Award 32597

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IN THE INDUSTRIAL COURT MLAYSIA

AT KUALA LUMPUR

CASE NO: 15/4-248/19

BETWEEN

AU LAI CHAN

AND

MALAYSIAN MOSAICS SDN. BHD.

AWARD NO : 811 OF 2020


BEFORE : Y.A. PUAN REIHANA BTE ABD. RAZAK
Chairman
VENUE : Industrial Court, Kuala Lumpur
DATE OF REFERENCE: 05.03.2019
DATES OF MENTION : 08.04.2019, 25.04.2019, 17.06.2019,
24.06.2019, 08.07.2019, 15.07.2019,
26.07.2019, 09.08.2019, 16.08.2019,
28.08.2019, 03.09.2019, 10.09.2019,
05.11.2019, 20.12.2019, 06.01.2020,
10.02.2020, 25.02.2020, 04.03.2020.

DATES OF HEARING : 17.09.2019,18.09.2019, 24.09.2019,


12.11.2019.

REPRESENTATION : Ms. Juanita Chua together with Mr.


Shanker Subbramaniam
Messrs Shanker, Arjunan & Chua
Counsels for Claimant
Dato’ T. Thavalingam together with Ms.
Shivani Sothirachagan
Messrs Lee Hishammuddin Allen &
Gledhill
Counsel for Company
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REFERENCE

This is a reference by the Minister of Human Resources pursuant to


Section 20(3) of the Industrial Relations Act, 1967 arising out of the
dismissal of AU LAI CHAN (The Claimant) by MALAYSIAN
MOSAICS SDN. BHD. (The Company’) on 10.10.2018.

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.

THE CLAIMANT’S CASE

[3] The Claimant’s pleaded case was as in her Statement of


Case listing her employment history with the Company and her job
descriptions.

[4] The Claimant commenced employment with the Company on


1.3.1996 as a Human Resource Executive and held several
positions within the Company.

[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.

[6] At the time of dismissal, she held the position of Senior


General Manager, Manufacturing and Operational Support and her
last drawn salary was RM44,151.00.

[7] The Claimant claimed that by a letter dated 10.10.2018; the


Company terminates her employment on the ground of redundancy.
The Company claimed that there was a downward trend in the
market, problem with the yields and the closure of one of its plant.

[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.

THE COMPANY’S CASE

[12] The Company is in the business of manufacturing and


distributing ceramic and porcelain tiles and accessories.

[13] It is the Company’s contention that due to the downward


trending of the market to cheaper products such as glazed
porcelain and with the increase in raw material costs, the
Company's Profit had dropped.

[14] The Company asserts that in view of the continued


deterioration of profits due to the rising costs in production, the
Company reviewed its operations and take measures to reorganize
the organization to improve its effectiveness and efficiency.

[15] The Company contends that due to the weak market


conditions its Plant 2 that was manufacturing products that
generated more revenue than the products manufactured in Plant 1
and Plant 3, were operating at a loss.

[16] The company avers that as it was not sustainable as an on-


going business concern, the management of the Company
undertook the business decision to shut down Plant 2.

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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.

[18] The Company contended that pursuant to the reorganization


certain employees across the all its 3 Plants as well as the
Headquarters in Petaling Jaya were identified as surplus to the
Company's manpower requirements.

[19] The Company denies the Claimant’s contention about her


core job functions contained in paragraphs 7 and 8 of the
Statement of Case.

[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.

[21] The Company contends that the Claimant was in charge of


general administration of the operations of the 3 Plants in Kluang,
Johor where she represents the interest of the 3 Plants in matters
relating to sales and customers, and performed assigned ad hoc
assignments from the COO when it is required from her.

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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.

[24] The Company avers that there was no position available


within the Company that would commensurate with the Claimant's
existing job functions and seniority and salary scale.

[25] The Company further avers that as the Claimant’s job


ceased to exist, there was no new employee employed by the
Company to replace the Claimant.

[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.

[28] The Claimant’s position was redundant and the Claimant’s


termination is with just cause and excuse.

THE LAW ON REDUNDANCY

[29] It is trite law that the right to reorganize is a managerial


prerogative as was firmly in the case of WILLIAM JACKS & CO.
(M) SDN. BHD. V S. BALASINGAM [1997] 3 CLJ 235 where the
Court of Appeal define the term “retrenchment” as follows:-

“Retrenchment' has been defined as the discharge of


surplus labour or staff by an employer for any reason
whatsoever otherwise than as a punishment inflicted by
way of disciplinary action. Whether the retrenchment
exercise in a particular case is bona fide or otherwise is a
question of fact and of degree depending on the peculiar
circumstances of the case.

It is well settled that the employer is entitled to organize his


business in the manner he considers best. So long as the
managerial power is exercised bona fide, the decision is
immune from examination even by the Industrial Court.
However, the Industrial Court is empowered, and indeed
duty-bound, to investigate the facts and circumstances of
the case to determine whether the exercise of power is in
fact bona fide”.

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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

An employer may organise his commercial undertaking for


any legitimate reason, such as promoting better economic
viability. But he must not do so for a collateral purpose, for
example, to victimize his workmen for their legitimate
participation in union activities. Whether the particular
exercise of managerial power was exercised bona fide or
for collateral reasons is a question of fact that necessarily
falls to be decided upon the peculiar circumstances of each
case."

[31] In PENGKALEN HOLDINGS BHD. V. JAMES LIM HEE


MENG [2000] 2 ILR 252 the Court summarizes the proposition on
redundancy as follows:

“The existence of surplus or supernumerary staff or a


redundancy situation can arise due to a number of
situations. A business entity facing a severe cutback in
business volume or which is attempting to rationalise its
business may have to reorganise and/or downsize. Where
a whole production line or business unit is discontinued,
the need for employees to work on that line or unit no
longer exists. Both the job functions and the jobs of the
employee in the said line or unit have ceased to exist. The
business entity with such a problem of surplus workers
would have to consider the painful option of retrenchment
of its surplus staff who were previously holding posts
which have since become redundant and are abolished
accordingly.”

[32] A genuine redundancy may also arise when the business


requires fewer employees. In the case of STEPHEN BONG V. FCB

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(M) SDN. BHD. & ANOR [1999] 1 LNS 131 the High Court Judge
stated as follows:-

Redundancy situations arise where the business


requires fewer employees of whatever kind ('Harvey on
Industrial Disputes '). In the case before me, it is the
Company's case that there was reduced work and
reduced business, which made the applicant's position
as an executive director in charge of one group
redundant. The Industrial Court is right when it held that
the applicant was redundant.”

[33] The burden of proof of is on the employer to prove actual


redundancy with concrete proof which eventually leads to the
retrenchment of the employee. Merely to show evidence of re-
organization by the Company is not sufficient. The Court of Appeal
in BAYER (M) SDN BHD V. NG HONG PAU [1999] 1 MELR
stated as follows:-

On redundancy it cannot be qain said that the appellant


must come to the Court with concrete proof. The burden is
on the appellant to prove actual redundancy on which the
dismissal was qrounded.

[34] In the case of SISTEM TELEVISYEN MALAYSIA BHD. &


ANOR V. SUZANA ZAKARIA [2005] 1 ILR 853 AT P.856, held as
follows:

“..... Hence to justify the retrenchment, there must


first be redundancy. To prove redundancy, the
company must prove that there is surplus of labour
or that the requirement of the job functions of the

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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”.

[35] In determining whether the Claimant was dismissed with just


cause or excuse by the retrenchment exercise undertaken by the
Company, this Court will have to determine whether there was
genuine redundancy situation had arisen which requires a need for
the reorganization exercise by the Company.

EVALUATION AND FINDINGS

[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.

[37] The Claimant contends that the losses shown in the


Company's Financial Statement for year end 31 December 2018
[COB-1 pages 1-83] were only paper losses and that the Group had
a profit guarantee from the former owner of the Company [Gek Poh]
which does not require the Company to close its Plant 2 and
retrench the Claimant.

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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.

[39] The Claimant contended that Plant 2 which was closed in


September 2018, if it continued to operate, there would have been
no reduction of production and no loss to the Company.

[40] The Claimant contended there was no evidence to justify the


closure of Plant 2 as the Company did not produce evidence for the
need to close Plant 2 and the need to restructure the Company’s
work force.

[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.

[50] The Company avers that Plant 2 that manufactured products


generating higher revenue than products manufactured in Plant 1
and Plant 3 due to the weak market conditions, the demand for
Plant 2's products had dampened and this condition resulted in the
Company operating Plant 2 at a loss.

[51] The Company asserts that the deterioration of profits of the


Company started in 2017 and continued into 2018 sphere where
the Company's loss was 129 million with its operating losses.

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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.

[53] As the Company’s business was unable to sustain, the


Group made the decision to close Plant 2, which was operating at a
loss and with the closure of Plant 2, 54% of the total production
capacity of Plant 2 that was operating at a loss was removed.

[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.

[55] The Company avers that there was no longer any


requirement for a Senior General Manager-manufacturing and
Operational Support in the Company since the COO was to liaise
directly with the Heads of Plants in relation to the manufacturing
and operations of the plants.

[56] The Company submits that the Claimant’s position ceased to


exist and no new employee hired to replace the Claimant neither
was there any position available within the Company that would

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commensurate with the Claimant's existing job functions and
seniority.

[57] In the Letter of Redundancy dated 10.10.2018, the Company


informed the Claimant that the Company was facing challenges in
the form of deteriorating profits, downward trending of the market to
cheaper products such as glazed porcelain, high cost pressures
brought about by the increase in raw material costs especially
natural gas, continued poor yields of the manufacturing operations
and the deteriorating yield from 91.8% in 2015 to 88.2% in July
2018.

[58] It was undisputed that prior to the reorganization exercise, the


Company had shut down Plant 2 where the management's decision
to shut down Plant 2 was due to deterioration of profits and that
Plant 2 was running as a loss.

[59] COW-1’s gave evidence explaining the financial status of the


Company making reference to the Company's Financial Statement
ending on 31.12.2018 in COB-1 pages 1-83. COW-1 states that
the Company continued deterioration of profits where the
Company's Profit after Tax ("PAT") had dropped from RM23.7
million to negative Rm20.7 million from 2015 as at end of July
2018. COW-1 also states that for the year 2018, the overall
performance of the Company PAT was at a loss of RMI29,
072.000.00 and the Company's production Yield had declined from
91.8% in 2015 to 88.2% as at July 2018.

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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.

[61] COW-2 confirmed that the deterioration of profits where he


clarified that COB-4 page 5 shows a yield decline from 91% to 88%
in 2015 and 2018 and confirm that in the year 2018, the Company's
losses were 129 million.

[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.

[64] It was also evidence in the Court that the Company's


deterioration of profits was also public knowledge where in an

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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:

"according to the group's filing to the stock exchange, Gek


Poh Holdings Sdn Bhd is obliged to pay a profit shortfall of
RM175.31mil to Hap Seng under the terms of the share sale
agreement for the latter's acquisition of Malaysian Mosaics
Sdn Bhd in 2016."

[65] The Claimant contends that the losses shown in the


Company's Financial Statement for year end 31 December 2018
[COB-1 pages 1-83] were only paper losses and that the Group had
a profit guarantee from the former owner of the Company [Gek Poh]
which does not require the Company to close its Plant 2 and
retrench her.

[66] Based on CLB-1 pg 53, the existence of a profit guarantees


the former owner of the Company [Gek Poh] is not disputed,
however that profit guarantee would only be paid to Hap Seng and
not to the Company when it faces a profit shortfall.

[67] There was no evidence adduce to show that the profit


guarantee from the former owner of the Company [Gek Poh] was
intended to be paid to the Company when it faces a profit shortfall.
The Claimant misconstrued that merely the profit guarantee from
the former owner of the Company is to back up the Company in the
event of a profit shortfall.

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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.

[73] It is clear that due to unsustainable of the Company’s


business; the Company's decision to shut down Plant 2 is bona
fide. The Company exercised its managerial prerogative to review
its operational requirements by shutting down Plant 2 and
subsequently carried out a reorganization exercise.

[74] It was undisputed that Plant 2 was running at a loss at that


material time. The Company’s decision to close Plant 2 that was
running at a loss was within its prerogative and not manipulated
with any ulterior motives.

[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.

[76] There was no evidence adduced by the Claimant to support


her contention that the company’s decision to close Plant 2 was

19
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.

[77] COW-2’s evidence that the Company was facing operating at


losses before the year 2018 and the Claimant conversation that the
Company was incurring losses which was recorded in a WhatsApp
message between her and her superior Mr. Dickson uundoubtedly
corroborates the Company was in fact facing challenges and
suffered financial losses.

[78] In that situation, the decision to close Plant 2 is obviously a


wise decision taken by the Company. In the absent of any evidence
to the contrary, the Claimant's contention that the losses incurred
by the Company were directly caused by the decision to close Plant
2 is baseless.

[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.

[80] COW-1’s explanation that with the closure of Plant 2- the


largest Plant, 501 employees were let go and the manufacturing
operation functions was very much reduced with the closure.

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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.

[84] COW-1’s evidence that the management identified the


Claimant’s position as surplus because COO who was in charge of
the Company's overall day to day running will liaise directly with the
Heads of Plants in relation to the manufacturing and operations of
the Company was not challenged. As such the reorganization of the
Company’s work force that ceased the Claimant’s position as
Senior General Manager-Manufacturing and Operational Support
was a bona fide exercise.

[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.

[86] During cross-examined about her extensive duties and


responsibilities as listed in Q&A 9 of her Witness Statement, the

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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.

[87] With no evidence to support her contentions, the Court have


no reason not to believe COW-1’s explanation that the Claimant’s
role in the Company was as a liaison between the COO and the
Heads of Plants to only oversees the manufacturing operations in
Kluang plants

[88] COW-1’s explanation cannot be his assumption about the


Claimant’s role in the Company because the Claimant’s superior
who was also the COO of the Company was made to absorbed the
Claimant’s functions. The COO would not be able to easily
absorbed the Claimant’s job functions if the Claimant’s job functions
comes heavy responsibilities.

[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).

[92] During her cross-examination, when questioned whether she


had any evidence to substantiate her contention, the Claimant
referred to a "Whatsapp conversation" between her and her
superior Dickson Yong on 6.4.2018 [CLB 10 page 14] where
Dickson Yong was seen saying to her not to further discuss
production issues until AP come back.

[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.

[95] It was also undisputed that in the Company’s post review


organisation chart COB-1 pages 133 and page 136, the Claimant's
position Senior General Manager-Manufacturing and Operational
Support ceased to exist and no new employee hired to replace the
Claimant.

[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.

[97] The Claimant claimed her retrenchment was motivated with


bad faith because her job function still exists but the Company did
not take steps to find alternative employment within the Company
or redesignate her back to her previous Human Resource role in
the Company.

[98] The Claimant however did not identify which position


available within the Company that would be suitable with her
existing job functions and seniority.

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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

[100] On the Claimant’s claim that the Company should have


placed her back to her previous position of human resource role, it
was undisputed that the Company could not place the Claimant
back to her previous position of human resource role as it would
constitute a demotion. The Claimant too during cross-examination
confirmed that her previous position is been carried out by one Mr
Wong Chun Keong who is a junior staff and for her to be placed to
that position would constitute a demotion.

[101] The Court is also of the view that it is no obligation for the
Company to look for alternative employment for the Claimant.

[102] About the Claimant’s contention that COW-1’s evidence was


not relevant because he was not the employee of the Company and
the non-calling of Mr. Dickson Yong the COO of the Company, the
Company did not prove its case, the Court finds this contention is
baseless.

[103] It was undisputed that COW-1 the Group Human Resource


Director was a member of the decision-making committee in
respect of the retrenchment and was also the signatory of the
Claimant's Letter of Termination not Mr. Dickson.

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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.

[106] The Claimant could have corroborated her claims through


COW-1 and challenge COW-1 on the decision of the committee in
retrenching her but she failed to do so.

[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.

[112] Taking into account the totality of the evidence adduced by


both parties and bearing in mind s. 30(5) of the Industrial Relations
Act 1967 to act according to equity, good conscience and the
substantial merits, the Court finds that the Company had

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established on a balance of probabilities the reasons for the
Claimant’s termination on grounds of redundancy.

The Claimant's case is hereby dismissed.

HANDED DOWN AND DATED THIS 12 JUNE 2020

-Signed-
(REIHANA BTE ABD.RAZAK)
CHAIRMAN
INDUSTRIAL COURT MALAYSIA
KUALA LUMPUR

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