The legitimacy of redundancy claims hinges on the bona fides of employer restructuring and evidence of necessity, affirming managerial rights under contractual obligations.

[1] The reference of the Honourable Minister of Human Resources is regarding the dismissal of Ab Razak Omar (hereinafter referred to as "the claimant"), by QSR Brands (M) Holdings Sdn Bhd (hereinafter referred to as "the company") on 1 February 2014. The reference was dated 26 May 2014 and received by the court on 11 June 2014.

Background Facts

[2] The claimant had vide a letter dated 6 December 2011, commenced employment on contract basis with KFC Holdings (Malaysia) Bhd (hereinafter referred to as "KFCH") as Vice President of Quality (System Organization) Department. This department was a newly established department and was subsequently renamed to Business Excellence Unit (hereinafter referred to as "BEX").

[3] The salient terms of the claimant's contract are as follows:

"1. Clause 3 : Fee

Fee : RM20,000 / - per month

2. Clause 4 : Duration of Contract

01 April 2012 - 31 March 2015

(subject to new regulation on retirement age)

3. Clause 5 : Notice Period For Termination

During probation, either party may terminate this contract of service by giving the other party one (1) month's written notice or one (1) month's pay in lieu of notice.

Upon confirmation, this contract of service can be terminated by either party giving the other six (6) months' written notice or salary in lieu thereof."

[4] KFCH then sold all of its assets, business and undertakings to Triple Platform Sdn Bhd (hereinafter referred as "TPSB") through a Business Sales Agreement dated 18 May 2012. It was anticipated that the business of KFCH will be privatised and will be transferred to TPSB on or about 14 January 2013 ("Business Transfer").

[5] Pursuant to the said business transfer, the claimant's employment contract with KFCH was terminated vide a letter dated 17 December 2012.

[6] TPSB then offered the claimant a continuous employment with TPSB vide a letter of offer dated 17 December 2012. The claimant was informed that his salary package remained the same and that his terms and conditions of employment with TPSB will be no less favourable than the terms he enjoyed with KFCH. This would essentially mean that the original duration of the contract ie 1 April 2012 to 31 April 2015 remained the same. The claimant had accepted this contract.

[7] Thereafter, vide notice dated 11 January 2013, the claimant was informed that the commencement date of employment with TPSB has been revised to 21 January 2013 and that all terms and conditions of the original contract remains valid.

[8] Subsequently, TPSB had on 21 February 2013 changed its name to QSR Brands (M) Holdings Sdn Bhd, which is the company in this matter.

[9] Pursuant to the business transfer in 2013, the new management of the company initiated an organisational restructuring which was to take effect from 1 August 2013. A business rationalisation was also conducted and the company's management directions were subsequently changed.

[10] It was discovered that BEX unit was not crucially driving the support system for the business of the company (the QSR Group) and due to the changes in the company's direction, particularly post-privatisation, the department was no longer required and a decision was made to dissolve the BEX unit.

[11] The Chairman of the company at that material time, one Datuk Ahmad Zaki Zahid met with the claimant towards the end of July 2013, where the claimant was informed of the impending dissolution of the BEX unit and the possible redundancy of the claimant.

[12] Subsequently, during a Management Committee Meeting on 31 July 2013, the Board of Directors had discussed about the impending dissolution of the BEX unit and had agreed that in light of the same, the claimant's contract will be terminated.

[13] Pursuant thereto, the Chairman issued a memo to all employees on 31 July 2013 informing all employees of the restruc