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2024 MarsdenLR 3419
INDUSTRIAL COURT KUALA LUMPUR
SAIED TAWOOSI GHAHNOUNEH – Appellant
Versus
SHEFFIELD ACADEMY SDN BHD – Respondent
Award No: 660 Of 2024 [Case No: 6/4-54/21]
The court upheld the dismissal of the employee as lawful due to genuine redundancy caused by financial difficulties, emphasizing the employer's right to reorganize without legal obligation to consult employees.
Headnote:(A) Industrial Relations Act 1967 – Section 20(3) – Dismissal of employee – Claimant dismissed on grounds of redundancy – Claimant contended that dismissal was unfair due to lack of consultation and payment of owed salaries – Company argued that redundancy was genuine due to financial difficulties exacerbated by the Covid-19 pandemic – Court found that the Company had a bona fide reason for the dismissal and that the Claimant's position was genuinely redundant. (Paras 29, 36, 90)
(B) Redundancy – Definition and principles – Redundancy arises when an employer requires fewer employees due to reorganization or financial constraints – The burden of proof lies on the employer to demonstrate genuine redundancy. (Paras 36, 41)
Facts of the case: The Claimant was employed as a Senior English Language Teacher and was dismissed on 9 July 2020. The Company claimed financial difficulties due to the Covid-19 pandemic and a lack of students, leading to the Claimant's redundancy. The Claimant disputed the redundancy and claimed unpaid salaries.
Findings of Court: The Court found that the Company had proven the redundancy of the Claimant's position and that the dismissal was lawful. The Claimant was owed unpaid salaries amounting to RM15,064.43.
Issues: Whether the dismissal was justified and whether the Company followed proper procedures in the redundancy process.
Ratio Decidendi: The Court ruled that the Company had a bona fide reason for the redundancy and that the Claimant's position was genuinely redundant due to financial constraints and lack of students. The Court emphasized that the employer is not legally obligated to consult employees prior to a redundancy.
Result: The Claimant's dismissal was upheld as lawful, but the Company was ordered to pay the outstanding salary shortfall.
AWARD
Reference
[1] This is a reference under s 20(3) of the Industrial Relations Act 1967 (the Act) by the Honourable Minister of Human Resources arising out of the dismissal of Saied Tawoosi Ghahnouneh ("the Claimant") by Sheffield Academy Sdn Bhd ("the Company") on 9 July 2020.
Summary Background Of The Case
[2] The Company operates as an Education Academy, and engaged in providing English Language, Business studies and Hospitality Courses mainly catering to foreign students. The Claimant, an Iranian, first joined the Company in 2012 via an employment visa as an English Teacher cum Academic Coordinator and Principal. Approximately 4 years later, in 2016 due to the non renewal of his visa as a result of issues related to the Company's licensing, the Claimant ceased his employment with the Company. In 2018, the Company reoffered the Claimant the position of Senior English Language Teacher vide job offer letter dated 3 October 2018 (offer letter) with effect from 1 November 2018 with a salary of RM8,300.00 per month.
[3] The Claimant executed an Employment Agreement containing the terms and conditions of the Claimant's employment over and above that has been stated in the offer letter.
[4] From February 2019 onwards, the Company contends that it has been mutually agreed between the Company and the Claimant to vary the terms of the Claimant's employment contract wherefore it has been agreed by the Claimant that he will carry on working with the Company with a salary reduction of RM6000.00. The Claimant, on the other hand, denies that such mutual agreement has ever taken place and was dissatisfied that the Company had failed to pay his salary as agreed in the offer letter and requested to the Company in writing to pay all the remaining unpaid salaries.
[5] As the Claimant's letter met with no reply, the Claimant through his solicitors issued a notice of demand dated 17 June 2020 to the Company to settle the payment of arrears of his salaries within 7 days. The Company, retorted by issuing a letter of termination dated 9 July 2020 terminating the Claimant's services on grounds of redundancy.
[6] The company produced only one witness, Mr Daljit Singh (COW 1) who was the Chief Executive Officer at the date of Claimant's dismissal whereas the Claimant was the sole witness in his case.
The Claimant's Pleaded Case
[7] The Claimant contends that his duties and responsibilities in the Company were permanent in nature but was couched in the form of a fixed term employment and at the time of dismissal, the Claimant was a permanent employee of the Company.
[8] The Company has failed to pay the Claimant the agreed monthly salary and had improperly deducted his salary. On 20 May 2020, the Claimant sent a letter to the Company requesting the Company to settle the outstanding payment of his salary.
[9] As there was no reply to the Claimant' request, the Claimant followed up by issuing a notice of demand dated 17 June 2020 through his solicitors demanding that the outstanding arrears of his salary be settled within 7 days to which the Company again maintained its silence.
[10] Instead, the Company issued a letter of termination of employment dated 9 July 2020 to the Claimant terminating his employment immediately on grounds of redundancy.
[11] It was further contended that the Company had only paid the Claimant a total of RM111,836.17 as salaries payments from the period between 1 November 2018 till the date of his termination when in actual fact the Company was supposed to have paid the Claimant RM168,490.00 based on the salary of RM8,300 a month multiply by 20 months that was till the date the Claimant was terminated in his employment.
[12] The Claimant pleads that the conduct of the Company in terminating his services was contrary to the principles of equity, good conscience and act of victimisation and thus, amounted to unfair labour practice.
[13] According to the Claimant, there was no consultation, assistance or support from the Company, i
