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2023 MarsdenLR 1151
INDUSTRIAL COURT KUALA LUMPUR
SHOBA NAIR KOCHU NARAYANAN – Appellant
Versus
ROCA MALAYSIA SDN BHD – Respondent
Award No: 2328 Of 2023 [Case No: 14/4-716/21]
The court affirmed that an employer's prerogative to reorganize is valid if based on genuine redundancy, supported by evidence of financial distress and adherence to retrenchment procedures.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Dismissal of employee - Claimant retrenched due to economic downturn and COVID-19 pandemic - Court evaluated necessity of reorganization and redundancy claims - Company provided evidence of financial distress and restructuring - Claimant's role deemed surplus to requirements. (Paras 42, 48, 112)
(B) Burden of proof - Employer must demonstrate genuine redundancy and compliance with retrenchment procedures - Court found no breach of LIFO principle; decision based on valid criteria of experience and skills. (Paras 86, 112)
(C) Disciplinary actions and victimization claims - Court upheld legitimacy of Company’s disciplinary measures against Claimant, finding no evidence of mala fide intent. (Paras 109, 112)
Facts of the case:
The Claimant, a QA Manager, was retrenched on 13 July 2020 due to the Company's declining performance exacerbated by the COVID-19 pandemic. The Company implemented cost-cutting measures, including salary reductions and staff layoffs, leading to her position being deemed redundant.
Findings of Court:
The Court concluded that the Company had demonstrated a genuine need for reorganization and that the retrenchment of the Claimant was justified, dismissing her claims of unfair dismissal.
Issues: The main issues included the legitimacy of the Company's reorganization, the existence of genuine redundancy, and adherence to retrenchment procedures.
Ratio Decidendi: The Court emphasized that the employer has the prerogative to reorganize its business and that the burden lies on the employer to prove redundancy, which was established in this case.
Result: Claim dismissed.
| Table of Content |
|---|
| 1. reference under industrial relations act (Para 1 , 2) |
| 2. claimant's employment details and role (Para 3 , 4 , 5 , 6 , 7) |
| 3. company's financial difficulties and operational impact (Para 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20) |
| 4. details of retrenchment process and payments (Para 21 , 22 , 23 , 24 , 25 , 26) |
| 5. claimant's employment performance and treatment (Para 27 , 28 , 29 , 30 , 31) |
| 6. claimant's allegations against company (Para 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41) |
| 7. court's role in dismissal cases (Para 42 , 43 , 44 , 45 , 46 , 47 , 48) |
| 8. assessment of company’s financial justification (Para 49 , 50 , 51 , 52 , 53 , 54 , 55) |
| 9. evidence of company's financial state (Para 56 , 57 , 58 , 59 , 60 , 61 , 62) |
| 10. company's cost-cutting measures (Para 63 , 64 , 65 , 66 , 67 , 68 , 69) |
| 11. details of restructuring and redundancy (Para 70 , 71 , 72 , 73 , 74 , 75 , 76 , 77 , 78 , 79 , 80) |
| 12. evaluation of retrenchment criteria (Para 81 , 82 , 83 , 84 , 85 , 86 , 87 , 88 , 89 , 90 , 91 , 92) |
| 13. court's findings on claimant's allegations (Para 93 , 94 , 95 , 96 , 97 , 98 , 99 , 100 , 101 , 102 , 103 , 104 , 105 , 106 , 107 , 108 , 109 , 110) |
| 14. court's final decision on retrenchment (Para 111 , 112) |
Reference
[1] This is a reference under s 20(3) of the Industrial Relations Act 1967 (1967 Act) by the Honourable Minister of Human Resources, emanates from the dismissal of Shoba Nair a/p Kochu Narayanan ("the Claimant") by Roca Malaysia Sdn Bhd ("the Company") on 13 July 2020.
[2] This Court will determine the issues before it and make its findings based on the pleadings, the relevant oral and documentary evidences, the notes of proceedings and submissions. The following documents were filed before this Court:
(i) Statement of Case dated 14 June 2021;
(ii) Amended Statement In Reply dated 23 July 2021;
(iii) Rejoinder dated 18 August 2021;
(iv) Company's Bundle of Documents: COB-1;
(v) Company's Supplementary Bundle of Documents: COB-2;
(vi) Travel Authorisation Form: COB-3;
(vii) Claimant's Consolidated Bundle of Documents: CLB-1;
(viii) Claimant's Post-Dismissal Documents: CLB-2;
(ix) Witness Statement of Diego Hernan Jolis: COWS-1;
(x) Witness Statement of Gaspe Mudiyanselage Anura Gamini Bandara Gaspe (Dr Gaspe): COWS-2;
(xi) Witness Statement of the Claimant, Shoba Nair a/p Kochu Narayanan: CLWS-1;
(xii) The Claimant's Additional Questions and Answers: CLWS-1A;
(xiii) The Claimant's Written Submissions dated 16 August 2023;
(xiv) The Company's Written Submission dated 16 August 2023;
(xv) The Claimant's Written Submissions In Reply dated 6 September 2023; and
(xvi) The Company's Written Submissions In Reply dated 6 September 2023
The Company's Case
[3] By a letter dated 23 March 2010, the Claimant was offered employment as QA Manager in the Company on 25 March 2010 subject to the terms and conditions stated therein. She was confirmed in her appointment as QA Manager on 25 June 2010.
[4] Between August 2018 and 13 July 2020, the Claimant reported to COW-1, the MD and she was based in the Company's factory at Bestari Jaya, Selangor ("Company's factory') and led the QA Department of the Company, which comprised of eight (8) employees as at July 2020.
[5] As a QA Manager, the Claimant's primary duties and responsibilities were amongst others, (i) to inspect the company's products and report the quality issues to ensure compliance to the company and quality standards; (ii) to identify misinspection and product non-conformity issues; and (iii) to facilitate proactive solutions by collecting and analyzing quality data.
[6] At the time of the Claimant's retrenchment on 13 July 2020, the Claimant's last drawn basic monthly salary was RM8,228.46.
[7] Prior to her retrenchment from service on 13 July 2020, the Claimant had seven (7) staff reporting to her.
[8] The Company's performance had been declining since 2016 due to global slowdown which affected the Malaysian economy, construction sector and oil price
