The dismissal of an employee due to redundancy is justified when a company follows reasonable and objective selection criteria, even if it departs from the Last In First Out principle.

AWARD

Zalina Awang @ Mamat:

Reference

[1] This is a Ministerial Reference dated 07 January 2021 under s 20(3) of the Industrial Relations Act 1967 ("the Act") arising out of the dismissal of Ariff Ali bin Md Ja'far (hereinafter referred to as "the Claimant") by Air Asia Berhad (hereinafter referred to as "the Company") with effect from 14 June 2020 for a decision and an Award to be handed down.

[2] The parties to the instant matter are Ariff Ali bin Md Ja'far (herein- after referred to as "Claimant") and Air Asia Berhad (hereinafter referred to as "the Company").

[3] This dispute before this Honorable Court emanates from a Ministerial reference pursuant to s 20(3) of the Industrial Relations Act 1967 (" IRA 1967") in respect of the dismissal of the Claimant effective 14 June 2020

[4] The hearing of this matter proceeded over three (3) days on 11 August 2022, 20 May 2024 and 21 May 2024 during which the Company produced three (3) witnesses, as follows:

4.1 Peh Jia En Vivien, Financial Controller ("COW-1");

4.2 Sachitananthan A/L Stritharan, Chief Pilot Operations ("COW-2"); and

4.3 Kuleswary A/P Tanabarlah, Head,Employee Relations ("COW-3").

[5] The Claimant produced only one (1) witness i.e. himself, during the proceedings in support of his case.

Salient Facts

[6] The Claimant commenced employment with the Company as a Co-Pilot effective 26 February 2013 [as at page 4-8 of COB-1] and was thereafter promoted to the position of Captain on 10 July 2018 , a position which he held until his last day of employment with the Company on 14 June 2020.

[7] Due to amongst others, the global economic changes and the difficult operating environment in the airline industry, particularly in the Asia Pacific region, the AirAsia Group had experienced severe financial difficulties. In this regard, AirAsia Group Berhad ("AAGB") reported a net operating loss of RM457 million in the year 2019. [as at page 82, COB1]

[8] The economic challenges above were aggravated by the Covid-19 pandemic which resulted in the cancellation of numerous flights and the grounding of several aircraft.

[9] The Malaysian government implemented the Movement Control Order effective 18 March 2020 which significantly restricted interstate and international air travel.

[10] Considering the above, the Company curtailed hiring, suspended all non-essential duty travel, deferred bonuses and merit increments, offered unpaid leave, cancelled events and reduced salaries in an effort to reduce its operational costs.

[11] However, as the said cost-cutting measures were unsuccessful, organizational changes were implemented across the AirAsia Group which entailed a reduction in workforce to ensure the financial stability and sustainability of the Company.

[12] Therefore, the Company had no alternative but to undergo a business alignment exercise to retain a lean and efficient operations team of pilots.

[13] Based on the above facts, it is apparent that the disputes emanate over the retrenchment of the Claimant by the Company. The challenge posed by the claimant against his retrenchment was premised on the contention that the retrenchment was wrongful, void, inoperative, done in a bad faith, did not follow the principle best fit, Last In First Out ("LIFO") and in breach of the provision on retrenchment in the Code of Conduct for Industrial Harmony ("Code").

[14] This Honorable Court was referred to the following documents, all of which were filed herein:

a. The Claimant's Statement of Case dated 7 April 2021 ("the Statement of Case");

b. The Company's Statement in Reply dated 26 July 2021 ("the Statement in Reply);

c. The Claimant's Rejoinder dated 23 August 2021 ("the Rejoinder");

d. The Company's Bundle of Documents ("COB-1");

e. The Company's Supplementary Bundle of Documents ("COB- 2");

f. The Claimant's Bundle of Documents ("CLB-1");

g. The Claimant's Bundle of Documents (2) ("CLB-2");

h. The Claimant's Bundle of Documents (3) ("CLB-3");

i. The Claimant's Bundle of Documents (4) ("CLB-4");

j. The Claima