JUDGMENT

Suria Kumar Dj Paul J:

Introduction

[1] There are two (2) appeals before me arising from the awards made by the Labour Court in each of these appeals.

[2] The appellant company was the employer of all the respondents in both the appeals.

[3] Both appeals concern the respondent/employees of the appellant company's claim for retrenchment benefits.

[4] The issues raised in both appeals are similar.

[5] Given such circumstances, the parties agreed that both appeals would be heard together.

[6] Parties will be referred to as the appellant and respondents hereinafter.

Background Facts

[7] The appellant company is part of the KNM Group of Companies and is listed on the Bursa Malaysia.

[8] The KNM Group experienced a serious financial problem. It was issued with a Practice Note 17 (PN17) by Bursa Malaysia. However, it is not clear from the evidence adduced by the appellant when it started experiencing financial problems

[9] According to the appellant company, it was in debt in the sum of RM1,200,000,000.00 owed to some 400 creditors and Court proceedings were commenced against them by the creditors.

[10] The appellant further contended that their business was so bad that it had to cease business and carry out a redundancy exercise for its employees. The exercise was termed by the appellant as a "tawaran pemberhentian kerja".

[11] What transpired next was that the representatives of the appellant company, including the Chief Executive Officer, held an online town hall meeting with the respondents on 23 November 2023 using "Microsoft Teams". During the meeting, the appellant explained to the respondents that they were in a dire financial situation.

[12] Subsequently, on 29 November 2023, each of the respondents received a Termination Notice from Sivaraj a/l Manikam, who is in charge of the appellant's Human Resources and Internal Audit, explaining that their services would be terminated and detailing the amounts they would receive from the retrenchment exercise.

[13] These termination notices to all the respondents were in a standard format.

[14] The sums of money to be paid to each of the respondents in respect of the Termination Notice (No 1), Retrenchment Compensation (No 2), Outstanding Salary (No 3), Outstanding Allowance (No 4), and Outstanding Staff claims (No 5) stated in the notice differed. This notice also stated that the employee's employment would be terminated with effect from 30 November 2023.

[15] It must be noted that the termination notices to all the respondents were dated on 30 November 2023, but they were handed over to them a day earlier on 29 November 2023. For easy reference, a sample of this termination notice issued to the 1st Respondent in Appeal No 8 is produced below:

"Ref No: DESB/HR/1123-038

Date: 30 November 2023

DEAR MR MOHD FADZLI BIN MOHD RADZI,

DE294

The KNM Group of companies (Group) has been facing severe financial distress since November 2021 when the Group defaulted in payment for the Thai Bond guaranteed by Asia Development Bank. The Group is unable to secure any new orders for business continuity since 31 October 2022 due to the company's PN17 status by Bursa Malaysia Securities and has a Restraining Order (RO) from High Court to allow the Group to have a moratorium from creditors' actions.

The Company have explored many options and initiatives to keep the company on-going. Unfortunately, all efforts have been unsuccessful and finally we have no other alternative but to reduce the workforce to ensure the financial stability of the company in the long run.

After reviewing all our options, we have concluded that we must eliminate almost all positions in the Melaka Fabrication Shop (MFS). It is with deepest regret that we wish to inform you that your position as NDT HEAD will be officially terminated with effect from 30 November 2023.

Your severance Termination Notice (No 1) and Retrenchment Compensation (No 2) amounting RM12,229.00 will be paid immediately within the next 7 days. However due to financial con