The employer must prove the justification for dismissal on the balance of probabilities, demonstrating actual redundancy and acting bona fide, without malice or unfair practices.

[1] This is an order of reference dated 28 January 2022 by the Director General of Industrial Relations Department pursuant to subsection 20(3) of the Industrial Relations Act 1967 arising out of the alleged dismissal of Lee Siong Teck (the Claimant) by Cahaya Mata Sarawak Management Services Sdn Bhd (the Respondent) on 31 May 2021.

Brief Facts

[2] The Company (Cahaya Mata Sarawak Management Services Sdn Bhd) is a subsidiary of Cahaya Mata Sarawak Berhad (CMSB) and a member of the Cahaya Mata Sarawak Group of Companies (CMS Group).

[3] Prior to working for the Company, the Claimant was under the employment of CMS Works Sdn Bhd as the Head of Contract Management from 1 June 2018.

[4] The Claimant commenced his employment with the Company on 1 May 2019 as a Manager, Project Management Office. At the time of dismissal, the Claimant was working as a Senior Manager, Project Management Office seconded to PPESW BPSB JV Sdn Bhd.

[5] Circa in 2020, the CMS Group had begun a group-wide restructuring exercise after the decision to sell 2% of CMS's stake in both PPESW BPSB JV Sdn Bhd and CMS Resources Sdn Bhd as well as the decision to split the Roads and Construction business into two separate entities.

[6] Prior to the sale of CMS's stake, the shareholdings of PPESW BPSB JV Sdn Bhd held by CMS Works Sdn Bhd (CMS Works) and Sarawak Economic Development Corporation (SEDC) were 51% and 49% respectively.

[7] The sale of 2% of CMS Works shares in PPES Works (Sarawak) Sdn Bhd (PPESW) to SEDC has increased SEDC's shareholding in PPESW to 51% and reduced CMS Work's shareholding to 49%.

[8] PPESW ceased to be a subsidiary Company of CMS Group and gave SEDC ultimate control authority over PPESW and PPESW BPSB JV. Then, CMS Resources Sdn Bhd was renamed SEDC Resources Sdn Bhd.

[9] As a result of the shares selling, the Company made the restructuring exercise by deciding all project management roles were to be managed by the respective business entities directly which makes the roles of the Project Management Office of the Company under the Group Chief Operations Officer's Department obsolete and closed.

[10] As the Project Management Office of the Company closed, the Claimant's position as Senior Manager, Project Management Office was made redundant. The Company was unable to find suitable roles for the Claimant within the CMS Group despite their efforts.

[11] Then, the Company engaged PPESW and PPESW BPSB JV to offer the Claimant as Senior Manager, Project Management for the Pan Borneo Highway Project (WPC06: Sungai Awik Bridge to Bintangor Junction) from 1 May 2021 until 30 June 2022 with a monthly basic salary of RM17,860.00.

[12] However, the Claimant rejected the employment offer by PPESW BPSB JV. Following the Claimant's confirmation rejecting the offer, the Company retrenched the Claimant's employment on grounds of redundancy and paid the severance package of RM63,281.56 to the Claimant upon his termination.

The Law

Roles And Functions Of The Industrial Court

[13] The role of the Industrial Court under s 20 of the Industrial Relation