The Court upheld that an employer has the right to terminate employees on redundancy grounds if done bona fide, regardless of subsequent employment positions offered.

The Reference

[1] LIM YUH WAH ('the Claimant') was terminated from her employment with VICTORY WIZARDS SDN BHD ('the Company') with effect from the 23rd of February 2016.

[2] The Claimant being dissatisfied by circumstances leading to her termination of employment made representations to the Director General for Industrial Relations, Malaysia; under s 20(3) of the Industrial Relations Act 1967 ('the Act'). The Claimant's representations was then referred to the Industrial Court for adjudication via a Ministerial Reference dated the 28th of October 2016.

The Award

[3] The hearing of this matter commenced and was duly completed on the 30th of October 2017. The solicitors for both parties were then directed by this Court to file outline submissions on or before the 11th of December 2017 and replies thereto on or before the 26th of December 2017. The Court now hands down its award.

Background Of The Case

[4] The Claimant was initially employed by a company known as Math Monkey as a Secretary and Administrative Executive with effect from the 13th of September 2011. By way of a letter dated the 12th of October 2011, the Claimant was confirmed to her position as an Assistant Centre Manager. Math Monkey operates children learning centres. On the 1st of February 2013, Math Monkey was taken over by the Respondent and the Claimant was appointed as the Centre Manager with a monthly salary of RM3,000.00. By way of a letter dated the 21st of December 2015, the Claimant was notified that her services with the Respondent was to be terminated with effect from the 23rd of December 2015 as the Respondent needs to restructure their operational cost to make the business viable. The Claimant avers that her termination was actuated with mala fide, bad labour practice, frivolous and was without just cause or excuse. She is now before this Court to seek the appropriate relief. The Respondent pleads otherwise. They took the position that the Respondent company has been downsizing its operations to reduce its losses since 2013.

The Issue

[5] As it is common ground that the Claimant was terminated of her services vide the letter dated the 21st of December 2015 the Court has only to determine if the termination was with just cause or excuse.

The Law

[6] In dealing with a reference under s 20 of the Industrial Relations Act 1967 , the Court is required to consider the question of whether there was, in fact, a dismissal and if so, whether the said dismissal was with or without just cause or excuse Wong Chee Hong v. Cathay Organisation (M) Sdn Bhd, [1988] 1 MLJ 92 followed). As the termination was due to the downsizing of the Respondent Company, the Court is required to inquire if the exercise was bona fide. In the case of William Jacks & Co (M) Sdn Bhd v. S Balasingam; [1996] 2 MLRA 678; [2000] 7 MLJ 1; [1997] 3 CLJ 235; [1997] 3 AMR 2585 the Court of Appeal defined the term "retrenchment" as follows:

"Retrenchment' has been defined as the discharge of surplus labour or staff by an employer for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action. Whether the retrenchment exercise in a particular case is bona fide or otherwise is a question of fact and of degree depending on the peculiar circumstances of the case. It is well-settled that the employer is entitled to organise his business in the manner he considers best. So long as the managerial power is exercised bona fide, the decision is immune from examination even by the Industrial Court. However,