Back
2023 MarsdenLR 2603
INDUSTRIAL COURT KUALA LUMPUR
KOK ONN FATT – Appellant
Versus
AIRASIA BERHAD – Respondent
Award No: 1300 Of 2023 [Case No: 15(11)/4-1893/21]
Retrenchment must be conducted in good faith and demonstrate genuine redundancy; demoting an employee during a transfer is considered unfair termination.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Dismissal of employee - Claimant dismissed by employer due to restructuring leading to redundancy - Claimant's refusal to accept a lower position as Licensed Aircraft Engineer viewed as demotion - Court found retrenchment lacked good faith and was unfair, as similar positions existed in the new entity. (Paras 31, 47, 82)
(B) Retrenchment - Definition and principles - Retrenchment is not merely termination; it requires proof of genuine redundancy and must be conducted fairly and in good faith. (Paras 47, 70)
Facts of the case:
Claimant employed as Maintenance Manager, dismissed during restructuring when his position ceased to exist, offered lower position in new entity, refused, leading to retrenchment. (Paras 6-22)
Findings of Court:
Court held that retrenchment was not justified as the Claimant's position continued in a different form and the offer from the new entity was a demotion. (Paras 81-84)
Issues: Whether the retrenchment was justified and conducted in good faith, and if the offer of a lower position constituted a demotion. (Paras 29, 84)
Ratio Decidendi: The court ruled that the retrenchment lacked good faith, as the Claimant's position was not genuinely redundant and the offer was unfairly demoting. (Paras 81-84)
Result: Claimant awarded RM561,328.00 in compensation. (Paras 89)
| Table of Content |
|---|
| 1. reference and procedural background. (Para 1 , 2 , 3 , 4 , 5) |
| 2. employment history and termination details. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23) |
| 3. company's case on restructuring and retrenchment. (Para 24 , 25 , 26) |
| 4. claimant's case on unfair dismissal. (Para 28 , 29) |
| 5. court's analysis of redundancy and business strategy. (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46) |
| 6. legal principles on retrenchment. (Para 47 , 48 , 49) |
| 7. discussion on the offer to the claimant. (Para 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59) |
| 8. claimant's position and redundancy analysis. (Para 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67) |
| 9. court's findings on fairness of retrenchment. (Para 68 , 69 , 70 , 71 , 72 , 73 , 74 , 75 , 76 , 77 , 78 , 79 , 80 , 81 , 82 , 83) |
| 10. court's order and compensation details. (Para 85 , 86 , 87 , 88) |
A. Reference
[1] This is a reference from The Honourable Minister of Human Resources, Malaysia to the Industrial Court of Malaysia under s 20(3) of the Industrial Relations Act 1967 ("the IRA ") in respect of the dismissal of Kok Onn Fatt ("the Claimant"), by his employer, AirAsia Berhad ("the Company") on 5 November 2020.
B. Background
[2] This case was previously tried and concluded by me as the Chairman of Court 11, Industrial Court of Malaysia. I had ceased to be the Chairman of Court 11 effective 16 January 2023. I have been requested to hand down this award as the presiding Chairman for the case after I was re-appointed as the new Chairman of Court 15 effective 1 June 2023.
[3] Together with the Claimant, there were two (2) other claimants who were jointly referred under the same reference by The Honourable Minister to the Industrial Court namely one Azrul Hisham Bin Azlan ("Azrul") and Chan Wei Loon ("CWL"). They were also employees of the Company and dismissed by the Company on 5 November 2020 for similar reasons.
[4] Notwithstanding, all the above named claimants were jointly referred to the Industrial Court under the same reference by The Honourable Minister, they were assigned with different suit / case numbers and regarded as separate individual cases in the Industrial Court as follows:
(a) Case No: 15(11)/4-1893/21 - Kok Onn Fatt
(b) Case No: 15(11)/4-1894/21 - Azrul Hisham Bin Azlan
(c) Case No: 15(11)/4-1895/21 - Chan Wei Loon
[5] When the cases were called up for hearing, parties had request for their cases to be heard together. For expediency's sake, the Court had agreed for all the three (3) cases to be heard together since the facts were identical and the issues to be tried were also similar. However, the Court shall hand down separate awards for each case.
C. Facts
[6] The Company is a wholly owned subsidiary of Capital A Berhad (formerly known as AirAsia Group Berhad) ("CAB"), providing low cost air carrier service.
[7] Pursuant to a letter of offer dated 2 May 2008, the Claimant commenced employment with the Company as Licensed Aircraft Engineer on 26 May 2008.
[8] The Claimant throughout his employment with the Company was given salary increments and promotions by the Company multiple times. At the time of the termination, the Claimant was employed by the Company as a Maintenance Manager (Part 145) and his last drawn monthly salary was RM35,083.00.
[9] Sometime in April 2020, CAB decided to form and incorporate a new entity known as Asia Digital Engineering Sdn Bhd ("ADE") which was wholly owned by CAB to be inter alia provider of engineering services for AirAsia's group of airlines as well as other commercial airlines in the region.
[10] With the inception of ADE, the Company decided to restructure and reorganize the Company's Engineering Department as certain engineering services for the Company's airlines would no longer be required from the Company's Engineering Department and be taken over by ADE.
[11] The Company's Approved Maintenance Organization ("AMO") under the Engineering
