Compensation in lieu of reinstatement cannot be awarded to an employee who has reached retirement age, as such reinstatement is not legally feasible.

[1] This is an appeal by Sabah Forest Industries Sdn Bhd (appellant) against part of the decision of the High Court that upheld the Industrial Court's Award of compensation in lieu of reinstatement in the sum of RM159,940.00 to Richard Felin Jinivon (2nd respondent).

[2] We heard the appeal on 24 April 2014. After hearing the parties, we adjourned the matter of our consideration and decision. We now give our decision and the reasons for the same.

Relevant Facts

[3] On 2 March 2006, the 2nd respondent was dismissed from the services of the appellant. As a result, the 2nd respondent filed a representation to the Minister under s 20(1) of the Industrial Relations Act 1967 ( IRA ) for reinstatement of his position.

[4] The Minister referred the appellant's representation to the Industrial Court for an Award. On 11 December 2009, the Chairman of the Industrial Court, after a trial, found that the 2nd respondent was dismissed without just cause or excuse and handed an Award under the following heads:

(i) Backwages from date of dismissal (2 March 2006) to last date of hearing (9 October 2008) but limited to 24 months:

RM7,270 x 24

=

RM174,480.00

Less 10% for contributory factor on part of appellant

RM 17,448.00

RM157,032.00

Compensation of one month's salary for each completed year of service (1 August 1984 until 2 March 2006

RM159,940.00

RM316,972.00

[5] There is no dispute that the trial started on 9 October 2008 and the Award was handed down on 11 December 2009. When the trial started, the 2nd respondent was 54 years and 10 months old. Thus, when the Award was handed down, he had passed the retirement age. And it is not in dispute either that under the appellant's General Terms and Conditions of Service the retirement age for male employees is upon reaching 55 years of age.

Issue

[6] The only issue that called for determination in this appeal is whether in law the Award of compensation in lieu of reinstatement to the 2nd respondent, whose dismissal was held to be without just cause or excuse, can be made when as at the date of the Award the 2nd respondent had already reached or passed his compulsory retirement age.

Findings

[7] This case concerns the representation made by the appellant under subsections 20(1) and (3) of the IRA . The subsections read:

"Representation on dismissal

20(1) Where a workman, irrespective of whether he is a member of a trade union or otherwise, considers that he has been dismissed without just cause or excuse by his employer, he may make representations in writing to the Director General to be reinstated in his former employment; the representations may be filed at the office of the Director General nearest to the place of employment from which the workman was dismissed.

(3) Upon receiving the notification of the Director General under subsection (2), the Minister may, if he thinks fit, refer the representations to the Court for an award."

[8] It is clear from the above that the primary remedy under s 20 for the IRA complaint is reinstatement. However, when reinstatement is not a suitable remedy a successful claimant can be awarded monetary compensation. (See Federal Court case of Dr Dutt v. Assunta Hospital , ). It is a well established principle that when a claimant is awarded monetary compensation, the award is made under two heads:

(i) Backwages not exceeding 24 months based on the last drawn salary from the date of dismissal, less deduction for post-dismissal earnings and contributory misconduct; and

(ii) Compensation in lieu of reinstatement based on the multiplicand of one month's salary for every completed year of service.

[9] As stated earlier, the only complaint by the app