Employer's right to retrench must align with bona fide actions; unjustified dismissal lacks legal legitimization.

[1] This is a reference by the Honourable Minister of Human Resources under s 20(3) of the Industrial Relations Act 1967 Malaysia on 9 August 2012 arising out of the dismissal of Mohd Azhan Ariffin ("the claimant") on 31 December 2010 by Ranhill Bhd ("the respondent").

[2] The hearing of this case was conducted before the then first Chairman, the Honourable Puan Tay Lee Li on 7 October 2013 and 8 October 2013. The case was then continued to be heard and concluded before the then second Chairman, the Honourable Tuan Kamaruzaman Ab Jalil on 1 April 2014.

[3] The claimant's solicitors, Messrs Nizamuddin Hamid & Co filed the Written Submissions on 3 September 2014 and Submissions In Reply on 31 March 2015 respectively. The respondent's representatives; Malaysian Employers Federation filed their Written Submissions on 6 February 2015.

[4] As the second Chairman, Tuan Kamaruzaman Ab Jalil being the last Chairman to hear the case had been transferred to another department in the Government service, the current President of the Industrial Court has directed the Mahkamah 16 Chairman to hand down the award in the interest of justice. The solicitors for the claimant and the representatives for the respondent had on 17 April 2017 informed the Court that the respective parties do not have any objections towards the current Chairman handing down the award.

[5] Thus, this award is handed down in total reliance on the evidence, documents and facts contained in the notes and records of proceedings made available to the original Court.

Brief Facts

[6] The claimant had commenced employment with Ranhill Berhad as a General Manager, Human Resources Management & Administration whereby he was attached to the Group Human Resources Management & Administration Department of Ranhill Berhad.

[7] On 28 October 2010, the claimant was served with a notice of retrenchment by the respondent where the respondent had informed the claimant that it no longer can sustain the claimant in its establishment due to its financial situation.

[8] The respondent had given the claimant retrenchment benefits inclusive of compensation in lieu of the notice period which amounted to a total sum of RM59,143.85 and terminated the claimant's services with immediate effect.

[9] According to the respondent, the financial situation faced by it had been due to the financial condition in two of its subsidiary companies, ie Ranhill Engineers and Constructors (REC) and Ranhill Energy & Clemical (R-E&C) thus had caused the respondent to review and reorganise its operation in both the subsidiary companies and in Ranhill Berhad itself.

[10] The claimant contended that his termination was improper and that the purported retrenchment of him was carried out in bad faith by the respondent and not in compliance with the requirements of Code of Conduct for Industrial Harmony and the Last In First Out (LIFO) principle.

[11] There were two main issues that arose for determination before this Court. Firstly was whether there had been a dismissal and if the answer to the first question was answered in the affirmative, whether the dismissal had been with just cause and excuse.

The Respondent's Case

[12] The respondent is a Public Listed Company which nature of business is investment holding, provision of management services to its subsidiaries and provision of engineering procurement and construction services.

[13] The respondent had dismissed the claimant via a Notice of Retrenchment dated 28 October 2010 which took effect on 31 December 2010.

[14] The respondent st