Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 MarsdenLR 1921

INDUSTRIAL COURT PERAK
RAJENDRAN BALAKRISHNAN – Appellant
Versus
ASSOCIATED PAN MALAYSIA CEMENT SDN BHD – Respondent
Award No: 1696 Of 2023 [Case No: 10/4-609/21]

Petitioner Advocates:Arjunan Arumugam,Thamotharan Palansamy ,Respondent Advocate: Sujatha Selliah,Muhajir Wazinie Morchseinie

The court upheld that retrenchment can be justified if the employer demonstrates genuine redundancy and acts in good faith, particularly during financial distress.

Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Dismissal and retrenchment - Claimant's employment terminated by Company on grounds of redundancy following restructuring due to financial distress - Claimant contended dismissal was unlawful and without just cause - Company established legitimate business reasons for restructuring - Court held that retrenchment was bona fide and justified based on financial circumstances and compliance with legal requirements. (Paras 1, 9, 44, 93, 100)

(B) Burden of proof - It is on the employer to demonstrate that dismissal is with just cause or excuse, especially in cases of retrenchment - Court must assess whether genuine redundancy existed and if the employer acted in good faith. (Paras 32, 36, 50)

Facts of the case:
The Claimant was employed since 1981 and was dismissed on 21 July 2020 under claims of redundancy after refusing an early retirement offer. The Company asserted that restructuring was necessary due to financial losses and operational inefficiencies exacerbated by the COVID-19 pandemic. (Paras 2-8, 53-60)

Findings of Court:
The Court found that the Company acted within its rights to restructure due to financial distress and that the Claimant's position was genuinely redundant following the restructuring. (Paras 94-100)

Issues: Whether the retrenchment was justified, whether the grounds provided by the employer were true, and whether the retrenchment was motivated by bad faith. (Paras 44, 50)

Ratio Decidendi: The Court determined that the Company had valid business reasons for the restructuring and retrenchment, which were bona fide and necessary to ensure the Company's survival. The Claimant failed to prove mala fide intentions on the part of the Company. (Paras 93-100)

Result: Claim dismissed.

Table of Content
1. reference of dismissal case to the industrial court. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8)
2. company's justification for restructuring and redundancy. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15)
3. claimant's arguments against the redundancy. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26)
4. court's role in evaluating dismissal and burden of proof. (Para 30 , 31 , 32 , 33 , 34 , 36 , 39 , 43 , 44)
5. evaluation of evidence regarding financial distress and redundancy. (Para 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61)
6. conclusion affirming lawful redundancy and dismissal. (Para 94 , 96 , 99)

Zulhelmy Hasan:

Reference

[1] This is a reference by The Honourable Minister of Human Resource Malaysia pursuant to s 20(3) of the Industrial Relations Act 1967 dated 29 January 2021 which was received by the Industrial Court of Malaysia on 9 February 2021 arising out of the alleged dismissal of Rajendran A/L Balakrishnan (hereinafter referred to as "the Claimant") by Associated Pan Malaysia Cement Sendirian Berhad (hereinafter referred to as "the Company") on 7 July 2020.

Factual Backgrounds

[2] The Claimant commenced employment with the Company with effect from 1 December 1981 in the position of General Worker. At the time of dismissal, the Claimant's last held position was Assistant Foreman with last drawn of basic salary of RM4,0770.00 per month.

[3] The Claimant was given letter dated 30 June 2020 (at p 37 of CLB-1) by the Company captioned "Retirement" and that his last day of employment was stated as at 1 July 2020. He then received another letter issued by the Company dated 1 July 2020 (at pp 38-39 of CLB-1) stating that he would be retired with effect from 30 June 2020 as he would have attained the requirement age of retirement.

[4] The Claimant vide letter dated 6 July 2020 (at p 40 of CLB-1) notified the Company that he had not attained the retirement age and declined the Company's suggestion for early or optional retirement. The Claimant made a police report on 7 July 2020 (at p 41 of CLB-1) against his sudden dismissal by the Company that he denied making any written application for early retirement with the Company.

[5] The Claimant again wrote a letter dated 10 July 2020 (at p 42 of CLB-1) in reference to the Company's letter dated 1 July 2020, affirming that he never submitted any letter volunteering for early retirement and would not accept unwarranted inducements, sanctioned under the cloak of early retirement and he maintained that he did not submit any letter requesting for early retirement.

[6] Due to non-existence of his role within the new Company structure, he was retrenched from his role. The Company issued a termination letter captioned "Persaraan Awal Dan Lebihan Pekerja (Redundancy)" dated 21 July 2020 (at p 43 of CLB-1) to the Claimant in person on the same date which was delivered by Mr Leong Chun Hor, the Human Resource Manager stating that the Claimant is terminated with effect from 21 July 2020.

[7] The Claimant claims before this Court is that his retrenchment was unlawful and without just or excuse whereas the Company states that the Claimant was retrenched as part of the Company's cost cutting measures.

[8] Being dissatisfied with the termination of his employment by the Company, the Claimant made a representation to the Minister of Human Resource Malaysia for this matter to be referred to the Industrial Court for adjudication accordingly. Hence, the Minister's reference under s 20(3) of the Act to this Court to determine whether the Claimant's dismissal was without just cause or excuse.

The Company's Case

[9] The Company had genuine and valid business reasons to restructuring its organization. The main reason and factor are the financial distress and massive loss throughout four (4) years from 2017 to 2020 that contribute to the necessity for the Company restructuring its organization. In order to secure the survival of the Company, the next reasonable

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2023 MarsdenLR 1921

INDUSTRIAL COURT PERAKRAJENDRAN BALAKRISHNAN – AppellantVersusASSOCIATED PAN MALAYSIA CEMENT SDN BHD – RespondentAward No: 1696 Of 2023 [Case No: 10/4-609/21]

The court upheld that retrenchment can be justified if the employer demonstrates genuine redundancy and acts in good faith, particularly during financial distress.

Cases Referred (5)

INDUSTRIAL COURT PERAK
RAJENDRAN BALAKRISHNAN – Appellant
Versus
ASSOCIATED PAN MALAYSIA CEMENT SDN BHD – Respondent
Award No: 1696 Of 2023 [Case No: 10/4-609/21]