Malaysia

In October 2014, the Federal Court of Malaysia, in Harianto Effendy Zakaria & Ors v Mahkamah Perusahaan Malaysia & Anor, [2014] 6 MLJ 305, upheld the dismissal of nine former bank employees by Bumiputera Commerce Bank Berhad (now known as Commerce International Merchant Bank, or CIMB, (the Bank), for unlawful picketing at the premises of the Bank.

The Facts
The appellants, who were members of the National Union of Bank Employees (NUBE), were employees of the second respondent, the Bank. As active members of NUBE, they were found to have participated in a trade union picketing in relation to a trade dispute between NUBE and the second respondent. It was alleged that bullhorns, air horns, whistles, banners and placards were used during the picket.

The Bank alleged that the picketing was unlawful as it was conducted within the premises, and that the appellants’ conduct had disrupted their business and operations. Upon a thorough investigation and subsequent domestic inquiry, the appellants were found guilty of misconduct, and their services were thereafter terminated.

Industrial Court
The Industrial Court, the first respondent in this case, upheld the decision of the Bank to terminate the appellants’ services, and held that although the misconduct was minor, the punishment of dismissal was necessary as such misconduct affected the second respondent’s goodwill in the banking industry.

The High Court
The appellants filed an application to the High Court for judicial review to quash the award, and contended that the Industrial Court had failed to consider relevant matters, and as a result, arrived at a totally perverse decision. The High Court ruled in favour of the Industrial Court and concluded that no error of law was committed in respect of the findings of facts relating to the appellants’ misconduct.

The Court of Appeal
An appeal was then filed to the Court of Appeal on the basis that the dismissal was too harsh and actuated by discriminative practice. The Court of Appeal unanimously dismissed the appellants’ appeal and ruled that since there was grave misconduct involving the core of the second respondent’s existence, dismissal would have been the inevitable punishment.

The Federal Court
The issues before the Federal Court were, namely: whether the appellants’ misconduct constituted just cause or excuse for dismissal; whether the punishment of dismissal was too harsh; and whether a high standard of conduct is expected from employees in the banking industry.

The Decision

The Federal Court dismissed the appellants’ appeal and held that there was no fixed rule of law to suggest that employees with unblemished records of service should not be dismissed for a single instance of insolence. It is important to consider the nature of the misconduct, whether they showed any remorse, and the nature of the employer’s business. As the appellants’ misconduct was clearly an act of wilful disobedience to which they showed no remorse, the dismissal was justified. Furthermore, the banking industry belonged to a special kind of business which renders services to the public, and therefore a high standard of conduct was expected of its employees.

ZUL RAFIQUE & partners
D3-3-8 Solaris Dutamas, No 1 Jalan Dutamas 1
50480 Kuala Lumpur, Malaysia
Tel: (60) 3 6209 8228
Fax: (60) 3 6209 8221
Email: mariette.peters@zulrafique.com.my
amylia.soraya@zulrafique.com.my
Website: www.zulrafique.com.my
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