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UNIVERSITI PUTRA MALAYSIA

MASTER OF BUSINESS ADMINISTRATION

1998/99

INDUSTRIAL RELATIONS

Term Paper Industrial Relations

Between

Dr. A. Dutt

And

Assunta Hospital, Petaling Jaya

PREPARED BY:

Lee Chen Hoe GS00164

Lecturer: Prof.Dr.V. Anantaraman MA (Madras), Ph. D (Wisconsin) Certificate I.T.P (Harvard) Malaysian Graduate School of Management Universiti Putra Malaysia

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TERM PAPER ON INDUSTRIAL RELATIONS

INDUSTRIAL COURT OF MALAYSIA

CASE NO. 83 OF 1976

BETWEEN

DR. A. DUTT

AND

ASSUNTA HOSPITAL, PETALING JAYA

AWARD NO.178/79

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A. Introduction

This is a landmark case involving the sudden termination of the contract of

employment of a workman Dr. A Dutt a Radiologist claimed to be an unfair dismissal

without just cause or excuse by his employer, Assunta Hospital. A representation was

made under section 20(1) to the Director General to address the dismissal. When

reconciliation failed to reach a solution, the Director General under section 20(2)

provided referred to the Minister who in turn on May 4, 1976 made reference under

section 20(3) to the Industrial Court for a decision.

The applicant applied for writ of prohibition and to prevent Chairman of

Industrial Court from proceeding with hearing of the case. The hospital argued at all

stages of the proceedings. There was some delay in supplying grounds of decision and

delay of notice of appeal was the reasons for dragging out hearing in Industrial Court.

The Industrial Court handed down the award on Dec 22, 1979 but the hospital applied to

the High court to remove the award of the Industrial Court into the High Court for the

purpose of quashing it by writ of certiorari.

The High Court on Nov 21, 1980 quashed the award of Industrial Court. The

respondent made an appeal to the Federal Court for a writ of certiorari to quash the ruling

of the High Court and the hospital crossed appealed. The Federal Court re-affirmed the

decision of the Industrial Court it had not committed an ultra vires in the jurisdiction of

law in awarding that the respondent

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was a workman,

his dismissal was without just cause or excuse

the compensation of $522,000,00 in lieu of re-instatement was proper

Build Up of the Case

Dr. A. Dutt an Indian citizen was engaged by the Assunta Hospital as a radiologist

in the hospital. He was first engaged sometime in September, 1963 and the contract was

for a period of three years for a number of times until 1969 with the same term and

conditions. Before the expiry of the contract in September, 1969 the existing contract was

reviewed and the Hospital Board wrote to Dr.A.Dutt notifying of the certain proposed

changes to his contract valid for a further period of three years. Dr. A. Dutt accepted the

reviewed contract on Oct 20, 1970 and effective for three years until Aug, 1972. He

accepted the same when the contract whose terms and conditions were modified slightly

and offered to him. It was during this time the dispute of unfairness emerged between Dr.

A Dutt and the hospital administration.

A board meeting of the hospital on 27th November, 1975 resulted in forwarding a

letter to Dr. A. Dutt that reads thus:

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" The Board has been considering your contract and we feel that it should be

reviewed.

Accordingly, this letter will give you formal notice of termination. The

notice will commence on 1st December and the contract will terminate on 29th

February, 1976.

The Board however is prepared to consider entering into a new contract with you,

although the terms will not be quite the same as the existing contract."

The purpose of the letter was to renegotiate a new terms of employment. The new

terms unilaterally offer were contained in a letter dated January 21, 1976.Among the

terms stated in the latter included the downgrading of Dr. A Dutt from senior Consultant

and as Director of Radiology and Head of Department to consultant, and reduction of fees

payable to and paid by first class and private clinic patients which was payable to him

and reduction of other privileges. Dr. A Dutt declined to accept the terms. The hospital

regarded his employment contract terminate don Feb 29, 1976.

Representation to Director General of Industrial Relations

Dr. A Dutt felt he had been dismissed without just cause and excuse and made

representation in writing under section 20(1) of the Industrial Relations Act 1967. The

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Minister of Labour and Manpower under section 20(3) referred representation to

Industrial Court for a decision.

Sub-section of 20 provides:

" (1) Where a workman who is not a member of a trade union of workmen

considers that he has been dismissed without just cause or excuse by his

employer, he may make representation in writing to the Director General to be

reinstated in his former employment; the representation may be filed at the

office of the Director General nearest to the place of employment from which

the workman was dismissed.

(1A) The Director General shall not entertain any representation under

subsection (1) unless such representations are filed within sixty days of the

dismissal:

Provided that were a workman is dismissed with notice he may file a

representation at any time during the period of such notice but not later than

sixty days from the expiry thereof.

(2) Upon receipt of the representations the Director General shall take such

steps as he may consider necessary or expedient so that an expeditions

settlement thereof is arrive at; where the Director general is satisfied that there

is no likelihood of the representations being settled, he shall notify the Minister

accordingly.

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(3)Upon receiving the notification of the Director General under subsection (2),

the Minister may, if he thinks fit refer the representation to the court for an

award."

B. Writ of Prohibition In The High Court

While dismissal was referred to the Industrial Court for a decision, the hospital

applied to the High Court for a writ of prohibition to prevent the Chairman of the

Industrial Court from proceeding with the hearing on grounds that:

(1) the Industrial Court has no jurisdiction to order the Controller of Immigration

to issue a Visit Pass for temporary employment in place of a citizen;

(2) the Industrial Court does not have jurisdiction to hear the case, because it

cannot order the reinstatement of a non-citizen;

(3) the respondent Dr. a Dutt is not a 'workman' under the Industrial Relations

Act,1967 since the Doctor's contract with the applicant Hospital was a

contract for service and not a contract of service; and

(4) the Chairman of the Industrial Court by sitting alone without the consent of

the parties, contravenes section 20(4) of the Industrial Relations Act and is

proceeding without jurisdiction.

The presiding judge, Mr. Justice Mohamed Azmi held since the reference was

presented by the Minister under section 20(3), it was lawful for the Chairman of the

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Industrial Court to sit alone in dealing with the case as provided for under section 23(30

and 23(4).

Section 23(3) reads:

Any division shall be constituted of Chairman and three members selected by

the Minister, one each of the panels specified under section 21(1)"

A proviso is however, enacted in section 23(4) which reads;

Notwithstanding the foregoing sub-section, for the purpose of dealing with any

reference to the court under section 20(3), a Division may be constituted by the

Chairman sitting alone."

The learned judge held that once the case is referred to the Industrial Court, it is

seized with the power to hear the dispute and to make an award. Kesatuan

Pekarja2kenderaan Sri Jaya v. Industrial Court. It was no proper case where a rit of

prohibition should be granted and he accordingly DISMISSED the application with

costs.

C .Writ of Prohibition in Federal Court

The Federal Court rejected the appeal with costs and HELD that

(1) the case came squarely within section 20(3) of the Industrial Relations Act

and therefore could be heard by the Industrial Court Chairman without a panel of

advisers. The learned judge was correct in dismissing this ground for an order of

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prohibition as being without substance; that the employee was dismissed without

just cause and excuse.

(2)the non-citizenship status of the respondent was irrelevant for the purpose of

the proceedings;

(3) the question whether the respondent was a workman was clearly within the

province of the Chairman to find in a reference to him of the workmans

representation of dismissal without just cause or excuse;

(4) once the Minister decides to make a reference and his order is not set aside,

the Industrial Court is seized with jurisdiction to hear the case and it is

implicit in the Act that the Industrial Court must exercise that jurisdiction.

Failure to do so may well result in an order for mandamus.

D Hearing in the Industrial Court

The Industrial Court that began hearings on July 5, 1976 and it was not until June

28, 1979 when it concluded the consequence, lasting 66 days in open court, inclusive of

the last day for submission. The number of hearings spread out over almost 3 years that

could have relatively simple uncomplicated case and shortened had it not been due to the

Hospital's tried every means to resist to hearing of reference. The Chairman who sat was

conscious that by section 30(3)

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The court shall make its award without delay and where practicable within thirty

from the date of the reference to it of the trade dispute or of a reference to it under

section 20(3)

he was required to hear the case speedily and hand down his award or dismiss the

reference. But though he showed his displeasure over the tactics employed by counsel for

the Hospital and though he was highly critical of such delays and reasons expressed of

implied for them, there was really nothing much he could do about it, when confronted

with the idee fixe of counsel that until the High Court and the Federal court had given

their decisions on the application for prohibition which he considered had excellent

chances of success, it would be a waste of time to continue with the hearing. A delay

some 3 years or so had resulted In these ..cases, the laws delays have been

intolerable. They have lasted so long as to turn justice sour. These are the words of Lord

Denning M.R. in Allen v. Sir Alfred McAlpine & Sons Ltd. echoed by Wilberforce in

Tolley v. Morris

The Industrial Court dealt at length before handed down the Award No.178/79 which

reads thus:

1. The dismissal of Dr. A Dutt by the Board was most unreasonable and very unfair,

without having heard properly from sides of the case-thus no sufficient or clear

evidence before coming to a reasonable or fair conclusion. The court finds the

dismissals no just cause or excuse whatsoever on the grounds shown of the

dismissal. The court finds that compensation in lieu of reinstatement was of

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the right decision due to the atmosphere of animosity has been created

against the claimant.

2. In awarding compensation, the court upheld Award No.29/77 in Industrial Court

Case No.81/1975 the usual principle that the award be ' just and equitable' in all

circumstances, having regards to the loss sustained by the Claimant in

consequence of the dismissal attributable to the action taken by the employer.

This may result in a greater amount compensation granted by the Common Law.

This was because in Industrial Law an employee has a right to property in the job

he holds and dismissal is depriving him of his right of tenure.

3. The Claimant had no doubt being unable to secure alternative employment at all

as he was an expatriate on a Visa Pass requiring an employer to sponsor his

employment renewable yearly prior to the approval of the Malaysianisation

Secretariat. Upon his dismissal, his Visit pass has been cancelled by the

Controller of Immigration on the Hospital's Informatory letter, leaving no option

but to return his country. The only option was to seek employment outside the

country since his dismissal, which he did. The Claimant did make reasonable

efforts to apply for the same position of Radiologist in Mount Elizabeth Hospital

Pte. Ltd, to Kuwait University and also Royal Perth Hospital, but he was

unsuccessful in each case.

4 The Claimant's counsel submits that compensation be granted beyond 1980 until

1984 at Claimant's retirement age based on the fact that the hospital was prepared

to continue employment beyond 1980. It was also uncertain whether the

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Malaysianisation Secretariat grant him approval for a further period beyond 1980

due to its strict policy no local citizen should be kept out of employment for the

Specialist post, if found to replace him at the end of 1980

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I. The payment of $14,000.00 being the unpaid balance of fees collected and

placed in a Fixed Deposit account together with interest thereon subject to

verification to be paid on or before Dec 31,1979

II. Arrears of salary from date of dismissal to date of conclusion of hearing

amounting to $120,000.00 to be paid before Jan 31, 1980.

III. Compensation for loss Specialist Fees amounting $240,000.00 to be paid

on or before Feb 29,1980; and

IV. Compensation in lieu of reinstatement amounting to $162,000.00 to be

paid on or before Feb 29, 1980.

V. Total sum of $522,000.00 apart from the specialist fees to be made to

Claimant are subjected to Income Tax clearance and be made through the

Claimant's Solicitor.

E. Writ of Certiorari to the High Court

The Hospital obtained leave of application to the High Court for a writ of

certiorari to quash the award by the Industrial Court naming Dr. A Dutt as the first

respondent and the Industrial Court as second respondent. The grounds of application

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were that the Industrial Court had acted ultra vires in jurisdiction error of law in the

followings:

(1) exceeded its jurisdiction in holding that the first respondent was a ' workman'

within the meaning of the Industrial Relations act, 1967.

(2) exceeded its jurisdiction by holding that appellant had been dismissed

without just cause and excuse thereby failing to recognize the right of the

applicant as employer under the contract to terminate the first respondent ;

and

(3) exceeded its jurisdiction in awarding a huge sum of $522,000.00 purported to

be compensation in lieu of reinstatement in a matter referred to it under

Section 20 of the Industrial Relations Act,1967.

The presiding judge of the High Court in Malaya at Kuala Lumpur, Mr. Justice

Datuk Hashim Yeop A Sani handed down the ruling on Nov 21, 1980(Appellate &

Special Powers Division)

That The Industrial Court

I. Had not committed any ultra vires of jurisdiction error of law in

holding that the was workman ; and

II. That the respondent had been dismissed without just cause or excuse;

but

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III. QUASHED the award of compensation in lieu of reinstatement was made

without jurisdiction on grounds

that the practice of conferment upon itself a discretion to award compensation

in lieu of reinstatement under the context of section 20(5) that reads as its

power in equity and good conscience was inappropriate.

that any relief that is not directly connected with or ancillary to reinstatement

will be outside the powers conferred by section 30(6) of the Act;

that The Industrial Court is not a court of record and being a creature of

stature its powers are to be derived solely from the four corners of the stature

of the Act.

Section 30(6) reads:

" In making its award, the Court shall not be restricted to the specific relief

claimed by the parties or to the demand made by the parties in the course of the

trade or in the matter of the reference to it under section 20(3) but may include

in the award any matter or thing which it thinks necessary or expedient for the

purpose of settling the trade dispute or the reference to it under section 20(3)."

F. Appeal to the Federal Court

Dr. A Dutt made an appeal to the Federal Court for a writ of certiorari to quash

the ruling of the High Court and the hospital crossed appealed. The presiding Federal

Court judges, Chief Justice, Raja Azlan Shah, FJ Wan Suleiman and FJ Chang Min Tat

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on January 22 & Feb 19, 1981 (Kuala Lumpur- Federal Court Civil appealed No.276 of

1980) RESTORED the award of the Industrial Court and HELD that

(1) The Industrial Court had not erred in law or in fact in arriving at its

conclusion that the appellant was a workman under section 2 is within the

Industrial Relations Act ;

Section 2 of the Act reads:

"Workman means any person, including apprentice, employed by an

employer under a contract of employment to work for hire or reward and for

the purpose of any proceedings in relation to a trade dispute includes nay

such person who has been dismissed , discharged or retrenched in

connection with or as a consequence of that dispute or whose dismissal,

discharge or retrenchment has led to that dispute."

(2) a claim for reinstatement in employment by a workman is a trade dispute

between the employer and the claimant connected with the non-employment

of the claimant, just as much as the complaint of a number of workmen

through their trade union ;

(3) The Industrial Court in this case had come to a finding of the fact the motive

for the termination of the services of the appellant was oblique and therefore it

was justified in holding the appellant had been dismissed without just cause of

excuse

The learned judges arriving at the above decisions by referring to Sections

20(1), 26(1) and the definitions of a trade dispute

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Section 26(1) reads:

" Where a trade dispute exists or is apprehended , the Minister may if that

dispute is not otherwise resolved refer the dispute to the court on the joint

request in writing to the Minister by the trade union and the employer who

is a party to the trade dispute or trade union representing the employer."

Trade dispute is defined under section 2 as:

any dispute between employers and workmen or between workmen and

workmen or between employers and employers, which is connected with the

employment or conditions of work of any person."

The title of the Industrial Relations Act, 1967 provides:

for the regulations between employers and workmen and their trade

disputes and the prevention and settlement of nay differences or disputes

arising from there relationships and generally with the trade disputes and

matters arising there from."

(4) The right to compensation must be an issue in representations for

reinstatement and necessarily arises where the court would not order

reinstatement. The Industrial Court if in its considered view proper when

awarding compensation in lieu of reinstatement for dismissal without just

cause.

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The awards in the above are set in section 30 of relevant subsections are as

follows:

" 30(1) The court shall have power in relation to a trade dispute referred to

it or in relation to a reference to it under section 20(3) , to make an award (

including an interim award) relating to all or any if the issues in dispute.

(5) The court shall act according to equity, good conscience and the

substantial merits of the case without regard to technicalities and legal

form

(6) In making its award, the court shall not be restricted to the specific relief

claimed by the parties or to the demands made by the parties in the

course of a trade dispute of in the matter of the reference to it under

section 20(3) but may include in the award any matter or thing it thinks

necessary or expedient for the purpose of settling the trade dispute of the

reference to it under section 20(3)."

It was further re-affirmed by quoting the relevant part of section 52(2)

52(2) the provisions of this Act relating to trade dispute.shall apply to

any matter referred to or brought to the notice of the court under the Act."

(5) the question whether the appellant was a workman within the meaning of the

Industrial Relations Act was a mixed question of law and fact. Whether he had

been dismissed without just cause or excuse was a pure question of fact. No

order of certiorari could lie for error on those two grounds and the cross-appeal

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of the respondents must therefore be dismissed;

(7) even if the award of compensation contained one or more errors upon its face,

the error or errors did not give the High Court jurisdiction to quash the decision

of the Industrial Court. The appeal must therefore be allowed and the award of

the Industrial Court restored by citing South East Asia Fire Bricks Sdn.

Bhd. v Non-Metallic Minerals Products Manufacturers Employees Union

and the ouster clause of 33B that removed the jurisdiction of the High court to

issue a writ of certiorari for errors of law by the inferior tribunal to the Federal

Court.

Their lordship also agreed with Goon Kwee Phoy v. J. & P. Coats (M) Bhd,

compensation could be awarded for dismissal without just cause and excuse.

G. Application to the Industrial Court for Non-Compliance of Award

On Apr 15, 1981, the hospital applied for leave to the Yang Di-Pertuan Agong

which leave was granted on May 19, 1981 conditional on the hospital paying

all monies under the Award to the Applicant's Solicitors by Aug 20, 1981. The

hospital did not pay the sum and the Federal Court on Nov 21, 1981 struck out

the conditional leave to appeal to the Yang Di-Pertuan Agong.

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Dr. A Dutt applied to the Industrial Court for a prompt payment of a sum to

be paid to him by the hospital and sought an order for the amount due and

interest at 6% per annum on $522,000.00.

The Industrial Court President The Honorable Mr. Justice Harun Hashim

sitting alone on Dec 8, 1981 handed down the award 229/81 that:

I. There is no excuse for any further delay to pay over the sums which are not in the dispute:

Salary $6,000.00

Fees 64,760.87

Arrears of Salary and Compensation 522,000.00

Total $592,760.87

II DISMISS the claims for interest as it was purely discretionary under Section

11 of Civil Law Act and subject

Section 7 of the Schedule to the Courts of Juricature Act, 1964; and

Section 21 of the Schedule to the Subordinate Courts Act, 1948

It was an offence under Section 56(3) reads:

" any person who fails to comply with an order of the Court under

subsection shall be guilty of an offence and shall on convict be liable not

exceeding two thousand ringgit or to imprisonment for a term not exceeding

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a year, or both and a further fine of five hundred ringgit for every day

during which such offence continues."

H. Application to the Industrial Court for the Time Application of Costs

The Industrial Court President Honorable Mr. Justice Harun Hashim sitting

alone handed down the award Nov 10, 1982 under award No. 222/82

according DISMISS the application by citing

It was out of time by any standards. The proper time to apply for costs and

expenses should either be:

A prayer in the Statement of case; or

in the course of proceedings before the court ; so that if costs and expenses are

awarded these from part of the award

I. Application to Court of Appeal for the release on the sum of award from

Inland Revenue Department

The ordeal did not come to an end when the Federal Court ordered the award to

be paid after Income Tax clearance. The Inland Revenue Department withdrew the relief

granted to him for the years of assessment 1972 to 1976 and also taxed some

$412,000.00 from his court award without granting any relief for legal costs

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incurred. This angered Dr. A Dutt as he was left with nothing after paying to his lawyer,

Datuk G. Sri Ram( a sitting Justice in the Court of Appeal).

Between November 1982 and September 1983, he made submission of 10 Forms

Q appealing the decision of the Department. Due to bureaucratic procedures, his

application was left in the department for seven years with no decision being made.

In November Dr. A Dutt then a senior consultant radiologist at a hospital in New

South Wales decided to write to the King who was then happened to be Sultan Azlan

Shah , who as the Chief Justice of Malaya, was one of the three judges in the Federal

Court that restored the Industrial Court Award.

The King's secretary wrote to the Inland Revenue Department for a speedy action.

The Special Commissioner took three years between 1990 and February 1993 to

CONCLUDE that Dr. A Dutt's legal costs and costs incurred

"wholly and exclusively in the production of his income" between 1972 and 1976

were deductible expenses. His award of $522,000.00 was considered as compensation

and not taxable.

The Inland Revenue Department appealed against the decision to the High Court.

The High Court judge Datuk Abu Mansor Ali RULED IN FAVOUR of the department

that certain items claimed by Dr. A Dutt to be wholly and exclusively for the production

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of income between 1972 and 1976 were not deductible but the legal fees incurred for the

Industrial Court case were deductible.

Still dissatisfied, Dr. A Dutt appealed against the High Court decision before

withdrawing without giving any reasons thereto when the case appeared for mention in

front the Court of Appeal judge Datuk Shaik Daud Ismail ( sitting together with Datuk

Ahmad Sheik Abdul Halim and Datuk Mokthar ) STRUCK OUT the appeal on

application of the department. Thus, ending the final chapter of his 21 years of legal

battle to clear his name from the vindictive and vexatious unfair dismissal by the

employer.

Conclusions

In concluding the award, the Court summed its views on the merits of claims reproduced

as below:

1 The hospital argued that Industrial Relations was not meant for professionals.

This was rejected at all stages. Following that decisions employees employed in

the capacity of managers, executives, confidential and security come under as

workman under the Act who were engaged under a contract of service.

2 Failure of employers to observe the principles of natural justice in deciding an

employee is only a "matter of academic interest" when the Industrial Court

reviewing the dismissal

3 Hearing by Industrial Court is a hearing of de novo where workman will be given

every opportunities to defend himself, and only in that sense can it be said that the

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question whether natural justice has failed at he domestic inquiry stage is a "

matter of academic interest"

4 An inquiry must be formal, so long as the employer basing on his decision to

dismiss an employee on sufficient and relevant evidence, even calling for his past

record of service and considering other mitigating circumstances.

5 The decision to dismiss the claimant from the by the Board was most unfair and

without having heard properly of both sides - having no sufficient evidence before

it to come to fair reasonable decision.

6 The Court found no just cause or excuse whatsoever in the grounds shown for

dismissal. The Court found compensation was the adequate remedy as

reinstatement was not possible in the case due to obvious atmosphere of animosity

that has created against the claimant.

7 In awarding compensation, the Court followed the usual principal the amount of

compensation awarding must just and equitable by the claimant in consequence of

dismissal in so far as the loss was attributable to the action by the employer.

8 In what is of concern is the contractual relationship of master and servant, where

servant is regarded as senile person with low dignity attached to his job, and if

contract if contract is terminated, there is no question affecting status involving

property rights.

9 The damages awarded could only represent loss of salary due to date of wrongful

dismissal, plus the amount would have earned during period of notice properly

given for the termination.

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10 In Common Law, the amount awarded must be reduced by whatever an employee

either has earned or would have earned to meet hid mitigation the loss by

dismissal. In this case, the claimant had no chance at all to find alternative

employment, being an expatriate on a visit pass requiring an employer to sponsor

employment from year to year period to be approved by the Malaysianisation

Secretariat.

11 The amount was in greater compensation granted by Common law, because in

employee has right to property to his job that he holds, so dismiss him will

deprive his right to tenure.

12 That the Industrial Court handing awards of dismissal with just cause or excuse,

may consider compensation in lieu of reinstatement by referring to section 30(10,

(5) and (6) for decision

13 The supervisory of the High Court over the Industrial Court is limited to cases

where the Industrial Court has not observed rules of natural justice or has acted in

bad faith or has committed a jurisdiction error.

14 That the definition of workman was within the meaning of the Act. The question

of the claimant as a workman was a mixed question of law and fact; whether he

had dismissed with just cause or excuse was a pure question of fact. No order of

certiorari could lie for error on these grounds

15 The High Court had no power to quash the decision of the Industrial Court. It

was for that reason the decision of Industrial Court was restored.

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Reference:

C.P. Mills (1984). Industrial Disputes Law in Malaysia, pp321-330