The court confirmed that redundancy requires the employer to demonstrate a genuine need for workforce reduction without mala fides and holds that there is no legal obligation for prior notice or alternative employment offers.

This case was referred by the Honourable Minister of Human Resources vide his reference dated 26 December 2006 and received by the court on 5 March 2007.

Background

This case was heard before Chairman court 1 and it was completed on 16 October 2008. However, the said Chairman was elevated to the post of Judicial Commissioner of the High court of Malaya with effect from 5 January 2009. The parties completed filing their written submissions on 6 July 2009. It is to be noted that on 30 Mac 2010 both parties had given their consent and did not object for the this award to be handed down by another Chairman of the Industrial court. As such, this case was transferred to this court. It is pertinent to note that after perusing through the notes of evidence and the submissions by the parties, the court does not find any problem in handing down the award, as the issue is straightforward, plain and clear

Brief Facts

The claimant started working with company as a Junior Secretary on 5 August 2000 and was given a salary of RM1,300.00 per month. The claimant contended that on the last week of May 2006, without any advance notice she was summoned into the office of the Managing Director ("the MD") and was informed casually by the MD that the company was incurring losses and that the claimant had to tender her resignation with immediate effect. However, the claimant said she refused to resign and was handed with a termination letter Prior to the dismissal, the claimant was drawing a monthly basic salary of RM1,600.00. For ease of reference the claimant's termination letter is reproduced as follows:-

TCI Marketing Sdn Bhd

25 Jalan Industrial Park, 40150 Shah Alam, Selangor, Malaysia

Tel : 6O-3-55695151 Fax: 60-3-5569 5152

E-mail: tcimktg@streamyx.com Homepage : www.TCl-Marketing.com

2nd June 2006

Ms Suganthi A/P Thyazaraj

(Present)

Dear Ms Suganthi,

Termination Employment

The company had been incurring tosses for the past 4 years, as a result of continued decline in business/sales year, after year It has reached a point that we are just not able to sustain these loses any further

This poor business scenario; has made the company not able to continue to bear the losses and has no choice but; to reorganize the company and review employment of staffs, with the view of reducing costs The company has to decide to cut back positions that are no longer relevant or required, and hence become redundant. Your position as Junior Secretary is one of them.

We regretfully inform you that we wish to terminate your Employment with one month's notice from this date, as provided for under Clause 2.2 under our General Terms of Employment.

We are pleased to offer you one month's salary in lieu of the one month's notice. Hence, your last day of work is today, 2nd June 2006.

We thank you for your past contributions and services to the company.

Yours faithfully,.

TCI Marketing Sdn Bhd

T.T. Low

Managing Director

THE LAW

The functions of the Industrial court in a reference under section 20 of the Act has been clearly spelt out in the Federal court of Goon Kwee Phoy v. J&P Coats (M) Bhd where the Federal court amongst other things stated:-

"Where representations are made and referred to the Industrial court for enquiry, it is the duty of that court to determine whether the termination or dismissal is with or without just cause or excuse. If the employer chooses to give a reason for the action taken by him the duty of the Industrial court will be to enquire whether the excuse or reason has or has not been made out. If ft finds as a fact that it has not been proved, the inevitable conclusion must be that the termination or dismissal was without just cause or excuse. The proper inquiry of the court is the reason advanced by it and that court or the High court cannot go into another reason not relied on by the employer or find one for it.".

The term "redundancy" has been defined by Dunston Ayudurai in Industrial Relations in Malaysia at page 2.55 in the following terms:-

"Redundancy refers to a surp

Click Here to Read the rest of this document