This alert discusses the recent Industrial Court decision of Kamaazura Bt Abu Bakar v KYP Education Sdn. Bhd. (Industrial Court Case No.: 12/4-665/18) that explored what amounts to insubordination and examined how the Company dealt with the matter.

Relationship With The Company

This case concerns an employee (the Claimant), who commenced employment with IKIP Education Sdn Bhd (the Company)) on 1 June 2009 as a lecturer with a starting monthly salary of RM3,150.00. Over the years she rose in ranks and was eventually promoted as a senior lecturer in January 2016 and appointed as the Manager of Multidisciplinary Research Centre (MUREDEC) in April 2015. As a result of these appointments, she received additional allowances and her last drawn salary was RM6,205.00.

Fall-Out

On 9 March 2017, the Claimant received a memo instructing her to vacate her room due to the restructuring of the college staffing. Then, on 13 March 2017, the Claimant was relocated to the Company’s Taman Gelora Campus from 1 April 2017 until further notice and redesignated as a lecturer. She was also no longer entitled to the additional allowances she was entitled to while at MUREDEC.

On 23 March 2017, the Claimant received a show-cause letter requiring her to explain five allegations of misconduct and insubordination. On 11 April 2017, the Claimant was given another show cause letter on the basis that she had committed another major misconduct when she was declared a bankrupt back in August 2014 and failed to rectify the issue despite financial assistance by the Company. These show cause letters were answered by the Claimant in her letter dated 12 April 2017 but her explanation was considered unsatisfactory.

Subsequently, a notice of Domestic Inquiry (DI) dated 17 April 2017 was issued to her whereby four charges of misconduct were preferred against the Claimant. The DI was held on 25 April 2017.

Guilty And Dismissed!

The DI panel found her guilty on three out of four charges. As a result, the Company proceeded to dismiss the Claimant with immediate effect on 28 April 2017. The Claimant appealed to the Company via a letter dated 2 May 2017 but to no avail which led her to file the complaint against the Company in the Industrial Court. In essence, she complained that she had been oppressed and victimised by the Company and her dismissal was without just cause or excuse.

The Company contended otherwise whereby the charges of the DI were justified and they were proven after a fairly conducted DI. Therefore, her dismissal was with just cause or excuse.

The Industrial Court’s Decision

After a lengthy trial, the Court decided in favour of the Company. In arriving at its decision, the Court focused on mainly one issue i.e. whether the Company can prove the allegations of insubordination and misconduct (as per the charges during the DI against the Claimant) on a balance of probabilities.

The Court did not accept the DI decision as conclusive but reconsidered all the evidence presented for the 3 charges during DI and came to its own decision in relation to those allegations. The Court held that the allegations as stated in the charges were, in fact, true, substantiated and proven on a balance of probabilities. As there were misconduct and acts of insubordination on the part of the Claimant, the decision to dismiss the Claimant was with just cause or excuse. Hence, the Claimant’s claim was rejected.

Key Lessons

There are 3 takeaways from this decision. They are:

• What can amount to insubordination?
• The importance of domestic inquiry and how to conduct one?
• How employers can legally and effectively deal with insubordination by an employee?

Insubordination

In this case, there were three charges of misconduct and insubordination that were found proven against the Claimant:

• Failure to attend a meeting that she was instructed to attend without satisfactory reason.
• Failure to follow her superior’s instruction to complete a task.
• Being declared bankrupt.

The Court held that her wilful disobedience to her superior’s instructions to attend a meeting and present a blueprint was insubordination. The Court cited in support the case of Zainudin Bin Kassim v. Johan Ceramic Berhad [2008] 2 LNS 1447, which held the following:

“The right to control employees is a distinguishing feature of a contract of employment. The right to control implies the right to ask the employee what work to do. It is a dominant characteristic in the relationship of employer and employee, which marks off the employee from an independent character. As such, the employee must subject himself to the said control and behave accordingly. (See Misconduct in Employment by B.R.Ghaiye at p. 42)”.

The issue was also exacerbated when the Claimant claimed her reason for absence was due to falling ill, but this was later found by the Court to be not credible as documentary evidence showed that she did show up in the school on the same day but just not the said meeting. The Court held that such inconsistency directly harms the overall credibility of the Claimant.

In relation to one of the charges, other than insisting not to do as she was instructed, the Claimant also used language against her superior that the Court found to be contemptuous and disrespectful against a superior, and unbefitting of an employee at a subordinate position. The Court cited the case of Tyco Engineering & Construction (M) Sdn Bhd v. Gunasilan Rengasamy [2004] 1 ILR 176, which provided the test was “whether the use of such language tends to lower the dignity or position of the superior officer”. If the answer is in the affirmative, it can amount to insubordination.

The Court further held that the emails sent by the Claimant implied incompetence of her superior, and that is a form of insubordination. The Court went on to say that “if action was not taken against the Claimant for her insubordination, other employees would have no qualms at all to refuse any tasks given to them in the future and this does not bode well for the industrial harmony at the workplace”.

Concerning the bankruptcy issue, the Court simply held that it was made clear in the Company’s policy that an employee cannot be bankrupt as it would affect the Company’s reputation and image. In the light that the Claimant failed to rectify or explain her bankruptcy despite the Company giving financial aid to her for this particular purpose, it amounted to misconduct as prescribed in the Company’s policy.

In summary, the Court held that the charges against the Claimant were indeed proven and that the Claimant did commit misconduct and insubordination that warranted a dismissal.

Importance Of Domestic Inquiry

While the Court did reconsider all the evidence presented during the DI to come to its finding on whether there were indeed misconduct or insubordination committed, as opposed to accepting the decision of the DI as conclusive, the Court nevertheless reminded that the DI was an important factor for consideration when deciding whether a dismissal was justified. The Court cited the case of Hong Leong Equipment Sdn. Bhd. v. Liew Fook Chuan & Other Appeal [1997] 1 CLJ 665 where it was held that:

“… The findings of a domestic inquiry are not binding upon the Industrial Court which rehears the matter afresh. However, it may take into account the fact that a domestic inquiry had been held when determining whether the particular workman was justly dismissed”.

In examining whether the DI was properly conducted, the Court held the following:

“It is well established that so long as at the domestic inquiry the rules of natural justice had been properly applied and the claimant had been given the opportunity to be heard and to present his or her case, then if a finding has been made against the claimant based on the evidence which had been presented to the domestic inquiry, the Court ought to consider its findings in order to conclude whether the employee has been dismissed with just cause or excuse – see Metroplex Administration Sdn. Bhd. v. Mohamed Elias [1998] 5 CLJ 467.”

Therefore, the advice to employers is to abide by good and fair labour practice, which includes issuing show-cause letters as well as holding DIs before a termination is carried out. Otherwise, the failure to conduct a DI or failure to conduct a DI fairly, will in no doubt persuade the Court that the dismissal was substantively and/or procedurally unfair.

Dealing With Insubordination

Here, the Company was able to successfully defend the case due to several things they did right, which other companies can model after. They are:

• Having clear work policies on what are accepted and what are not accepted behaviours.
• Having a clear job scope for each employee.
• Having the mechanism to deal with instances of insubordination and misconduct, including standard operating procedures on show-cause letters and domestic inquiries.
• Issuing show-cause letters and organising domestic inquiries in a fair and just manner, including having an independent domestic inquiry panel to conduct the DI, and adhere to natural justice and the rule of law when conducting the domestic inquiry.
• Keeping records meticulously and efficiently, and being able to retrieve and collect them when necessary such as during inquiries and court trials.
• Obtaining quality legal advice and representation.

Conclusion

This case provides a good reference to what can amount to insubordination and shows that certain conduct that we often see at the workplace may have serious consequences. However, as long as businesses and employers abide by the law and can demonstrate that they treat their employees fairly, then they will be able to resist allegations of unfair dismissal when they remove an employee who does not subscribe to similar values and cause disruption at the workplace.

– This alert was first published in the Legal Focus law alert of Messrs Rosli Dahlan Saravana Partnership. A PDF copy of this alert can be downloaded here.