RMN v Menteri Perdagangan Dalam Negeri, Koperasi & Kepenggunaan Malaysia & Ors [2018] 6 MLJ 1

Federal Court (Putrajaya)

Lawfulness of an employee’s dismissal

1. The Appellant was a long-serving government officer who later became a permanent employee of the Companies Commission of Malaysia (“CCM”) following its establishment.
2. She held the substantive post of Director of Registration Services and was later appointed as Deputy Chief Executive Officer (“Deputy CEO”) by the Minister under section 11 of the Companies Commission of Malaysia Act 2001 [Act 614] for a fixed term.
3. A disciplinary action was commenced against her based on allegations connected to a letter she authored and distributed to external parties, which was said to bring disrepute to the organisation.
4. The Disciplinary Committee found her guilty and recommended cancellation/revocation of her appointment as Deputy CEO; and dismissal from CCM service.
5. Following the recommendation, the Minister issued a letter terminating her contract of service and revoking her Deputy CEO appointment.

Whether the Minister had the legal authority under section 11 of Act 614 to dismiss/terminate the appellant’s employment (in addition to revoking her Deputy CEO appointment).

1. Whether the Minister had the legal authority under section 11 of Act 614 to dismiss/terminate the appellant’s employment (in addition to revoking her Deputy CEO appointment).

1. The Federal Court reaffirmed the constitutional and statutory principle that a public officer cannot be dismissed except by the proper authority recognised by law. By virtue of Article 135(1) of the Federal Constitution, a member of the public service is protected from being dismissed or reduced in rank by an authority subordinate to (or different from) the authority empowered to appoint an officer of equal rank, unless such power is lawfully delegated. Therefore, where dismissal is carried out by a person or body without such authority, the purported dismissal is invalid and has no legal effect. This principle was supported by earlier Federal Court authorities such as Lionel v Government of Malaysia [1971] 2 MLJ 172 (Federal Court) and S S Kanda v Government of the Federation of Malaya [1962] MLJ 169 (Federal Court).
2. The Court further held that the Minister’s powers under section 11 of Act 614 are limited to the appointment and revocation of the appellant’s post as Deputy Chief Executive Officer, and do not automatically include the legal power to terminate her underlying service as an employee of CCM. The Court emphasised the important distinction between an officer’s grade and an officer’s post: the loss or removal of a post does not, by itself, amount to termination of service. Accordingly, even though the Minister could lawfully revoke the appointment to the Deputy CEO office, the Minister could not lawfully dismiss the Appellant from CCM service unless dismissal authority was expressly granted or delegated under the relevant disciplinary scheme.
3. The Federal Court also ruled that under the Statutory Bodies (Discipline and Surcharge) Act 2000 [Act 605], disciplinary authority over officers of statutory bodies lies with the properly constituted Disciplinary Committee, which must comply with the disciplinary procedures and has power to impose punishments under the Regulations. In particular, section 6 of Act 605 and Regulation 39 of Act 605 confer upon the Disciplinary Committee both the jurisdiction to determine guilt and the power to impose the punishment of dismissal where dismissal is warranted. In this case, the Disciplinary Committee found the Appellant guilty and recommended dismissal to the Minister, and the Minister accepted the recommendation. However, once the recommendation was accepted, the Disciplinary Committee itself should have proceeded to impose the punishment of dismissal as required by Regulation 39. 
4. As the Disciplinary Committee failed to exercise its statutory duty to impose the punishment and the Minister purported to issue the dismissal letter in its place, the dismissal was not carried out by the lawful authority and was therefore void.
5. Finally, the Court rejected the argument that the Minister merely “executed” the will of the Disciplinary Committee. The Federal Court clarified that the Minister had no legal power to execute dismissal on behalf of the Disciplinary Committee. The Court distinguished this from situations where a dismissal letter is signed by another person but is nonetheless the act of the proper authority. 
6. In that context, the Federal Court referred to Goh Ching Huat v Pendaftar Pertubuhan Malaysia & another appeal [2017] 1 MLJ 545 (Federal Court), where the dismissal was still treated as valid because it was the act of the correct disciplinary authority, even if signed by someone else. Here, however, the dismissal was imposed by the Minister and not by the Disciplinary Committee, rendering it legally defective and invalid. 

Decision

The Federal Court allowed the appeal and held that the dismissal letter issued by the Minister was void, as the Minister was not the lawful authority to impose dismissal of the Appellant from CCM service. The Minister could revoke her Deputy CEO appointment, but termination from service had to be imposed by the proper disciplinary authority under the statutory disciplinary scheme.

In statutory bodies, dismissal must be made by the legally designated disciplinary authority, and not by another authority merely because that authority has appointment/revocation powers over a separate office. Even when misconduct is established, a dismissal will be invalid if imposed by the wrong decision-maker (ultra vires / jurisdictional error).