National Union of Commercial Workers

- vs -

Lindeteves-Jaboberg (M) Sdn Bhd

Judgment

Suffian LP

(delivering the judgment of the Court)

1. Miss Faridah Harun, Madam Tamishmathi Kuppusamy and Miss Margaret De Cruz, typist, stenographer and typist respectively (“employees”) employed by Lindeteves-Jacoberg (M) Sdn Bhd (“the company”) were retrenched and received identically worded letters dated 30 September 1977, from the company saying that the company had to retrench them with effect from 1 October 1977, owing to a serious downturn in turnover and profits during the preceding years.

2. The retrenchment was disputed by their union, the respondents, and the dispute was reported to the Ministry but it could not be resolved. Eventually by letter dated 19 November 1977, the Minister for Labour and Manpower wrote to the President of the Industrial Court reporting that a dispute had arisen between the company and the union and referring the dispute to the Industrial Court under s 26(2) of the Industrial Relations Act, Act 177 (“the Act”).

3. On 11 November 1978, the Industrial Court made their award, ordering re-instatement of all three employees.

4. On 19 December the company obtained leave to move the High Court for an order of certiorari to remove into the High Court the award of the Industrial Court for the purpose of its being quashed.

5. On 30 August 1979, the substantive motion was heard by Abdul Hamid J as he then was, and in a reserved judgment delivered on 6 December he quashed the award, because, he said,

   This court finds that the Industrial Court had erred in law and the error is apparent on the fact of the record.

   The union appeals against that judgment.

6. That judgment had been delivered before the judgment of the Privy Council was delivered some six months later on 24 June 1980, in South East Asia Fire Bricks Sdn Bbd v Non-Metallic Mineral Products Manufacturers Employees Union [1980] 2 MLJ 165; [1980] 3 WLR 318 (“Fire Bricks").

7. The Privy Council there considered the effect of s 29(3)(a) of the Act [now s 32(3)(a)] which reads:

   Subject to this Act, an award of the [Industrial] Court shall be final and conclusive, and no award shall be challenged, appealed against, reviewed, quashed or called in question in any court.

8. Several judges sitting singly in the High Court had held that the above provision did not prohibit them from quashing an award of the Industrial Court if it contained an error of law apparent on the face of the record.

9. But in Fire Bricks [1980] 2 MLJ 165; [1980] 3 WLR 318 their Lordships held:

   1. that s 29(3)(a) did prohibit the High Court from quashing an award of the Industrial Court by certiorari proceedings, if it merely made an error of law on the face of the record which did not affect its jurisdiction; and, following the House of Lords decision in Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147 further held that:

   2. when words in a statute oust the power of the High Court to review decisions of an inferior tribunal by certiorari, they must be construed strictly;

   3. it has that power if the inferior tribunal has acted without jurisdiction or “if it has done something in the course of the inquiry which is of such a nature that its decision is a nullity” (per Lord Reid at page 171);

   4. but if the inferior tribunal has merely made an error of law which does not affect its jurisdiction, and if its decision is not a nullity for some reason such as breach of the rules of natural justice, then the ouster will be effective; and

   5. the suggestion by Lord Denning in Pearlman v Harrow School [1979] 1 QB 56, 70 that the distinction between an error of law which affected jurisdiction (quashable) and one which did not (not quashable) should be discarded, was not accepted. The court can correct an error of law of the inferior tribunal if the tribunal acted in excess of its jurisdiction, as opposed to merely making an error of law in its judgment by misinterpreting the statute in question.

10. In Fire Bricks [1980] 2 MLJ 165; [1980] 3 WLR 318 the union there called out their members in the appellants’ factory on strike. The appellants issued notices to all their striking employees informing them that unless they returned to work within 48 hours their services were deemed to be terminated.

11. On 12 February 1974, the Minister for Labour and Manpower referred the dispute to the Industrial Court under s 23(2) of the Act.

12. On 16 February the striking employees sought to return to work on the advice of the union, but the appellants refused to allow them to return, maintaining that their employment had already been terminated and their places filled.

13. The union maintained that the men were still employees of the appellants, and that the lock-out was illegal because the dispute had been referred to the Industrial Court.

14. Thus the question was whether or not the men by going on strike had terminated their contracts of employment. The Industrial Court considered this question and ruled that they had not, and ordered the appellants to take them back as from the date of the lock-out.

15. Their Lordships of the Privy Council found that the dispute was one which the Minister had power to remit to the Industrial Court (under s 23(2); that the Industrial Court applied their mind to the proper question for the purpose of making their award; that the award was accordingly within the jurisdiction of that court; that for present purposes their Lordships assumed, without deciding, that the award contained one or more errors of law upon its face; but if so, the errors did not affect the jurisdiction of the Industrial Court — as the court had addressed their mind to the proper question — and their Lordships were therefore of opinion that s 29(3)(a) of the Act (now s 32(3)(a) effectively ousted the jurisdiction of the High Court to quash the decision by certiorari proceedings.

16. In Anisminic [1969] 2 AC 147 the plaintiffs, an English company, owned property in Egypt which was sequestered by the Egyptian authorities following the Suez Incident.

17. In 1957 the plaintiffs sold the sequestered property to an Egyptian organization, TEDO.

18. In 1959 the plaintiffs made an application for compensation to the Foreign Compensation Commission claiming that they were entitled to participate in the Egyptian Compensation Fund in respect of their sequestered property.

19. The Commission construed the provision under which they were acting as requiring them to enquire, when the applicant was himself the original owner, as was the case here, whether he had a successor in title.

20. Their Lordships did not think that the provision did so require. The Commission made that enquiry and held that TEDO was the applicant’s successor in title, and as TEDO was not a British subject, the Commission rejected the appellant’s claim. Their Lordships held that the court had in the circumstances power to quash the decision of the Commission, notwithstanding s 4(4) of the Foreign Compensation Act, 1950, which provided:

    The determination by the Commission of any application made to them under this Act shall not be called in question in any court of law.

21. The word “determination”, it was held, did not include everything which purported to be a determination but was not in fact a determination because the Commission had misconstrued the order defining their jurisdiction.

22. At page 171 Lord Reid said:

    It has sometimes been said that it is only where a tribunal acts without jurisdiction that its decision is a nullity.... But there are many cases where, although the tribunal had jurisdiction to enter on the inquiry, it had done or failed to do something in the course of the inquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it had no power to make. It may have failed in the course of the inquiry to comply with the requirements of natural justice. It may in perfect good faith have misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question which was not remitted to it. It may have refused to take into account something which it was required to take into account. Or it may have based its decision on some matter which, under the provisions setting it up, it had no right to take into account. I do not intend this list to be exhaustive. But if it decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide that question wrongly as it is to decide it rightly.

23. In view of Fire Bricks [1980] 2 MLJ 165; [1980] 3 WLR 318 Mr. Davidson for the company conceded that the High Court has no power to quash, as it has done, the award of the Industrial Court on the ground that the latter have made an error of law apparent on the record. But he sought to uphold the learned judge’s decision by arguing that, although the Industrial Court had jurisdiction to enter on the inquiry, their decision was a nullity on the ground that, unlike in Fire Bricks [1980] 2 MLJ 165; [1980] 3 WLR 318 where they applied their mind to the proper question for the purpose of making their award (the question being whether or not by going on strike the workers there have terminated their contracts of employment), in the instant case they had not, but instead decided some questions not remitted to them; that in making their award they had not asked themselves the right question; and that they took into account matters that they had no right to take into account.

24. Because of all this, it was argued that they had made an error of law which affected their jurisdiction, and accordingly it was within the power of the learned judge to quash their award by certiorari proceedings.

25. With respect we do not agree.

26. What was the question before the Industrial Court?

27. It will be observed that the Minister’s letter to the President of the Industrial Court was in general terms and did not specify the questions on which a decision of the Industrial Court was required — as has to be done in India.

28. In their written statement of case before the Industrial Court the union contended that the purported retrenchment was not bona fide and that the company had breached the rule “last in, first out”.

29. In their written statement in reply to the Industrial Court, the company denied that the retrenchment was not bona fide, contended that in respect of the first and third employees they had followed the rule “last in, first out”, that in respect of the second they were justified in retrenching her, and prayed that the court uphold the retrenchment.

30. Thus the question before the Industrial Court was a straightforward one: was the retrenchment bona fide or not?

31. The Industrial Court recognized that retrenchment was a matter for management. Management sought to justify it on the ground of economics, that turnover and profits were down, and in view of expenses at head office in Amsterdam, expenses on office maintenance, and bad debts, they had to reduce staff, and they had no alternative but to retrench the three employees.

32. In the event the Industrial Court came to the conclusion that the “retrenchment exercise was .... in the circumstances not proper”.

33. In doing so, we think that the Industrial Court had applied their mind to the proper question for the purpose of making their award; and had not asked themselves the wrong questions and taken into account matters which they should not have taken into account. Accordingly, in our judgment, they had not made an error of law which affected their jurisdiction, and therefore their award could not have been quashed by certiorari proceedings.

34. For the above reasons, we would allow the appeal, set aside the order of the learned judge, and restore the award of the Industrial Court.

35. The company to pay costs here and below.

Cases

South-East Asia Fire Bricks Sdn Bhd v Non-metallic Mineral Products Manufacturers Employees Union [1980] 2 MLJ 165; [1980] 3 WLR 318; Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147; Pearlman v Harrow School [1979] 1 QB 56; Selangor Omnibus Company Ltd v Transport Workers Union [1967] 1 MLJ 280; Sungei Wangi Estate v Uni [1975] 1 MLJ 136; Mak Sik Kwong v Minister of Home Affairs, Malaysia (No 2) [1975] 2 MLJ 175; Seereelall Jhuggroo v Central Arbitration and Central Board [1953] AC 151.

Legislations

Industrial Relations Act (Act 177): s.26, s 29

Representations

DP Xavier for the appellants.

WSW Davidson for the respondents.