Josephine Banun Pako v.

[2008] 7 CLJ Hong Leong Bank Bhd 699

A JOSEPHINE BANUN PAKO

v.

HONG LEONG BANK BHD

B HIGH COURT SABAH & SARAWAK, KUCHING
HAMID SULTAN ABU BACKER JC
[JUDICIAL REVIEW NO: JR-02-07-II]
31 OCTOBER 2007

C LABOUR LAW: Industrial Court - Award - Whether award should

reflect restitution for contemptuous conduct of employer - Whether employer
wrongfully and falsely accused employee of misappropriation of money -
Whether applicant should be compensated in full

LABOUR LAW: Industrial Court - Award - Practice Note 1 of 1987

D
of Industrial Court - Whether Industrial Court can award back wages
exceeding 24 months - Whether Practice Note 1 of 1987 of Industrial
Court prevents award of back wages exceeding 24 months - Quantum of
back wages is a matter within discretion of Industrial Court and must
reflect findings and observations
E
The applicant, a clerk cum teller in the bank working for more
than eight years, was very unreasonably and unscrupulously
accused of a criminal offence and dismissed from employment. The
learned chairman of the Industrial Court recognised the great
F injustice employed on her by the respondent. Following from his
findings, the learned chairman ordered the claimant to be
reinstated to her previous employment. On the relief of back
wages, the learned chairman held that Practice Note No 1 of
1987 issued by the Industrial Court, limited the award of back
G wages to a period of 24 months. The applicant applied for an
order of certiorari to quash that part of the award awarding her
back wages limited to 24 months. The applicant, inter alia, claimed
that the learned chairman had committed an error of law in
limiting the monetary award of back wages to a period of 24
H months as this was a case in which reinstatement was ordered
and was not a case wherein the court ordered compensation in
lieu of reinstatement.

I
 Current Law Journal
700 Supplementary Series [2008] 7 CLJ

Held (allowing the application): A

(1) The award must reflect restitution for the contemptuous

conduct of the respondent who had, without due care and
regard of the employees’ interest as a whole, imposed on an
honest employee who had diligently served the respondent for B
about a decade, wrongful and false accusation of misappropriation
of RM500. As a result, the respondent had destroyed the self
respect, esteem of the employee as well as that of her family
members, which must have caused great stress to the applicant
and her family members. In such cases, there was nothing C
inequitable or unconsciousable for the applicant to be
compensated in full. This was a case which warranted to do
so. (para 9)

(2) Practice Note 1 of 1987 of the Industrial Court cannot tie

D
the hands of the tribunal when the justice of the case
warrants not to do so. The quantum of back wages is a
matter within the discretion of the Industrial Court and must
reflect the findings and observations. In this case the award
was not reflective of the findings. (para 9)
E
Case(s) referred to:
Chan Hock Liong v. Associated Motor Industries (M) Sdn Bhd [1998] 3 CLJ
Supp 105 HC (refd)
Chong Chung Moi v. The Government of the State of Sabah & Ors [2007] 4
AMR 472 (refd) F
Dr A Dutt v. Assunta Hospital [1981] 1 LNS 5 FC (refd)
Edaran Otomobil Nasional Sdn Bhd v. Neoh Hock Lye, Quah Poh Huat,
Lee Cheow Liam [1990] 1 ILR 163 (refd)
Hoh Kiang Ngan v. Mahkamah Perusahaan Malaysia & Anor [1996] 4 CLJ
687 FC (refd)
Kelab Golf Negara Subang v. Mohd Roslan Khamis [1992] 2 ILR 239 G
(refd)
Koperasi Serbaguna Sanya Bhd (Sabah) v. Dr James Alfred (Sabah) & Anor
[2000] 3 CLJ 758 CA (refd)
Michael Lee Fook Wah v. Menteri Sumber Tenaga Manusia, Malaysia &
Anor [1998] 1 CLJ 227 CA (refd) H
MP Mathew Palm Oil Sdn Bhd, Prai v. Arulandu Alponsoh [1991] 2 ILR
1317 (refd)
Nestle Food Storage (Sabah) Sdn Bhd v. Terrence Tan Nyang Yin [2002] 1
ILR 280 (refd)
Oriental Assemblers Sdn Bhd Johor v. Zahibul Mohamad [1993] 1 ILR 319
Sarawak Shell Bhd v. Peter Lenjau & Anor [2004] 2 ILR 37 (refd) I
Syarikat Kenderaan Melayu Kelantan Bhd, Kota Bharu v. Jusoh Salleh
[1994] 1 ILR 294 (refd)
 Josephine Banun Pako v.
[2008] 7 CLJ Hong Leong Bank Bhd 701

A Syarikat Kenderaan Melayu Kelantan Bhd v. Transport Workers Union

[1992] 1 ILR 101 (refd)
Transport Workers’ Union v. Selangor Omnibus Co Ltd (Award No 62 of
1981) (refd)
UMW Toyota Assembly Services Sdn Bhd. v. Transport Equipment & Allied
Industry Employees’ Union [1990] 2 ILR 339 (refd)
B
Utusan Melayu (M) Bhd v. National Union of Journalists’ Malaysia [1992]
2 ILR 177 (refd)
Web Printers Sdn Bhd v. Nandah Kumar PK Menon [1992] 2 ILR 124
(refd)
Wong Yuen Hock v. Syarikat Hong Leong Assurance Sdn Bhd & Another
C Appeal [1995] 3 CLJ 344 FC (refd)

For the applicant - See Chee How; M/s Baru Bian

For the respondent - Leonard Shim; M/s Reddi & Co

Reported by Amutha Suppayah

D

JUDGMENT

Hamid Sultan Abu Backer JC:

E
[1] This is my judgment in respect of the applicant’s application
for an order of certiorari to quash that part of the Industrial
Court’s Award No. 74 of 2007 awarding the applicant back wages
which were limited to 24 months.
F
[2] In this application, the applicant sought only to review that
part of the learned chairman’s decision in holding that the
monetary award of back wages be limited to a period of 24
months.
G Brief Facts

[3] This is a sad case where the applicant was very unreasonably
and unscrupulously accused of a criminal offence and dismissed
from employment. The accused was a clerk cum teller in the bank
H working for more than eight years. One day a sum of RM500 went
missing and the applicant was the one who brought it to the
attention of all the relevant persons of the respondent immediately
and that too on that very same day that the money went missing.
Subsequently, a domestic enquiry was held to answer the charge
I that “the claimant as the teller of Miri branch had on 1 October
2001 misappropriated RM500 from the account of Marong
General Contractor (No. 02700060472) when she debited RM500
 Current Law Journal
702 Supplementary Series [2008] 7 CLJ

from the said account for the encashment of a cash cheque No. A
457841 presented by Lydia Ujong Eban but she did not pay and
return the cheque to the customer thereby causing a loss of
RM500 to the bank”. Very admirably, the learned chairman of the
Industrial Court was quick to recognise the great injustice
employed on her by the respondent and made the following B
findings, observations and awards namely:
Regrettably what we have before this Court is not even a trace
of suspicion that the Claimant has committed misappropriation of
Bank’s funds. The Bank, has forgotten that it is their bounden
C
duty to discharge untainted proof that the claimant has
misappropriated the funds and she has done so dishonestly, to wit
she has gained unlawfully and the Bank has suffered a loss
unlawfully. This is consistent with the definition of “dishonesty”
found in section 24 of the Penal Code. Further consistent with
section 403 of the same Code it is not proven on a balance of D
probabilities that the claimant has committed the misappropriation
by converting the funds for her own use or for some other
purpose.

Conclusion
E
Adopting the text book authorities referred to earlier in this Award
to the present case at hand it can be concluded that the body of
evidence available tantamount not even to a reasonable suspicion
thus not amounting to a belief in the guilt of the claimant, the
employee of the bank. In the absence of that belief the Bank has
F
no reasonable grounds to sustain the allegation against her. The
Bank has also failed to make a reasonable investigation into the
alleged misconduct by the claimant and the conclusions drawn by
the Panel Of Inquiry is not tenable.

From the evidence adduced both in this Court and at the G

disciplinary inquiry, what is available is not even a trace of
suspicion that the claimant has misappropriated the funds in
question. Her conduct and her consistent explanation to her
superior officers both during the time of transaction and before the
panel of inquiry is consistent with the discharge of her duties. Her
conduct in the alleged transaction and her honest explanation is H
laudable and consistent with her express contract of employment
with the bank. Inter alia in her “Terms and Conditions of
Employment under Hong Leong Bank Berhad” produced in Court
as Annexure “R-6” to the Bank’s Bundle of Documents marked
in Court as COBD she has agreed to the following: I
 Josephine Banun Pako v.
[2008] 7 CLJ Hong Leong Bank Bhd 703

A …k) FRAUDS & MALPRACTICES: You are expected to

maintain a standard of conduct and integrity which is
beyond reproach. Guidelines and regulations enforced
by the Bank, BAFIA, Code of Ethics and any
guidelines circulated by Bank Negara Malaysia and
Association of Banks in Malaysia from time to time
B
must be strictly complied with.

If you are found to be involved directly or indirectly

in malpractices, fraud, misappropriation, forgery or
corruption, disciplinary action, including dismissal and
C where applicable criminal prosecution, may be taken
against you …
Hence pursuant to clause (k) of R-6, it is crystal clear that she
has contracted with the bank to undertake her task and
responsibility onerously, dutifully and at all times cautiously. She
D has also at all times especially during the impugned transaction
maintained a standard of conduct and integrity which is beyond
reproach.
It is only apparent that the claimant has performed her task as a
teller responsibility. This is compatible with her job as a teller; by
E virtue of which she holds a fiduciary position. She is in effect
entrusted to deal with the Bank’s funds, cash or otherwise. Her
action speaks volumes and her immediate reference to her
supervisor of the transaction bespeaks of her honesty and integrity
wholly consistent with her position as a teller.

F …
Remedies
Following from my findings and conclusion above, I now order
the claimant to be reinstated to her previous employment. The
order of reinstatement is befitting in the case of this claimant as
G her conduct at work and during the impugned transaction is above
board. Her immediate reference to her supervisor COW1 only
fortifies her trustworthiness. Further the claimant has expressed
her wish to go back to work with the Bank as she testified that
she has no ill feelings and the Bank was just doing their job. She
H must be commended for being magnanimous after having a sword
of Damocles over her livelihood. The Bank on the other hand has
not shown any evidence to refute the claim by the claimant for
reinstatement or has negated the testimony of the claimant on this
aspect of the case. As the Bank has not adduced any form of
evidence that it does not wish to take the dismissed claimant back
I to her job, this Court cannot take an easy approach and decide
that it may not be practicable to put the claimant back into the
employment with the Bank. The Bank has also not proffered any
evidence of impracticability.
 Current Law Journal
704 Supplementary Series [2008] 7 CLJ

… A

On the relief of back wages, the following are my

observations.

– The claimants are entitled to back wages from the date of

dismissal to the date of hearing; B

– The rationale being the claimants will be in full employment

with the employer if not for the dismissal, which is found to
be unjust, without basis and excuse.

– Practice Note No 1 of 1987 issued by the Industrial Court, C

which speaks of “Guidelines on dismissal cases”, seeks to
limit the award of back wages to a period of 24 months.
On the effect of the application of the Practice Direction, I
am reminded of the observation made by this court in
Award No 94 of 2005, Chung Sen Transportation v. Johnny
D
anak Rinip, also reported in [2005] 1 ILR 184, in the
following manner:

… It has to be borne in mind that the Practice Note is

only a guideline as the intitulement suggests and nothing
more, thus it serves as a guide to prevent astronomical E
compensation award being handed down by the
Industrial court. The practice direction is intended to be
no more than a guideline and cannot be exalted into a
rule of law reflecting the true effect of the law relating
to remedies available to a dismissed workman. In this
regard aid is sought from the dicta of Raja Azlan Shah F
LP (as he then was) sitting in Federal Court in the case
of Jayasankaran v. Public Prosecutor [1983] 1 CLJ 171;
[1983] CLJ (Rep) 182 …

– However as an arbiter of industrial disputes, this court has

G
to be reminded of the principle of equity and good
conscience, the fulcrum upon which the court has to lean on
when awarding monetary compensation. This applies with
equal force to both the employee and the employer.

– Further the court is also bound by the principle that for an H

award of back pay, it is the duty of the claimant to mitigate
against loss and the burden of proving that the claimant has
not done so lies with the employer.

– There shall be an adjustment made to the award if the

claimant has been able to secure employment since the date I
of dismissal. Further if the matter to which the claim relates
was to any extent caused by or contributed to by any action
of the claimant, the court may reduce the back pay. This is
 Josephine Banun Pako v.
[2008] 7 CLJ Hong Leong Bank Bhd 705

A in accord with the principle adumbrated in the case of Dr

James Alfred (Sabah) v. Koperasi Serbaguna Sanya Bhd (Sabah)
& Anor [2001] 3 CLJ 541. Statutorily, it is also in accord
with subsection 30(5) of Act 177.

– … The aforesaid award of back wages is in accord with the

B discretion bestowed upon this court in arriving at a fair and
reasonable amount concurrent with the facts and
circumstance prevailing in the case. On the exercise of
discretion I am guided by the case of Conway v. Queen
[1845] Coc. c.c 210 (217), where Crampton J had observed
C that “the exercise of discretion has been characterized as
odious, but where the necessity exists for its exercise, a
judge is bound not to shrink from the responsibility
devolving on him.” However, in exercising the discretion I
have to act purely as an adjudicator and I must resist from
being a crusader.
D
[4] The applicant says before me that: (a) the learned chairman
had committed an error of law in limiting the monetary award of
back wages to a period of 24 months as this is a case in which
reinstatement was ordered and is not a case wherein the court
E ordered compensation in lieu of reinstatement. (b) the learned
chairman, in coming to the decision, has expressly taken into
consideration irrelevant issue or question that the claimant should
not be allowed to be unjustly enriched. (c) the learned chairman
has erred in directing that there is no evidence in the Industrial
F Court as to any improvement of the terms and conditions which
the claimant would have received during the period had she not
been dismissed. (d) the award of back wages is not in accordance
with the discretion bestowed upon the court in arriving at a fair
and reasonable amount, concurrent with the facts and
G circumstance prevailing in the case.

[5] The respondent argues that the order of reinstatement does

not carry an automatic entitlement to full back wages and it is
erroneous for the applicant to contend that there is an entitlement
H to full back wages, when the facts of the present case clearly
reflect why the Industrial Court had to exercise it’s discretion to
limit the back wages to 24 months. The respondent relies, inter
alia, on the following cases and authorities where it was decided
as follows:
I
(i) In Transport Workers’ Union v. Selangor Omnibus Co Ltd Award
No. 62 of 1981 where the court did not award any
compensation, although it ordered reinstatement.
 Current Law Journal
706 Supplementary Series [2008] 7 CLJ

(ii) Learned author OP Malhotra in his well known treatise “The A

Law of Industrial Disputes” succinctly explained the effect of
an order of reinstatement and whether there is an automatic
right to full back wages and stated:
Neither reinstatement nor payment of backwages as such is B
a common law right. But these reliefs can, however be
granted by the Industrial Tribunals in the course of
Industrial adjudication. The effect of reinstatement is to
restore an employee to his former capacity, status, and
emolument, as if his services had never been terminated and
the employee gets the benefit of continuity of service. In C
the absence of cogent reasons to the contrary such
compensation should normally be equal to the full wages or
remuneration he would have received had he continued in
service but for the order of termination of service. However
there are exceptions to this rule where the tribunal in its D
discretion may deny or reduce backwages for instance, the
extent of income, if any, earned by the workman elsewhere
during the period of his enforced unemployment and the
nature of the efforts of the absence thereof, on his part to
secure alternative gainful employment will be relevant
factors to be taken into account in denying or scaling down E
quantum of backwages … .

… such discretion must be exercised having regard to

certain approved principles and procedure. A workman
directed under an award to be reinstated with backwages
F
would not be entitled to backwages for the period during
which he was usefully employed elsewhere because he
cannot be allowed to take double advantage and make
excessive gains relying on the wrongful acts of his
employer.
G
(iii) In the case of Wong Yuen Hock v. Syarikat Hong Leong
Assurance Sdn Bhd. & Another Appeal [1995] 3 CLJ 344 the
employee had contended that the Industrial Court had no
jurisdiction to limit the back wages to 12 months salary after
holding the dismissal to be unfair. The Federal Court rejected H
this argument.

(iv) In Koperasi Serbaguna Sanya Bhd (Sabah) v. Dr James Alfred

(Sabah) & Anor [2000] 3 CLJ 758 the Court of Appeal stated
that in industrial law involving compensation for unfair
I
dismissal, there are only two types of compensation, which are
back wages and compensation in lieu of reinstatement. The
Court of Appeal held as follows:
 Josephine Banun Pako v.
[2008] 7 CLJ Hong Leong Bank Bhd 707

A In industrial law, the usual remedy for unjustified dismissal

is an order of reinstatement. It is only in rare cases that
reinstatement is refused. For example, as here, where the
relationship between the parties has broken down so badly
that it would not be conducive to industrial harmony to
return the workman to his place of work. In such a case,
B
the Industrial Court may award monetary compensation.
Such an award is usually in two parts. First, there is the
usual award for the arrears of wages, or backwages, as it
is sometimes called. It is to compensate the workman for
the period that he has been unemployed because of the
C unjustified act of dismissal. Second, there is an award of
compensation in lieu of reinstatement.

(v) In Chan Hock Liong v. Associated Motor Industries (M) Sdn Bhd
[1998] 3 CLJ Supp 105 an application was made for variation
D
of the Award on the following basis “On reinstatement the
claimant (applicant) is entitled to full arrears of backwages from
the date of dismissal to the date of reinstatement.” The court
in dismissing the application held as follows: “It is to be noted
that reinstatement and backwages are two separate things and
E
one does not render the other ambiguous or uncertain.”

(vi) In Utusan Melayu (M) Bhd. v. National Union of Journalists’

Malaysia [1992] 2 ILR 177 the court had handed down an
award of reinstatement and arrears of back wages which was
limited to 24 months. The union, on behalf of the employee,
F applied to the court for a variation of the award on the basis
that where the order of reinstatement is made, it carries with
it the right to full back wages. The court in dismissing the
application drew support from the case of Allahdad Khan bin
Alamji v. Souhthern Kinta Consolidated Bhd Slim River where the
G
court held “… there are two limbs to the payment of such
compensation. First, upon an order for reinstatement, the
claimant became entitled to back-pay either in full or in part
depending upon circumstances.”

H (vii) There are a string of Industrial Court Awards wherein

reinstatement had been ordered although back wages have
been limited to 24 months as in the instances of Kelab Golf
Negara Subang v. Mohd Roslan bin Khamis [1992] 2 ILR 239,
Oriental Assemblers Sdn Bhd. Johor v. Zahibul bin Mohamad
I [1993] 1 ILR 318, M.P. Mathew Palm Oil Sdn Bhd., Prai v.
Arulandu a/l Alponsoh [1991] 2 ILR 1317, UMW Toyota
Assembly Services Sdn Bhd. v. Transport Equipment & Allied
 Current Law Journal
708 Supplementary Series [2008] 7 CLJ

Industry Employees’ Union [1990] 2 ILR 339, Web Printers Sdn A

Bhd. v. Nandah Kumar s/o P.K. Menon [1992] 2 ILR 124 and
Syarikat Kenderaan Melayu Kelantan Bhd, Kota Bharu v. Jusoh
bin Salleh [1994] 1 ILR 294.

Law B

[6] It is trite that the remedy of judicial review is concerned

with reviewing not the merits of the decision in respect of which
the application for judicial review is made, but the decision making
process itself. An order of certiorari will lie to quash a decision
C
which has already been made by an inferior court or administrative
tribunal or other public authority in excess or abuse of jurisdiction
or contrary to the rules of natural justice, and where there is an
error of law on the face of the decision of such a tribunal. In
Michael Lee Fook Wah v. Menteri Sumber Tenaga Manusia, Malaysia
D
& Anor [1998] 1 CLJ 227, in dealing with an appeal concerning
the appellant’s application for an order of certiorari and mandamus
to quash the Minister’s decision, the court opined:
… The court is more concerned with the decision-making process
and not the decision itself. The court should not readily question E
the administrative decision of the first respondent as that is his
absolute discretion. If the first respondent had acted ultra vires,
unfairly or unjustly in exercising his discretion, then it is the duty
of the courts to interfere in an application for review of that
decision. The underlying principles of judicial review have been
F
stated in a number of cases, and it is the exercise by those with
whom discretionary power is vested, not in the courts, that the
courts are required to review.

[7] It is trite that the High Court has jurisdiction in certiorari

proceedings to interfere with an award of compensation of G
Industrial Court. In Koperasi Serbaguna Sanya Bhd (Sabah) (supra)
the court opined:
It is open to the High Court in certiorari proceedings to interfere
with the quantum of compensation awarded by the Industrial
H
Court is in accordance with law. If it is not, there is no reason
why an award of compensation may not be quashed. Whether the
High Court ought to interfere with an award of compensation in
any given case will depend on the facts of the particular case. The
ground on which an award of compensation may be reviewed are
the same as those on which any decision of a public decision- I
maker may be challenged. There are at least four reasons why
the decision of a public decision-maker may be void, they being,
 Josephine Banun Pako v.
[2008] 7 CLJ Hong Leong Bank Bhd 709

A it may be contrary to law, or it may be procedurally flawed, or it

may be unreasonable in the Wednesbury sense, or it may be
disproportionate.

It is the contention of the applicant that the monetary award of

back wages is procedurally flawed, or it may be unreasonable in
B
the Wednesbury sense, or it may be disproportionate.

[8] The applicant says on the facts and pursuant to the grounds
of the award, limiting the monetary award is procedurally flawed
and/or it is unreasonable in the Wednesbury sense. However, the
C respondent argues that there is no error of law in limiting back
wages to 24 months and relies on the following authorities and
practice direction:

(i) In Hoh Kiang Ngan v. Mahkamah Perusahaan Malaysia & Anor

D [1996] 4 CLJ 687, the Federal Court ruled that the scope of
judicial review was wide and an error of law encompasses the
following:
In Syarikat Kenderaan Melayu Kelantan Bhd. v Transport
Workers Union [1995] 2 CLJ 748 the Court of Appeal
E
correctly recognised that Anisminic had done away with the
distinction between errors of the law that go to jurisdiction
and errors that do not. We are of the opinion that the
following extract from the judgement of the Court of
Appeal accurately declares the present state of the law
F general law.

An inferior tribunal or other decision-making authority,

whether exercising a quasi-judicial function or purely an
administrative function, has no jurisdiction to commit an
error of law. Henceforth, it is no longer of concern whether
G the error of the law is jurisdictional or not. If an inferior
tribunal or other public decision-taker does make such an
error, then he exceeds his jurisdiction. So too is jurisdiction
exceeded, where resort is had to an unfair procedure. (See
Raja Abdul Malek Muzaffar Shah bin Raja Shahruzzaman v.
Setiausaha Suruhanjaya Pasukan Polis & Ors [1995] 1 CLJ
H
619), or where the decision reached is unreasonable, in the
sense that no reasonable tribunal similarly circumstanced
would have arrived at the impugned decision.

It is neither feasible nor desirable to attempt an exhaustive

I definition of what amounts to an error of law, for the
categories of such an error are not closed. But it may be
safely said that an error of law would be disclosed if the
decision – maker asks himself the wrong question or takes
 Current Law Journal
710 Supplementary Series [2008] 7 CLJ

into account irrelevant considerations or omits to take into A

account relevant considerations (what may be conveniently
termed an Anisminic error) or if he misconstrues the terms
of any relevant statutes, or misapplies or misstates a
principle of the general law.
B
(ii) In Dr. A Dutt v. Assunta Hospital [1981] 1 LNS 5, the court
stated:
A reinstatement order carries with it a prima facie right to
an order of the recovery of wages since the date of
dismissal. Such order is ancillary to the order of C
reinstatement. But circumstances vary from case to case
and an employer should be entitled to a remission for
various reasons, for example, for any delay in the
finalisation of the order which is not entirely his fault.

(iii) In Sarawak Shell Bhd v. Peter Lenjau & Anor [2004] 2 ILR 37 D
it was also held that limiting back wages to 24 months would
be fair to both parties as it would balance the rights of the
company and claimant; the Industrial Court ruled:
If the Claimants feel that they have lost out in not getting E
either reinstatement and or monetary compensation, part of
the cause is the delay that has taken place between the date
they were dismissed and the conclusion of their case. The
court cannot accept their claim for backwages and
compensation in lieu of reinstatement exceeding 24 months.
To allow backwages up to the last date of hearing and their F
service to be calculated to the same date tantamounts to
punishing the company for the delay in the hearing and
completion of this case for which the company is not
responsible. It is also true of course that the Claimants are
also not responsible. Therefore, limiting the backwages to G
24 months and the compensation in lieu of reinstatement to
the period of actual service is fair and equitable to both
parties. Nobody gains or loses arising out of the delay. To
allow claims exceeding 24 months due to delays for which
no party is responsible would be contrary to s. 30(5) of
the Industrial Relations Act 1967 which requires the court H
to act according to equity, good conscience and the
substantial merits of the case without regard to technicalities
and legal form.

(iv) In Nestle Food Storage (Sabah) Sdn Bhd v. Terrence Tan Nyang
I
Yin [2002] 1 ILR 280 the court stated:
 Josephine Banun Pako v.
[2008] 7 CLJ Hong Leong Bank Bhd 711

A The court is of the opinion that the basic approach that a

workman held to have been dismissed without just cause
should be awarded backwages subject to a maximum of 24
months is long established and that there will be undue
violence to the existing process of awarding and assessing
backwages were some other formula to be applied save in
B
exceptional cases. More importantly, however, the court is
of the view that subject to some observations and
consequential modifications set out hereinafter, it represents
a just and equitable formula for awarding backwages. The
court thinks that the formula for awarding backwages
C provides a workable basis for assessing and awarding a
workman’s backwages in a sensible and fair way taking into
consideration various relevant factors inter alia, his loss of
wages, the duty to mitigate and the onus and burden of
proof. The prescription of the multiplier of 24 months
strikes a right balance between the interests of the parties.
D
It takes into account a realistic and reasonable time frame
for the workman to recover from the setback of his
dismissal and to be restored to his earning capacity prior
to his dismissal. It also takes into account the justifiable
concern that delays in the statutory processes of conciliation,
E reference and adjudication should not inflate the quantum of
backwages awarded and unduly penalise employers by
exorbitant awards which have no rational relationship or
nexus between loss and liability. The formula affords the
workman a monetary award of backwages which is fair and
adequate for the loss of the earnings arising from his
F
dismissal.

(v) In Edaran Otomobil Nasional Sdn Bhd v. Neoh Hock Lye, Quah
Poh Huat, Lee Cheow Liam [1990] 1 ILR 163 Steve Shim J (as
he then was) opined:
G
It is interesting to note that subsequent to the decision of
the High Court, the Industrial Court, in the overwhelming
majority of awards in 1988 and 1989, had not considered
the principle of mitigation loss. Indeed, in a fair number of
instances, the Court had instead adopted the guideline in
H Practice Note No.1 of 1987, limiting computation of
backwages to a maximum period of 24 months. This is the
method I will adopt in the instant case.

After careful consideration, I therefore make the following

orders: (1) Backwages: 26 March 1987 (date of termination)
I
to 23 February 1990 (date of conclusion of hearing)
covering a period of 35 months. Adopting the guideline in
Practice Note supra, I shall allow a maximum period of 24
 Current Law Journal
712 Supplementary Series [2008] 7 CLJ

months. At the rate of $300.00 per month as wages, the A

amount for 24 months is $7,200.00. This shall be the
amount for each of the Claimants under this head. (2)
Compensation in lieu of reinstatement. This is given at the
usual rate of one month salary for each completed year of
service. I will allow 4 months. Therefore, at the rate of
B
$300.00 per month, the amount is $1,200.00. This shall be
the amount for each of the Claimants under this head.

(vi) In Syarikat Kenderaan Melayu Kelantan Bhd v. Transport Workers

Union [1992] 1 ILR 101, Steve Shim J (as he then was), in
limiting the quantum of back wages to 24 months, held as C
follows:
Hearing proper commenced on 27 January 1992. Thus
between the date of their dismissals and date of hearing,
there is a lapse of over 5 years. This delay is of course
D
no fault of the company. In any event, in accordance with
practice, we shall adopt a multiplier of 24 months.

(vii) Industrial Court Practice Note No. 1 of 1987 (29 June 1987)
stipulates as follows:
E
(a) Back pay in full from the date of dismissal to date of
conclusion of hearing, subject to a maximum of 24 months.

[9] I have read the application and the articulate submissions of

both parties in detail. I take the view that the application must
be allowed. My reasons are as follows: F

(i) This is not a case to provide a ‘win win’ situation for the
applicant and respondent by limiting the quantum of award.
The award must reflect restitution for the contemptuous
conduct of the respondent who had, without due care and G
regard of the employees’ interest as a whole, imposed on an
honest employee who had diligently served the respondent for
about a decade, wrongful and false accusation of misappropriation
of RM500. As a result, the respondent has destroyed the self
respect, esteem of the employee as well as that of her family H
members, which must have caused great stress to the applicant
and her family members. In such cases, there is nothing
inequitable or unconscionable for the applicant to be
compensated in full. This is a case which warrants to do so.
I
(ii) The learned chairman had rightly concluded that “The fair
amount of monetary award must also reflect the punitive
element on part of the bank”. However, the computation of
 Josephine Banun Pako v.
[2008] 7 CLJ Hong Leong Bank Bhd 713

A award and the limiting of the award to 24 months do not

reflect any punitive element at all. In consequence, the learned
chairman has fallen into great error as submitted by the
applicant. I have dealt with this area of law in great detail in
the case of Chong Chung Moi @ Christine Chong v. The
B Government of the State of Sabah & 2 Ors [2007] 4 AMR 472
and the relevant part is reproduced here as follows:
A radical change to widen the scope of the above
proposition took place in the Court of Appeal’s decision in
Syarikat Kenderaan Melayu Kelantan Bhd v. Transport
C
Workers’ Union [1995] 2 CLJ 748, where Gopal Sri Ram
JCA opined:

In my judgment, the true principle may be stated as follows.

An inferior tribunal or other decision-making authority,
D whether exercising a quasi-judicial function or purely an
administrative function, has no jurisdiction to commit an error
of law. Henceforth, it is no longer of concern whether the
error of law is jurisdictional or not. If an inferior tribunal or
other public decision-taker does make such an error, then he
exceeds his jurisdiction. So too is jurisdiction exceeded,
E where resort is had to an unfair procedure (see Raja Abdul
Malek Muzaffar Shah Raja Shahruzzaman v. Setiausaha
Suruhanjaya Pasukan Polis & Ors [1995] 1 CLJ 619), or
where the decision reached is unreasonable, in the sense that
no reasonable tribunal similarly circumstanced would have
F arrived at the impugned decision.

It is neither feasible nor desirable to attempt an exhaustive

definition of what amounts to an error of law, for the
categories of such an error are not closed. But it may be
safely said that an error of law would be disclosed if the
G decision-maker asks himself the wrong question or takes into
account irrelevant considerations or omits to take into
account relevant considerations (what may be conveniently
termed an Anisminic error) or if he misconstrues the terms
of any relevant statute, or misapplies or misstates a principle
of the general law.
H
Since an inferior tribunal has no jurisdiction to make an error
of law, its decisions will not be immunized from judicial
review by an ouster clause however widely drafted.

(iii) I do not think “Practice Note No. 1 of 1987” of the

I
Industrial Court can tie the hands of the tribunal when the
justice of the case warrants not to do so. Support for my
proposition can be found in a number of cases. The quantum
 Current Law Journal
714 Supplementary Series [2008] 7 CLJ

of back wages is a matter within the discretion of the A

Industrial Court. (See Dr. James Alfred (supra)). The quantum
of back wages though is at the discretion of the Industrial
Court it must reflect the findings and observations. In this
case it was the finding of the learned chairman that the
applicant cannot be faulted at all and the learned chairman B
had in fact in an unusual manner given great salutation to the
applicant. The award is not reflective of the salutation and/or
based on the said findings; it is not consistent to restrict the
quantum of the award.
C
[10] For the reasons stated above, I allow the applicant’s
application and make the following orders.

(i) an order of certiorari to quash that part of the Industrial

Court’s Award No. 74 of 2007 awarding the applicant back
D
wages which were limited to 24 months.

(ii) the award in respect of back wages is to be remitted to the

Industrial Court for reassessment on the basis that the
applicant is entitled to the salary and benefits she might
reasonably have expected to receive during her period of E
dismissal; principally back pay or wages, including any
improvement of terms and conditions which she would have
received during that period had she not been dismissed, taking
into consideration the collective agreement between the
Sarawak Commercial Bank’s Association and the Sarawak F
Bank Employees Union.

(iii) the respondent to pay the costs of the applicant. The getting
up fees shall not exceed RM30,000. If the getting up fees
cannot be agreed, the applicant is at liberty to tax his costs. G

I hereby order so.