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CASE NO. : 3(25)(3)/4-1388/13

AWARD NO. : 910 OF 2016



(Sitting Alone)


: Industrial Court Malaysia, Kuala Lumpur

Date of Reference

: 10.10.2013

Dates of Mention

: 3.12.2013, 7.2.2014,
10.3.2014, 10.4.2014,
4.6.2014, 25.6.2014,
22.9.2014, 13.2.2014,

Dates of Hearing

: 17.3.2015, 28.1.2016

Written Submission
of Claimant

: 29.2.2016

Written Submission
of Company

: 25.4.2016

Submission in Reply
by Claimant


28.2.2014, 6.3.2014,
29.4.2014, 8.5.2014,
7.8.2014, 2.9.2014,
2.3.2015, 24.6.2015,



: Mr. Anand Ponnudurai and Ms Kamini

From Messrs Bodipalar Ponnudurai De Silva
Counsels for the Claimant
Ms Sivagami Sivalingam
From Messrs Zaid Ibrahim & Co.
Counsel for the Company

This is a reference made under section 20 (3) of the Industrial
Relations Act 1967 (the Act) arising out of the dismissal of Mr. Jaswant
Singh a/l Sapuran Singh (hereinafter referred to as the Claimant) by
Global Process Systems Sdn. Bhd. (hereinafter referred to as the
Company) on 1 March 2013.


The Ministerial reference in this case required the Court to hear

and determine the Claimant's complaint of dismissal by the Company on

1 March 2013.

The Claimant was employed as a Finance Manager by the

Company on 4 August 2008 vide a contract of employment dated 3 June

2008 (exhibit CL-2).

He was subsequently confirmed in the position

after he had completed a six-month probationary period (letter from the

Company dated 17 February 2009 (exhibit CL-3)). The Claimant was
then promoted in July 2010 to the position of Financial Controller, a
position he held until his dismissal. The Claimant then received two (2)


annual increments in April 2011 and January 2012 respectively (exhibits

CL-4 and CL-5). Subsequently, vide a letter dated 18 January 2012, the
Company issued a cheque to the Claimant to acknowledge and
appreciate the Claimant's efforts for the Company in the year 2011
(exhibit CL-6).

It was not disputed that the Claimant was requested to attend a

meeting with Mr. Scott Ewen (COW2 - the Company's Group Chief
Financial Officer) in the presence of Ms Sharifah Anizah Syed Ahmad
(the Company's Human Resource Manager) on 30 November 2012.
During the said meeting, the Claimant was informed that due to the
Company's restructuring exercise necessitated by the revised business
plans and shared resources, the Claimant's position was redundant and
therefore it was necessary for the Company to terminate his employment
on the grounds of structural changes across the Group. The Claimant
was told to leave the office immediately after that.

The Claimant's Notice of Termination dated 30 November 2012

(pages 34 and 35 of the Company's Bundle of Documents (COB))

informed the Claimant that his last day of employment with the Company
was 1 March 2013. The same letter also informed the Claimant that he
was to be put on garden leave till 1 March 2013. This letter was not
delivered to the Claimant on 30 November 2012 but sent to him by post.
Apart from the Notice of Termination, the Claimant was also sent a letter
entitled Termination Benefit dated 30 November 2012 which was sent
to the Claimant via AR Registered post on 11 December 2012 (page 36
of COB). The said letter sought to inform the Claimant that he would
receive a total of RM40,589.68 as termination benefits according to
Regulation 6 of Employment (Termination and Lay-off Benefits)


Regulations 1980. The Claimant was also notified that he was to be

compensated based on the balance of his unused annual leave on his
last day of service. The Claimant confirmed that he had received the
sum of RM56,700.48 on 5 March 2013 (page 41 of COB) in accordance
with the terms stipulated in the letter entitled Termination Benefit dated
30 November 2012.
The Duty of the Industrial Court

The duty of the Industrial Court was stated by his Lordship Salleh

Abbas LP in the case of Wong Chee Hong v. Cathay Organisation (M)

Sdn. Bhd [1988] 1 CLJ (Rep) 298 at page 302 that:
When the Industrial Court is dealing with a reference under

section 20, the first thing that the Court will have to do is to
ask itself a question whether there was a dismissal, and if so,
whether it was with or without just cause or excuse..

The Company's Case


The Company produced two witnesses to rebut the Claimant's

claim that his dismissal on the ground of retrenchment was without just
cause or excuse. They were Mr. Ian F. Prescott (COW1) the Group
Chief Executive Officer during the 2012/3 period and Mr. Scott Ewen

It was the Company's case

that the Claimant's last held

position as the Financial Controller was found to be redundant pursuant

to a report entitled S2012 GPS Corporate Restructure & Change
Initiatives (pages 14 to 30 of COB) dated 2 November 2012. The
following reasons were given:



The operations in both Singapore and Malaysia were

integrated into one Asia Pacific Region with the introduction
of a Global Shared Services Function; and


The Company's reporting structure was simplified by

operating on a regional basis with the provision of the
Shared Services in an efficient and consistent manner
across the whole organization (pages 31 to 33 of COB).


This exercise purportedly resulted in the Claimant's duties and

responsibilities as Financial Controller for Malaysia being absorbed into

a larger role of Regional Financial Controller for Asia Pacific.


Company took the stand that the Claimant was not the right fit for the
new role for Asia Pacific as the Claimant did not have the necessary
outlook for the role.









undertaken across the board in several companies within the same

Group and staff from Dubai and Singapore were also impacted other
than those based in Malaysia.

Apart from retrenching staff, the

Company had also considered transferring staff between several

companies within the same group of companies but there was none
which commensurate with the Claimant's experience and/or qualification.

The Company had not disputed that the new role was

subsequently taken by a new employee called Ms Yeoh Ee May who

was recruited not from the exiting employees of the Company. COW2
said the Company had considered her hiring in December 2012 and her


recruitment was barely two months after the Claimant's dismissal. She
was made the Regional Financial Controller for Asia Pacific. Thus, the
Company had created a new role which effectively absorbed the two (2)
financial controllers' roles (financial controller for Malaysia and financial
controller for Singapore) to create the role of Regional Financial
Controller for Asia Pacific. Therefore, both the Claimant and Jean Luc
(Singapore's financial controller) were considered redundant by the
Company. It was the Company's contention that it was necessary for an
external candidate to be brought into the Company as the Claimant was
not a strong candidate for the enlarged role. COW2 testified that Ms
Yeoh was eventually hired based on her higher academic qualifications
and vast work experience.

COW2, the Group's CFO was consistent throughout cross-

examination about the above fact. He had earlier on claimed that both
candidates in Singapore and Kuala Lumpur had been considered for the
new enlarged role. The Claimant was based in Kuala Lumpur and Jean
Luc, a French expatriate was based in Singapore. COW2 alleged that
Jean Luc had far more relevant experience and would have been the
candidate most likely to get the role. Notwithstanding, it was decided
that there were skills available in the Malaysia work place to find a
suitable candidate who did not require an expatriate package so Jean
Luc was not offered the position.

COW2 further justified that Ms Yeoh's position was different from

the Claimant's last held position with very differing job description and
very different responsibilities. Apart from saying that the Claimant had
not possessed the international insight required, COW2 testified that
there were many errors in the Kuala Lumpur accounts due to the


misreporting of the Ringgit and USD. Nevertheless, COW2 admitted

under cross-examination that he was not alleging that the Claimant had
performance issues but it was his opinion owing to the fact that the
organisation did not have any candidates who were up to the mark
which he expected. Hence, he said he had no alternative but to resort to
an external hire in the hope that the external hire could turn things
around in the Company.

COW2 then testified on his decision making process in selecting

the person who was most suitable to take the position as the Regional
Financial Controller for Asia Pacific. He said the position required a
candidate with a more international outlook who was able to manage
multi-site and multi-currency types of operation.

It also required a

candidate who was able to introduce new working practices to

streamline the operation and standardise the same across all the
regional operations.
The Claimant's Case

The Claimant himself testified in support of his own case. He told

the court that on 30 November 2012, he received a telephone call

wherein he was informed that COW2 would be arriving in Kuala Lumpur
at or about 5.00 pm and the Claimant was asked to wait for him as
COW2 wanted to meet him. The said meeting between the Claimant,
COW2 and Ms Sharifah Anizah was held in the office.

At the said

meeting, the Claimant was informed that there was a restructuring

exercise and there was a new organisation structure which was going to
be adopted by the Company. The Claimant was further informed that as
a result of this new organisation structure, his position had became


redundant. COW2 also told the Claimant that the Company's Financial
Manager at the material time would be taking over all of his duties and
responsibilities. The Claimant testified that it was at this meeting that he
was notified for the first time of the restructuring of the Company and of
the termination of his employment. Both COW1 and COW2 confirmed
this fact about notifying the Claimant the same, during their crossexamination. The Claimant was never ever furnished with the S2012








Organizational Announcement and he reiterated that the first time he

saw these two documents was when he had a glimpse of the Company's
bundle of documents after it was filed in court.

The Claimant was of the opinion that the position of Regional

Finance Controller for Asia Pacific was not any different from his last role
except for the fact that it covered a wider geography, adding on an
additional country which was Singapore. The Claimant stressed that his
position and functions had still been in existence at all material time. He
claimed that the job functions which the Regional Finance Controller
performed were alike his position and duties which commensurate with
his background, seniority, qualifications and vast working experience in
the Company. In fact, after looking at the job description for Ms Yeoh
which was provided by the Company (pages 46 and 47 of COB), the
Claimant noted that he was more experienced in the finance sector
compared to Ms Yeoh who only had 16 years experience in comparison
to the Claimant's 30 years of work experience in the same field.

In addition, the Claimant alleged that the Company was well

aware that he could have easily taken on the expanded role and that
had been demonstrated during his tenure with the Company, particularly


in managing INE and AMS in Dubai which were companies in the GPS
Group. Other than the Claimant's experience with GPS and its affiliated
companies, the Claimant said he also had previous experience working
in New Zealand, Japan and Indonesia.

Therefore, the Claimant

asserted that it was clear that he is capable of managing multi-site and

multi-currency types of operations while managing operations with the
Company's subsidiaries such as MMPL Ltd., CMPL Ltd., Flareon Inc.,
Flareon Sdn. Bhd. and INE Sdn. Bhd. Moreover, the Claimant said he
had also overseen operations that were valued ranging from USD 51.5
million to USD 126 million. Considering all that, the Claimant believed
that he was more than qualified to take on the new role in the Company.
The Law

The following authorities will be relevant in the discussion on the

issues present in this retrenchment case. In the often cited case of

William Jacks & Co. (M) Sdn. Bhd. v. S. Balasingam [1997] 3 CLJ 235 at
page 241, his Lordship Gopal Sri Ram JCA in the Court of Appeal
Retrenchment means: the discharge of surplus labour or
staff by the employer for any reason whatsoever otherwise
than as a punishment inflicted by way of disciplinary action
(per S.K. Das J in Hariprasad v. Divelkar AIR [1957] SC 121
at p.132).
Whether the retrenchment exercise in a particular case is
bona fide or otherwise, is a question of fact and of degree
depending for its resolution upon the peculiar facts and


circumstances of each case.

It is well-settled that an

employer is entitled to organise 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 a particular case to determine whether
that exercise of power was in fact bona fide..


The burden of proof is on the employer to prove redundancy

which eventually leads to the retrenchment of the employee. It was

stated by the Court of Appeal in Bayer (M) Sdn Bhd v. Ng Hong Pau
[1999] 4 CLJ 155:
On redundancy it cannot be gainsaid 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 grounded. (See Chapman & Ors v. Gooneven &
Rostowrack China Clay Co Ltd [1973] 2 All ER 1063). It is our
view that merely to show evidence of a re-organization in the
appellant is certainly not sufficient.

There was evidence

before the court that although sales were reduced, the

workload of the respondent remained the same. After his
dismissal, his workload was taken over by two of his former
colleagues. Faced with these evidence, is it any wonder that
the court made a finding of fact that there was no convincing
evidence produced by the appellant that the respondent's
functions were reduced to such an extent that he was
considered redundant.




The above findings were upheld by the Federal Court as good

law and as correctly setting out the principles in relation to retrenchment

and redundancy. In the Federal Court case of Dynacraft Industries Sdn.
Bhd. v. Kamaruddin Kana Mohd Sharif & Ors [2012] 9 CLJ 45, the
question that arose was whether or not redundancy was proven when
the functions still existed but had been taken over by others.


dismissing the company's appeal, the Federal Court adopted and

approved the Court of Appeal's decision in Bayer particularly the
paragraph which has been quoted above.

In Harris Solid State (M) Sdn. Bhd. & Ors. v. Bruno Gentil s/o

Pereira & Others [1996] 4 CLJ 747 at page 767, the Court of Appeal
held as follows:
Whether the particular exercise managerial powers 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. When the facts of the case are
such that they would lead a reasonable tribunal to conclude
that the exercise of managerial powers such as the closure of
a business was for a collateral purpose, aimed at depriving a
workman of his fundamental right to earn a livelihood, then,
any termination of employment in consequence of such
exercise may be struck down as constituting unfair labour



Evaluation of Evidence and Findings


First and foremost, it is settled law whether it is a situation of

retrenchment or redundancy that the employer must show that the

employee's functions have ceased and not being carried out under a
different manner or by others. The cessation of a position may not be
material but the job functions and duties which remain are essential for

If the evidence adduced establishes, and subsequent

findings of fact are made, that the job functions and duties remain after
the retrenchment exercise, then it cannot be said there is a state of
redundancy. In this respect, the Claimant's argument on this point can
be looked at with reference to pages 44 and 45 of COB which were the
organisation charts for the Finance Department of the Company
exhibited before the Claimant's termination (page 45 of COB) and after
his termination (page 44 of COB).

The Claimant had established in court during the hearing that the

organisation chart at page 45 of COB is incomplete. The Claimant had

explained that the organisation chart had not shown his entire reporting
line. Whilst the chart had shown that he was reporting to the Director
and General Manager of the Company at the material time, it had not
shown that the Claimant had also reported to the General Manager of
INE Sdn. Bhd., Flareon Group Sdn. Bhd. and Asserts. However, these
(including reporting to the General Manager of the Company) were all
dotted reporting lines. The Claimant asserted that he was at all times
during his tenure, reporting directly to the Group Chief Financial
Controller (CFC). Referring to page 44 of COB which is the organisation
chart after the Claimant's dismissal, Ms Yeoh who was appointed as the
Regional Financial Controller had also reported to the CFC. She had


also held the same functions as the Claimant did when he was the
Financial Controller of the Company. The Claimant has alleged that if a
comparison is made for both the organisation charts, it is apparent that
Ms Yeoh's position had lesser functions and responsibilities compared to
his when he was the financial controller. The example the Claimant
gave was that Ms Yeoh did not have to be in charge of the Treasury as
the Claimant had done when he worked with the Company.

It is also undisputed that the Claimant was informed during the

meeting on 30 November 2012 with COW2 that the financial manager of

the Company would take over his duties and responsibilities when he
was asked to go on garden leave with immediate effect. It means that
his job functions had not diminished or aborted completely but someone
had to perform them. The Claimant's testimony regarding this was not
challenged by the Company's counsel during the hearing of the matter.
COW2 also testified that Ms Yeoh had taken over the Claimant's duties
and function when she assumed the Regional Financial Controller's post
in the Company.

The court finds that the Company had failed to adduce sufficient







responsibilities had ceased to exist.




The oral and documentary

evidence produced have shown and even admitted by the Company

witnesses that all the Claimant's functions still existed. To amplify this
point, the fact that the Company had employed another person to take
over the Claimant's functions shows that there was no genuine
redundancy as alleged by the Company. The court also notes that it
was not disputed that the Company's Malaysian Finance team remained
even after the Claimant's retrenchment. COW1 had confirmed during


cross-examination that pending Ms Yeoh joining the Company as the

Regional Financial Controller, the Malaysian finance team still carried
out the financial aspects in Malaysia. Moreover, pages 44 and 45 of
COB which are the Company's organisation charts before and after the
reorganisation reflect that most of the employees who were working in
the Claimant's team were still in the Company after the Claimant's
retrenchment and had reported to the new recruit Ms Yeoh.

Regarding the Company's claim that the Claimant was not the

right fit for the new and enlarged role which Ms Yeoh was recruited for,
the Company had failed to show what exactly he had lacked for the
expanded role. The Claimant had testified that the job functions of the
Regional Finance Controller were similar to his position and the duties of
the expanded position also commensurate with his background,
seniority, qualification as well as his vast working experience within and
prior to his employment with the Company. From the job description for
Ms Yeoh which was provided by the Company found at pages 46 and 47
of COB, it would appear that the Claimant was more experienced in the
finance sector as compared to Ms Yeoh who only had 16 years in
comparison to the Claimant's 30 years of work experience in the finance
field. The Company should have taken into account that the Claimant
could have taken on the expanded role as it had been demonstrated
during the Claimant's tenure with the Company, particularly in managing
INE Sdn. Bhd and MMPL Ltd. which were some of the subsidiary
companies in the GPS Group.

Unfortunately, the Company had never considered the Claimant

for the new role to be based in Kuala Lumpur and the court finds that the
Company was unable to provide a proper justification for the same.


COW1 was ignorant of the fact that the Claimant was a certified public
accountant. COW2 was the Group Chief Financial Officer from April
2012 and admitted that he had no knowledge of the Claimant's previous
experience and the accounts the Claimant had dealt with. Hence, he
would not have been able to judge on the Claimant's suitability
especially when he admitted he had not met and discussed with the
Claimant on the expanded position. COW2's evidence that the Claimant
had reported to him for a mere four to five months before COW2 decided
that the Claimant was not the right fit clearly showed that the Company
had not given any consideration for the Claimant to fill the new role. It is
apparent that they worked together only for a short duration and the
Claimant was working in Kuala Lumpur whereas COW2 was based in
Dubai. It was also admitted they had only met once or twice before the
Claimant was terminated from employment though COW2 claimed to
have communicated with the Claimant using other means. Hence, the
Company had not taken into account the Claimant's contribution to the
Company nor his qualification but pushed him aside that he was not the
right fit.

The hiring of Ms Yeoh and retrenching the Claimant on the

ground that the Claimant was not suitable for the expanded role when
COW2 himself testified that he had no knowledge of the Claimant's
previous experience and qualifications of the Claimant clearly amounts
to an unfair labour practice and was clearly a mala fide act of the

The court's attention was further drawn to the following

undisputed facts:

As admitted by the Company, the Company had initiated

the purported restructuring and issued a memorandum on


28 October 2012 (pages 12 and 13 of COB) and barely four

(4) days later, the HAYS Report which appears at pages 14
to 30 of COB was issued. At the last paragraph at page 21
of COB, it could be seen that it had already been decided
that an external recruitment be employed for the Company.
Therefore, the entire process of retrenching the Claimant
and the hiring of Ms Yeoh smacks of mala fide and an intent
to victimise the Claimant; and

Similarly, when pressed for an answer on the issue of

providing an alternative role for the Claimant, COW2 had
admitted under cross-examination that whilst there were
alternative junior positions available, the Claimant was not
offered any on the basis that it would be an insult to him.


Although it is well-settled that an employer is entitled to organise

his business in the manner he considers best, that managerial power

has to be exercised bona fide. The court is unable to agree that the
Company had exercised its restructuring exercise and power in bona
fide when it retrenched the Claimant on the ground that he was
redundant. As explained, the Claimant's functions had remained but
they were merely taken over by a new hire. The manner the Claimant
had been disregarded and not assessed fairly and considered for the
new role despite having the necessary qualifications and experience
(COW2 admitting the Claimant had no performance issues) shows the
lack of bona fide in the exercise of the Company's managerial power.




On the totality of the evidence before this court, it is clear that the

Claimant's dismissal was without just cause or excuse. His claim is

therefore allowed.

The primary relief in a dismissal case is reinstatement but in

deciding whether the Claimant should be ordered a reinstatement to his

former position in the Company, the court has to consider the industrial
harmony of the parties and if that could be maintained should the
Claimant be reinstated. The Claimant who is now aged 51 has been
dismissed for more than three (3) years and his duties and
responsibilities must have been taken over by others since his dismissal.
The court notes that he was holding an important and senior position in
the Company and he may not have an equivalent position to return to
should he be reinstated. Hence, it is not in the interests of industrial
harmony to make an order of reinstatement for the Claimant .

On the issue of remedy, the case of Koperasi Serbaguna Sanya

Bhd. (Sabah) v. Dr. James Alfred and Anor [2000] 3 CLJ 758 is in point.
The Court of Appeal at page 766 stated the following:
In industrial law, the usual remedy for unjustified dismissal is
an order of reinstatement.

It is only in rare cases that

reinstatement is refused. For example, as here, where the

relationship between the parties had broken down so badly
that it would not be conducive to industrial harmony to return
the workman to his place of work.

In such a case, the

Industrial Court may award monetary compensation. Such an



award is usually in two parts. First, there is the usual award

for the arrears of wages, or back wages, as it is sometimes
called. It is to compensate the workman for the period that he
has been unemployed because of the unjustified act of
dismissal. Second, there is an award of compensation in lieu
of reinstatement..


The Claimant told the court that he had not been employed after

his dismissal from the Company. The Company was also not able to
adduce any evidence that the Claimant was gainfully employed after his
dismissal. The Claimant's last drawn monthly salary was RM18,000.00
and he was paid fixed monthly medical allowance of RM350.00. This is
evident from the payslips on pages 37, 42 and 43 of COB. Having
considered all the above and item 1 of the Second Schedule of the Act,
the court hereby orders that the Claimant be allowed the relief of
payment of backwages equivalent to the maximum of 24 months of his
last drawn monthly salary and the fixed monthly medical allowance of
RM350.00. He is also to be paid compensation in lieu of reinstatement
equivalent to one month's salary for each year of completed service.
Since the Claimant had been paid RM56,700.48 as termination benefit
by the Company, the amount shall be deducted from the award. Thus,
the award shall be:

Backwages of 24 months:
RM18,000.00 + RM350.00 x 24 months


RM 440,400.00


Compensation in lieu of reinstatement of

one month's pay for each year of
completed service:


RM18,000.00 + RM350.00 x 4 months'

salary (August 2008 to 1 March 2013)

RM 73,400.00


RM 513,800.00


RM 56,700.48


RM 457,099.52

The amount, after deducting the necessary statutory deductions if

any, is to be paid by the Company to the Claimant through the

Claimant's solicitors Messrs Bodipalar Ponnudurai De Silva within 30
days from the date of this award.

In arriving at this decision, the court has acted with equity and

good conscience and the substantial merits of the case without regard to
technicalities and legal form as stated under section 30 (5) of the Act.


- Signed -