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General News

Participation In Trade Union Activity, A Shield Against Unlawful Dismissal?Saturday, 1 October 2022
​Malaysian Airline System Bhd v Ismail Nasaruddin Abdul Wahab [2021] 3 ILR 172, COA 
- A Case Summary -
Participation In Trade Union Activity, A Shield Against Unlawful Dismissal?
Author: Bernard Kanny
[1]   At the material time, the Claimant was the President of NUFAM and a member of its Executive Committee. The Company is responsible for the operation of an airline transportation service.
[2]   On 8.11.2013, it was brought to the company's attention that The Sun newspaper was carrying an article on NUFAM'S call for the resignation of the company's CEO. The article published in the newspaper referred to an interview of the claimant conducted with Sunbiz; whereby the said article also made reference to a press statement issued by the Claimant. The article raised various other allegations against the Company.
[3]   The Company issued a show cause letter on 12.11.2013. The show cause letter contained the following allegations:
  • NUFAM vide its President, had called on the CEO to resign saying he had failed to resolve their plight since he took over in September 2011. NUFAM said it is calling on the PM to review the CEO's contract and remove him as CEO of MAS as it was unhappy that there had been no changes in resolving the cabin crew's problems and they have become demoralised.
  • That the claimant following an interview with Sunbiz had criticised MAS management stating that the management created disharmony amongst the cabin crew fraternity and that MAS compromised the welfare and well-being of its employees when crew members were overworked. The Claimant also criticised MAS on picking on the 'weight control' issue and wanted MAS to straighten out and regulate its policies.
[4]   The Company in its show cause letter informed the Claimant that he was an employee of the Company, therefore he owed a duty and responsibility to the Company. The Claimant's actions tantamount to a breach of the implied terms of employment/fiduciary duty to serve the Company with good faith and fidelity. Further, the Claimant was in breach of his express terms of employment in Clause 12, Appendix 1 of the MAS Book of Discipline as well as the procedures governing grievance procedures pursuant to the collective agreement. His actions were a serious misconduct.
[5]   The Claimant replied the show cause. In his response, the claimant, among others, states that the press statement was made in his capacity as the President of NUFAM and not as an employee of the Company.
[6]   Dissatisfied with the Claimant's explanation, the company dismissed the Claimant from employment with immediate effect. The Claimant's appeal was rejected by the company.
[7]   The claimant filed a claim for unlawful dismissal under S.20(1) IRA 1967 at the Industrial Court.
[8]   The Industrial Court accepted the Company's witness evidence that the claimant had failed to appreciate the following:
  • That the Claimant had failed to appreciate that the Company had previously accorded him with the opportunity to improve his behaviour by issuing him with lesser punishments when he made press statements in the past;
  • Instead of desisting, he repeated his conduct; despite being expressly warned against making future statements to the press pertaining to the business of the Company;
  • The Claimant had acted in defiance of the Company's warnings and had committed misconduct of a similar nature in this instance; and
  • The Claimant was well aware of the Company's position in relation to his action of speaking to the media without prior consent of the Company, which the Company deems as misconduct under item 12 of Company's Book of Discipline.
[9]   The Industrial Court held that:
[a]   ss. 4(1) and 5(1) of the IRA 1967 are inapplicable as the Claimant was found guilty of the allegations of misconduct levelled against him; and
[b]   Even if there was any breach of ss. 4(1) and 5(1) of the IRA 1967, the avenue to redress such breaches was by way of s.8 of the IRA 1967 and it was not open to the Claimant in a reference under s. 20(1) of the IRA 1967 to consider ss. 4(1) and 5(1).
[10]   Hence, the Industrial Court ruled in favour of the Company and reaffirmed the position that the fact that he was an officer of a trade union did not grant him the immunity from disciplinary action if his conduct amounted to a breach of the express/ or implied terms of his employment.
[11]   Aggrieved, the Claimant filed a judicial review application at the High Court.
[12]   The High Court disagreed with the IC's ruling and held that the Claimant was unfairly dismissed because the Company had dismissed him for participating in trade union activities. The High Court quashed the decision of the IC and remitted the matter for assessment of compensation.
[13]   The grounds of judgement of the High Court are as follows:
  • Ss. 4, 5 and 59 of the IRA 1967, provide wide protection for members of a trade union for participating in trade union activities. A workman's dismissal for participating in trade union activities tantamount to victimisation or unfair labour practice actuated by mala fide;
  • The question of whether an employer has exercised such managerial power bona fide or for collateral reasons is a question of fact that must be decided on the circumstances of each case;
  • Being a trade union member per se does not mean one is shielded from any misconduct. This must be viewed based on the facts of each case; and
  • The Claimant's press statements relate to the objective of NUFAM as a trade union and are undoubtedly trade union activities to ensure the good working conditions of its members. The Company failed to produce any cogent evidence that the press statements have caused reputation damage.
[14]   Aggrieved, the Company filed an appeal to the Court of Appeal.
[15]   The Court of Appeal identified 4 central issues, namely:
  • Whether the Claimant's dismissal was a violation of ss. 4 and 5 (1)(d)(ii) of the IRA 1967;
  • Whether the dismissal of the Claimant was lawful;
  • Whether the membership in the union immunised the Claimant from dismissal pursuant to s.22(1) of the TUA 1959;
  • Whether there was a trade dispute between NUFAM and the Company.
[16]   The COA found as the President of NUFAM, the Claimant was elected by his fellow workers in the Company. He works alongside them. He is employed by the same employer as they are. He is their leader and speaks for them. If any of them has a grievance with the management, he takes it up. It was his duty to represent the union.
[17]   However, the Claimant is not paid by NUFAM. He is not an "officer" of NUFAM. "The Claimant is only an official". He is paid by his employer. Hence, the Claimant is the servant of his employer.
[18]   The Company argued as follows:
  • High Court erred in taking into account an irrelevant consideration, namely, that there is no evidence that the Company's reputation was tarnished; as the press statements were disparaging and disrespectful of the CEO;
  • High Court failed to appreciate that ss. 4(1) and 5(1) IRA 1967 did not apply as the Claimant had committed acts of misconduct warranting disciplinary action being taken against him; and
  • Existence of an implied term in the contract of employment that the Claimant would not conduct himself in a manner to destroy or damage the relationship of confidence and trust between the Claimant and the Company.
[19]   These arguments were refuted by the Claimant. The crux of his contention is that his dismissal was a purported "union busting" by the Company and that his dismissal was a violation of ss. 4 and 5(1)(c) and 5(1)(d)(ii) IRA 1967.
[20]   The Court of Appeal decided as follows:
  • Any conduct of the employee, irrespective of their position as a trade union member which is likely to damage the reputation of the employer may constitute gross misconduct and will lead to disciplinary action up to and including dismissal;
  • There is an implied duty of good faith in contracts of employment. Thus, any breach will amount to misconduct.;
  • There were warnings issued to the Claimant in the past for making similar press statements. Claimant's repeated actions was a testament of his defiance to Company's warnings;
  • Claimant's repeated misconduct underlines his insubordination against the Company and that as a long serving employee, he ought to have been aware of the policies instead of acting in contravention of the same;
  • Claimant was well aware he required prior consent of the Company in writing before issuing any press statement;
  • The Claimant breached express regulations of the Company, namely the procedure governing grievances and Clause 12, Appendix 1 of Company's Book of Discipline.
[21] Hence, the COA held that pursuant to s.5(2) IRA 1967 the act of discharging the Claimant for proper cause cannot be deemed a contravention of s.5(1) IRA 1967.
[22]   The Claimant submitted that because of his status as an officer of a trade union engaged in a lawful trade union activity at the time the Company took adverse action against him meant that the Claimant was therefore immune and protected under s.22 of the TUA 1959.
[23]   S.22 TUA 1959 means when a tortious act committed by a registered trade union or its members, will be excluded from liability in a suit brought by the trade union or its members themselves or by officers' representation to the court.
[24]   The COA held that the present action by the Claimant is not an action in tort. The action is an action for unlawful dismissal pursuant to the alleged breach of the terms and conditions of employment. Thus, the facts of this case will not be covered by S.22 TUA 1959.
[25]   In this regard, the COA referred to the IC case of Kumpulan Sua Betong Sdn Bhd v Maruthan Kuppusamy [1996] 2 ILR 1594 where the court referred to Alfred Avins, Employee's Misconduct which opined: "The making of a public defamatory attack on superiors is insubordination as is the use of abusive language about superiors to third persons."
[26]   The COA held the issue between NUFAM and MAS was certainly a "trade dispute" within the context of s.2 IRA 1967.
[27]   It was the view of the COA that it is the intention of Parliament that when there is a "trade dispute", the parties must adhere to the procedure under ss. 18, 19 and 26 IRA 1967.
[28]   However, the Claimant did not settle the disputes according to the provisions of the relevant laws. Instead, the Claimant issued the press statements seeking the dismissal of the CEO. Further, the grievance procedure under the collective agreement has not been exhausted by the parties when the Claimant issued the press statement.
[29]   Clearly, the contact of employment between MAS and the Claimant had implied into it, a duty of good faith. There was an implied duty that the employee would not, without proper and reasonable cause, conduct himself in a manner likely to destroy or seriously damage the relationship of confidence and trust between the parties. In addition, an employee must not damage the reputation of the employer.
[30]   Although, an employee has the right to be involved in legitimate trade union activities, the fact that he was an officer of a trade union did not grant him/her immunity from disciplinary action if his/her conduct amounted to a breach of the express/implied terms of his/her employment. Such participation does not shield the employee from unfair dismissal claims.
[31]   The COA's decision reaffirms the position that when engaging in a trade union activity, the employee must ensure that he/she is not derelict in his/her fundamental duty as an employee of his/her employer.
industrial court,  trade union,  Malaysian Airline System
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