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2024 MarsdenLR 3421
INDUSTRIAL COURT PENANG
NOOR HASNOL OSMAN – Appellant
Versus
UITM ENERGY & FACILITIES SDN BHD – Respondent
Award No: 185 Of 2024 [Case No: 18/4-1358/22]
The employer must prove genuine redundancy for dismissal; mere restructuring or economic losses are insufficient to justify termination.
Headnote:(A) Industrial Relations Act 1967 – Section 20(3) – Dismissal of employee – Claimant dismissed on grounds of redundancy – Court must determine if dismissal was with just cause or excuse – Employer bears burden of proof to establish redundancy – Mere restructuring or economic losses insufficient to justify dismissal. (Paras 17, 20, 31, 39)
(B) Fixed Term Contracts – Premature termination of fixed term contract requires just cause or excuse – Employee has security of tenure recognized under the Federal Constitution. (Paras 23, 24)
Facts of the case: The Claimant was employed as Director & Head of Project Delivery and was dismissed on 31 May 2022, with the Company citing redundancy due to restructuring. The Claimant received termination benefits but claimed they were unfair and illegal. (Paras 2-9)
Findings of Court: The Company failed to prove that the Claimant's position was genuinely redundant and that the dismissal was a bona fide exercise of managerial power. (Paras 70-71)
Issues: Whether there existed a redundancy situation, whether the Claimant's position was redundant, and whether the retrenchment was bona fide. (Paras 22)
Ratio Decidendi: The Court found that the Company did not provide sufficient evidence to justify the redundancy claim, and the dismissal was tainted with mala fide intentions. (Paras 70-71)
Result: The Claimant is entitled to backwages totaling RM496,689.40. (Para 84)
AWARD
The Reference
[1] This is a reference made on 12 September 2022 by the Director General of Industrial Relations Department to the Industrial Court of Malaysia under s 20(3) of the Industrial Relations Act 1967 (hereinafter referred to as 'the Act') arising out of the dismissal of NOOR HASNOL BIN OSMAN (hereinafter referred to as 'the Claimant') by UITM ENERGY & FACILITIES SDN Bhd (hereinafter referred to as 'the Company'). The Director General's reference in this case before the Court requires the Court to hear and determine the Claimant's complaint of dismissal by the Company on the 31 May 2022.
Brief Background Facts Of The Case
[2] In brief, the Claimant pleaded in his Statement of Case dated 4 November 2022 that he commenced employment with the Company on the 2 January 2018 as a Director, Facilities Management on a fixed term employment contract (CLB-1 p 9-14).
[3] At the time of his dismissal on 31 May 2022, the Claimant pleaded that he was working in the Company as Director & Head of Project Delivery. The Claimant pleaded that his last drawn salary at the material time of his dismissal was RM29,170.00 per month.
[4] Further, the Claimant stated that via letter dated 1 April 2022, the Company had served a Notice of Retrenchment giving the Claimant two (2) months' notice pursuant to cl 13 of the Claimant's renewed fixed term employment contract dated 26 October 2021 (CLB-1 p 1-6 and p 15-16 respectively). The said contract period was from 1 January 2022 until 31 December 2023.
[5] The Claimant further pleaded that the Company had informed him through the said notice and in a meeting on 3 March 2022 that due to the economic situation at the material time and Company's latest business strategy, the Claimant's job functions had ceased to exist, hence the Claimant's position became redundant.
[6] The Claimant then pleaded that the Company had tried to find alternative suitable positions in the Company but was unable to find any. The Claimant stated that he received a sum of RM57,540.60 as termination benefit on 8 April 2022, however he stated it was received under protest and without prejudice to his rights to make further claims against the Company. He claimed that the said payment was illegal and was unfair to him.
[7] The Claimant further claimed that the Company had failed to provide him any satisfactory answers when he asked them for an explanation for terminating his services. He tendered copies of WhatsApp messages and emails to support his contention. He also claimed that the Company had failed to fairly execute a Voluntary Separation Scheme, breached the Code of Conduct of Industrial Harmony, and also failed to adopt a fair procedure before retrenching him. As such he claimed that his dismissal was not justified.
[8] The Claimant also pleaded that his termination was high handed and is tainted with mala fide intentions and victimization as he was the only employee who was retrenched.
[9] The Claimant did not plead for reinstatement to his former position but had pleaded for backwages and other benefits.
[10] The Company on the other hand in its Statement in Reply dated 9 December 2022 averred that the Company is part of UiTM Holdings which is wholly owned by UiTM and the group has nine subsidiaries. The Company represents the Energy Division under the UiTM group of companies and it has 3 subsidiaries responsible for renewable energy investment, development and management which are:
1. UiTM Solar Power Sdn Bhd.
2. UiTM Solar Power Dua Sdn Bhd.
3. Go Energy Sdn Bhd.
[11] The Company stated that there was a genuine need for a restructuring exercise in response to the economic situation at that time. The Company pleaded that for the financial year 2021 the group and the Company had suffered nett losses of RM60,768,600.00 compared to a net profit of RM3,341,736.00 for the year 2020.
[12] As such the Company pleaded that on a meeting held on 3 March 2022 between the Company and the Claimant, the Claimant was infor
