The court upheld the employer's prerogative to manage business operations, confirming that the termination of the employee was justified due to bona fide financial difficulties.

AWARD

Eswary Maree:

Reference

[1] This is a reference under s 20(3) of the Industrial Relations Act 1967 (1967 Act) by the Director General of Industrial Relations, emanates from the dismissal of Lim Weng Kiak ("the Claimant") by Fujiaire Heavy Industries Sdn Bhd ("the Company") on 7 July 2021.

[2] This Court will determine the issues before it and make its findings based on the pleadings, the relevant oral and documentary evidences, the notes of proceedings and submissions. The following documents were filed before this Court:

(i) Statement of Case dated 31 May 2022;

(ii) Statement In Reply dated 1 July 2022;

(iii) Company's Bundle of Documents 1 marked as COB-1;

(iv) Company's Bundle of Documents 2 marked as COB-2;

(v) Company's Bundle of Documents 3 marked as COB-3;

(vi) Company's Bundle of Documents 4 marked as COB-4;

(vii) Claimant's Bundle of Documents marked as CLB-1;

(viii) Company's Witness Statement and Supplementary Witness Statement of Tan Boon Eng marked as COWS-1A and COWS-1B accordingly;

(ix) Witness Statement of the Claimant, Lim Weng Kiak marked as CLWS-1;

(x) The Claimant's Written Submissions dated 29 October 2023;

(xi) The Company's Written Submission dated 30 October 2023;

(xii) The Claimant's Written Submissions In Reply dated 16 November 2023; and

(xiii) The Company's Written Submissions In Reply dated 17 November 2023

The Company's Case

[3] The Claimant first commenced his employment with Fujiaire (Malaysia) Sdn Bhd (hereinafter referred to as "Fujiaire Malaysia") on 13 May 2010 as a Technical & Engineering Senior Manager with a monthly salary of RM9,000.00.

[4] On 30 April 2021 however, Fujiaire Malaysia was shut down due to poor financial performance and all employees of Fujiaire Malaysia were consequently retrenched on 30 April 2021.

[5] In an attempt to salvage the business of Fujiaire Malaysia, the Company came into the picture and most former employees of Fujiaire Malaysia including the Claimant were offered jobs with effect from 1 May 2021 although the operations of the Company would be significantly smaller in comparison to Fujiaire Malaysia.

[6] Effective on 1 May 2021, the Claimant was offered an employment with the Company with a revised remuneration to monthly RM5,000.00 to which he had acknowledged.

[7] In this regard, there were no elements of duress and/or pressure on the part of the Claimant to accept his new employment with the Company with effect from 1 May 2021 based on the terms and conditions of the Supplementary Agreement and that the reduction in remuneration compared to his previous remuneration package from Fujiaire Malaysia was due to the fact that Company's operations was significantly smaller.

[8] The Company had suffered financial hardship and had no choice other than to proceed with the closure of business operations leading to the retrenchment of all its employees including the Claimant.

[9] However, prior to the closure of business, the Company had taken multiples appropriate measures to improve the Company's business and its financial position such as:

(a) Attempted to seek for injection of funds from investors;

(b) Implementation of business recovery plan; and

(c) Refocusing of business markets.

[10] Unfortunately, even the above steps and with the Movement Control Order (MCO) still in place at that time, the financial condition of the Company continued to deteriorate. The Company had incurred losses of RM1,959,250.95 as at 31 December 2021.

[11] Due to the poor and deteriorating business performance of the Company, the management, board members and the shareholders of the Company had ultimately decided to proceed with the closure of business of the Company with effect from 7 July 2021.

[12] The Company had issued a letter of termination of employment dated 7 July 2021 to the Claimant retrenching the Claimant's employment as a result of the closure of business of the Company with effect from 7 July 2021.

The Claimant's Case

[13] The Company appointed the Claimant on 15 June 2010 to the position of Se