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2024 MarsdenLR 3027
INDUSTRIAL COURT KUALA LUMPUR
ZAM ZUVITA ZAMANI – Appellant
Versus
MRCB BUILDERS SDN BHD – Respondent
Award No: 1231 Of 2024 [Case No: 15(6)/4-1469/21]
Retrenchment must be conducted in good faith with genuine redundancy; failure to prove these elements renders the dismissal unlawful.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Dismissal of employee on grounds of redundancy and financial adversity - The court found that the retrenchment was not conducted fairly, lacking genuine redundancy and just cause, thus ruling the dismissal as unlawful. (Paras 21, 82, 100)
(B) Retrenchment - Definition and principles - Retrenchment means discharge of surplus labor, and must be conducted in good faith, with genuine redundancy and proper procedure followed. (Paras 40-49)
(C) Burden of proof - The employer bears the burden to prove genuine redundancy and justification for retrenchment. (Paras 43, 48)
Facts of the case:
The Claimant was dismissed by the Company on 31 July 2020 due to alleged redundancy amidst the COVID-19 pandemic, which she contested as unfair. (Paras 2, 20)
Findings of Court:
The court held the retrenchment was not bona fide and lacked just cause, ordering compensation instead of reinstatement. (Paras 82, 100)
Issues: The main issues were whether the retrenchment was genuine and conducted fairly, and whether the Claimant was dismissed by the correct entity. (Paras 29, 60)
Ratio Decidendi: The court ruled that the Company failed to demonstrate genuine redundancy and that the retrenchment process was not executed in accordance with established principles of industrial law. (Paras 81, 82)
Result: The court ordered the Company to pay the Claimant RM151,848.00 as compensation. (Para 101)
AWARD
A. Reference
[1] This is a reference from The Honourable Minister of Human Resources, Malaysia to the Industrial Court of Malaysia under s 20(3) of the Industrial Relations Act 1967 ("the IRA ") in respect of the dismissal of Zam Zuvita Binti Zamani ("the Claimant") by her employer, MRCB Builders Sdn Bhd ("the Company") on 31 July 2020.
B. The Proceedings
[2] The Claimant in our present case was dismissed by the Company by way of retrenchment, purportedly on the grounds of redundancy and financial adversity.
[3] The case was first called up for hearing on 31 October 2023. The Company commenced the case by calling its sole witness namely Tunku Siti Raudzoh Binti Tunku Ibrahim ("COW1") to give evidence in support of the Company's case against the Claimant.
[4] COW1 was the General Manager, Human Resource of the Company at all material times, and had since retired from the Company on 1 September 2022.
[5] Upon the conclusion of the Company's case, the Claimant commenced her case against the Company. The Claimant did not call any other witnesses to give evidence at the trial. Only the Claimant gave evidence at the trial in support of her case against the Company.
[6] The following cause papers and documents have been filed and/or marked as evidence before the Court and were referred to during the proceedings:
(a) The Claimant's amended Statement of Case dated 20 July 2021 ("the Statement of Case");
(b) The Company's Statement in Reply dated 2 September 2021 ("the Statement in Reply");
(c) The Claimant's Rejoinder dated 15 September 2021 ("the Rejoinder");
(d) The Claimant's amended Statement of Case dated 30 August 2023 ("the Amended Statement of Case");
(e) The Company's amended Statement in Reply dated 1 September 2023 ("the Amended Statement in Reply");
(f) The Company's Bundle of Documents ("COB1");
(g) The Company's Bundle of Documents (2) ("COB2");
(h) The Claimant's Bundle of Documents ("CLB1");
(i) The Claimant's Bundle of Documents 2 ("CLB2");
(j) The Company's letter titled "Austerity Measures - Variation of Benefits Packages" dated 6 May 2020, marked as exhibit "CO1";
(k) The Witness Statement of Tunku Siti Raudzoh Binti Tunku Ibrahim ("COWS1");
(l) The Witness Statement of Zam Zuvita Binti Zamani ("CLWS1"); and
(m) The Claimant's EPF statements and proofs of her attempts to seek employment after he was dismissed by the Company.
C. Salient Facts
[7] The Company is a wholly owned subsidiary of Malaysian Resources Corporation Berhad ("MRCB") and is principally involves in the business of providing engineering and construction services to its customers.
[8] Pursuant to a letter of offer dated 16 May 2005, the Claimant commenced employment on a one-year fixed-term contract basis as Contract Officer (Job Grade 3) with MRCB Engineering Sdn Bhd, effective 16 May 2005.
[9] MRCB Engineering Sdn Bhd, and the Company in our present case are part of the same group of companies owned by MRCB ("the MRCB Group").
[10] The Claimant's fixed-term employment contract was continuously extended, and she remained employed as a contract employee until she was eventually made a permanent employee of MRCB Engineering Sdn Bhd through an Appointment as Contract Officer letter dated 10 April 2022.
[11] By a letter of transfer dated 15 January 2014, the Claimant was informed that she would be transferred from MRCB Engineering Sdn Bhd to MRCB Sentral Properties Sdn Bhd, with retrospective effect from 1 July 2014.
[12] Subsequently, the Claimant was assigned to several other companies within the MRCB Group before being transferred to the Company as a Contract Officer in the Procurement Department, via a letter dated 12 March 2018.
[13] By a letter dated 1 April 2019, the Claimant was then promoted to the position of Senior Executive Procurement (Grade 4) in the Company, a position she held until the date of her dismissal.
[14] On 16 March 2020, the Prime Minister of Malaysia announced the implementation of the Movement Control Order ("MCO") effect
