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2023 MarsdenLR 44
HIGH COURT MALAYA PENANG
R G MALARVILI GOPAL KRISHNAN & ORS – Appellant
Versus
CHAMPSURF SDN BHD & ORS – Respondent
[Judicial Review Application No: PA-25-65-12/2022]
Judicial review of retrenchment decisions emphasizes managerial discretion during economic downturns, with the burden of proof on the employer to demonstrate justification for retrenchment.
Headnote:(A) Industrial Relations Act 1967 - Section 20 - Judicial review of Industrial Court's decision regarding retrenchment - Court upheld Industrial Court's finding that retrenchment was justified due to Covid-19 pandemic impact and conducted bona fide - Applicants were retrenched without just cause claim - No legal obligation for consultation prior to retrenchment - Court emphasized managerial discretion in workforce reorganization. (Paras 6, 14, 16, 20, 28, 29)
(B) Judicial Review - Standard of review - High Court not to interfere with Industrial Court's findings unless they are unreasonable or unsupported by evidence - Importance of evidence and credibility in retrenchment cases. (Paras 9, 12, 14, 22)
Facts of the case:
Applicants were employees of R1, a hotel that retrenched all staff due to closure from Covid-19. They received one month’s salary in lieu of notice but claimed unjust dismissal. Industrial Court ruled retrenchment was with just cause.
Findings of Court:
Industrial Court found retrenchment justified and bona fide, dismissing applicants' claims.
Issues: Was the retrenchment justified and conducted with just cause? Did the Industrial Court err in its findings?
Ratio Decidendi: Court affirmed that managerial discretion allows for retrenchment during economic downturns; the burden of proof lies with the employer to establish justification for retrenchment.
Result: Judicial review application dismissed with costs.
| Table of Content |
|---|
| 1. judicial review application and background of the case. (Para 1 , 2 , 3 , 4 , 5) |
| 2. grounds for judicial review and role of the industrial court. (Para 6 , 7 , 8) |
| 3. judicial review principles and limitations. (Para 9 , 10 , 11 , 12 , 13) |
| 4. assessment of the industrial court's findings. (Para 14 , 15 , 16) |
| 5. justification for retrenchment and bona fide exercise. (Para 17 , 18 , 19 , 20 , 21) |
| 6. evidence supporting the necessity and execution of retrenchment. (Para 22 , 23 , 24 , 25 , 26) |
| 7. code of conduct for industrial harmony guidelines. (Para 27 , 28 , 29) |
| 8. interpretation of employment contracts and termination benefits. (Para 30 , 31 , 32 , 33 , 34) |
| 9. construction of employee handbook clauses. (Para 35 , 36 , 37 , 38 , 39 , 40) |
| 10. evaluation of evidence and burden of proof in retrenchment. (Para 41 , 42 , 43 , 44 , 45 , 46) |
Introduction
[1] This is a judicial review application for an order of certiorari to quash the 3rd Respondent's ("Industrial Court") decision in Award No 2151/2022 dated 22 September 2022. The Industrial Court had dismissed the Applicants' claim that they were retrenched by the 1st Respondent ("R1") without just cause and excuse. I dismissed the judicial review application. Here are the grounds of my decision.
Background Facts
[2] R1 operated and managed the Rainbow Paradise Beach Resort in Penang ("Hotel"). The 2nd Respondent is the sole shareholder of R1. The Applicants were the employees of R1. They were earning above RM2,000 per month.
[3] On 30 April 2020, all 89 employees, including the Applicants, were retrenched with effect on 1 May 2020 due to the closure of the Hotel's business as a result of the Covid-19 pandemic and MCO (Movement Control Order) lockdown. The Applicants did not receive any retrenchment benefit at the time of their retrenchment. They were compensated with 1 month salary in lieu of 1 month notice.
[4] The Applicants complain that R1 dismissed them without just cause or excuse. They made representations under s 20 of the Industrial Relations Act 1967 to be reinstated to their former employment. The Applicants' representations were referred to the Industrial Court for an award.
[5] The Industrial Court, after evidentiary hearing, concluded that the Applicants' dismissal by way of retrenchment was with just cause and excuse. Hence, the Applicants' claims were dismissed. Dissatisfied, the Applicants filed the present judicial review proceedings.
The Law On Judicial Review
[6] The decision of inferior tribunals may be reviewed for both process and substance on the grounds of illegality, irrationality, procedural impropriety and proportionality. (See the Federal Court case of R Rama Chandran v. Industrial Court of Malaysia & Anor [1996] 1 MELR 71; [1996] 1 MLRA 725; ; [1997] 1 AMR 433).
[7] The function of the Industrial Court, in dealing with a reference under s 20 of the Industrial Relations Act 1967, is to determine whether the misconduct complained of by the employer as the ground of dismissal is in fact committed by the workman. And if so, whether such ground constitutes just cause or excuse for the dismissal. (See the Federal Court case of Wong Yuen Hock v. Syarikat Hong Leong Assurance Sdn Bhd & Another Appeal ; [1995] 3 CLJ 344; [1995] 2 AMR 2145).
[8] The findings of the Industrial Court are amenable to judicial review where the facts do not support the conclusion arrived at by the Industrial Court. Or where the findings of the Industrial Court have been arrived at by taking into consideration irrelevant matters or by failing to take into consideration relevant matters. (See the Federal Court case of Ranjit Kaur S Gopal Singh v. Hotel Excelsior (M) Sdn Bhd [2012] 1 MELR 129; ; [2010] 6 MLJ 1; [2011] 1 ILJ 479; [2010] 8 CLJ 629; [2010] 4 ILR 475; [2011] 3 AMR 38).
[9] I would be slow to interfere with findings of facts made by the Industrial Court, where it reaches a conclusion that is supported by evidence and is in accordance with the gov
