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INDUSTRIAL COURT, KUALA LUMPUR
FIREX SDN. BHD. – Appellant
Versus
CIK NG SHOO WAA – Respondent
Award No. 69 Of 199O [Case No.1:4/4-354/87 (14 March 1990)]
[23 MARCH 1990]
This is a case involving a dispute between Firex Marketing Sdn. Bhd. (the Company) and Ng Shoo Waa (the Claimant) over the termination of her services by way of retrenchment. In her Statement of Case dated 16 January 1987, the Claimant has pleaded a number of issues: (1) That the Company's purported retrenchment was in reality a disguised dismissal because the Company was unhappy when the Claimant insisted that she be allowed to take her annual leave,(2) That, on the assumption of the validity of the retrenchment, the Company did not attempt to offer her another position and for completely disregarding the principle of last in, first out; (3) That alternatively, on the assumption of the validity of the retrenchment, the Company did not comply with the organisational handbook on retrenchment exercise in failing to offer to pay her one month for every year of service with the Company. The Claimant has prayed for an order of reinstatement without loss of benefits or alternatively, damages. The Company in its Statement in Reply dated 20 May 1988, has denied the allegations and claims maintaining, in effect, that the retrenchment was done as a result of the restructure and rationalisation of operations necessitated by the poor economic performance of the Company.
At the outset it is pertinent to restate the principles involved. For this, a passage in Award No.121/80: Ong Lean Phaik v. C.F. Sharp & Co. (M) Sdn. Bhd., is I think, sufficiently illuminating:
It is the right of every employer to reorganise his businessin any manner for the purpose of economy or convenience provided he acts bona fide. He should not carry out the reorganisations for the purpose of victimising any of his employees and getting rid of his services. Victimisation in this context means punishment by way of dismissal of an innocent workman who has in some way incurred the displeasure of his employer ..... In other words, if the employer goes through the exercise of a reorganisation only for the purpose of providing himself with an excuse to get rid of the services of an innocent workman who had incurred his displeasure, he would be acting mala fide. But the employer has a right to determine the volume of his labour force consistent with his business and organisation and if the implementation of a reorganising scheme adopted for reasons of economy and better management of the business, the services of some of the employees become excess of the requirement of the business, the employer is entitled to discharge each excess.
I would associate with the principles so stated above. It is well established that it is for management to decide the strength of its staff which it considers necessary for efficiency in its undertaking. The Court will not intervene unless it is shown that the decision was capricious or without reason or was mala fide or was actuated by victimisation or unfair labour practice. These principles have been consistently applied by the Industrial Court in numerous cases. They must, mutatis mutandis, apply in the present case.
Now, it is the Company's case that due to its poor economic performance, the Company was compelled to restructure and rationalise its operations and that in consequence, the Claimant's position as Sales Manager became redundant and she had to be retrenched accordingly. Was the Company performing badly as alleged? According to Mr. Quek Jin Fong, the Director of the Company as well as the Financial Controller of Malfa International Trading Corporation Bhd. of which the Company was a subsidiary, the Company was certainly not doing well at all material times. He referred to the audited accounts, exhibits CO1 and CO2. In exam-in-chief, he said inter alia:
(CW1 shown page 6 of CO1) Looking at the turnover for 1985, itwas $1,506,926. In 1986, the turnover was reduced to $1,311,063. For 1985, the operating loss before taxation was $237,543 and the operating loss was then increased to $256,186 .......
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