AWARD

Siti Saleha Abu Bakar:

Reference

[1]) This is a reference made by the Honourable Minister of Human Resources to the Industrial Court under s 20(3) of the Industrial Relations Act 1967 of the dispute over the claimant's dismissal by the company on 26 March 2003.

The Undisputed Facts

[2] By a letter of appointment dated 5 April 2000 (p. 1 of Bundle 'A') the claimant was appointed as the Assistant Editor cum Translator for the company with effect from 10 April 2000 with a starting salary of RM2,500 per month.

[3]Vide a letter dated 18 December 2000 (p. 5 of Bundle 'A') the claimant's post was confirmed by the company and she was promoted to the post of 'Bahasa Malaysia Content Editor' with a new salary of RM3,300 per month with effect from 1 December 2000.

[4] The claimant's last drawn salary was RM3,600 per month.

[5] By a letter dated 20 February 2003 (p. 15 of Bundle 'A') the company informed the claimant that the company after much consideration had decided to cease the operation of the website the claimant was working on and that the claimant's services had become redundant. Her last day of work was to be on 19 April 2003.

[6]Vide a letter dated 26 March 2003 (Exh CO1 in Statement in Reply) the company offered the claimant an early release with immediate effect on a payment of RM5,709.10. This was duly accepted by the claimant.

The Issues

[7] The main issue before the Court is whether the claimant was dismissed for just cause and excuse. To ascertain this it is incumbent upon the Court to consider the following.

(i) Did a redundancy situation arise leading to the claimant's retrenchment in this case.

(ii) If there was a redundancy situation was the consequential retrenchment made in compliance or in conformity with accepted standards of procedure.

The Law

[8] In his book "Industrial Relations in Malaysia: Law and Practice" the author Dunston Ayadurai defines "redundancy" as follows

Redundancy refers to a surplus of labour and is normally the result of reorganization of the business of an employer and it's usual consequence is retrenchment ie. the termination by the employer of those employees found to be surplus to his requirements Thus there must be retrenchment or termination of the surplus

[9] In the case of William Jacks & Co (M) Sdn Bhd v. S Balasingam, [2000] 7 MLJ 1 Gopal Sri Ram JCA set down the test to determine whether the employee was surplus or redundant thus justifying his retrenchment as follows

Retrenchment means the discharge of surplus labour or staff by an employer for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action (per S.K. Das) inHariprasad v. Divelkar AIR 1957121 at p 132).

[10]) 'Retrenchment' in it's ordinary acceptation connotes that the business itself is being continued but that a portion of the staff or the labour force is discharged as surplusage. See Pipraich Sugar Mills v. Pipraich Sugar Mills Mazdor Union AIR 195795.

[11] In the William Jacks & Co (M) Sdn Bhd case (supra) the Court of Appeal also held as follows

It is the right of every employer to reorganize his business in any manner for the purpose of economy or convenience provided he acts bona fide... The employer has the right to determine the volume of his labour force consistent with his business and organization and if by the implementation of a reorganization scheme adopted for reasons of economy and better management of the business the services of some of the employees become excess of the requirement of the business the employer is entitled to discharge such excess

[12] It is a settled principle that in selecting employees for retrenchment an employer should resort to the "last in first out" rule unless he can show sound reasons why he had to depart from it. Where it is necessary for some employees to be dismissed because of redundancy the Court will require the employee to show how, by whom and on what basis the selection was made. See National Union of Cinema & Amusement Workers v. Shaw Computer Man