An employer can dismiss an employee for financial reasons if the decision is made in good faith and with just cause, as established by evidence of financial hardship.

Reference

[1] This is a reference made under s 20(3) of the Industrial Relations Act 1967 ("Act") arising out of the dismissal of Lim Pooi Yee ("Claimant") by Version Lifestyle Sdn Bhd ("Company") on the 1 July 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 1 July 2020.

[3] This court considered the notes of proceedings, documents and cause papers in handing down this Award namely:

(i) Interim Award dated 30 March 2021

(ii) Statement of Case dated 30 March 2021

(iii) Statement in Reply dated 13 April 2021

(iv) Rejoinder dated 20 April 2021

(v) Claimant's Bundle of Documents - CLB1, CLB2

(vi) Company's Bundle of Documents -COB1, COB2

(vii) Claimant's Witness Statement-CLWS-1 (Lim Pooi Yee)

(viii) 2nd Respondent's Witness Statement-RWS (Lee Yin Sian)

(ix) Claimant's Written Submission and Reply

(x) 2nd Respondent's Written Submission and Reply

(xi) Claimant's and 2nd Respondent's Bundle of Authorities

Introduction

[4] The dispute before this court is the claim by the Claimant that she had been dismissed from her employment without just cause or excuse by the Company on the 30 June 2020.

[5] By a letter of appointment dated 30 May 2019, the Claimant was offered employment with the Company as general manager. The Claimant's last drawn salary was RM15,000.00.

[6] On the 3 July 2020, the 2nd Respondent handed a letter dated 29 June 2020 to the Claimant, proposing a temporary variation to the Claimant's employment contract.

[7] The Claimant then rejected to the 2nd Respondent's proposal by a letter dated 6 July 2020 and deemed her employment has been terminated or constructively dismissed by the Company.

[8] The Claimant contended that her termination was done in bad faith and without just cause or excuse.

The Duty Of The Industrial court

[9] The Supreme court in the case of Wong Chee Hong v. Cathay Organisation (M) Sdn Bhd ; ; [1988] 1 MLJ 92; [1988] 1 CLJ (Rep) 298 held that:

"When the Industrial court is dealing with a reference under s 20, the first thing that the court will have to do is to ask itself a question whether there was a dismissal, and if so, whether it was with or without just cause or excuse.".

[10] The Federal court in the case of Goon Kwee Phoy v. J & P Coats (M) Bhd [1981] 1 MLRA 415; held that:

"Where representations are made and are referred to the Industrial court for enquiry, it is the duty of that court to determine whether the termination or dismissal is with or without just cause or excuse. If the employer chooses to give a reason for the action taken by him, the duty of the Industrial court will be to enquire whether that excuse or reason has or has not been made out. If it finds as a fact that it has not been proved, then the inevitable conclusion must be that the termination or dismissal was without just cause or excuse"

The Standard Of Proof

[11] In the case of Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor ; ; ; , the court laid down the principle that the standard of proof that is required is one that is on the balance of probabilities.

"Thus in hearing a claim of unjust dismissal, where the employee was dismissed on the basis of an alleged criminal offence such as theft of company property, the Industrial court is not required to be satisfied beyond a reasonable doubt that such an offence was committed. The standard of proof applicable is the civil standard, ie, proof on a balance of probabilities which is flexible so that the degree of probability required is proportionate to the nature and gravity of the issue."

Claimant's Case

[12] (a) The 2nd Respondent was t