PETALING JAYA: Beleaguered government-linked company TH Heavy Engineering Berhad (THHE) was slapped with an award of RM440,300 after the Industrial Court heard a former senior executive’s claim of constructive dismissal in the company’s absence.
The finance ministry owns a 64.45% stake in THHE through its wholly owned subsidiary, Urusharta Jamaah Sdn Bhd.
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In her award, Kuala Lumpur Industrial Court chairman Eswary Maree said: "Two individuals appeared before this court and requested to appear for the company (THHE). Upon enquiry of this court, these individuals admitted that they are not employees of the company but of a subsidiary company."
Holding they had "no authority and no locus standi to appear on behalf of the company", Eswary proceeded to hear the case on an ex-parte basis. She said Section 29(d) of the Industrial Relations Act 1967 permitted the court to proceed with the hearing in THHE’s absence.
In her award dated July 3, Eswary also noted that the Malaysian Employers Federation had on March 11 – two weeks prior to the trial date – written to inform the court that they were no longer representing THHE in the proceedings.
Eswary went on to issue the award in favour of claimant Malik Rahim, THHE’s former group general manager of finance, holding he was constructively dismissed by the company on March 3, 2022.
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Eswary said the claimant was entitled to treat himself as dismissed after THHE imposed two unilateral pay-cuts, failed to remunerate him for additional work undertaken, demoted him, and prohibited or excluded him from carrying out his duties.
She said the company’s conduct was in breach of the fundamental terms of the claimant’s contract of employment and "evinced an intention on the part of the company not to be bound by (its) essential terms."
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Referring to THHE’s pleaded defence to the claim, Eswary said: “This Court also finds that the company’s reliance on (the Covid-19) pandemic, (its) PN 17 status and the flailing oil and gas industry as a justification for its acts towards the claimant will not hold water as this is not a case of retrenchment.
"This Court finds that the company was unable to prove on the balance of probabilities that the dismissal of the claimant was with just cause or excuse," the award read.
Eswary awarded the claimant 24 months’ backpay, subject to a 30% deduction for post-dismissal earnings, amounting to RM310,800.
He was also given RM129,500 as compensation in lieu of reinstatement, being one month’s salary of RM18,500 for each of his seven years of service with the company.
The claimant, who joined THHE as senior financial accounting manager in 2014, before rising to the position of group general manager of finance four years later, treated himself as constructively dismissed after THHE failed to respond to three letters of protest.
“The claimant wrote to the company referring to his previous communications and stated that its silence and inaction showed that it had no wish to honour the employment relationship.
"He further noted that his access to emails, shared folder and other systems had been blocked without his knowledge or consent. In the circumstances, the claimant stated that he had no choice but to consider himself constructively dismissed," she said.
Eswary also noted from the claimant’s evidence that THHE’s legal department had in 2021 refused to cooperate with him to finalise the company’s audited accounts. She also said he was excluded from exco meetings he had attended previously.
She said the claimant had by notice protested his pay cuts and demotion on several occasions.
Despite such notice, the company failed to remedy the breaches complained.
Victimised due to whistle-blowing
The claimant also alleged that he had suffered unlawful acts of victimisation, intimidation or mistreatment for lodging three whistle-blower complaints in 2021 over "serious financial misconduct"perpetrated by certain employees."
"No substantial or meaningful disciplinary action was taken against the said employees by the company. In fact, it appeared that the company had swept it under the rug or rewarded or remunerated some of the said employees," he said.
Eswary said based on the conduct of the company, the claimant had successfully proven that he was constructively dismissed.
"The company’s conduct were all breaches of fundamental terms of the contract of employment which were calculated to seriously damage the relationship of confidence and trust between them,"she said, adding that they were"unacceptable and unjust."
Aneera Joshini Chowdhury appeared for the claimant.
THHE went into voluntary winding-up in September last year.
On Feb 2, the High Court allowed three of the company’s creditors to commence proceedings for its compulsory winding-up.
On May 27, the High Court allowed the three creditors to appoint the official receiver as THHE’s interim liquidator and take possession of all the company’s assets and property.