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2021 MarsdenLR 3747
INDUSTRIAL COURT KUALA LUMPUR
KESATUAN KEBANGSAAN PEKERJA-PEKERJA PERUSAHAAN PETROLEUM DAN KIMIA SEMENANJUNG MALAYSIA – Appellant
Versus
REX PLAST.... – Respondent
Award No: 1005 Of 2021 [Case No: 4/3-5/20]
The court ruled that retrenchment benefits should be calculated based on 365 days a year as per the Collective Agreement, not a reduced figure based on working days.
Headnote:(A) Industrial Relations Act 1967 – Section 30(4) – Trade dispute – Dispute concerning retrenchment benefits computation based on Collective Agreement Article 21 – Union claims for calculation based on 312 days, while company asserts 365 days is correct – Court finds company’s interpretation valid as it reflects the ordinary meaning of a year without a distinction for working/non-working days – Claim for additional retrenchment benefits dismissed. (Paras 4, 19, 27)
Facts of the case: The dispute involves 39 former employees of the company retrenched in December 2017, seeking additional retrenchment benefits due to differences in interpretation of payment computation based on the Collective Agreement.
Findings of Court: The court determined that the company correctly interpreted the Collective Agreement to mean a year consists of 365 days, resulting in no additional payments owed to the employees.
Issues: The primary issue was the correct interpretation of 'days in a year' under Article 21 of the Collective Agreement and its implications for retrenchment benefits.
Ratio Decidendi: The court emphasized that the term 'year' should be understood in its ordinary sense as 365 days, without excluding non-working days for monthly-paid employees.
Result: Union's claim dismissed.
AWARD
Augustine Anthony:
[1] The parties in this matter filed their respective written submissions dated 26 March 2021 (Union's Skeletal Submissions), 29 March 2021 (Company's Written Submission), 8 April 2021 (Union's Submissions in Reply) and 12 April 2021 (Company's Written Submissions in Reply).
[2] This court considered all the notes of proceedings in this matter, documents and the cause papers in handing down this award namely:
(i) The Union's Statement of Case dated 5 August 2020;
(ii) The Company's Statement in Reply dated 24 August 2020;
(iii) The Union's Rejoinder dated 4 September 2020;
(iv) The Union's Bundle of Documents - UB; and
(v) The Union's Witness Statement - UW-WS .
Introduction
[3] The union represents 39 former employees of the company and these employees had served the company for a period of 6 to 28 years. There is no dispute that there was closure of the company in December 2017. As a consequence of the closure of the company, the company made payments in the form of retrenchment benefits to all the 39 former employees of the company totalling a sum of RM1,181,181.00. The union being dissatisfied with the payments made to the 39 former employees is now claiming an additional sum of RM200,616.15 being retrenchment sum that the 39 former employees were purportedly entitled to be paid based on the union's formula on computation of payment of retrenchment benefit pursuant to art 21 of the Collective Agreement signed between the union and the company on 15 May 2014 and taken cognisance by the Industrial court vide COG No: 147/2014 on 1 July 2014 (The Collective Agreement). The company on the other hand contends that it had adopted the correct computation of the retrenchment benefits pursuant to art 21 of the Collective Agreement based on interpretation of contract principles, precedents and practices relating to the calculation of retrenchment benefits when the company made payments to all the 39 former employees who are members of the union.
[4] The sole issue that is in dispute before this court for its determination is on the proper interpretation of art 21 of the Collective Agreement relating to the number of days in a year. The company states that the number of days in one year equals to 365 days and thus the computation of payments of retrenchment benefits based on the 365 days amounts to RM1,181,181.00. The union claims that the correct number of days in a year for the computation of retrenchment benefits must be 312 days and based on 312 days' computation, there is still a shortfall of RM200,616.15 being retrenchment sum that the 39 former employees are purportedly entitled to be paid by the company.
[5] The union's evidence was led by one Prakas Rao a/l Appalasamy (UW1) who was a former employee of the company. The company relied solely on the documents filed in this court to argue its case without calling any witnesses in support of its case as the matter in dispute before this court is on the correct interpretation of art 21 of the Collective Agreement.
The Union's Case
[6] The union's case can be summarised as follows:
(i) This trade dispute involves 39 former employees who had served the company for a period of between 6 and 28 years.
(ii) The 39 former employees received a notice of termination dated 23 November 2017 informing them that their last day of service was on the 4 December 2017.
(iii) Subsequently the company made payments to all the 39 former employees of their retrenchment benefits which the union states were not in accordance with the provision of the Collective Agreement.
(iv) The former employees had then approached the company to seek clarification as to the formula of calculation and had requested the breakdown of the calculation for the payment to the retrenched employees.
(v) The former employees were informed by the company that the retrenchment benefits paid out were based on the calculation derived on 365 working days a year which according to the union was a wrong formula utilised.
(vi) T
