Employment Act

Question 1

In Malaysia the governing law that addresses partnership matters is provided in the Partnership Act 1961. a) The general rule for the extent of a partner’s liability is that every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm incurred while he is a partner. Discuss.

b) What are the ways in which a partnership may be dissolved?

Question 2

Fact of case:
a. Mr. Pity bought a BMW (reg. no. KK 8888) from Mr. Kaya at purchase price of RM 32,000.00. b. Deposit RM 9,900.00 was paid and a loan of RM 22,100.00 has been granted by Mr. Kaya with repayment period 35 month’s installment. c. Mr. Pity want to do full settlement as he have a purchaser for the car but was told that the transfer of the car could not be done due to the registration number (KK 8888) is belong to a motorcycle (FR80). d. Mr. Pity had returned the car to Mr. Kaya and requested to refund the deposit of RM 9,900.00 and RM 17,192.00 for the amount of 28 month repayment from Mr. Kaya. e. Mr. Pity also claimed damages arising out of the expenses of hiring a car for his use and damages for anxiety caused as being blacklisted by financial institution.

In this case, Mr. Kaya had no good title to the BMW car No. KK 8888 when the hire purchase agreement was entered into on 19 March 1991 because it is not suits with Section 27 of the Sale of Goods Act 1957. In Section 27 of Sale of Goods Act implies that if goods are bought from a person who is not the owner, and who does not sell them under his authority, the buyer does not acquire any title. This ‘Nemo dat qoud non habet’ (which means, no one can give a better title than he has himself) rule serves to protect the right of the owner. As in the case of Ng Ngat Siang vs. Arab-Malaysian Finance BHd. & Anor (1988) 3 MLJ 319 where the plaintiff bought a car from the second defendant, the registered owner of the car.

The second defendant had to pay off MUI Finance from whom he had earlier obtained a hire-purchase facility in order plaintiff’s name. For this purpose the second defendant retained the registration card. Upon obtaining the cancelation of endorsement of MUI’s ownership, the second defendant sold the car to B whose purchase was finance by the first defendant. The first defendant endorsed its ownership claim on the registration card. The plaintiff applied to the court to determine as to whether he or the first defendant had a better title to the car.

In the judgment, after a full payment was made by the second defendant to MUI Finance and MUI Finance had relinquished all rights to ownership over the car, the plaintiff had acquired ownership to the car and the second defendant’s further dealings on the car with the first defendant are therefore illegal.

To that end, the first defendant acquired no title or interest over the car when they purchased it and their only remedy, if any, is against the second defendant personally for the return of the purchase price but as against the plaintiff they cannot claim any right of ownership over the car. Mr. Pitty is also had no good title to the BMW car No. KK 8888 since it is also not suits with Section 14(c) of the Sale of Goods Act 1957. That is why the JPJ had taken the action to detained the registration card, due to the car may be suspected to be stolen or a fraud registration.

Reference:

Section 27 Sale of Goods Act 1957 – (1) Subject to this Act and of any other law for the time being in force, where goods are sold by a person who is not the owner thereof, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell: Provided that where a mercantile agent is, with the consent of the owner, in possession of the goods or of a document of title to the goods, any sale made by him when acting in the ordinary course of business of a mercantile agent shall be as valid as if he were expressly authorized by the owner of the goods to make the same; provided that the buyer acts in good faith and has not at the time of the contract of sale notice that the seller has no authority to sell.

Section 14 Sale of Goods Act 1957 – In a contract of sale, unless the circumstances of the contract are such as to show a different intention, there is: (a) an implied condition on the part of the seller, that, in the case of a sale, he has a right to sell the goods, and that, in the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass; (b) an implied warranty that the buyer shall have and enjoy quiet possession of the goods; (c) an implied warranty that the goods shall be free from any charge or encumbrance in favor of any third party not declared or known to the buyer before or at the time when the contract is made. Question 3(a)

In the case of Mr. Pokok being terminated by his employer due the reason of not coming to work for 4 days consecutive without any notice, the judgment is not correct even though the action seems valid according to Section 15(2) Employment Act 1955 – “An employee shall be deemed to have broken his contract of service with the employer if he has been continuously absent from work for more than two consecutive working days without prior leave from his employer, unless he has a reasonable excuse for such absence and has informed or attempted to inform his employer of such excuse prior to or at the earliest opportunity during such absence.”

The employer just terminates Mr. Pokok because:

1. The employer just taking a part of the Section 15(2) Employment Act 1955 (as underline above). 2. Leave requested by Mr. Pokok on 26 November 1996 is not following the company procedure due to the leave is taken on 23, 24, 25 and 26 November 1996. According to company procedure, the leave should be applied one (1) week before the leave. 3. The reason of leave applied by Mr. Pokok is unreasonable.

If we look at the reasons of terminating Mr. Pokok, the employer’s decision is not solid and not giving any chances to Mr. Pokok to defend himself.  It is clearly found that the employer does not investigate to confirm Mr. Pokok has informed or attempted to inform his employer of such excuse prior to or at the earliest opportunity during his absence (the bold part of Section 15(2) Employment Act 1955.

This is because Mr. Pokok had applied for leave on 23 November 1996 and sends the leave memo by his friend to his supervisor and assumes his leave is approved. Yes, it is still not following the procedure but Mr. Pokok is not planning for the leave. He has to apply it just because of sudden event arises. The company procedure may apply for planned leaves but not in sudden cases.

Regarding the absence on 26 November 1996, Mr. Pokok claimed that he has informed his officer verbally and witnessed by his colleague.

There for, referring to Section 14 Employment Act 1955; an inquiry should be done before terminating Mr. Pokok.

Question 3(b)

In case of Mr. Good and his employer, the decision of terminating Mr. Good is correct because the company has give Mr. Good a chances for him to defend himself in an inquiry on 20 June 1997 instructed via letter dated 17 June 1997. Referring to Section 14(1), the company action is valid. Even though the case can be look like prejudice to Mr. Good whereby it just based on testimony from another security guard, Mr. Bad, the maid, Ms. Sexy and assumption of the surrounding circumstances means that there is no direct evidence. But, the company is taking a consideration of past cases where Mr. Good was caught committing the same offence 3 years ago.

Reference:

Section 14(1) Employment Act 1955 – an employer may, on the grounds of misconduct inconsistent with the fulfillment of the express or implied conditions of his service, after due inquiry: (a) dismiss without notice the employee;

(b) downgrade the employee; or (c) impose any other lesser punishment as he deems just and fit, and where a punishment of suspension without wages is imposed, it shall not exceed a period of two weeks.

Question 4

There are several remedies provided under the Sale of Goods Act for breach of contract of sales of goods: 1. Right of the unpaid seller against the goods
An unpaid seller is a seller to whom the whole of the price has not been paid to tendered; or when a bill of exchange or other negotiable instrument has been received as conditional payment, and the fact the instrument has been dishonored. The rights of unpaid seller against the goods are:

i. A lien of the goods for the price, where he is in possession of the goods. Section 46(1a) Sale of Goods Act 1957 – Subject to this Act and of any law for the time being in force, notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has, by implication of law: (a) a lien on the goods for the price while he is in possession of them;

ii. A right of stopping the goods in transit in the case of buyer’s insolvency, where he has parted with the possession of the goods. Section 46(1b) Sale of Goods Act 1957 – (b) in case of the insolvency of the buyer a right of stopping the goods in transit after he has parted with the possession of them;

iii. A right of resale subject however to Section 54. Section 46(1c) Sale of Goods Act 1957 – (c) a right of resale as limited by this Act

iv. A right of withholding delivery, where the property in goods has not passed to the buyer. Section 46(2) Sale of Goods Act 1957 – Where the property in goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and co-extensive with his rights of lien and stoppage in transit where the property has passed to the buyer. 2. Rights of the seller to sue for breach of contract

The seller can sue the buyer for breach of contract if:

i. It is contracted that the price be paid on a certain date regardless of delivery and the buyer wrongfully neglects or refuses to pay such price even though the property in the goods has not passed and the goods have not been appropriated to the contract Section 55(2) Sale of Goods Act 1957 – When notice of stoppage in transit is given by the seller to the carrier or other bailee in possession of the goods, he shall redeliver the goods to or according to the directions of the seller.

The expenses of such redelivery shall be borne by the seller. ii. The property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods – Section 55(2) Sale of Goods Act 1957 3. Right of the buyer to bring an action for non-delivery Section 57 of the Sale of Goods Act provides that if the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery.

4. Rights of the buyer to bring an action for specific performance i. The buyer may bring an action for specific performance of contract by way of delivery of specific or ascertained goods. This provided under Section 58 of the Sale of Goods Act 1957 – Subject to Chapter II of the Specific Relief Act 1950 [Act 137], in any suit for breach of contract to deliver specific or ascertained goods, the court may, if it thinks fit, on the application of the plaintiff, by its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages.

The decree may be unconditional, or upon such terms and conditions as to damages, payment of the price or otherwise, as the court may deem just, and the application of the plaintiff may be made at any time before the decree. ii. This remedy depends very much on the discretion of the courts, where specific performance is ordered by courts only when the goods are of special or peculiar kind such as valuable paintings, priceless antique.

As example; Case of Behdke vs. Bede Shipping Co. Ltd. (1972) 1K.B 649 – the court held that a ship was a specific chattel in respect of which an order for specific performance could be made. Here, the court took into account of the fact that the ship in question was of peculiar and practically unique value to the buyer, that the buyer wanted the ship for immediate use. 5. Remedies available to buyer for breach of warranty

If the seller commits a breach of warranty or where the buyer opposites or is compelled to treat a breach of condition by the seller as a breach of warranty, the buyer cannot reject the goods. However, the buyer may setup against the seller the breach of warranty in decrease or extinction of price or sue the seller for damages for breach of warranty.