The court affirmed that retrenchment can be justified based on financial necessity, and the employer's discretion in selecting employees for redundancy must be exercised bona fide.

AWARD

Ahmad Zakhi Mohd Daud:

Reference

[1] This is a reference made under s 20(3) of the Industrial Relations Act 1967 ("Act") arising out of the termination of Kannan A/L Loganathan and Masliza Binti Alias ("Claimants") by Taylor's University Sdn Bhd ("Company") on the 31 December 2019.

[2] The Ministerial reference in this case required the Court to hear and determine the Claimants' complaint of termination by the Company on 31 December 2019.

[3] This Court considered the notes of proceedings, documents and cause papers in handing down this Award namely:

(a) Statement of Case dated 28 August 2020 and 1 September 2020

(b) Statement in Reply dated 2 October 2020 and 23 October 2020

(c) Rejoinder dated 30 October 2020

(d) Claimant's Bundle of Documents - CLB-K1, CLB-K2, CLB-K3, CLB-M1

(e) Company's Bundle of Documents -COB-K, COB-1, COB-2, COB-3, COB-M

(f) Claimant's Witness Statement - CLW-KS (Kannan A/L Loganathan), CLW-MS (Masliza Binti Alias)

(g) Company's Witness Statement - COW-1S (Chee Lye Yee)

(h) Company's Witness Statement - COW-2S (Balaguru Ambalavanan)

(i) Company's Witness Statement - COW-3S (Dr Latiffah Pawanteh)

(j) Company's Witness Statement - COW-4S (Professor Dr Neethiahnanthan)

(k) Company's Witness Statement - COW-5S (Justina Prisca Ngui)

(l) Claimant's Written Submission and Reply

(m) Company's Written Submission and Reply

(n) Claimant's and Company's Bundle of Authorities

Background

[4] The dispute before this Court is the claim by the Claimants that they had been terminated from their employment without just cause or excuse by the Company on 31 December 2019.

[5] By a Letter of Appointment dated 3 May 2012, the Claimant (Kannan) was offered employment with the Company as Lecturer. The Claimant's last drawn salary was RM8,969.00 per month.

[6] The Claimant (Masliza) was offered employment with the Company as Assistant Manager, Faculty Office at the Faculty of Social Sciences and Leisure Management ("FSLM"). The Claimant's last drawn salary was RM6,409.00 per month.

[7] On 25 September 2019, the Company issued Notice of Redundancy ("NOR") to the Claimants informing them that they are being terminated from their employment with effect from 31 December 2019 due to the Company's financial situation and the need to reduce its workforce. On 1 November 2019, the Company issued another NOR for the revised termination benefits.

[8] The Company had given the Claimants termination benefits which amounted to RM67,681.82. for Kannan and RM87,137.75 for Masliza.

[9] The Claimants contended that the Company's retrenchment exercise was done in bad faith and without just cause or excuse.

The Duty Of The Industrial Court

[10] The Supreme Court in the case of Wong Chee Hong v. Cathay Organisation Malaysia Sdn Bhd ; [1988] 1 MLJ 92; [1988] 1 CLJ (Rep) 298 held that:

"When the Industrial Court is dealing with a reference under s 20, the first thing that the Court will have to do is to ask itself a question whether there was a dismissal, and if so, whether it was with or without just cause or excuse. "

[11] The Federal Court in the case of Goon Kwee Phoy v. J & P Coats (M) Bhd; held that:

"Where representations are made and are referred to the Industrial Court for enquiry, it is the duty of that Court to determine whether the termination or dismissal is with or without just cause or excuse. If the employer chooses to give a reason for the action taken by him, the duty of the Industrial Court will be to enquire whether that excuse or reason has or has not been made out. If it finds as a fact that it has not been proved, then the inevitable conclusion must be that the termination or dismissal was without just cause or excuse".

The Burden of Proof

[12] The High Court in the case of Weltex Kni