An employer can reorganize for economic reasons, but must act bona fide; genuine redundancy must be proven for dismissal to be justified.

AWARD

Amrik Singh:

Reference

[1] This is a reference made under subsection 20(3) of the Industrial Relations Act 1967 arising out of the dismissal of Ang Thiam Yong (hereinafter referred to as "the Claimant") by Nuformsystem (M) Sdn Bhd (hereinafter referred to as "the Company") on 5 August 2020.

Background

[2] The Company is in the business of construction services. The Claimant commenced employment with the Company as a Sales & Servicing Manager on 1 April 2017 and was subsequently confirmed in his employment on 1 July 2017.

[3] The Claimant reported directly to the General Manager. His job scope involved securing and bringing in sales, providing quotations and negotiating with customers regarding the rental pricing, providing sales service to customers, collection of monies due from sales as well as closing all projects that had been completed with the customers.

[4] During his 3.5 years of employment, the Claimant was involved in 34 projects and collected RM28.7 million in revenue for the Company. As early as 2018 and 2019, the commissions that were due to the Claimant was not paid in a timely manner and the Company had at times, shortchanged the commission payments from 3% which had been verbally informed to the Claimant during his interview to 1% and subsequently to 0.5%. The Claimant contends that the Company did not keep their end of the bargain and did not provide any explanation for these changes.

[5] On 8 May 2020, the Claimant claimed that he had been forced to sign the "Cost Management Measures Relating to Covid-19 Pandemic" letter dated 2 May 2020 (the Cost Management letter) as the Company would withhold the April 2020 monthly salary if he did not agree to sign the Cost Management letter.

[6] Despite of the cost reduction exercises undertaken by the Company, these efforts proved insufficient for the Company to 'weather through the storm' and found itself headed towards a barren situation.

[7] The unfavourable economic of the Company led to reorganisation exercise resulted in the Claimant's position and services being identified as redundant.

[8] The Company then issued a letter of retrenchment dated 5 August 2020 to the Claimant notifying him of his cessation of employment and was paid RM69,473.29 which included a goodwill payment of one (1) month salary as the retrenchment benefit.

[9] The Claimant's last drawn salary with the Company was RM10,400.00. He prays to this Court to be reinstated to his former post without loss of seniority, be paid all the salary/commission and benefits, monetary or otherwise, employer's contribution to EPF and in the event this Court finds that the reinstatement is not the proper remedy the Claimant further prays for punitive compensation.

The Claimant's Case

[10] It was contended by the Claimant that when the Claimant was interviewed and employed based on the Claimant's credentials, the Company had portrayed that nothing is going to affect the Company's business and the Claimant (given his excellent performance) had a legitimate expectations to be continued in employment.

[11] The Claimant's monthly basic salary was RM13,000.00 and was confirmed in his position on 1 July 2017 and till the date of his termination, the Claimant had served the Company with an unblemished record of service.

[12] The Claimant avers that apart from securing and bringing in sales, providing quotations and negotiating with customers regarding sales services to customers, collecting monies due from sales, closing all completed projects, his work scope also included issuing invoices and account payable.

[13] In regard to his commission, the Claimant contends that the Company held all Security Deposit Payment commission totalling approximately RM2 million due to account closing and pending approval from the headquarters which the Company is bound to pay a contractual bonus of eight (8) months but paid only 6.5 months bonus.

[14] In furtherance to that over the last 12 months, the Company was supposed to pay 0.5% commiss