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2023 MarsdenLR 176
INDUSTRIAL COURT KUALA LUMPUR
SHAHRUL FAZLI ABDUL RASHID – Appellant
Versus
AIRASIA X BERHAD – Respondent
Award No: 2243 Of 2023 [Case No: 22/4-15/21]
Retrenchment must be based on genuine redundancy and can use a 'best fit' selection criterion rather than mandatory guidelines like Last In, First Out.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Dismissal of employee - Claimant's retrenchment by Company deemed bona fide due to severe financial difficulties exacerbated by Covid-19 pandemic - Evidence of poor performance ratings and adherence to 'best fit' selection criteria established - Court finds retrenchment was justified. (Paras 1, 33, 56, 60)
(B) Employment Law - Retrenchment - Employer's adherence to guidelines such as Last In, First Out principle is not mandatory - Company followed a bona fide selection process based on performance ratings and operational needs. (Paras 43, 58)
Facts of the case:
The Claimant was retrenched by the Company on 14 June 2020 amid severe financial difficulties caused by the Covid-19 pandemic. He alleged unfair selection and favoritism in the retrenchment process, citing that he was not informed of the reasons for his dismissal. (Paras 7-14, 15-14)
Findings of Court:
The Court found that the Company had demonstrated genuine redundancy due to financial losses and that the Claimant's retrenchment was executed in good faith, with adherence to a fair selection process. (Paras 34-36, 60)
Issues: The key issues included whether the retrenchment was justified and whether it adhered to the principles of fairness and transparency in the selection process. (Paras 33)
Ratio Decidendi: The Court ruled that the Company provided sufficient evidence of financial hardship and followed a reasonable selection process that did not violate any binding statutes, thus validating the retrenchment. (Paras 56, 58)
Result: Claimant's case dismissed.
| Table of Content |
|---|
| 1. procedural history of the case. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. claimant's arguments against retrenchment. (Para 7 , 8 , 9 , 10 , 11 , 12) |
| 3. company's defense and rationale for retrenchment. (Para 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30) |
| 4. court's role in assessing dismissal. (Para 32 , 33) |
| 5. assessment of redundancy and justification. (Para 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43) |
| 6. court's findings on retrenchment process. (Para 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55) |
| 7. bona fide nature of the retrenchment. (Para 56 , 57 , 58) |
| 8. conclusion on the retrenchment validity. (Para 59 , 60) |
Reference
[1] This is a reference made under s 20(3) of the Industrial Relations Act 1967 (Act 177), arising out of the dismissal of Shahrul Fazli Bin Abdul Rashid (hereinafter referred to as "the Claimant") by Airasia X Berhad (hereinafter referred to as "the Company") on 14 June 2020.
[2] The Ministerial reference in this case required the Court to hear and determine the Claimant's complaint of dismissal by the Company on 14 June 2020.
I. Procedural History
[3] The Court received the letter pertaining to the Ministerial reference under s 20(3) of the Industrial Relations Act 1967 on 4 January 2021.
[4] The matter was fixed for mention on 3 February 2021, 10 March 2021, 27 October 2021, 24 November 2021 and 12 July 2022.
[5] The trial proceeded on 10 April 2023, 11 April 2023 and 26 May 2023. However, on the continued hearing date of 14 June 2023, Counsel for the Claimant failed to turn up in Court, as well as the Claimant, and the matter had to be adjourned. The hearing continued, and concluded, on 28 June 2023.
[6] At the conclusion of the trial on 28 June 2023, parties were directed by the Court to file in their written submissions. However, only the Company's solicitors filed in their submissions. The Claimant has, to date, failed to file any written submissions despite numerous reminders being given to the Claimant's solicitors. The Court is thus left with no other alternative but to proceed to hand down this Award.
II. The Parties' Position On The Merits
(a) The Claimant
[7] The Claimant commenced his employment with the Company as a Flight Attendant on 26 October 2010 on a fixed term contract on 2 years' period of employment with 6 months period of probation. On 7 January 2023, the Claimant accepted the Company's offer of a permanent position as a Flight Attendant. He was thereafter promoted as Senior Cabin Crew and offered a new salary scheme in April 2017.
[8]Vide a Notice of Retrenchment dated 10 June 2020, the Company retrenched the Claimant's employment as a Senior Cabin Crew for the following reasons:
i. The Company was undergoing severe financial difficulties due to global economic changes;
ii. All measures had been taken to account in retaining all those in fixed term contracts such as curtailed hiring, suspended all non-essential duty travels, deferred bonus and merits increment, offered unpaid leave, cancelled events and reduced salaries but to no avail.
[9] The Claimant contends that approximately a week before the retrenchment took place, there was a Zoom online meeting held by the Group Chief Executive Officer telling all the senior and cabin crew members that the Company is doing good and demand the crew members not to be panicked and/or not to believe any rumours of any employee being terminated.
[10] However, on 10 June 2020, another Zoom meeting was held by the Company representatives chaired by the Cabin Crew Manager and Assistant Manager of the Company, in which they had informed all attendee of the Zoom meeting that there will be a retrenchment on selected crew members. On the same day, the Claimant received the Notice of Retrenchment from the Company.
[11] The Claimant contends that the reasons given and measures taken by the Company were not in line with the true situation of the Company. Not too long after the retrenchment o
