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2023 MarsdenLR 2140
INDUSTRIAL COURT KUALA LUMPUR
MAGESWARAN RAJASEKARAN – Appellant
Versus
BT GLOBAL TECHNOLOGY (M) SDN BHD – Respondent
Award No: 2339 Of 2023 [Case No: 7/4-321/22]
Retrenchment must be justified and conducted in good faith; failure to comply with fair practices results in dismissal being deemed without just cause.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Retrenchment of employee - Claimant's position deemed redundant due to company restructuring - Employer's prerogative to reorganize business upheld, provided actions are bona fide - Burden on employer to justify retrenchment with evidence - Claimant retrenched without just cause or excuse. (Paras 11, 12, 35, 44)
(B) Retrenchment Principles - Company must act in good faith and follow proper procedures during retrenchment - Last In First Out (LIFO) principle not applicable when entire department is closed - Company failed to demonstrate genuine efforts to source alternative employment for retrenched employee. (Paras 25, 34, 44)
Facts of the case:
The Claimant was retrenched on 31 March 2021 after serving as Manager Cash Collection and Billing Operations since February 2018. The Company cited redundancy due to restructuring and offered minimal compensation. The Claimant contested the retrenchment, asserting it was unjust.
Findings of Court:
The Court found that the retrenchment was executed without just cause, lacking good faith and proper procedure, leading to the conclusion that the Claimant was dismissed improperly.
Issues: Whether the retrenchment was justified and conducted in good faith; whether the Company adhered to fair practices during the retrenchment process.
Ratio Decidendi: The Court held that the Company failed to prove the retrenchment was bona fide and that it did not properly consider alternative employment for the Claimant, resulting in a finding of dismissal without just cause.
Result: The Court ordered the Company to pay compensation totaling RM237,663.17 to the Claimant.
| Table of Content |
|---|
| 1. reference by director general for award (Para 1 , 2 , 3) |
| 2. claimant's employment details and retrenchment (Para 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 3. legal framework for retrenchment (Para 11 , 12 , 13 , 14 , 15) |
| 4. application of lifo principle in retrenchment (Para 25 , 26 , 27) |
| 5. company's obligation in retrenchment process (Para 28 , 29 , 30) |
| 6. court's analysis of bona fide retrenchment (Para 31 , 32 , 33 , 34 , 35 , 36) |
| 7. court's findings on retrenchment fairness (Para 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44) |
| 8. court's decision on remedy and compensation (Para 45 , 46 , 47) |
Reference
[1] This is a reference by the Director General of Industrial Relations to this Industrial Court under s 20(3) of the Industrial Relations Act 1967 ("The Act") for an award in respect of the dispute arising out of the alleged retrenchment of MAGESWARAN A/L RAJASEKARAN ("the Claimant") by his employer, BT GLOBAL TECHNOLOGY (M) SDN BHD ("Company")
[2] The Court takes cognizance of the following papers and documents files;
i) Statement of case dated 12 May 2022
ii) Statement in reply dated 13 June 2019
iii) Rejoinder dated 7 July 2022
iv) Claimant's Bundle of Documents (CLB1)
v) Claimant's Additional Bundle of Documents (CLB2)
vi) Company's Bundle of Documents (COB1)
vii) Company's Additional Bundle of Documents (COB2)
viii) Witness Statement of the Claimant (CLWS1)
ix) Witness Statement of Alice Koo Sheau Huey (COWS1)
x) Witness Statement of Simon Kenneth Binning (COWS2)
xi) Company Written Submission dated 16 June 2023
xii) Company's Bundle of Authorities
xiii) Claimant's Written Submission 20 June 2023
xiv) Claimant's Bundle of Authorities
xv) Submission in Reply by Company dated 3 July 2023
xvi) Company's additional Bundle of Authorities
xvii) Submission in Reply by Claimant dated 13 July 2023
[3] The Claimant was retrenched by the Company on 31 March 2021 via notice dated 20 November 2020.
Brief Facts
[4] The Claimant was employed as the Manager Cash Collection and Billing Operations with effect from 7 February 2018 with a monthly salary of RM11,000.00. The Claimant was one of the pioneers who built the team of 'Cash Collection' in the Kuala Lumpur branch and managed the portfolio of Asia Pacific, Middle East and Africa ('AMEA') which consist of 42 countries. The Claimant started the team in the Company independently and from the scratch, by hiring employees and training them. The Claimant also in charge of the transition of knowledge and idea with the Chief Financial Officer ("CFO") of 7 AMEA sub region including India. The Claimant was the one, who interviewed cash collection teams all over the world. The Claimant had succeeded in enhancing the outcome collection, target and had caused overdue reduction as much as 60% in total.
[5] The Company issued 2 months' notice to cease the Claimant's employment for the reason of redundancy in Claimant's position. The Claimants' last drawn salary was RM12,528.46. The Claimant replied to the Company's notice and requested for a reasonable compensation whilst the Company only offered one and half month salary as ex gratia payment for the loss of employment however the Company has refused to consider the Claimant's request.
[6] The Company averred that the commencement of the employment of the Claimant was on 8 January 2018 and not on 7 February 2018. On 19 November 2020, the Company held a Townhall meeting to share to Company's Global Footprint plans for Malaysia and informed the employees that those who are impacted with the redundancy exercise will be given the redundancy notice. Subsequent email was sent to all the employees as a recap of the Townhall meeting. The Company has been reviewing its operations around the world by planning to consolidate some officers and grouping skills and teams into key locations, which would fit into the Company's future and growth ambitions. In April 2020, the Company has decided to reduce the number of roles whereby majority roles will be moved Hungary and In
