Dealing with Workplace Misconduct

Integrity, Reliance & Relationship
Rajeswari Karupiah & Co.
Managing Workplace
Misconduct

What is Misconduct?
BR Ghaiye:
Misconduct is not a term of art… If the conduct of
an employee is of such a character that he is not
regarded as worthy of employment it may… be
liable to be called misconduct.

Pearce v. Foster (1886) 17 QBD 536
Per Lopes LJ:
“If a servant conducts himself in a way inconsistent
with the faithful discharge of his duty in the service,
it is misconduct which justifies immediate
dismissal…”

Lewis v. CW Railway Co [1877] 3 QBD 195
“… the doing of something or the omitting to
do something which is wrong to do or omit…”

Types of Misconduct
 Minor
 Major
 Criminal

Minor Misconduct
 Occasional late coming
 Smoking in non-smoking area
 Negligence in performance of duty
 Non-adherence to SOPs

Major Misconduct
 One that is serious enough to warrant dismissal
 Dishonesty
 Gross insubordination
 Theft
 Threatening behaviour
 Assault of superior

Criminal misconduct
 Actions that warrant a police report and attracts
criminal prosecution
 Theft
 Cheating
 Stealing
 Sabotage
 Tampering with employer’s property

What are the Characteristics of Misconduct?
 ESSO Production Malaysia Inc v Md Yusop
Nordin [1997] 2 ILR 711
 Inconsistent
 Prejudicial
 Unsafe
 Grossly immoral
 Difficult

Characteristics of Misconduct
 Peace Disturbing
 Insulting
 Insubordinate
 Negligent

 Absenteeism
 Less than 2 days – minor?
 More than 2 days – Employment Act 1955
 Habitual absenteeism
 Tardiness – similar treatment as absenteeism
Examples of Misconduct

 Excessive medical leave
 In excess of authorised limit
 No proof of illness

 Defences to Absenteeism
 Unavoidable reason
 Condonation

 Disobedience / Insubordination
Intrakota Komposit Sdn Bhd v. Kdr (B)
Mohamed Bakar Mansor [2001] 2 ILR
523

Intrakota Komposit…
Industrial Court:
“It is abundantly clear from the authorities that for
disobedience to be a misconduct it must be grave
and wilful and the burden of proof is on the
employer to establish that the workman was
disobedient and that such disobedience was wilful”

Defences
• where employer’s instruction was unlawful/ unreasonable
• Supply Oilfiled Services Sdn Bhd, Labuan v. Abdul
Wahap Baki [1998] 2 ILR 78
• Ngeow Voon Yean v. Sungei Wang Plaza Sdn Bhd /
Landmarks Holding Bhd [2006] 3 CLJ 837

Ngeow Voon Yean v. Sungei Wang Plaza Sdn Bhd /
Landmarks Holding Bhd [2006] 3 CLJ 837
If an employee is doubtful whether the order is legal, the proper
course is for the employee is to obey the order first and to
challenge its legality in separate proceedings.
If the law allows the employee to disobey any order he thinks is
not legal, it would be impossible for the management to maintain
discipline and industrial peace.
He can point out his difficulties, if any, to the superior and if the
latter insists on the order being carried out, he can do the work
and take the matter further in proceedings against his employer or
to complain to his union. If he disobeys, he must take the risk if
the court finds the order to be lawful and reasonable.”

Supply Oilfiled Services Sdn Bhd, Labuan v.
Abdul Wahap Baki [1998] 2 ILR 78
Facts
The claimant was employed as a foreman at the time
of the dismissal. The company had dismissed him
based on two charges, namely:
(i) the claimant was said to have refused to obey the
instructions of his superior.
(ii) it was alleged that the claimant had failed to
report to work on several occasions.

Supply Oilfield Services…
Held:
“There is merit in the submission made on behalf of the claimant
that the claimant had in these circumstances been subjected to
instructions which were not within the scope of his duties as a
foreman. In the circumstances they were calculated to humiliate
him and lower his esteem in the sight of his colleagues.
Having been directed to do chipping work together with other
rigging under the supervision of another foreman, the claimant a
foreman was unceremoniously summoned to perform other
rigging duties. This was adding insult to injury and the court is
of the view that the claimant was justified in these
circumstances to refuse to comply with COW2’s instructions.”

Kong Seng Chai V. Perusahaan Otomobil Nasional
Sdn Bhd Award No. 465 Of 2017
Facts
The claimant had been employed by the company as the
General Manager-Supply Chain Management. Approximately
a year and a few months into his employment with it, he was
issued a show cause letter for charges, inter alia, of being
insubordinate, ie. by his actions of failing to wear a necktie,
despite being instructed to do so, and for failing to make a
presentation to the Task Force Customer Complaint Meeting.

Kong Seng Chai …
• Charge 1
In view of the importance of the Task Force Customer
Complaint Meeting that was held on 29 August 2012 at 9.30
a.m. at VIP Lounge, COE; and the presentation you were to
make to the Deputy Chief Executive Officer, it was incumbent
upon you as a staff holding a General Manager position to
ensure that you were properly attired by wearing a necktie
when you attend the said meeting.
You failed to wear a necktie and had thereby acted
disrespectfully.

Kong Seng Chai …
• Charge 2
At the Task Force Customer Complaint Meeting that was held
on 29 August 2012 at 9.30 a.m. at VIP Lounge, COE, the
Deputy Chief Executive Officer commented on your failure to
wear a necktie and you were instructed by the Deputy Chief
Executive Officer to get a necktie. It was clear and implied
from his instruction that you were to return to the said meeting
wearing a necktie and to make your presentation.
You left the meeting at about 9.36 a.m. and failed to return to
the said meeting to make the presentation. In doing so, you
had been insubordinate and disobedient.

Kong Seng Chai …
• Charge 3
In failing to make the presentation at the Task Force
Customer Complaint Meeting that was held on 29th
August 2012 at 9.30 a.m. at VIP Lounge, COE, you
had also disobeyed the instruction of Encik Abdul
Rashid Musa, Sector Head Technical Operations
where the instruction was given earlier to you during
the Preparatory Meeting on 28 August 2012 between
2.30 p.m. to 4.30 p.m. at his Office.

Kong Seng Chai …
Held for the company: dismissal with just cause
and excuse
The company had succeeded in proving the
misconduct of the claimant, which had justified his
termination. Although his actions of not wearing a
necktie for the meeting could be viewed as a minor
misconduct, what had ensued after the meeting had
constituted serious misconduct and it had been a
reflection of his attitude of not being able to accept
his superior's instructions. His actions had amounted
to serious acts of insubordination and disobedience.

More Examples of Misconduct
 Abusive language
 May be treated in similar fashion as fighting
at workplace
 Defences
 Isolated incident
 Provocation
 Length of services
 Previous service record

 Steelform Industries Malaysia Sdn Bhd v Foo
Fook Ban [1991] 1 ILR 442
“…whilst the claimant had committed a
serious offence, he had been greatly provoked
by what he thought was an accusation that he
has misappropriated money belonging to his
fellow workers.”

 Negligence
 Employee to exercise reasonable care and
skill
 Jupiter General Insurance Co Ltd v Shroff
[1973] 3 All ER 67 – “… the standards of
those of men and not those of angels”.

 Rank Xerox Ltd v Chong Siew Sing @ Hong
Lian Hwa [1989] 1 ILR 594
“… a single act of negligence by an employee
may justify dismissal if it is so gross or the
consequences of further error are so serious…”

Investigation
 What are the purposes of investigation?
 Fact-finding
 To find out if employee has a case to
answer

 What are the methods of investigation?
 Interview
 Record statements
Investigation

Suspension
 What are the purposes of suspension?
 Facilitate investigation
 Prevent tampering of evidence
 Prevent commission of further offence
 Enable employee to prepare defence
 Prevent sabotage

 Suspension according to
 Employment Act 1955
14 days on half pay
 Employment contract
 Contract silent?
Advisable to suspend on full-pay
Suspension

 Implications of suspension
 Accusation of victimisation
 Claim of constructive dismissal
 PLUS Bhd v. Mohd Shukri Ngah [2001] 2
ILR 10
Suspension

PLUS Bhd v Mohd Shukri Ngah [2001] 2 ILR 10
Facts
The claimant worked for the company as a superintendent in
the traffic department. The company alleged that he had
committed three acts of dishonesty and suspended his services
for 14 days on half pay pending inquiry. His suspension period
was extended, but on full pay. The claimant subsequently left
the company, claiming that he had been constructively
dismissed on the ground that the company allegedly breached
a fundamental term of his contract by deducting, without his
consent, his pay by half pay during the initial 14 days of his
suspension.

PLUS Bhd…
Held:
• There was no specific provision, express or implied,
which would empower the company to suspend the
claimant on half pay pending the domestic inquiry.
There was no evidence to show that the company
had made known to the claimant the relevant rule,
regulation, procedure, practice or policy which was
to be read as a term of his contract, and which
empowered the company to suspend the claimant on
half pay.

• By effecting the said suspension, the company did
commit a fundamental breach of the claimant’s
contract of employment. To unilaterally deduct the
pay of an employee without his consent is a serious
breach. If the suspension had been on full pay then
it may be a different story altogether.
PLUS Bhd…

 What is the implication of a defective charge?
 ESSO Production (M) Inc v Maimunah
bte Ahmad & Anor [2002] 2 MLJ 45
Charge

 Telekom Malaysia Kawasan Utara v Krishnan
Kutty Sanguni Nair [2002] 3 CLJ 314
“… it is quite clear to us that the Industrial
Court should not be burdened with the
technicalities regarding the standard of
proof, the rules of evidence and procedure
that are applied in a Court of Law”.
Implication of A Defective Charge

 See also
 Dreamland Corp (M) Sdn Bhd v Chong
Chin Sooi [1988] 1 MLJ 111
 Wong Yuen Hock v Syarikat Hong Leong
Assurance Sdn Bhd & Anor [1995] 3 CLJ
344
Implication of A Defective Charge

Domestic Inquiry
 What is domestic inquiry?
 A due inquiry that is conducted before any
punishment is meted out
 Employment Act 1955, Section 14

 What is the purpose of a domestic
inquiry?
 Opportunity for the employee to defend
himself
 Inquiry is conducted in an orderly manner
 Inquiry is completed expeditiously
Domestic Inquiry

 What are the guidelines of Domestic
Inquiry?
KJJ Cleetus v. Unipamol (Malaya) Sdn Bhd
Kluang (Award 66 of 1975):
 Earliest possible after suspension
 Particulars of misconduct to be documented
 Reasonable time for preparation
Domestic Inquiry

 Right of employee to be represented
 Impartiality of officers
 Examination of relevant witnesses
 Proceedings to be documented
KJJ Cleetus…

Punishment
 What are the types of Punishment?
 Warnings
 Withholding of benefits
 Suspension without pay
 Transfer
 Downgrading
 Demotion

 What are the factors to be considered?
 Gravity of misconduct
 Employee’s employment record
 Goodyear Malaysia Bhd v. National Union of
Employees in Companies Manufacturing Rubber
Products (Award No. 88 of 1986)
 Sugayindran a/l Vellasamy v. TNB Distribution
Sdn. Bhd. (Award No. 923 of 2008)
Punishment

 Provocation
 Felda Oil Products Sdn Bhd v Salleh bin
Mohayat (Award No. 92 of 1991)
 Disparity in punishment
 Bank Bumiputera Malaysia Bhd v Ghazali
bin Kassim [1995] 1 ILR 113
 Zainudin Md Ali v. Paling Industries Sdn
Bhd [2007] 1 ILR 124
Punishment

Bank Bumiputera Malaysia Bhd v Ghazali bin
Kassim [1995] 1 ILR 113
Facts
The claimant was the chief cashier in the employ of the
bank, and contends his dismissal, in sequel to an alleged
misconduct for dereliction of duty and negligence for failure
to supervise unauthorised withdrawals, is without just cause
or excuse. The claimant submitted that the company had
been inconsistent in its punishment of employees who had
committed similar acts of misconduct. He claimed the bank
had not imposed the extreme penalty of dismissal in other
cases of similar misconduct.

Bank Bumiputera Malaysia Bhd…
Industrial Court:
“…the disparity argument is fundamentally founded on the basis of
the principle of equity which requires an employer to treat sufficiently
like cases alike and which deplores any arbitrariness or uneven
handedness in the treatment of employees who have committed
similar offences in similar circumstances. The existence of such lack
of equity might well be reflected in the manner in which an employer
deals with a subsequent offender similarly circumstanced as the
claimant. In this regard it does not matter that the case which is
referred to as an example of inconsistent punishment occurred soon
after the claimant’s case so long as the offence is essentially similar
and the circumstances in which the two had occurred are also fairly
comparable.”

Zainudin Md Ali v. Paling Industries Sdn
Bhd [2007] 1 ILR 124
Facts
The claimant was employed by the company as a shift
supervisor, responsible for the night shift workers. The
claimant was caught gambling in a group of 8 workers
during the night shift, when he should have been attending to
the machines. The company issued suspension letters to all
the 8 employees concerned including the claimant. The
claimant was also issued a show cause letter, to which he
responded. The company was not satisfied with the
claimant's explanations and proceeded to terminate his
employment.

Zainudin Md Ali…
Industrial Court:
“The claimant also raised the issue of disparity in punishment.
COW2, the claimant's fellow worker was only punished with
(2) weeks suspension and (1) week without salary whereas the
claimant was dismissed from service. The principle of equity
and good conscience certainly requires employees who
behaved in much the same way to receive the same punishment.
Hence, if one person is penalized much more heavily then
another for a similar offence, then the employer has not acted
fairly. However, with respect, this principle is not applicable in
the instant case, as the facts…

Zainudin Md Ali…
…show that the claimant was the most senior employee at
the time and he had instigated the gambling. As such he was
a bad influence on the other workers and his dismissal
served as a warning to others. It is for this reason, his
punishment could not be the same as COW2, his junior co-
worker. In conclusion, for the reasons stated the court finds
that in all the circumstances of the case, that the
punishment imposed is commensurate with the gravity of
the misconduct proved against the claimant. Hence, the
dismissal is with just cause or excuse.”

 Double punishment
 Medipro Manufacturing (M) Sdn Bhd v. Siti
Azmah Mat Taib [1999] 1 ILR 449
Punishment

Medipro Manufacturing (M) Sdn Bhd v. Siti
Azmah Mat Taib [1999] 1 ILR 449
Facts
In this case the company had demoted the claimant from her position
as administrative and personnel manager in the personnel department
to executive in the same department with a reduction in salary. The
claimant contended that aside from the fact that the company had no
power to demote her the company had punished her twice because
prior to demoting her the company had also given her a severe
warning. She claimed since the date the warning had been given she
had not committed a fresh misconduct to entitle the company to
demote her. The company contended after being warned for two
misconducts the company discovered another misconduct committed
by the claimant which the company was not aware of at the time of
giving her the warning. Thus the demotion.

Medipro Manufacturing (M) Sdn Bhd…
Held:
“The court was satisfied that when the company demoted
the claimant it was not aware of her third misconduct. On
the balance of probabilities the court finds the company
discovered this after demoting the claimant. However, the
court is now well aware of the fraudulent action of the
claimant in ordering tickets for persons who had no
connection with the company…In the circumstances,
although the company was not aware that the claimant
had committed the third misconduct the court would hold
that her demotion was with just cause.”

Thank You All
rajeswari@rajeslawyer.com
Phone: 012-292 2494

Dealing with Workplace Misconduct

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