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2024 MarsdenLR 1847
INDUSTRIAL COURT JOHOR
SYAFREEN SALLEHUDIN – Appellant
Versus
PEARL DISCOVERY DEVELOPMENT SDN BHD – Respondent
Award NO: 1177 Of 2024 [Case No: 10(8)(16)/4-2007/20]
The employer must prove genuine redundancy and adherence to proper retrenchment procedures; failure to do so renders the dismissal without just cause.
Headnote:(A) Industrial Relations Act 1967 – Section 20(3) – Retrenchment – Claimant's employment terminated under the pretext of redundancy due to financial constraints during the Covid-19 pandemic – Company failed to prove genuine redundancy or adherence to proper retrenchment procedures – Claimant entitled to compensation for remaining contract period. (Paras 75-83)
(B) Burden of Proof – The employer bears the burden to prove that the dismissal was with just cause or excuse, particularly in cases of retrenchment. (Paras 26-29)
(C) Redundancy – Redundancy must be established through evidence showing that the employee's position is genuinely surplus to requirements, not merely through reorganization. (Paras 30-34)
Facts of the case: The Claimant was employed as a Landscape Manager, later redesignated, and was terminated without valid reason during a purported retrenchment exercise. The Company claimed financial difficulties but failed to substantiate this claim. (Paras 5-8, 17-19)
Findings of Court: The Company did not prove that the Claimant's position was redundant or that the retrenchment was conducted in good faith. (Paras 75-78)
Issues: Whether the retrenchment was justified, whether the grounds for retrenchment were true, and whether the retrenchment was conducted in good faith. (Paras 38-39)
Ratio Decidendi: The Court found that the Company failed to demonstrate genuine redundancy and that the retrenchment was not conducted bona fide, leading to the conclusion that the dismissal was without just cause. (Paras 75-78)
Result: The Claimant awarded RM145,200.00 as compensation for the remaining contract period.
AWARD
Reference
[1] This is a reference by the Honourable Minister of Human Resources of Malaysia dated 8 September 2020 pursuant to s 20(3) of the Industrial Relations Act 1967 which was received by the Industrial Court of Malaysia on 15 September 2020 arising out of the alleged dismissal of SYAFREEN BIN SALLEHUDIN (hereinafter referred to as "the Claimant") by PEARL DISCOVERY DEVELOPMENT SDN. BHD. (hereinafter referred to as "the Company") on 30 April 2020.
Factual Backgrounds
[2] The hearing of this matter took place together with another three (3) matters namely; 10(8)(16)/4-2293/20, 10(8)(16)/4-2294/20 and 10(8)(16)/4-2295/20 which were heard before Y.A. Puan Azwarnida binti Affandi, the Chairperson at the Industrial Court of Malaysia, Johor Branch on 26 May 2022, 19 July 2022, 12 December 2022 and 13 December 2022. Due to unforeseen circumstances and transfer of the previous presiding Chairperson to another government agency, the President of the Industrial Court of Malaysia on 15 July 2024 had transferred all four (4) matters to the Industrial Court of Malaysia, Perak Branch for the Chairman of the said division to handed down the Awards for each of four (4) matters including the present case pursuant to s 22(2) dan 22(3), and s 29(g) of the Industrial Relations Act 1967 .
[3] The Company is the property developer of Puteri Cove Residence & Quayside (PCR) located in Puteri Harbour, Iskandar Puteri. The principal activity of the Company is real estate development.
[4] The ultimate holding company of the Company is Pacific Star Development Limited (PSDL), a limited liability company listed and incorporated in Singapore. The Company is the subsidiaries of PSDL are collectively referred to as PSD Group.
[5] By way of Letter of Appointment dated 19 February 2018 (Exhibit B of CLB-1), the Claimant was employed by the Company as a Landscape Manager for a duration of two (2) years from 5 March 2018 until 4 March 2020 earning a salary of RM5,500.00 per calendar month (p 13 of CLB-1). Thereafter, the employment of the Claimant was extended by way of a Letter of Extension dated 26 February 2020 (pages Exhibit C of CLB-1) as he was redesignated as a Landscape & Facilities Manager for a duration of another two (2) years from 5 March 2020 until 4 March 2020 with a salary of RM6,600.00 per calendar month (p 20 of COB-1).
[6] The employment of the Claimant was terminated by Letter of Termination dated 1 April 2020 with his last drawn salary was RM6,600.00 per calendar month. He was given one (1) month's termination notice as per Clause 10(b) of the Letter of Appointment (p 15 Exhibit B of CLB-1) from the date of the Letter of Termination wherein the Claimant's last day of service with the Company was on 30 April 2020 (p 23 of CLB-1).
[7] The Company stated that the termination of the Claimant from his employment with the Company had to be done on in view that the Company at the material period was facing dire financial constraint and business operations that were severely affected during the Covid-19 pandemic despite that the Company had made every effort but due to the position and job function of the Claimant becoming redundant, then the retrenchment exercise was inevitable.
[8] Being dissatisfied and aggrieved with the Company's decision to terminate the Claimant's services via retrenchment exercise even though the fixed term employment contract has not yet expired, the Claimant filed a representation claim in this reference pursuant to s 20(3) of the Industrial Relations Act 1967 for this division of the Industrial Court to hand down a just and appropriate Award.
The Claimant's Case
[9] The Claimant contends that the Company; Pearl Discovery Development Sdn Bhd (PDD), just before the Covid-19 pandemic began, embarked on a sudden retrenchment exercise that was aimed at the blue-collar employees and did not involve the top level and high-level management. There was no evidence adduced at the trial that the middle or top-level mana
