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2024 MarsdenLR 314
INDUSTRIAL COURT KUALA LUMPUR
SIMON YESUDASON – Appellant
Versus
MENANG DEVELOPMENT (M) SDN BHD – Respondent
Award No: 9 Of 2024 [Case No: 14/4-123/22]
The court affirmed that an employer has the prerogative to reorganize its business, and the burden lies on the employer to prove that a redundancy is bona fide and justified.
Headnote:(A) Industrial Relations Act 1967 – Section 20(3) – Dismissal of employee – Claimant's employment terminated due to redundancy amid financial difficulties exacerbated by the Covid-19 pandemic – Company demonstrated bona fide retrenchment process and just cause for dismissal – Claimant's role rendered redundant following cessation of immediate superior's employment. (Paras 6, 20, 79)
(B) Employment Law – Redundancy – Employer's prerogative to reorganize business operations – Burden of proof lies on employer to establish redundancy – Retrenchment must be bona fide and not motivated by mala fide intentions. (Paras 14, 15, 50)
Facts of the case: The Claimant was employed as a driver and was terminated due to redundancy as the Company faced financial difficulties worsened by the Covid-19 pandemic, leading to the cessation of his immediate superior's role. (Paras 4, 6)
Findings of Court: The Court found that the Company had established that the Claimant's termination was justified and carried out in good faith, with no evidence of victimization. (Paras 79)
Issues: Whether the termination was justified and whether the redundancy was bona fide. (Paras 17, 79)
Ratio Decidendi: The Court held that the Company had the right to reorganize its business and that the Claimant's position was genuinely redundant due to the cessation of his superior's employment and the financial state of the Company. (Paras 20, 79)
Result: Claim dismissed.
AWARD
Reference
[1] This is a reference under s 20(3) of the Industrial Relations Act 1967 (1967 Act) by the Director General of Industrial Relations, emanates from the dismissal of Simon Yesudason by Menang Development (M) Sdn Bhd on 22 March 2021.
Preamble
[2]Vide an Interim Award No 2195 of 2022 dated 29 September 2022 this instant case was heard together with Case No 14/4-700/22 (between M Azman Mohamed v. Menang Development (M) Sdn Bhd) and Case No 14/4-701/22 (between Lechumanan Patoo v. Menang Development (M) Sdn Bhd). As these cases had not been consolidated but only heard together, this Court will hand down separate and distinct Award for each individual case which highlights the distinct facts of each of the case.
[3] This Court considered all the notes of proceedings in this matter, documents and the cause papers in handing down this Award, namely:
(i) Statement of Case dated 18 March 2022;
(ii) Statement In Reply dated 11 April 2022;
(iii) Rejoinder dated 21 April 2022;
(iv) Claimant's Bundle of Documents: CLB-1A;
(v) Claimant's Bundle of Documents 2: CLB-2A;
(vi) Claimant's Bundle of Documents No 3: CLB-3A;
(vii) Company's Bundle of Documents: COB-1A;
(viii) Company's Bundle of Documents 2: COB-2A;
(ix) Company's Bundle of Documents 3: COB-3A;
(x) Claimant's Witness Statement, Simon Yesudason: CLWS-1A;
(xi) Company's Witness Statement of Norizati Mohd Sharif: COWS- 1A;
(xii) Company's Witness Statement of Simon Wee Howe Yew: COWS-2A;
(xiii) Company's Written Submission for all the Claimants dated 30 August 2023;
(xiv) Claimant's Written Submission for all the Claimants dated 29 August 2023;
(xv) Company's Submissions in Reply for all the Claimants dated 25 September 2023; and
(xvi) Claimant's Submissions in Reply for all the Claimants dated 25 September 2023.
Brief Facts
[4]Vide a letter of appointment dated 31 May 2018, the Claimant had been appointed as a Company Driver reporting to the Executive Director of the Company. The salient terms of the employment contract are as follows:
(i) Date of commencement of Claimant's employment is 4 June 2018;
(ii) Basic salary of the Claimant shall be RM2,500.00 with a fixed travelling allowance of RM1,000.00;
(iii) The Claimant shall serve a three (3) months' probation period subject to extension at the discretion of the management;
(iv) That upon confirmation of employment, termination of service can only be affected by either party giving one (1) month's notice in writing or one (1) month's salary in lieu of notice; an
(v) That the Claimant is expected to work more than eight (8) hours per day with one (1) rest day per week.
[5]Vide a letter of confirmation dated 4 September 2018 the Claimant was confirmed as the Company's Driver for the said Executive Director of the Company, where the terms and conditions of employment as per the letter of employment remain.
[6]Vide a letter dated 22 February 2021, the Claimant's services were terminated by the Company on the following grounds:
(i) The Company has been facing financial difficulties in recent years due to poor market offtake and worsen by Covid-19 pandemic outbreak since March 2020;
(ii) That the Company, despite efforts to rectify the financial situation, had seen no improvement and have been left with the option of downsizing the workforce; and
(iii) Due to said downsizing of workforce and restructuring, the Company has determined that the Claimant's role has become redundant.
The Company's Case
[7] The Company contends that the dismissal of the Claimant is lawful and justified on the following grounds:
(i) The Company has reduced and/or downsized due to reduce the cost and lessen cashflow affected by the Covid-19 pandemic;
(ii) The Claimant's role has been identified as redundant following the cessation of Dato' Shun;
(iii) The Claimant's redundancy exercise was carried out at the height of the Covid-19 pandemic where businesses were severely affected financially;
(iv) The Company had also suffered from losses for three financial years consec
