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2023 MarsdenLR 2137
INDUSTRIAL COURT KUALA LUMPUR
ABDUL RASHID YUSOH – Appellant
Versus
GRAND ELITE SDN BHD – Respondent
2000 of 2023 [Case No: 15(6)/4-141/21]
The closure of a business due to economic reasons, including the impact of a pandemic, is a valid basis for termination of employment, and the right to livelihood does not apply when employment no longer exists.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Dismissal of employees - The case involves the dismissal of 109 employees by their employer due to the impending closure of the hotel for renovation, amidst the COVID-19 pandemic. The Court addressed whether the termination constituted retrenchment or closure of business. The Court found that the closure was genuine, not a pretense, and the Respondent acted within its management prerogative. (Paras 29, 30, 41, 42, 97)
(B) Employment Rights - The Court held that the right to livelihood is protected under the Federal Constitution, but it applies only when actual employment exists. The Claimants had been lawfully terminated due to business closure, which negated the basis for reinstatement. (Paras 116, 118, 129)
Facts of the case:
The Claimants were employees of the Respondent, which managed a hotel that closed for renovation due to the COVID-19 pandemic. The Respondent offered a Voluntary Separation Scheme, which many employees accepted, while the Claimants rejected it and were subsequently retrenched. (Paras 10, 12, 14, 21)
Findings of Court:
The Court found that the hotel’s closure was genuine and not merely a temporary measure. The Respondent's decision to terminate the Claimants was justified due to the business ceasing operations. (Paras 29, 30, 41)
Issues: The main issues were whether the termination was a valid retrenchment or a closure of business and whether the Claimants were entitled to reinstatement after the hotel reopened. (Paras 39, 40, 129)
Ratio Decidendi: The Court ruled that the closure of the hotel was a bona fide business decision, and the Claimants’ termination was lawful. The right to continue employment does not exist when the business has ceased. (Paras 88, 136)
Result: Claimants' case dismissed.
| Table of Content |
|---|
| 1. minister's reference for dismissal cases. (Para 1 , 2 , 3 , 4) |
| 2. court's procedural background and authority. (Para 5 , 6 , 7 , 8 , 9) |
| 3. details of claimants' employment and vss offer. (Para 10 , 11 , 12 , 14 , 15 , 16 , 17 , 18 , 19) |
| 4. claimants' contention on closure and financial stability. (Para 21 , 22 , 24 , 25 , 26 , 27) |
| 5. nature of retrenchment and closure distinction. (Para 29 , 30 , 31 , 32 , 33 , 34) |
| 6. legal distinction between closure and retrenchment. (Para 39 , 40 , 41 , 42 , 43 , 44) |
| 7. impact of covid-19 on business operations. (Para 45 , 46 , 47 , 48 , 49 , 50) |
| 8. duration and nature of hotel closure. (Para 55 , 56 , 57 , 58 , 59 , 60) |
| 9. rebranding and management changes post-closure. (Para 70 , 71 , 72 , 73 , 74 , 75 , 76) |
| 10. management prerogative in business closure. (Para 85 , 86 , 87 , 88 , 89 , 90 , 91) |
| 11. vss as a humane alternative to retrenchment. (Para 97 , 98 , 99 , 100 , 101) |
| 12. claimants' refusal of vss and consequences. (Para 105 , 106 , 107 , 108 , 109) |
| 13. legal implications of refusal to accept vss. (Para 120 , 121 , 122 , 123 , 124) |
| 14. court's dismissal of claimants' case. (Para 135 , 136 , 137) |
A. Reference
[1] The 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 is in respect of the dismissal of Abdul Rashid Bin Yusoh and 108 others ("the Claimants") by their employer, Grand Elite Sdn Bhd ("the Respondent") on 9 June 2020.
B. Case History
[2] The Claimants' cases when first referred by the Honourable Minister to the Industrial Court were registered as follows:
[3] By a letter dated 24 April 2021, the Respondent's Solicitors applied for all the cases listed as nos 2 to 109 above to be consolidated and tried together with case no 1 on the list, abovementioned. The Claimants' representative, Mr A Sivananthan informed the Court that the Claimants have no objection to the Respondent's aforesaid application for consolidation of cases.
[4] Accordingly, the Court has pursuant to an Interim Award No 99 of 2021 [2021] 2 MELR 71] dated 28 April 2021 allowed the Respondent's application for consolidation and ordered that all the above mentioned cases to be consolidated into one and tried together under case no 15(6)/4-141/21.
C. Procedural Background
[5] The case was previously tried and concluded by the learned Chairman, Yang Arif Tuan Iznan Bin Ishak who had since retired from the Malaysian Public Services on 9 May 2023 and ceased to be the Chairman of the Industrial Court of Malaysia.
[6] I have been appointed as the new Chairman of Court 15, effective 1 June 2023 and since taken over the conduct of this matter as the new Chairman of this Court.
[7] I have been requested to deliver and prepare the Award for this matter. Parties have on 13 June 2023 given their consent for me to deliver and hand down the Award without the need for the case to be heard de novo.
[8] I rely on the authority of Bax Global (Malaysia) Sdn Bhd v. Sukhdev Singh Pritam Singh & Anor ; ; [2011] 2 ILR 251; where the Court held that s 23(6) of Industrial Relations Act 1967 allows another Chairman to continue hearing a part-heard case and the new Chairman can hand down the award in such case to ensure speedy disposal of industrial disputes as required by the Act.
[9] Therefore, this Award is written based on my reading, perusal and evaluation of the facts and evidence contained in the notes of proceedings prepared by the former Chairman, Yang Arif Tuan Iznan and gleaned from the documents made available to me.
D. Facts
[10] The Respondent is a wholly owned company of President Hotel Sdn Bhd and at all material time was operating and managing the hotel known as "The Parkroyal Kuala Lumpur" ("the Hotel") which belongs to UOL Group Ltd, a Singapore listed property firm.
[11] The Claimants at all material time were employees of the Respondent, working at the Hotel in various positions of employment. Save
