- This case was heard jointly together with 17 cases since alleged dismissals arose from identical facts and sequence of events leading to the termination of employment of the 17 Claimants.
- The Company manufactures and provides fine sugar and other sweetener ingredients for consumers, retailers, food service distributors, food manufacturers, culinary professionals and specialty market across Malaysia.
- Due to the rising operational cost, the Company decided to reduce the headcount of the Security Section of the Company by outsourcing the same to Deuma Force Sdn Bhd.
- The Company decided to reduce the workforce of the Security Section security guards employed by the Company to 4 security guards and work with the outsourced security guards of the Company.
- Due to the outsource, the jobs of the 17 security guards employed by the Company [the Claimants] became redundant and the Company had to retrench the Claimants.
- On 19 September 2018 in a meeting, the Company notified the employees including the Claimants about the Right-Sizing exercise and the outsourcing of job function of the security section, which led to the Claimants’ became redundant.
- On 25 September 2018, the Company proceeded to pay all the 17 Claimants their retrenchment benefits, their salary up until 21 September 2018, the payment in lieu of notices for 1 month, their balance annual leave encashment and retirement benefits as per the Company’s Retirement Benefit Scheme.
- The Company asserts that:
- the Company had the right to exercise its managerial prerogative to reorganize its business in any manner they think best and that the Company’s managerial prerogative to reorganize was done in a bona fide
- COW-2 (Director of People Division of the Company) stated that due to the rising cost of raw materials, increased competition, lower consumer spending and the government’s approval of permits for the import of sugar by other 3rd party companies and other industrial players, the Company had to look for avenues to manage and reduce the costs of operations.
- COW-2 states that in order to circumvent any further losses suffered by the Company, the Company had to reorganize its operations to which the Company decided to outsource a large part of its Security Section to reduce the operational costs.
- COW-2 confirmed that the Company outsourced the security services to Deuma Forces Sdn Bhd and by the outsourcing of the security section of the Company, the Company managed to achieve savings of RM413,899.00 from September 2018 to April 2019.
- The Company retained the 4 security guards and retrenched the Claimants based on the Company’s “Performance Management System” (“PMS”) and disciplinary record where the 4 security guards retained were always amongst the top performers based on the PMS with good disciplinary records.
- The 16 Claimants [except for Claimant Salim bin Abd Samat who was not present for the meeting with the Company on 19.09.2018 as he was on leave] alleged that on 19 September 2018 they were called up by the Company officers for a meeting to be informed about the Right-Sizing exercise and that the Company would be hiring outsourced guards for the Company.
- They were dismissed on 19.09.2018 the same day being notified of the Right-Sizing exercise and were asked to come back to collect the payment from the Company on 24.09.2018.
- The Claimants avers that:
- the Company unlawfully terminated them from their employment under the guise of retrenchment as the Company did not notify, warn or inform the Claimants about their job being redundant and that their service will be terminated.
- their jobs are not redundant and still exist because the Company employed foreigners as guards to perform the Claimants’ job functions.
- the Company is still making profits and the retrenchment is merely an excuse to remove them from the Company.
- the Company had violated the “Last In First Out” (LIFO) principle in selecting employees to be retained and retrenched when the Company selected 4 security guards to be retained and terminated the 17 Claimants.
- The Claimants never challenged:
- COW-2’s evidence neither was there any evidence adduced by the Claimants to show that the Company’s exercise to reorganize its business were tainted with mala fide motives intended to victimize the Claimants or drive out the Claimants from their employment.
- The Claimants did not challenge nor brought any evidence to the contrary with regards to the facts that the Company manage or reduce a huge amount of its operational costs by the outsourcing its security section. As such, the reorganization exercise by the Company is for a genuine necessity reason and the exercise of its managerial prerogative was bona fide
- There was also not even any evidence adduced by the Claimants before the Court to consider that the action of the Company to restructure its security section was with mala fide motives. As such, no reason for this Court to rule that the reorganization exercise by the Company, which led to the Claimants’ retrenchment tainted with any mala fide motives.
- The Claimants never challenged COW-2 during the trial about the selection done by the Company in retaining the 4 security guards and retrenching the 17 Claimants.
- All the performance data of all employees in the Security Section of the Company extracted from the Performance Management System of the Company was available and served on the Claimants before the trial. However, the Claimants never challenged those PMS records neither adduced any evidence to show that the Company’s selection to retaining the 4 guards and retrenching the 17 Claimants was not a fair selection. As such, the Claimants are deemed to have agreed with the Company’s selection in retaining the 4 guards and retrenching the 17 Claimants.
- The Court is of the view that the Company has the prerogative to reorganize its business operations in any manner for the purpose of its economic viability and in the manner, the Company think best.
- As the Claimants did not challenge the Company’s selections at all neither adduced any evidence to the contrary, the Court is of the opinion that the Claimants acknowledged that the Company’s selection was a fair selection where the Company is seen to have acted fairly and did not departed with the LIFO rules in retrenching the Claimants.
- LIFO. It is trite law that the LIFO is not an absolute mandatory rule as it is not a statutory provision, which cannot be departed from by the Company when retrenching their employees. The Court is satisfied that the Company’s selection based on the Company’s “Performance Management System” (“PMS”) and disciplinary record was a justifiable way of selecting the retention of employees during a retrenchment exercise.
- The law is clear in that there is no legal obligation on the part of the employer to consult his employee before retrenchment or give advance warning to the employee on the possibility of retrenchment.
- The Court is satisfied that the re-organization by the Company was a bona fide exercise of its managerial prerogative to run the business operations as it deemed fit in order to successfully continue the Company’s overall business operations. As such, the Company had just and proper reasons to terminate the employment of the Claimants.
- The Court finds the Company had established on a balance of probabilities the reasons for the Claimants’ termination on redundancy.
Source: SYAMAIZAR AZMI v. CENTRAL SUGARS REFINERY SDN BHD  MELRU 531
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