Award 32597
Award 32597
Award 32597
AT KUALA LUMPUR
BETWEEN
AU LAI CHAN
AND
AWARD
BACKGROUND
[2] This case 15/4-248/19 was heard jointly together with case
No 15/4-249 WONG MENG KOON and case no 15/4-253/19 LIM
CHWEE HOON.
[5] The Claimant avers that apart from dealing with human
resource matters she had performed several other core duties for
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the Company as listed in paragraph 7 and 8 of her Statement of
Case.
[8] The Claimant asserts that the Company was never in any
financial difficulties that would bring about the Company to retrench
her.
[9] The Claimant contends that she was not redundant because
her job functions continued to exist but the Company redistributed
her functions to her superior and other employees including to
some expatriates.
[10] The Claimant avers that the Company did not consider
transferring her to other positions within the Company or put her
back to the positions she previously held in the human resource
department of the Company.
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[11] The Claimant contends that the dismissal was without just
cause or excuse.
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[17] It is the Company’s contention that the Company then
conducted a review of all the departments within the Company and
identified certain roles ranged from senior management to
administrative positions as surplus to the Company's work force
requirements.
[20] The Company avers that the Claimant's job was merely as
the liaison between the Company's Chief Operating Officer [COO]
and the production teams on production and administration matters
of the operations.
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[22] The Company avers that the Claimant's job functions were
absorbed by her superior, the COO of the Company one Mr
Dickson Yong, who was all the material time in charge of the
Company’s overall day to day functions.
[23] It was the Company’s contention that with the taking over of
the Claimant’s job by the COO, there was no longer any
requirement for a position of Senior General Manager
Manufacturing & Operational Support in the Company to be in
charge of general administration of the reduced operations of the 3
Plants.
[26] The Company avers that though the Claimant was not
entitled to any retrenchment benefits, the Company on a goodwill
basis paid the Claimant a severance package in the sum of
RM380,002.30 which the Claimant accepted without any protest or
complaint over the sum she received from the Company.
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[27] The Company contended that there was a genuine
redundancy situation had arisen where the Claimant’s position was
surplus to the Company’s requirement and it was the prerogative of
the Company to reorganize its business in the manner it deems fit.
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[30] In the case of HARRIS SOLID STATE (M) SDN. BHD & ORS
V. BRUNO GENTLL PEREIRA & ORS [1996] 4 CLJ 747, Gopal
Sri Ram JCA at p. 767 held as follows
8
(M) SDN. BHD. & ANOR [1999] 1 LNS 131 the High Court Judge
stated as follows:-
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employee has ceased or has greatly diminished to
the extent that the job no longer exists or that the
business requires fewer employees of whatever kind
resulting from a reorganization exercise or due to
whatever other legitimate reasons”.
[36] The Company called Simon Sin the Hap Seng Group Human
Resource Director [COW-1] and Ng Boon Kong, the Company’s
General Manager of Finance [COW-2] while the Claimant was the
sole witness for her case.
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[38] The Claimant further contended that the Company's
reasoning that it was making losses did not justify her dismissal
because most of the losses incurred by the Company were directly
due to the closure of Plant 2.
[41] The Claimant alleged that most of the losses incurred by the
Company were cause by the wrong decision of the Company to
close Plant 2 and where the Company made payment of
compensation to hundreds of employees based at Plant 2 on a
voluntary separation scheme. The Claimant also alleged that the
intent for the closure of Plant 2 was to start a new joint venture with
the Chinese.
[42] The Claimant claims that her retrenchment exercise was mala
fide on the ground that the Company has not produced any
evidence to show what are other steps was taken to reduce the
alleged high operating costs and losses before closing down Plant
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2 and reorganizing the Company’s work force structure which lid to
the Claimant’s terminating.
[43] The Claimant avers that she is not merely a liaison between
COO Dickson Yong and the 3 Head of Plants or performing general
administrative functions as alleged by the Company. The Claimant
asserts that she was performing managerial functions and that the
functions still exist.
[44] The Claimant asserts that her function still exists but the
Company redistributed her functions and duties to other employees
of the Company to one Wong Chun Keong, two Deputy General
Managers and to her superior the COO of the Company Mr.
Dickson Yong.
[45] The Claimant claimed she is not redundant and that her
termination was with ulterior intention because the Company did not
consider placing her in any other positions within the Company or
transferring her back to her position in the human resource, which
she had held previously.
[46] The Claimant submits that COW-1 who is the Group Human
Resource Director of the Hap Seng Group is not an employee of
the Company therefore could not be a material witness of the
Company.
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[47] The Claimant avers that COW-1 who is the employee of the
Group does not have knowledge of the Company’s affairs and the
Company’s employees job functions.
[48] The Claimant contended that the Company should had called
the Chief Operating Officer [COO] of the Company Mr. Dickson
Yong as its material witness because he has direct knowledge of
the whole Company’s situation and the job functions of the
Company’s employees.
[49] It was the Company’s contention that the losses were due to
the downward trend of the market to cheaper products, significant
cost pressures, increase in raw material costs, and the continued
poor yields of the manufacturing operations causing the yield to
deteriorate from 91.8% in 2015 to 88.2% in July 2018.
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[52] The Company’s states that with the profits continued to
deteriorate, e the compressed margins coupled with rising costs in
productions, and the Company’s business was unsustainable. The
Company reviewed its operations to improve the organisation's
effectiveness and efficiency and took drastic measures to stop the
decline.
[54] The Company avers that with the closure of Plant 2, the
management also reviewed the Company’s work force structure by
removing any kind of duplicity of work and the Company identified
the Claimant’s position as redundant to the Company’s work force
requirement.
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commensurate with the Claimant's existing job functions and
seniority.
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[60] COW-2 the General Manager of Finance of the Company
states that the Company’s losses started in 2017 and continued
into 2018 with its operating losses. COW-2 explained about COB-4
a document relating to the information about the Company’s
Porcelain Products sold from 2015 to 2018 as in COB-4 which
shows analysis on output reduction and yield decline from the year
2015- 2018.
[62] The Court is satisfied that both COW-1 and COW-2 provided
a clear and consistent evidence of the Company's losses and
financial status making reference to COB-1 page 1-83 the audited
financial statement of 2018 and the production yield analysis from
the year 2015-2018 [COB-4 page 5].
[63] The Court is of the view that the audited accounts are a true
indication of the financial status of the Company; which clearly
showed that the company incurred losses since 2017. There is no
reason for the Court to doubt the contentment of those documents.
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article published in the STAR tendered as evidence by the Claimant
as reflected in CLB-1 pg 53, which reads as follows:
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[68] The Claimant somehow during cross-examination admitted
that she was aware of the Company suffering a profit shortfall of
RM175.31 million and losses of RM129,072,00.00 in the year 2018.
[69] The Claimant at all material time was aware of the losses
suffered by the Company where she in a "Whatsapp" conversation
with her superior, Dickson Yong as in COB-6 were they were
communicating about the Company losses. The Claimant never
deny having such conversation with her superior the COO of the
Company.
[70] It is the Court’s finding that there is nothing to doubt about the
content of the audited ffinancial statement of 2018 [COB1 page 1-
83], production yield analysis from the year 2015- 2018 [COB-4
page 5], the Claimant’s Whatapps conversation with her superior
[CLB-1 pg 53] which all shows that the Company was going through
financial difficulties. The fact that the Company was not performing
and that there were poor yields of the manufacturing operations,
this situation had contributed to the deterioration of the profits. The
Claimant’s contention that the Company was not in any financial
difficulty is therefore unsubstantiated.
[71] The Claimant asserts that the trend of the production yield
from 2015 and 2018 of Plant 2 were stable, however no proof to
show that the trend was stable. The Claimant eventually agreed
that the production yield is one of the most important indicators of
how efficiently and effectively a plant is operating.
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[72] The Court is of the view that that in view of the continued
deterioration of profits due to the rising costs in production, the
Company’s financial performance was unsustainable, and as such,
it is justified for the Company to review its operations and take
drastic measures to improve the Company’s effectiveness and
efficiency in all its affairs.
[75] The Claimant claimed that most of the losses incurred by the
Company were directly caused by the decision to close Plant 2
where she contended that Plant 2 that was closed in September
2018, if it continued to operate, there would have been no reduction
of production.
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bad economic decision. Neither did the Claimant challenged COW-
1 or COW-2 to make them agree with her that losses incurred by
the Company were directly caused by the decision to close Plant 2.
[79] COW-1 gave evidence that with the closure of Plant 2, the
Management reviewed the Company's work force structure by
removing any kind of duplicity of work in the Company.
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[81] The Claimant’s function of overseeing the manufacturing
operations of all the 3 plants in Kluang was definitely reduced with
the closure of Plant 2.
[83] With the closure of Plant 2 and the with the reduced
manufacturing operations functions, it is obvious that the Company
no longer need such a senior person to oversee a very much
reduced manufacturing operation. As such, it is obvious the
Claimant’s position is a surplus to the Company’s requirement.
[85] The Claimant denies COW-1’s explanation that her role in the
Company was merely as a liaison between the COO and the Heads
of Plants. The Claimant in her evidence Q&A 9 of her Witness
Statement listed an array of duties and responsibilities that she
claimed she had performed.
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Claimant conceded to having no evidence nor having any
documentation before the Court to substantiate her claims or to
show that what she listed was the duties and responsibilities she
performed as the Senior General Manager-Manufacturing and
Operational Support of the Company.
[89] The Claimant admitted that she reports to the COO, take
instructions from COO, and obtain approval from him too. No
evidence adduced before this Court to show that the COO or the
Company doesn’t know anything about the plants activities without
the Claimant’s involvement. As the COO was easily made to
absorbed the Claimant’s job function, the Claimant's position was
indeed redundant due to the reorganisation exercise and she is
indeed a surplus to the Company’s requirement.
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[90] The Court is of the view that pursuant to the major reduction
in the production capacity and operations, the Company’s decision
to looked at its manpower requirement and identified the Claimant
as surplus to the Company's manpower requirements was a bona
fide decision and not motivated with any ulterior intention to
victimized the Claimant.
[91] The Claimant also avers that her duties and functions
continued to exist but was redistributed to other employees who
were Adam Þandian (an expatriate), Wonq Chun Keong, Gan Swee
Ho. Chung Fock Yit and Frank Liu (an expatriate).
[93] The Whatsapp conversation was in April 2018 while she was
still employed by the Company. Nothing in the Whatsapp can
corroborate her contention that Adam Pandian had in fact taken
over her duties after she had been retrenched as the conversation
between her and Dickson Yonq [COO] had taken place during her
tenure in the Company.
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[94] There was no documentary evidence either adduced that could
show Adam Pandian, Wonq Chun Keonq, Gan Swee Ho, Chung
Fock Yit and Frank Liu had been distributed with the Claimant’s
duties.
[96] It was undisputed that the Claimant was not the only
employee retrenched but there were other employees too affected
by the reorganisation exercise. The fact that no new employees
employed to replace the Claimant, it goes to prove that the
retrenchment was not motivated by bad faith.
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[99] Neither could the Company place the Claimant in any post
within the Company as there was no position available within the
Company that would commensurate with the Claimant's existing job
functions and seniority
[101] The Court is also of the view that it is no obligation for the
Company to look for alternative employment for the Claimant.
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[104] As the Group Human Resource Director, obviously COW-1 is
the source of reference for human recourses related issues of the
entire business and will have knowledge of the subsidiaries affairs
and employees under the Group. COW-1 is the relevant witness
with material knowledge as to the rationale behind the Company's
decision to retrench the Claimant.
[105] It was also undisputed that COW-1 was one of the members
of the decision-making committee in respect of the retrenchment
along with Mr Dickson Yong the COO of the Company. Mr
Dickson’s evidence would be the same with COW-1’s evidence.
[107] On the other hand, the Claimant herself could have applied
for the production of Mr Dickson as a witness for her case. There
was nothing to stop the Claimant to apply for a subpoena for the
said Mr Dickson to testify for her case.
[108] The Court is of the view that the Claimant was unable to
show anything that can demonstrate to this Court’s satisfaction that
the Company’s decision to terminate her employment were
actuated by ulterior motive that could be construed as an exercise
in bad faith.
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[109] In the present case, due to the downward trend of the
market to cheaper products, significant cost pressures, increase in
raw material costs, and the continued poor yields of the
manufacturing operations causing the Company’s yield to
deteriorate leading to the closure of Plant 2, the Company rightfully
reorganize its structure for economic purposes to sustain the
business. There was surplus of the work including the works the
Claimant was performing and obviously the Company requires
fewer employees. Under these circumstances, the Claimant’s
position was excess to the requirements the Company, therefore
the Company is entitled to discharge such excess.
[110] The Court is satisfied that the reasons in the dismissal letter
were not a manipulative act on part of the Company to victimize the
Claimant. The Company exercised its managerial powers bona fide
and the Claimant's termination was with just cause or excuse.
[111] Given this facts, the Court is satisfied that the reorganization
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.
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established on a balance of probabilities the reasons for the
Claimant’s termination on grounds of redundancy.
-Signed-
(REIHANA BTE ABD.RAZAK)
CHAIRMAN
INDUSTRIAL COURT MALAYSIA
KUALA LUMPUR
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