently clear to the Court that by issuing his 24 hours notice on 10 July 2000, the Claimant had voluntarily resigned from the service of the Company. The Claimant’s claim of unjust dismissal is accordingly dismissed.

HANDED DOWN AND DATED 30 SEPTEMBER 2003

( SOO AI LIN )

CHAIRMAN

INDUSTRIAL COURT