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2024 MarsdenLR 290
INDUSTRIAL COURT KUALA LUMPUR
JOHN ASHLEY ETHERINGTON & ANOR – Appellant
Versus
OCEANEERING SERVICES (MALAYSIA) SDN BHD – Respondent
Award No: 162 Of 2024 [Case No: 7/4-903/20]
Retrenchment must be justified and conducted in good faith; failure to prove genuine redundancy renders termination unlawful.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Retrenchment - Claimants alleged unlawful termination without just cause - Company claimed redundancy due to business restructuring - Court found no genuine redundancy and failure to comply with industrial practices - Claimants' retrenchment ruled as lacking good faith. (Paras 54, 56, 57)
(B) Retrenchment - Employer's managerial prerogative to restructure - Court's role to ensure retrenchment is bona fide and not victimizing - Burden of proof lies with employer to justify redundancy. (Paras 14, 24, 27)
Facts of the case:
The Claimants were retrenched by the Company claiming redundancy due to restructuring. The 1st Claimant was a senior manager, while the 2nd Claimant was under probation. The Company claimed financial losses and closure of its KL office. The Claimants alleged no genuine redundancy existed.
Findings of Court:
The Court found the retrenchment lacked good faith and was improper. The Claimants were dismissed without just cause.
Issues: The main issues were whether there existed circumstances justifying the retrenchment and whether the Company acted bona fide in its decision.
Ratio Decidendi: The court ruled that the Company failed to demonstrate genuine redundancy or compliance with fair industrial practices, leading to a finding of unlawful termination.
Result: Claimants' claims allowed.
AWARD
Reference
[1] This is a reference by the Honourable Minister of Human Resources under s 20(3) of the Industrial Relations Act 1967 ("The Act") for an award in respect of the dispute arising out of the alleged retrenchment of JOHN ASHLEY ETHERINGTON AND MOHD AZAM BIN SAAT ("the Claimants") by his employer, OCEANEERING SERVICES (MALAYSIA) SDN BHD ("Company").
Brief Facts
[2] The Court takes cognizance of the followings papers and documents files:
i) Statement of case of 1st Claimant dated 5 September 2020
ii) Statement of case of 2nd Claimant dated 18 September 2020
iii) Statement in Reply dated 25 January 2021
iv) Claimant's Bundle of Documents (CLB1, CLB2, CLB3, CLB4, CLB5)
v) Company's Bundle of Documents (COB1,COB2 and COB3)
vi) Company's Supplementary Bundle Documents - COB 5
vii) Witness Statement of Claimant (CLWS1, CLWS2, CLWS 4 (A), CLWS 4 (B))
viii) Witness Statement of WAHEEDAH BINTI ABDUL JABAR (COWS1a), COWS2 (A), COWS 2 (B)
ix) Company Written Submission 17 April 2023
x) Company's Bundle of Authorities 1 & 2
xi) Company's Bundle of Authorities Volume 2
xii) Claimant's Joint written Submission 2 June 2023
xiii) Submission in reply of Company dated 2 May 2023
xiv) Rejoinder dated 7 March 2021
This case has been consolidated pursuant to a Court Award No 1389 of 2020.
The Claimants' Case
[3] The 1st Claimant was employed effective from 24 July 2017 as Manager Asia Pacific Asset Integrity (APAC) one of the Senior Manager positions in the Company reported to the Senior Vice president Asset Integrity. The 1st Claimant was responsible for the leadership and management of all aspects of the Oceaneering Asset Integrity business in the geographical region to meet the Company's short- and long-term business objectives. It is stated in the 1st Claimant's job description that personnel of various region should report to the 1st Claimant.
[4] The 1st Claimant's job description requires him to supervise 336 subordinates excluding the SGA (6 employees) across APAC region. On 10 October 2019, COW3 met the 1st Claimant in the 1st Claimant's office and informed orally that as a result of Path to Profit (P2P) exercise, the 1st Claimant's position became redundant. On 18 October 2019, the 1st Claimant received a notice of retrenchment of his position which stated that his last working date will be on 30 October 2019 which means the 1st Claimant was served with 14 days notice.
[5] The 1st Claimant's last drawn salary was RM107,924.02 on October 2019. On 10 October 2019, Cameron Burchell being the Company's Human Resource Manager ("COW3") and verbally informed the 1st Claimant that as a result of the "Path to Profitability" ("P2P") exercise undertaken by the Company, the 1st Claimant's position was made redundant. When the 1st Claimant inquired with regards to the notice period, COW3 said that this takes effect on immediate basis.
[6] The 2nd Claimant was employed on 24 June 2019 as Advanced NDT (Non- Destructive Testing) Manager SEA (South East Asia) (SIS- Specialized Inspection Services) with a salary of RM31,250.00 per month. The 2nd Claimant was under the probation of 6 months when he was prematurely terminated on 6 November 2019 on grounds of redundancy. The 2nd Claimant was recruited to setup, formulate and to develop, organize and acquire the manpower and other resources (machinery and equipment) of the NDT and SIS with the aim to expand its revenue and business activities.
[7] The 2nd Claimant in the span of less than 3 months of his employment service, had secured service contracts from new clients namely, Lott Inspection Sdn Bhd ("Lott"), Heng Yuan Refining Company Berhad (formerly known as Shell Refining Company (Federation of Malaya) Berhad), Pulse Eddy Current ("PEC"), Long Range Ultrasonic Testing ("LRUT") and etc. Lott's Inspection Work would have taken a year to be completed. Lott is also the main contractor for inspection in Malaysia Liquid Natural Gas ("MLNG") and Bintulu which is the largest Liquid Natural Gas Plant
