Topic 4 O SAFETY AND HEALTH AT WORK OCCUPATIONAL SAFETY AND HEALTH ACT 1994 COMPILATION OF CASE STUDY (MICHAEL CASE) - Infographic Filing Guidance Questions: 1. Can a young person work with machinery in any workplace? 2. What are the duties of employer and employee in ensuring all employees are safe when they are at work? 3. What went wrong in this case? Whose fault? 4. What are the penalties imposed on offender who violates the statutory duties under the Act?11:57 learninghub.upm.edu.my Topic 5 EMPLOYEES SOCIAL SECURITY ESSA 1969 SELF-EMPLOYMENT SOCIAL SECURITY ACT 2017 EMPLOYMENT INSURANCE SYSTEM ACT 2017 INFOGRAPHIC FILING Questions: 1. Why is it important for the employer to contribute to the employees social security fund under SOCSO? 2. What are the penalties imposed by the Act if any employer fails to contribute to the fund? 3. How much is the contribution of the employer and employee in terms of percentage into the employees social security fund and into the employment insurance scheme fund? 4. Why did the government introduce the Self- employment Social Security Act? 5. Describe the types of benefit provided under the Acts enforced by SOCSO. 6. Discuss whatever issues and principle of laws that you find in the Case Study that capture your interest and understanding. A N 99 III O ATopic 7 Oo O TRADE UNION TRADE UNION ACT 1959 TRADE UNION INVOLVEMENT - INFOGRAPHIC FILING 1. What is a trade union and how is it important in the employment environment? 2. What are the requirements for getting a trade union registered? 3. Does a trade union enjoy certain rights, immunities and privileges as a registered trade union? 4.Are there any specific conditions imposed on a trade union before they can call for a strike? 5. What items should contain in the Trade Union Constitution?Topic 8 oo O INDUSTRIAL RELATIONS INDUSTRIAL RELATIONS ACT 1967 INDUSTRIAL RELATIONS ACT - INFOGRAPHIC FILING 1. Explain the process of a Claim for Recognition by the Trade Union. 2. What are the rules to be followed by the workmen before they can go for strike? 3. Who can conduct a lock-out? What is a lock- out under the law? 4. What are the rules to conduct a picket? 5. What is a Collective Agreement? 6. Explain the process of conducting collective bargaining to achieve the Collective Agreement. 7. What is the effect of a Collective Agreement? 8. Explain the meaning of Representations of dismissals.Topic 10 oo OTHER LEGISLATION MINIMUM RETIREMENT AGE MINIMUM WAGES SUBMISSION OF INDIVIDUAL FILE (INFOGRAPHIC) TEST 2 (20%) Individual Infographic Report (25-30 pages).eli LAW [2020] 1 LNS 609 Legal Network Series DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR (BAHAGIAN RAYUAN DAN KUASA-KUASA KHAS) [PERMOHONAN SEMAKAN KEHAKIMAN NO: WA-25-334- 07/2019] Dalam perkara Mahkamah Perusahaan Kes No. 28(7)/2- 462/17 dan Award No. 1291 dalam Tahun 2019 bertarikh 25.4.2019 dan diterima pada 6.5.2019 antara Kesatuan Kebangsaan Pekerja- Pekerja Hotel, Bar & Restoran, Semenanjung Malaysia dan Primula Beach Hotel Sdn Bhd. Dan Dalam perkara Aturan 53, Kaedah- Kaedah Mahkamah 2012; Dan Dalam perkara Seksyen 25 Akta Mahkamah Kehakiman 1964 dan perenggan 1 dalam Lampiran dalamnya. ANTARA KESATUAN KEBANGSAAN PEKERJA-PEKERJA HOTEL, BAR DAN RESTORAN, SEMENANJUNG MALAYSIA ... PEMOHON DAN[20211] 1 LNS 6119 Legal Network Series [6| I'll The Hotel's judicial review application is only in relation to the Industrial lCourt's decision on Article 1'0 Salary Structure and Appendices A it A! and Article 1'2 - Service Charge & Appendix B. On the other hand, the Union's judicial review application is only to review the Industrial Court's decision with regards to Article 24 Sick Leave and Hotptmllzntion. The Hotel's Ground of The Judicial Review [3| The Hotel's ground for Judicial review are the following: Article 10' - Salary Structure and AppEndicea A & Al. (0 (ii) (iii) {iv} the Industrial Court erred in lawr andfor in fact in accepting the Union's proposal by failing to take into account the fact that the Hotel's employees have been paid in compliance with the Minimum Wages Order after the change to clean wage system. The implementation of the Minimum Wages Orders 2012 and 2016 has resulted in the salary revision to the employees: the Industrial Court erred in accepting the Union's proposal to maintain the seniority of employees based on years of service with percentages are unjustified and unreasonable. the Industrial Court erred in considering the consumer price indextCl'l} which has no correlation with seniority of employees: the Industrial Court erred in law andfor in fact in accepting the Union's comparison with Crystal Crown Hotel in ID [2020] l LNS 609 Legal Network Series [9| {V} {vi} determining the rates of job in Appendix AI as salaries paid by lCrystal Crown Hotel are higher to hotels in Terengganu, Kelantan dan Pahang; the Industrial lCourt erred in law andfor in fact in accepting the Union's proposal of 20 steps increment compared with 12 steps increment proposed by the Hotel and failing to consider that the minimum salary in the scale was much lower compared to post implementation of the Minimum Wages Orders; the Industrial Court erred in accepting the Union's proposal that parties are to negotiate on wages and service charge when a new position was created since the Hotel does not practice the service charge system. Article 12- Service Charge 8: Appendix B (i) The Industrial Court erred in lawr anda'or in fact in accepting the Union's proposal as the Hotel cannot be forced to implement the service charge system as the Hotel has stopped collecting 0 service charge and implemented the clean wage system since LLEOE} with the agreement of employees The Hotel also contends that the Industrial Court erred and acted in excess of or without jurisdiction when it held that the new Collective Agreement is the 4'\" Collective Agreement instead of the 1" Collective Agreement. The Hotel submission with regards to the Union judicial review application are as follows: [2020] 1 LNS 609 Legal Network Series Article 24(c)- Sick Leave and Hospitalization (i) The Industrial Court was right in allowing the monetary capping proposed by the Hotel in Article 24(c) on the following reasons: (a) Article 24(c) was raised after the close of pleadings. (b) The Union did not cross examine the Hotel's witness pertaining to the monetary capping and as such was not challenged during the hearing. (c) The Union did not advance any reason for objecting the monetary capping The Union's Submission and Grounds for Judicial Review [11] Conversely, the Union's submission on Article 10 and 12 of the new Collective Agreement are as follows: Article 10- Salary Structure and Appendices A & AI The Industrial Court was correct: (i) in accepting the Union's proposal with regards to Article 10 as compliance with the Minimum Wages Orders is not the same as a salary revision. The Minimum Wages Orders is not in place of a salary revision and not a justification to deprive employees of the salary revision; (ii) in accepting the Union's proposal to maintain the seniority of employees based on years of service with percentages is justified in light of the implementation of the Minimum Wages Orders in order that seniority is proportionately reflected; 12[1010] l LNS 6|]! Legal Network Series (iii) in taking into account that if a revision in term of percentage is not given, junior employees will be receiving the same salary as senior employees which will result in industrial disharmony and instability; {iv} in determining salary revision by taking into account the CPI which is legally accepted factor for salary revision; {v} in accepting the Union comparison with Crystal Crown Hotel in determining the rates of jobs in Appendix Al. The Union submitted that no evidence was adduced by the Hotel to prove that the salary paid by the Crystal Hotel are higher compared to hotels in Terengganu. Kelantan and Pahang; {vi} to accept the Union's 20 steps increment which is fair and reasonable by taking into account that the Hotel has been in operation for 35 years since 1934: (vii) in deciding that the Hotel ought not to have unilaterally changed the service charge to clean wage system Article 12- Service Charge 3: Appendix B The Union submitted that the Industrial Court was correct: (i) in holding that there was no evidence of direct negotiation between the Hotel and the employees or any evidence that the employees had agreed to the implementation of the clean wage system and the abolition of the service charge system; (ii) to draw an adverse inference against the Hotel for not calling En. Marzulti or En. Ahmad Shari Mijan as I3 * [2020] 1 mm ms Legal Network Series witnesses to prove the clean wage system has been agreed by the employees; (iii) to reject the Hotel's clean wage system based on the following reasons: (a) the Hotel cannot unilaterally abolish the service charge system; (b) service charge is a fundamental term in the contract of service which is paid over and above basic wages and belongs to the employees; (c) the clean wage system is less favourable than the service charge system; (d) the imposition of service charge is the current practice of other hotels. (iv) The Union further submitted that the Industrial Court was correct in holding that the newr Collective Agreement is the 4LII Collective Agreement. [III As regard to Article 24(ci- Sick Leave a Hospitalization. the Union submitted that the Industrial Court erred in law andi'or in fact and acted in excess of or without jurisdiction on the following grounds: (i) Article 24 was an agreed article between parties: (ii) Article 24(c) was subsequently proposed by the Hotel and included in the Disputed Articles but the Hotel did not amend their pleadings to reect their proposal; (iii) the Industrial Court failed to give regard to the principle that parties are bound by their pleadings; l4 [2020] 1 LNS 609 Legal Network Series (iv) the Industrial Court appears to have mixed up the proposals and positions taken by the parties. Findings of This Court [13] It is trite law that a decision in relation to public duty and function is subject to judicial review on the grounds of illegality, irrationality or procedural impropriety. (Akira Sales & Service (M) San Bhd v. Nadiah Zee bt. Abdullah and Another Appeal [2018] 2 CLJ 513 FC; Menteri Sumber Manusia & Ors v. Kesatuan Kebangsaan Pekerja- Pekerja Hotel & Anmother Appeal [1998] 1 CLJ 215 CA). [14) It is also a principle of law that a reviewing judge ought not to disturb the findings of the Industrial Court unless they were grounded on illegality or plain irrationality, even where the reviewing judge might not have come to the same conclusion. (Ranjit Kaur a/p Gopal Singh v. Hotel Excelsior (M) San Bhd [2010] 6 CLJ 1 FC, Petroleum National Bhd v. Nik Ramli Nik Hassan [2004] 2 MLJ 288, [2003] 46 CLJ 625, FC). [15] Further, the reviewing judge would only exercise its discretion to grant the prerogative relief if he is satisfied that substantial injustice has ensued or likely to ensue as explained by the Federal Court in Hoh Kian Ngan v. Mahkamah Perusahaan Malaysia [1996] 4 CLJ 687, as follows : "The true principle governing the grant to prerogative relief appears in the following passage in the judgment of Bose J in Sangram Singh v. Election Tribunal AIR 1955 SC 425 at p 429: 15[2020] 1 LNS 609 Legal Network Series "That, however, is not to say that the jurisdiction will be exercised whenever there is an error of Jaw. The High Courts do not, and should not act as courts of appeal under Art 226. Their powers are purely discretionary and though no limits can be placed upon that discretion it must be exercised along recognized Jines and not arbitrarily; and one of the limitations imposed by the courts on themselves is that they will not exercise jurisdiction in this class of case unless substantial injustice has ensued, or is likely to ensue. They will not allow themselves to be turned into courts of appeal or revision to set right mere errors of Jaw which do not occasion injustice in a broad and general sense, for, though no legislature can impose limitations on these constitutional powers it is a sound exercise of discretion to bear in mind the policy of the legislature to have disputes about these special rights decided as speedily as may be. Therefore, writ petitions should not be lightily entertained in this class of case'. " [16] In the present case, it concerns a trade dispute relating to Collective Agreement between the Hotel and the Union. In this regard, the Industrial Court in making its award, must take into accourt section 30(4) of the IRA 1967, which provides: "In making its award in respect of a trade dispute, the Court shall have regard to the public interest, the financial implications and the effect of the award on the economy of the country, and on the industry concerned, and also to the probable effect in related or similar industries. " 16[2:20] 1 LNS ans Legal Network Series in] Reverting to the instant case, the core issues as alluded to earlier are with regards to the Industrial Court's decision on Articles 10. 12 and 24 {c} of the New Collective Agreement. Article 10- Salary Structure and Appendices A J: A]. E13] \"9] EWI EZII As to Article 10, the Industrial Court made the following ndings : (i) the Union's proposed salary structure is to maintain the seniority of employees based on years of service with percentages: (ii) the proposed percentage claims based on the CPI of 8.4% for the period of January 2013 to December ZOIS are justied and reasonable. In this regard. maintaining the seniority of employees based on years of service is reasonable as taken into account by the Industrial Court that if a revision in terms of percentage is not given. junior employees will be receiving the same salary as the senior employees which will result in industrial disharmony and instahil ity. This is also in line with the Minimum Wages Orders 2012 and 2016 that seniority is proportionately reected. The Union's proposal which was accepted by the Industrial Court increase proportionately the minimum salary for other position in the job hierarchy to reect the seniority of each position. In the case of New York Hotel Joker Hahn: (lmej Klasik Sdn Bird) v. Kesnman Kebangsaan Pekerja-Pekerja Hotel. Bar den Restores. Semenanjung Malaysia ct Ann-r [2013] l LNS I389. l7 [2020] 1 LNS 609 Legal Network Series the percentage of increase in salary based on seniority was also held not illegal or irrational by the High Court. [22] Further, the determination of salary revision based on CPI as a factor is legally accepted. The CPI relates to the costs of living and clearly one of the purposes of salary revision is to help employees to deal with the high costs of living. [23] The issue on CPI has been explained by the Industrial Court which I agree, in the case of Bright Ocean San Bhd Pelabuhan Klang v. Kesatuan Pekerja-Pekerja Pembekal Perkhidmatan Sampingan Pelabuhan, Pelabuhan Klang & Other Disputes [1997] 2 ILT 725, as follows: "The Court also pointed out to the Union that the purpose of salary revision is to help the employees to cope with higher costs of living after the last revision. An accepted measure of the cost of living is the consumer price index (CPI). The Court would consider salary revision if it can be shown that there has been an increase in the CPI since the last salary revision provided that the company is not incapable of meeting salary revision. " [241 In the present case, it is reasonable for the Industrial Court to accept the Union's proposal for employee who has served 5 years and more but less than 10 years to be given the basic salary of RM900.00 plus 2%, those who served 10 years and more to be paid the basic salary of RM900.00 plus 4% and an employee drawing RM900.00 and more to be paid 8% of the existing basic salary. Here the 2%, 4% and 8% proposed by the Union are within the CPI of 8.4% for the period between January 2013 and December 2015. The evidence of CPI by the Union was not challenged by the Hotel. 18[102"] 1 LINE we Legal Network Eeries [25] Next1 the Hotel has not established that the rates paid by the Crystal Crown Hotel is higher than the hotels in Terengganu. Kelantan and l3'ahang1 this includes the Hotel. No evidence was adduced to support the Hotel's contention. The law is trite that 'be who asserts must prove' which the Hotel has failed to do. (section 1'03 of the Evidence Act 1950; Eastern Enterprise Ltd 9. ag Chao Kin: [[969] 1 ML] 236). Further1 taking into account that the Hotel has been in operation for 35 years, the 20 steps increment accepted by the Industrial Court is justied and reasonable. In Crystal Crown Hotel ch Resort Sdn Bhd v. Kesattran Kebangsaan Pekerja-Peherja Hotel, Bar cit Restoran. Semenanjnng Malaysia [2011'] 9 ML] 119. the Court accepted that the 20 steps increments as justied where it stated as follow5: "(5?)" The dispute under this head was whether the l3 steps salary scale proposed by the hotel should be adopted or the 20 step salary scale proposed by the Union was to be accepted. The H? had accepted the 20 step salary scale proposed by the Union, The bases for tht's were: {a} the hotel has been in operation for alnrost 20 years: the union was guided by the 20 step salary scale adapted by a neighbouring hotel, Shah Village: and despite the rst CA being the rst CA to be executed. the hotel had been in business for alrnost 2|? years. eli LAW [2020] 1 LNS 609 Legal Network Series 1. PRIMULA BEACH HOTEL SDN BHD 2. MAHKAMAH PERUSAHAAN MALAYSIA ... RESPONDEN- RESPONDEN DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR (BAHAGIAN RAYUAN DAN KUASA-KUASA KHAS) PERMOHONAN SEMAKAN KEHAKIMAN NO: WA-25-348- 07/2019 Dalam perkara permohonan oleh Pemohon untuk Perintah Certiorari di bawah Aturan 53, Kaedah-Kaedah Mahkamah 2012; Dan Dalam perkara Seksyen 26 Akta Perhubungan Perusahaan 1967; Dan Dalam perkara Award Mahkamah Perusahaan No. 1291 Tahun 2019 bertarikh 25 . April 2019 yang diterima oleh Pemohon pada 8bb Mei 2019. ANTARA PRIMULA BEACH HOTEL SDN BHD ... PEMOHON DAN[101\"] l LNS Ell! Legal Network Series {58] Based on the reasons given, l in of the view that tile 20 step salary scale wasjustieti and ought to have been accepted. \" [29] The decision of the High Court in Crystal Crown Hotel's case has been afrmed by the Court of Appeal on 3l.?.2l]l'l. [30] Next, the Industrial Court was correct in holding that the Hotel Inust negotiate and must not unilaterally decide on the wages and service charge including to change the service charge system to clean wage system which also involved restructuring of wages. [31] This decision is in line with the Minimum Wages Order 2l2 in particular Order 6 which stipulates: \"Negotiation for restructuring of wages 6. Nothing in this order shall be construed as preventing the employer and the employee. or the trade union as the case may be. from negotiating on the restructuring of wages under section 178 of the Employment Act \"'55. section 93 of the Sabah Labour Ordinance or section ills of the Sarawak Labour Ordinance. as the case may be, before this Order contes into operation in relation to the employer concerned provided that- {a} the restructured basic wages to be paid to tile employee shall be in accordance with the minimum wages rates specified in this Order: (b) the restructured wages shall not be less favourable than the employee 's existing to ages ; 20 [2020] I LNS W9 Legal Network Series (c) the restructured wages shalt not he less than the amount of wages earned by the employee as agreed in the contract of service before the restructuring of the wages; the restructuring of the wages shall only involve the payment for wort: done during the normal hours of work of the employee; and the restructuring of the wages shalt not cause the employee to lose any remuneration specified under paragraph (a) to (I): of the denition of 'wages' in section 2 of the Employment Act \"55. section 2 of the Sahah Lahour Ordinance and Section 2 of the Saran-ah Lahaur Ordinance which the employee would he entitled to under the contract of service. " [32I 0n the some issue. in the Federal Court case of National Union of Hotel. liar and Restaurant Workers. Peninsular Malaysia v. Shangri-La Hotel (Malaysia) Bhd [20H] 5 CLJ 513. Richard Malanjum C155 (as he then was] said this: \"ll! the lib! l96? also provides the process to he followed in coming up with a collective agreement which is defined as \"an agreement in writing concluded between an employer or a trade union of employer on one hand and a trade union ofworltmen on the others relating to the terms and conditions of employment. and work of workmen or concerning relations between such parties '. Basically the parties are required to negotiate and upon concluding an agreement it is necessary to secure cognizance from the industrial Court as provided for under 1. if. There is no 2| [29211] 1 LNS say Legal Network Series provision that allows for unilateral imposition of terms antir conditions of employment by an employer or a trade union of employers upon members represented lay a trade union of workmen. \" [33] Likewise in the case of Buhit Jambul Hotel Development Silt: Bhd v. Kesatuan Kebangsaan Peherja-Peherja Hotel. Bar dun Restoran, Semenanjung Malaysia [2005] 1 [LE 92?. which stated the following: "The court is of the view that the existing art. 5(3) is a provision that should be maintained. it provides for the two parties to negotiate to determine these issues which are of importance to both. As has been held by the learned President in the case of Hotel Equatorial (M) Sdn Bhd v. Xebangsaan Pelterja-l'elcerja Hotel. Bar dan Restoran. Semenanjung Malaysia {wild} l LEE 4' l2 {Award No. ljl of l9\"). at p. 4l3: 'the hotel cannot be said to have the prerogative to create new positions within the scope of the agreement unilaterally and to determine the basic salary thereof'. Negotiations is the cornerstone of a successful relationship between the parties and to remove a provision for negotiation would only create imbalance in the relationship and lead ultimately to industrial disharmony. The court is confident that with a history of court previous collective agreements behind them. the parties would listen to the voice of reason in carrying out negotiation. " Ill-II In the present case. clearly the Hotel has no legal authority to implement the clean wage system unilaterally. 22 LAW: [2020] 1 LNS 609 Legal Network Series [35] The Hotel's contention that it has implemented the Minimum Wages Order 2012 and 2016 which resulted in the salary revision to the employees is misconceived. The purpose of Minimum Wages Orders is to ensure the employees is paid the basic salary as required under the Minimum Wages Order. [36] The compliance with the Minimum Wages Order does not exclude the employer to have a salary revision which the employees are entitled to including a raise in the maximum salary. [37] The rationale of Minimum Wage has also been explained by the Minister in tabling the National Wages Consultative Council Bill on 30.6.2011 reported in Hansard as follows: "Dalam fasal 2 rang undang-undang ini, gaji minimum ertinya gaji pokok yang diwartakan dalam perintah gaji minimum. Rasional gaji pokok dipilih sebagai gaji minimum adalah bagi mengelakkan pelaksanaan gaji minimum ini dimanipulasikan kaedah pembayarannya kepada pekerja. Selain itu, secara umumnya pembayaran elaun dan pemberikan faedah penggajian oleh majikan adalah berdasarkan kepada gaji pokok seseorang. Oleh itu, sebarang pemberian elaun seperti elaun lebih masa yang diasaskan kepada gaji pokok akan dapat meningkatkan pendapatan keseluruhan seseorang pekerja. Gaji pokok juga akan dapat memastikan seseorang pekerja dapat menerima caruman KWSP atau PERKESO yang lebin tinggi dan ini akan dapat menjamin masa depan pekerja dan keluarganya. Dengan kata lain, gaji minimum juga bertujuan meningkatkan perlindungan sosial kepada pekerja bukan sahaja semasa mereka bekerja tetapijuga untuk hari tua. " 23[2020'] l LNS 6|]! Legal Network Series [33] In the circumstances. the Hotel is not excused from providing salary revision on the basis of having complied with the Minimum Wages Orders. Article 12- Service Charge 8: Appendix B. [39] In regards to Article 12, the Industrial Court has accepted the Union's proposal to be incorporated in the New Collective Agreement as alluded to earlier. In arriving to this decision, the Industrial Court has made its ndings as follows: (i) no agreement has been obtained from the employees when the clean wage system implemented; (ii) the clean wage system is less favourable to the employees; (iii) the service charge is a fundamental term of the contract of employment governing the Union and the Hotel. On the issue that no agreement was obtained from the employees to implement the clean wage system. the Hotel as mentioned earlier. contends that the abolition of the service charge system was with the agreement of the employees. However. the Hotel who asserted this fact failed to introduce any evidence to support the contention. The Hotel cannot shift the burden to the Union to establish this fact. Winslow l in Eastern Enterprise Ltd '9. ag Chan Kins (supra) said this: \"i accordingly find that the piainus have not discharged the burden of proving a case against the defendant in the first place. g [2920] 1 LNS ens Legal Network Series No burden accordingly shifts to the defendant to prove that the premises were not being used for immoral purposes. In short, the defendant would not have to disprove something which has not been proved against him? " (See also Ton Kr'nr Kirsten v. Ton Kee Ktat (M) Sdn Bird [1993] 1 ML] 69? (HC)). [43] In any event, the Union has produced the following evidence : (i) on 1.1.2l3, the Hotel issued a circular signed by En. Ahmed informing the employees that a brieng will he held on 3.1.2013 relating to salary adjustment. (ii) UW~2 testied that as the employees were walking into the brieng room on 3.1.20\". the Hotel's General Manager. En. Marzuki. in a harsh tone inquired who had made a complaint regarding the abolition of the service charge system and said employees who do not want the clean wage system may leave the briefing. The employees who felt offended had left the brieng. (iii) UW-Z then with a group of housekeeping staff met with the then Human Resource Manager. En. Ahmad Shari Mijan to object to the clean wage system and UW2 has also raised his objection with the Front Ofcer Manager. [HI As the evidence of UW-2 was not challenged during cross- examination his evidence was correctly accepted by the Industrial Court. [HI Thus. the Industrial Court was correct in holding that no evidence of direct negotiation between the Hotel and the employees or the employees has agreed to the abolition of the service charge system. 25 [2020] 1 LNS 609 Legal Network Series [46] In relation to this, the Industrial Court was also correct to draw an adverse inference against the Hotel for failure to call En. Marzuki or En. Ahmed Shari Mijan as their witnesses. [47] As the Hotel contends that the clean wage system and abolition of the service charge system is with the agreement of the employees, both witnesses are material witnesses. En. Marzuki, the General Manager was the person who conducted the briefing on 3.1.2013, inter alia, in regards to the implementation of the clean wage system and En. Ahmed, the Human Resource Manager is the person who signed the circular for the said briefing. In facts, En. Marzuki was present during two of the hearing days at the Industrial Court. But was not called by the Hotel to give evidence. [48] The adverse inference under section 114(g) of the Evidence Act 1950 is that if both said witnesses were called to give evidence, the evidence given would be unfavourable to the Hotel. [49] Next, the Industrial Court was correct in rejecting the Hotel's clean wage system as the service charge is a fundamental term in the contract of service and cannot be unilaterally abolished by the Hotel. [50] The service charge is a fundamental term in the contract of service has been explained by the Privy Council in Peter Anthony Pereira & Another Appellants and Hotel Jayapuri and Another Respondents [1986] 1 WLR 449, in the following words: "The learned Judge and the Federal Court concluded that Mr. Pereira's share of the service charge was not "wages within the meaning of the Act. The reason which led them to this conclusion was that, as the Board and the hotel 26[2020] l LNS 609 Legal Natural-IL Series company have argued here, the service charge is money collected from the customers for distribution according to the points system and therefore, so ran the reasoning, was never the hotel company 's money but was money paid by the customers for the employees and passed to them through the hotel company. Even if this be a correct anainis of the position. it is plain that Mr. Pereira's entitlement to his share of the service charge collected by the hotel company arises antler his contract of service with the hotel company and therefore1 even if the hotel company in terms of that contract is acting as his agent to collect for him and the other employees from the hotel's customers. the service charges which they pay to the hotel company. that money is due to them by the hotel company under their contracts of serviCe as a reward for the service which the employees render under their contracts of service to the hotel company itself: Accordingly. the share of service charge is properly to be regarded as due to Mr. Pereira under his contract of service as remuneration and for the reasons already it is in respect of the normal periods of work. That money. once in the hands of the hotel company. is due by them as employer to Mr. Pereira in terms of his contract of employment and the provisions of the Act entitling the employer to relief from the employee for the employee 's share of the contribution under the Act. entitles the hotel company to deduct that contribution. not only from the basic salary, but also from the money due antler his contract to Mr. Fereira in respect of his share of the collected service charge. Their Lordships are therefore of the view that the reasoning of both the Federal Court and 27 [mu] 1 LNS any Legal-Network Series the learned Judge, with great respect, does not negative the conclusion which has been already stated. " E51] Further, the replacement of service charge system with clean wage system has been decided in the Crystal Crown's case which was then afrmed by the Court of Appeal. In this case it was held that the clean wage system proposed by the Hotel was rightly rejected by the Industrial Court. The High Court in the said case held as follows : \"The service charge scheme is unique. in that, the money does not come from the employer but collected from the customers of the hotel and placed in a fund jointly owned by the employer and employees. This fund is pure income of the employee which sum is paid to employees pursuant to the contract ofservice. The Privy Council had clarified that the money from which the service charge points were paid did not belong to the hotel (see Peter Anthony Pereira and Another v. Hotel Jayapuri Bhd and Another {was} l Whit 4'49). The rationale and concept for the introduction of the service charge in the hotel industry as highlighted above showed that the money collected and deposited into the joint account of the employee and the hotel belongs to the eligible employees of the hotel and the payment to the employees in accordance of the service points allocation is provided in the contract of employment. hence i agree with the award made by the JC that the hotel could not be permitted to meet its obligation to pay the minimum wage as envisaged by the NWCC and MWO by utilising the service charge paid by its customers or patrons. in view of 23 [2021!] l LNS 609 Legal Network Series [52] \"Lil [54| [55| the above. the 'ciean wage' system proposed by the irate]r was rightiy rejected by the HT. " In addition, the clean wage system is less favourable to the employees as evidence produced by the Union shows that the gross salary of an employee is lesser in the clean wage system as compared to the service charge system. This is not in line with the Minimum Wages Orders as referred to earlier. This issue has also been decided in Crystal Crown's case where the Judge said this: \"38; The Jaw had envisaged that the impiementation of the minimum wage system mast not in any way resatt in the empioyee getting anything favourahie than the earpioyee '5 current wages. Neither cauid the basic restructured wages be Jess than the amount of wages earned by the empiayee pursuant to the contract of service. " Reverting to the present case. the Industrial Court has taken into account UW-Z's salary under the service charge system which was RM1.339.00 compared to RMIJSOJUO after the implementation of the clean wage system. Likewise. another employee by the name of Saidi Mad. Rani @ Senna. where a letter was issued by the Hotel to him that he would be paid a clean wage of RM1.690.00 compared to RM2.052.50 he was paid under the service charge system. Additionally. the service charge system is the current practice of other hotels and accepted practice in the hotel industry as explained by the Union's witness, UWl. The Hotel also raised an issue that the Union did not object when the clean wage system was implemented. This contention. 29 (2020] 1 LNS 609 Legal Network Series 1. KESATUAN KEBANGSAAN PEKERJA-PEKERJA HOTEL, BAR DAN RESTORAN, SEMENANJUNG MALAYSIA 2. MAHKAMAH PERUSAHAAN MALAYSIA ... RESPONDEN- RESPONDEN JUDGMENT Introduction [1) On 25.4.2019, the Industrial Court handed down its award on a dispute over the terms of the Collective Agreement between the National Union of Hotel, Bar & Restaurant Workers, Peninsular Malaysia ('the Union') and Primula Beach Hotel Sdn Bhd ('the Hotel'). |21 Arising from this award, the Hotel filed a judicial review application No: WA-25-348-07/2019 for an order of certiorari to quash part of the said award. 131 The Union also filed a judicial review application No: WA-25- 334- 07/2019 for an order of certiorari to quash part of the Industrial Court's award. |4) Both judicial review applications were heard together by this court as the challenge is against the same award. The Salient Facts [5) Based on the affidavits filed and written submissions by both parties, the relevant facts in these applications are the following:[2:120] 1 LNS we Legal Network Series E515] i57| l53| [59I I nd, is devoid of any merits based on the explanation given by the Union which are the following: (i) the clean wage system was implemented when the previous 61 Collective Agreement had long expired and the in house Union had dissolved; (ii) the Union was not informed of the implementation of the clean wage system; (iii) the Hotel's action in challenging the recognition of the Union since the Union was accorded recognition on 12.2.2040, right up to the Federal Court where the Eeave application was dismissed on 26.9.2013. In the circumstances, the Industrial Court was justied in rejecting the clean wage system and restoring the service charge system. Next. the Hotel also contended that the New Collective Agreement is the l" Collective Agreement and not the 4* Collective Agreement as decided by the Industrial Court On this issue. based on the 6 previous Collective Agreements. the Union had been a party to the l\" 2"\" and 3\"" Collective Agreements. The previous terms and conditions continue to govern the parties to the Collective Agreement until superceded by a new Collective Agreement with a new terms and conditions This is consistent with section I? of the IRA I915? which provides: "(U A collective agreement which not been taken cognizance of by the Court sitaii' be deemed to be an award and Mail be binding on - JD [2020] 1 LNS 609 Legal Network Series (a) the parties to the agreement including in any case where a party is a trade union of employers, all members of the trade union to whom the agreement relates and their successors, assignees or transferees; and (b) all workmen who are employed or subsequently employed in the undertaking or part of the undertaking to which the agreement relates. (2) As from such date and for such period as may be specified in the collective agreement it shall be an implied term of the contract between the workmen and employers bound by the agreement that the rates of wages to be paid and the conditions of employment to be observed under the contract shall be in accordance with the agreement unless varied by the subsequent agreement or a decision of the Court. " [60] After having considered the evidence before the Industrial Court and the grounds of the award, I find, there is no reason for this court to interfere with the findings of the Industrial Court. The award does not suffer any infirmities of illegality or irrationality and no substantial injustice has ensued or likely to ensue in the present case. [61] Further, the Industrial Court has taken into account the provision of section 30(4) of the IRA in his award. Conclusion [62] As such, the Hotel's application for judicial review is dismissed with costs of RM6,000.00. 31[run] 1 LNS 5119 Legal Network Series The Union's Judicial Review Application ['63] The Union's judicial review application is in relation to Article 24(c) as decided by the Industrial Court to be incorporated in the new Collective Agreement. For ease of reference Article 24ft) is as follows : "(cl All employees shall be entitled to a maximum of Ringgit Malaysia forty {RM40.00) per visit and not more than Ringgit Malaysia eigitt {RMBQOO} in a month from each Hotel '5 appointed clinic free consultation together with medicine precribed or in the case of emergency by any Government Medical Practitioner. " Article 24(c) clearly provides for monetary capping on out patient treatment which is RIM-10.00 per Visit Ell-180.00 per month. Firstly. Article 24 has been agreed by parties and placed under the Agreed Articles in the written statement by both parties under section 54(1) oftl'le IRA [967. [6H The Agreed Article 24 is the following: \"ARTICLE 24 SICK LEA VE AND HOSPITAL/SA \"ON (a) Every employee shall after being examined and certied by the Hotel's appointed doctors, any registered medical practitioner or medical officer be entitled to paid sick leave in tlte aggregate in each calendar year at the Hotel '3' expenses as follows: [2010] 1 LNS sue Leg-l Network Series (l!) is) (1') An employee who has completed Jess than two years service. shall be entitled to fourteen (l4) working days; (ii) An employee who has completed two years service or more but less than ve years service. shall be entitled to eighteen (l8) working days: (iii) An employee who has completed ve (5) years service or more, shall be entitled to twentywtwo (22) working days. Where hospitalisation is necessary. the employee is entitled to sixty (60) days in aggregate in each year provided that where an employee takes any paid siclt leave under la) in any calendar year, the period of his entitlement to paid sick leave under this clause in such calendar year shall be reduced to the extent of the number of days of paid sick leave taken under (a) above. Where recommended by the Hotel 's appointed doctor or Government Medical (Nicer, employees shall be granted free treatmentand hospitalisation in a second class ward in a government hospital or its equivalent in a private hospital. The Hotel shall bear the cost of second class hospital accommodation charges. medical expenses. surgical fees; specialist fee and X rays. provided always that the total liability of the Hotel shall not exceed Ringgit Malaysia Five Thousand (Rhflfl in any calendar year; LAW [2020] 1 LNS 609 Legal Network Series (d) An employee shall also be entitled to paid sick leave after examination by a dental surgeon as defined in the Dental Act 1971; (e) An employee who is certified by the hotel's appointed doctors, any registered medical practitioner or medical officer to be ill enough to be hospitalised but is not hospitalised for any reason whatsoever, shall be deemed to be hospitalised for the purpose of this Article; (f) The Hotel shall not be liable for: (i) medical, surgical or other appliances; (ii) dentures or dental treatment; (iii) Spectacles, lenses or optician's fees; (iv) Expenses incurred as a result of confinement, disease or injuryarising from misconduct or exposure to any unjustifiable hazards; (v) Expenses incurred as a result of attempted suicide or injury arising from the performance of an unlawful act, provoked assault, drug abuse or breach of peace except endeavouring to save human life; (vi) Expenses incurred as a result of miscarriage or abortion, treatment relating to birth control or infertility, any complications treatment resulting from pregnancy; (vii) Any expenses incurred for the treatment of any mental illness certified as such by the Hotel's[run] 1 LNS any Legal Natural-IL Series appointed doctor or Government Medical Oicen " E63] Thereafter. the Hotel proposed the inclusion of Article 246:) and included it in the Disputed Articles without amending the Hotel's ' pleading. Here, the Industrial Court has failed to take into account that parties are bound by their pleadings as explained by the Federal Court in the case of Ranjit Kaur nip 3 Gopal v. Hotel Excelsior {M} Sdn bhd [Him] 6 ML] 1. which held as follows : "There is no doubt that the underlying objectives and purposes of the Act is to ensure social justice to both employers and employees and to advance the progress of industry by bringing harmony and cordial relationship between the parties and to eradicate unfair labour practices. to protect workmen against victimisation by employers and to ensure termination of industrial disputes in a peaceful manner (see Tanjong .lara Beach Hotel Sdn Bhd v. National Union of Hotel. Bar :2 Restaurant Workers Peninsular Malaysia {2004} 4 CU 657). However. as rightly pointed out by learned counsel for the respondent. s. 30(5) of the Act cannot be used to override or circumvent the basic rules of pleading. The industrial Court. like the civil courts must conne itself to the four corners of the pleading. This had been held to be so by this court in Roma Chandran which are as follows .' it is trite law that a party is bound by its pleadings. The industrial Court must scrutinise the pleadings and identify the issues. tahe evidence. hear the parties' arguments and nally pronounce its judgment having strict regards to the issues. 35 [21:20] 1 Laws ans Legal-Network Series There is no reason to depart from the above view. Pleadings in the Industrial Court are as important as in the civil courts. The appellant must plead its case and the Industrial Court must decide on the appellant 's pleaded case. This is important in order to prevent element of surprise and provide room for the other party to adduce evidence once the fact or an issue is pleaded. Thus, the industrial Court's duty. to act according to equity. good conscience and substantial merits of the case without regard to technicalities and legal form under s. 30(5). does not give the industrial Court the right to ignore the Industrial Court Rules \"'6? made under the principle Act. " ['10] Thus. in accepting the Hotel's proposal with regards to unpleaded Article 24(c). in the circumstances of this case. is an error of law hy the Industrial Court. E'lll Further. money capping for out-patient treatment in Article 24(c) is unreasonable. less favourable and causes substantial unjustice to the employees. Thus. this is. I believe. the reason why there was no monetary capping on out-patient treatment in all the previous Collective Agreements. I'lZI I am in agreement with the Judge who rejected the monetary capping on out-patient treatment in the ease of Kesatuan Peherja-Feherja Kelah Sentenanjung Malaysia v. Tropicana Golf and Country Resort Berhad [20I2] I IL! 122, and said this : "... The court after comparing with the other clubs in the Klang Valley finds that these clubs didI not put any capping for outpatient medical treatment. The court also believes that the key to retain the employees in the company is to offer greater benets. Thus. the court is of the view that 36 LAW [2020] 1 LNS 609 Legal Network Series there should not be any monetary capping for the employees of the club but the said medical treatment and outpation treatment must be by the club's panel of doctors, government hospitals or by a specialist recommended by the club's doctors at the expenses of the club, which shall include the cost of consultation and prescribed medicine. " Conclusion 173] Premised on the aforesaid reasons, the Union's judicial review application is allowed with costs of RM3,000.00. The award of the Industrial Court on Article 24(c) is set aside. Dated: 16 JANUARY 2020 (NORDIN HASSAN) Judge Appellate and Special Powers Division Kuala Lumpur High Court. COUNSEL: PERMOHONAN SEMAKAN KEHAKIMAN NO: WA-25-348-07/2019 For the applicant - A Ramadass & M Jothiletchimy; M/s Ramadass & Associates For the respondent - Shireen Selvaratnam, Srah Ho Yixin & Ooi Xin Yi; M/s Sreenevasan 37LAW [2020] 1 LNS 609 Legal Network Series PERMOHONAN SEMAKAN KEHAKIMAN NO: WA-25-334-07/2019 For the applicant - Shireen Selvaratnam, Srah Ho Yixin & Ooi Xin Yi; M/s Sreenevasan For the respondent - A Ramadass & M Jothiletchimy; M/s Ramadass & Associates Legislation referred to: Evidence Act 1950, ss. 103, 114(g) Industrial Relations Act 1967, ss. 17, 30(4), 54(1) Minimum Wages Order 2012, 0. 6[2020] 1 LNS 609 Legal Network Series (i) On 17.3.2008, the Union submitted a claim for recognition where on 12.2.2010 the Minister of Human Resources decided recognition be given to the Union. The Hotel's application for judicial review to quash the Minister's decision was dismissed by the High Court on 22.8.2011. The Hotel's appeal to the Court of Appeal was dismissed on 6.5.2013 and the Hotel's application for leave to the Federal Court was dismissed on 26.9.2013. (ii) On 22.1.2016, the Union submitted a proposal to the Hotel for a new collective agreement as the previous has expired since 31.10.2007. The negotiations on the Collective Agreement commenced on 15.9.2016. (iii) Prior to the proposed new Collective Agreement, there were 6 Collective Agreements which are as follows : (a) 1"t Collective Agreement. Collective Agreement between Pantai Terengganu Motel (Pantai Primula Hotel) and the Union from 1.4.1985 to 31.3.1988. (b) 2nd Collective Agreement. Collective Agreement between Primula Resorts Management San Bhd. (Primula Beach Resort) and the Union from 1.1.1991 to 31.12.1993. (c) 3"d Collective Agreement. Collective Agreement between Primula Resorts Management San Bhd (Primula Beach Resort) and the union from 1.1.1994 to 31.12.1996. (d) 4th Collective Agreement.LAW [2020] 1 LNS 609 Legal Network Series Collective Agreement between PTB Resorts Sdn Bhd (Primula Parkroyal, Kuala Terengganu) and Kesatuan Pekerja-Pekerja Primula Parkroyal Kuala Terengganu (In-House Union) from 1.11.1997 to 30.10.2000. (e) 5" Collective Agreement. Collective Agreement between PTB Resorts San Bhd (Primula Beach Resort) and In-House Union from 1.11.2001 to 30.10.2004. (f) 6" Collective Agreement. Collective Agreement between PTB Resorts San Bhd (Primula Beach Resort) and In-House Union from 1.11.2004 to 30.10.2007. (iv) On 30.12.2016, the Union reported the trade dispute in respect of the new Collective Agreement to the Director- General of Industrial Relations pursuant to section 18(1) of the Industrial Relations Act 1967 ('IRA 1967'). (v) As both parties failed to resolve the trade dispute and to conclude the terms of the new Collective Agreement, the trade dispute was referred to the Industrial Court by the Minister on 24.3.2017 for adjudication pursuant to section 26(2) of the IRA 1967. (vi) In the Industrial Court proceedings, the dispute was in relation to 7 articles of the new Collective Agreement which are as follows: (a) Article 10 - Salary Structure and Appendices A & A 1;LAW: [2020] 1 LNS 609 Legal Network Series (b) Article 12 - Service Charge & Appendix B; (c) Article 23 - Paid Leave for Trade Union Course; (d) Article 27 - Retirement Benefits; (e) Article 24 - Sick Leave & Hospitalisation; and (f) Article 34 - Medical Boarded Out. (vii) After having heard the evidence and submission by parties, on the 25.4.2019, the Industrial Court decided inter alia, the following: (a) Article 10 proposed by the Union to be incorporated in the Collective Agreement which is as follows: Article 10 -Salary Structure and Appendices A & Al. (a) With effect from 1" January 2016 every employee whose basic salary is less than RM900. 00 shall be entitled to a salary revision as follows: (i) An employee who has served less than 5 years shall be paid the basic salary of RM900. 00; (ii) An employee who has served 5 years and more but less 10 years shall be paid the basic salary of RM900. 00 + 2%; (iii) An employee who has served 10 years and shall be paid the basic salary of RM900.00 + 4%;LAW: [2020] 1 LNS 609 Legal Network Series (iv) An employee irrespective of years of service is drawing a basic salary of RM900. 00 and more, shall be paid 8% on the existing basic salary; (b) With effect from 1 January 2016, every employee shall follow the salary structure J as per Appendix A and from 1 July 2016 as per Appendix A 1, (c) In the event of a new position which the Scope of this Agreement is created, the Hotel together with the Union shall negotiate on the salary and service charge points pertaining to such position. (b) Article 12 proposed by the Union to be incorporated in the Collective Agreement which is the following: ARTICLE 12 SERVICE CHARGE, APPENDIX A (a) The Hotel shall retain 10% of the 100% service charge imposed on all bills monthly. The remaining 90% of service charge shall be fully distributed to all employees covered within the Scope of this Agreement as listed in Appendix B, except part-times, temporary, casual and retired employees. (b) The Hotel shall furnish to the Union Head Office not later than fifteenth (15") day of the following month, a copy of the monthly statement of accounts of the service charge of the preceding month and to extend the same to the House Committee as follows: (i) The total service charge for each outlet;LAW: (2020] 1 LNS 609 Legal Network Series (ii) The grand total service charge; (iii) The total number of service charge points of the employees; (iv) The total number of service charge points of increased or decreased; (v) The value of service charge per point; (vi) The names, designation, department, date of employment and individual service charge point together with the individual value. (c) The Union shall have every right to check and inspect all accounting books, bills, documents or accounts relating to the 10% service charge of any period of time on serving seven (7) days written notice. (d) The service charge points shall on no circumstances be deductible when an employee is on any type of paid leave. (c) Article 23 proposed by the Union to be incorporated in the Collective Agreement which is as follows: ARTICLE 23 PAID LEAVE FOR TRADE UNION COURSES (a) An employee nominated by the Union to attend Trade Union Courses organised by the Union, Malaysian Trades Union Congress (MTUC), National Productivity Corporation (NPC) or the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF), shall be granted leave without abatement of wages:[102\"] l LNS 6|}! Leg-l. Network Series (a) {.0 Provided that: (i) The Union noties the Hotel in writing of one (1) week before the commencement ofsuci: courses. As regard to Article 24, its content has been agreed by parties except sub-artiele {c}. The industrial Court cited the following subarticle (e) : We) Ail employees shalt be entitled to a maximum of Ringgit Malaysia forty (RM-ttt) per visit and not more than Ringgit Malaysia eighty (EMBOCOJ in a month from each Hotel's appointed clinic free consnitution together with medicine prescribed or in the case of emergency by any Government Medical Practitioner. " The Industrial Court decided to incorporate this sub-article {c} in the Collective Agreement. Artie-i: 27 has been agreed by both parties and no further ruling was made with regards to this Article. Finally. as to Article 34', the Union proposes 15 days last drawn basic salary for every year of service. or a lump sum payment of RM3.000.00 whichever is higher. The Industrial Court accepted the Hotel's contention that the payment should be the discretion of the Hotel and not a legal obligation. As such. the proposed article by the Union is excluded from the Collective Agreement. The Industrial Court also made a nding that the new Collective Agreement is the 4'\" Collective Agreement