In the recent case of Maritime Intelligence Sdn Bhd v Tan Ah Gek [2021] 10 CLJ 663 (“Maritime Intelligence”), the Federal Court held that the Industrial Court, in dealing with a claim of dismissal without just cause or excuse under section 20 of the Industrial Relations Act 1967 (“the Act”), does not have the right to enquire into reasons subsequently advanced by an employer by way of pleadings in the Industrial Court to justify an employee’s dismissal when the pleaded reasons were not given at the time of dismissal.
 
This important decision clarified the long established proposition of the Federal Court in Goon Kwee Phoy v J & P Coats (M) Sdn Bhd [1981] 1 LNS 30 that the proper inquiry of the Industrial Court is to determine whether “the reason advanced by the employer” is proven and the Industrial Court cannot go into another reason not relied on by the employer or find one for it. The decision of the Federal Court in Maritime Intelligence has now determined that “the reason advanced by the employer” is the reason that operated on the employer’s mind prior to or preceding the time of dismissal. It has shut the door to the employer being able to rely on subsequently discovered misconduct or reasons which operate on the employer’s mind post-dismissal to prove just cause or excuse for the dismissal of an employee.   
 
Facts
 
The respondent (the “Employee”) in this case filed a claim against the appellant (the “Company”) for unjust dismissal under section 20 of the Act. In justifying the dismissal of the Employee before the Industrial Court, the Company sought for the first time, to rely on two further allegations against the Employee in addition to the allegations raised against the Employee at the time of dismissal. In other words, the Company wanted to rely on reasons which were not contemplated during the time of dismissal of the Employee but which it raised by way of pleadings.
 
The Industrial Court found that the dismissal was without just cause and excuse and both the High Court (on judicial review) and Court of Appeal concurred with the findings of the Industrial Court.
 
Aggrieved by the outcome, the Company brought the matter on appeal to the Federal Court, where the Federal Court dealt with the following question of law:
 
“Whether the Industrial Court has the right to enquire into reasons subsequently put up by the employer via pleading to justify the dismissal, even if such reasons were not given at the time of the dismissal.”
 
The Decision of the Federal Court
 
In answering the above question of law in the negative and ruling in favour of the Employee, the Federal Court delved into the interpretation of section 20 of the Act, which governs an employee’s representation for unfair dismissal. Section 20 provides as follows:
 
“20. (1) Where a workman, irrespective of whether he is a member of a trade union of workmen or otherwise, considers that he has been dismissed without just cause or excuse by his employer, he may make representations in writing to the Director General to be reinstated in his former employment; the representations may be filed at the office of the Director General nearest to the place of employment from which the workman was dismissed.
 
(2) …
 
(3) Upon receiving the notification of the Director General under subsection (2), the Minister may, if he thinks fit, refer the representations to the Court for an award.”
 
The Federal Court in interpreting section 20 of the Act stated as follows:
 
“[46] By virtue of the clear statutory content of section 20(3), the function of the Industrial Court is tied inextricably to the representations of the workman of a dismissal without just cause or excuse. Those representations are made by the workman at the time of his dismissal, for reasons which he feels are without any reasoned basis or for reasons that are insufficient to warrant a dismissal. The focus of the enquiry of the Industrial Court under section 20(3) of the Act, is therefore premised on matters and events as they occurred at the time of the dismissal. The reasons operating in the mind of the employer, which preceded the decision to terminate, and resulted in the decision to terminate, comprise the matters to be considered and adjudicated upon by the Industrial Court under section 20(3).
 
…
 
[48] The term ‘representations’ therefore ties the jurisdiction of the Industrial Court down to the reasons, factors or events operating in the mind of the employer at the time of dismissal resulting in the representation.”
 
(Emphasis ours)
 
According to the Federal Court: 

What if no reasons are given by the employer at the time of dismissal?
 
Where the employer fails to give reasons, it does not mean that the dismissal is without just cause or excuse entitling the workman to reinstatement. The Federal Court held that even if no reasons were given at the time of dismissal, the scope of the Industrial Court's adjudication is still tied to the representation by the employee and thereby to the factors operating in the mind of the employer at the time of the dismissal.³ In such a situation, the Industrial Court will itself embark on an inquiry, allowing the employer to adduce evidence to explain why the dismissal is with just cause or excuse, notwithstanding that it failed to comply with the principles of natural justice by allowing the workman to defend himself against the allegations against him. The evidence which the employer will be allowed to adduce must be evidence which was evident and operational in its mind immediately prior to, or at the time of dismissal, and not evidence which arose in the employer’s mind subsequently because those factors did not make the employer reach the decision that the workman’s services ought to be terminated.
 
Is subsequently discovered misconduct relevant in any way?
 
Although the Federal Court precluded an employer from relying on post-dismissal reasons for purposes of proving just cause or excuse, the Federal Court acknowledged that such subsequently discovered misconduct may be adduced by the employer if they are relevant to the remedy that may be awarded by the Industrial Court even if the employee is found to have been dismissed without just cause or excuse. The Federal Court found that it was the duty of the Industrial Court under section 30 of the Act to consider the subsequent facts and circumstances and mould the relief accordingly to achieve complete justice between the parties.
 
Comments
 
The Federal Court’s decision in Maritime Intelligence underlines the importance for employers to craft the reasons for dismissal carefully when dismissing an employee. These reasons will be closely scrutinised by the Industrial Court and there will be no room for the employer to introduce new or other reasons at the stage of the Industrial Court proceedings to justify the dismissal.
 
While it may be tempting for some employers to not state the reasons in the dismissal letter with a view of having the flexibility to justify the reasons for dismissal in the Industrial Court, it should be noted that: 

Article by Siva Kumar Kanagasabai (Partner) and Adam Thye (Associate) of the Employment Law Practice Group of Skrine. 

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