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2022 MarsdenLR 1851
INDUSTRIAL COURT MALAYSIA KUALA LUMPUR
CHOONG WAI KIT – Appellant
Versus
TROPICANA SHARED SERVICES SDN BHD – Respondent
Award No: 244 Of 2022 [Case No: 14/4-2988/20]
The court held that termination for redundancy must be substantiated by proof of genuine need and compliance with procedural standards; failure to do so renders the dismissal unlawful.
Headnote:(A) Industrial Relations Act 1967 – Section 20(3) – The Claimant's employment was terminated by the Company on grounds of redundancy due to Covid-19 pandemic affecting business operations. The court examined whether the dismissal was with just cause or excuse based on the genuine need for restructuring, actual redundancy proof, and compliance with procedural standards. (Paras 21, 25, 56)
Facts of the case: The Claimant, employed as General Manager for three months, was dismissed on 19 April 2020. The Company cited redundancy during pandemic-induced cost containment. (Paras 4, 5, 26)
Findings of Court: The court found the termination was unjustified, lacking proof of actual redundancy and did not satisfy necessary procedural requirements. (Paras 55, 56)
Issues: The central questions were the necessity of restructuring, existence of redundancy, and adherence to procedural standards in the retrenchment process. (Paras 25)
Ratio Decidendi: Genuine redundancy must be proved by the employer, who must also comply with the Code of Conduct for industrial harmony. The court concluded the dismissal lacked justification. (Paras 21, 25, 59)
Result: The Claimant's claim was allowed with award for back wages. (Paras 56, 60)
Reference
[1] This is an order of reference made under s 20 (3) of the Industrial Relations Act 1967 ("hereinafter referred to as IRA 1967") arising out of the dismissal of Choong Wai Kit ("hereinafter referred to as the Claimant") by Tropicana Shared Services Sdn Bhd (hereinafter referred to as the Company") on 20 April 2020.
Cause Papers
[2] The pleadings referred to at the trial were:
a. Statement of Case dated 19 March 2021
b. Statement In Reply dated 12 April 2021
c. Rejoinder dated 26 April 2021
d. The Company's Bundles of Documents 1 - COB-1
e. The Company's Bundles of Documents 2 - COB-2
f. The Claimant's Bundle of Documents 1 - CLB-1
g. The Claimant's Bundle of Documents 2 - CLB-2
[3] The witnesses who gave evidence at the trial were:
The Company's Witness
Kuan Lai Shim (Esther) - COW-1
The Claimant testified as the sole witness.
Factual Background
[4] The Claimant was employed as the General Manager of the International Sales Department within the Marketing and Sales Department of the Company for a fixed tenure of one (1) year from 13 January 2020 until 12 January 2021.
[5] At the point of the Claimant's termination, the Claimant remained a probationer and had only served just over three (3) months of his one (1) year fixed term employment contract.
[6] Due to the Global Covid-19 pandemic beginning in the 4th quarter of 2019 the Company decided to shut down the International Sales Department of the Company to manage and/or reduce the cost of operations to ensure sustainability.
[7] The Claimant's position General Manager of the International Sales Department became redundant.
The Company's Case
[8] The Claimant's employment with the Company was terminated on 19 April 2020 on grounds of redundancy.
[9] As the General Manager of the International Sales Department, the Claimant's sole focus and portfolio involved marketing and sales of properties only to the international market.
[10] The Claimant was tasked to arrange and organise potential buyer from outside of Malaysia as well as coordinate property agents outside of Malaysia to visit and view available properties and sites proper in Malaysia.
[11] Due to the Global Covid-19 pandemic beginning in the 4th quarter of 2019 which resulted in the:
(a) Implementation of the Movement Control Order on 18 March 2020 by the Government of Malaysia (which was yet to be completely lifted at the point of filing);
(b) worldwide shutdown of business and border - crossing; and
(c) deterioration in overall economic activities in most countries internationally including major world economies.
[12] The Company had to look for avenues to manage and/or reduce the costs of operations to ensure sustainability. One of the avenue would be to shut down the International Sales Department of the Company. Accordingly, the Claimant's position General Manger of the International Sales Department became redundant.
[13] The Company's act of reorganization by shutting down of the International Sales Department was necessary and a bona fide act by the Company to reduce operating costs.
[14] The Claimant was employed as a General Manager in the Marketing & Sales Department of the Company since 13 January 2020 vide Contract of Employment dated 9 January 2020.
[15] The Contract of Employment was valid for a term of one year from 13 January 2020 to 12 January 2021.
[16] The Claimant's basic salary was RM18,000.00 per month in addition to a monthly car allowance of RM3,500.00.
[17] The Claimant was required to serve a probation period of six month from the date of the Contract of Employment.
[18] Vide letter "Ending of Contract For Employment " dated 6 April 2020 issued by the Company, the Claimant's employment with the Company was terminated and the last day of the Claimant's employment was on 19 April 2020.
[19] The Company cited cost containment as reason due to the global pandemic causes by Covid-19 as ground for dismissal.
[20] The Claimant avers that the termination of his employment by the Company was not a genuine
