Industrial Court Award - Retrenchment Case Gamuda Vs Chen Than Wooi

IN THE INDUSTRIAL COURT OF MALAYSIA
CASE NO. 9(23)(15)/4-677/01
BETWEEN
GAMUDA BERHAD
AND
CHEN THAN WOOI
AWARD NO. 557 OF 2007
Before : MOHD. AMIN FIRDAUS ABDULLAH

CHAIRMAN
Venue : Industrial Court of Malaysia, Kuala Lumpur
Date of Reference : 5TH OF JUNE 2001
Dates of Mention : 2ND OF AUGUST 2001, 5TH OF AUGUST 2002, 7TH OF

APRIL 2003, 5TH OF FEBRUARY 2004, 1ST OF
OCTOBER 2004, 1ST OF NOVEMBER 2004, 11TH OF
APRIL 2005, 6TH OF MAY 2005, 28TH OF JULY 2005,
28TH OF OCTOBER 2005 & 24TH OF FEBRUARY 2006
Dates of Hearing : 10TH – 11th OF NOVEMBER 2005, 14TH OF

DECEMBER 2005, 18TH OF JANUARY 2006 & 30TH OF
JUNE 2006
Representation : Miss L.G. Seah, the learned counsel from

Messrs Lobo & Associates for the Claimant
Miss Wong Keat Ching, the learned counsel from

Messrs Zul Rafique & Partners for the Respondent
Reference :
The reference under Section 20 (3) of the Industrial Relations Act 1967 (Act 177)
by the Honourable Minister of Human Resources, Malaysia is regarding the
dismissal of Chen Than Wooi (“the Claimant”) by Gamuda Berhad (“the
Respondent”).
Create PDF with GO2PDF for free, if you wish to remove this line, click here to buy Virtual PDF Printer
AWARD
The reference under Section 20( 3 ) of the Industrial Relations Act 1967 (Act 177)
by the Honourable Minister of Human Resources Malaysia, is regarding the
dismissal of Chen Than Wooi ( “the Claimant” ) by Gamuda Berhad
(“Respondent” ). It was dated the 5th of June 2001 and received by the Court’s
Registry on the 28th of June 2001.
This case originated from Court No.15 and was mentioned there on the
2nd of August 2001; 5th of August 2002; 7th of April 2003 and 5th of February
2004. On the 1st of October 2004; 1st of November 2004 and the 11th of April
2005 both parties told the learned Chairman of that Court that they were desirous
of the Court mediating the case. Mediation was then fixed on the 6th of May 2005
but it failed.
On the 28th of July 2005 this case was transferred to Court No. 23 and
was mentioned on the same date and on the 28th of October 2005. The hearing
of this case began on the 10th of November 2005 and ended on the 30th of June
2006 in Court No. 23 in Kuala Lumpur.
On the 7th of November 2006, this Court No. 9 received the case file
together with both parties’ Written Submissions from the headquarters.
BACKGROUND FACTS
The Claimant also known as Alex Chen joined the services of the
Respondent Company on the 15th of November 1993 where his initial
appointment was as a Senior Mechanical and Electrical Coordinator (Senior M &
E Coordinator) emplaced on Grade B3. His last position was as a Senior M & E
Coordinator (Manager) being upgraded to Grade B2.
Pursuant to his appointment, the Claimant was assigned to work on the
Hospital Universiti Kebangsaan Malaysia Project (HUKM Project) which involved
complex mechanical and electrical engineering works. He was the Head of the M
& E engineering works for this project. By the 30th of January 1997 the HUKM
Project was completed. On the 1st of May 1997 the Claimant was transferred to
the Design and Technical Division (D & T Division) based in the headquarters to
work on the new Gamuda Headquarters Project which was later shelved due to
the downturn of the economy in late 1997 and in 1998 in the country.
According to the Company in view of the bleak economic outlook and the
need to trim overhead expenses in order to maintain financial viability, the
Company was forced to undertake retrenchment exercise. In doing so it
identified the Claimant as being redundant because the Company had only
highway projects at that material time which did not require the Claimant’s
mechanical and electrical expertise. Vide a letter dated the 22nd of January 1998
(COB page 8), the Company notified the Claimant of his retrenchment with effect
from the 1st of March 1998. From the Company’s viewpoint, the retrenchment of
the Claimant was based on genuine reasons of redundancy in line with Industrial
Law principles contrary to the Claimant’s claim that he was retrenched on
grounds of victimization and unfair labour practice.
ISSUES
Basically both learned counsels agreed on the four issues:-
i) Has the Company proven the reasons stated in the Claimant’s
letter of dismissal dated 22/1/98?
ii) Do those reasons given by the Company to dismiss the Claimant
constitute just cause or excuse for his dismissal?
iii) Was the Claimant’s services truly redundant?
iv) If so, was the Company’s decision to dismiss him carried out in
compliance with established industrial law principles such as the
“LIFO principle” and the Code of Conduct for Industrial Harmony?
PARTIES’ CONTENTION
Respondent Company
The learned counsel for the Company contended that it is trite law that
every employer possesses the right and privilege to reorganize his business
provided it is bona fide.
The essence of the Company’s case is that beginning from October1997
and 1998 the recession which affected the whole country had caused a
slowdown in the construction industry. The construction sector was then declared
as a non-priority by the government. The Company was badly hit by the
economic downturn and it was also difficult to get fundings from the banks. In fact
in December 1997 Bank Negara Malaysia announced a restriction in funding to
the construction sector and the deferment of major infrastructure projects. Lai
Tak Ming (COW 1) who was then the Assistant General Manager of Human
Resource and Administration Division for the Company in his evidence had said
that as a result of the economic slowdown some of the Company’s major projects
had to be deferred or aborted. The Wisma Gamuda Headquarters; the Kuala
Lumpur Elevated Highway and the Sprint Highway were projects that were
deferred and the total value of them was about RM 2.5 billion. The delay in
project implementation resulted in a surplus of manpower in the Company.
COW 1 testified that the Management had then found that the job
functions of the Claimant were surplus to the Company’s requirements mainly
due to his expertise in building electrical and mechanical services in connection
with high-rise buildings. The Claimant has no background in civil engineering. At
that material time the Company had only highway projects. Before resorting to
retrenching him, the Company had reassigned the Claimant to the D & T
Division.
The Company argued that the RM131 million profits made as highlighted
by the Claimant were pre-tax profit figures earned before the said economic
recession set in. It also submitted that it is an accepted industrial law principle
that the question of financial losses ought not to be a condition precedent for
reorganization or retrenchment.
Chow Chee Wah (COW 3) the Company’s Senior General Manager for
the Design and Technical Division in his evidence said that when the Claimant
was transferred to the D & T Division in May 1997, the Gamuda Headquarters
Project was still in its planning stages. COW 3 in replying to the contention of
the Claimant’s learned counsel that her client was also involved in the Lebuhraya
Damansara Puchong Toll Equipment Project explained that since at that point of
time there was not much work to do, the Claimant was then directed to oversee
some minimal M & E works at that project site. He further said that the
Claimant’s involvement in the LDP Project was very minimal as the M & E works
there did not require his level of experience and skill. Moreover the toll
equipment for this project was outsourced. Although COW 1 admitted that in
January 1998 the LDP Project was still on-going but the Company then needed
funding. This Project was finally completed in June 1998.
In answering the Claimant’s contention that it had not complied with the
LIFO principle, the Company’s learned counsel cited the case of Capital Land
Sdn. Bhd. v. Lam Chan Meng [2004] 3 ILR 61 where it appears that certain
circumstances can justify the departure from applying the principle.
The Company had also complied with the Code of Conduct for Industrial
Harmony because the retrenchment was undertaken only as a last resort. The
Management had done its best to soften the impact of the hardship by even not
requiring the Claimant to come to work after giving him the Letter of
Retrenchment dated the 22nd of January 1998 as seen here. (COB; page 8).
This was to give him more time to look for alternative employment. In fact the
Management had even helped him to find another job in Signtech Malaysia Sdn.
Bhd. where he commenced employment on the 16th of February 1998 as a
Senior Manager (Electrical Engineer) on a monthly salary of RM8000.00.
Summing up, the Company’s learned counsel resonated the very fact that
the Claimant’s retrenchment was done bona fide. It was not an act of
victimization or unfair industrial practice. Apart from the Claimant, more than 280
employees from various job categories were also retrenched during that material
time. She referred to the Restructuring Exercise Lists (CO 4 and CO 5) to
support her claim. Cost- cutting measures were also taken like salary, bonus
and recruitment reductions in order to reduce overhead expenditure. It was
argued that the Claimant had failed to adduce evidence of such purported
victimization or unfair labour practice. Therefore she submitted that the dismissal
of the Claimant was done with just cause or excuse.
Claimant
The Claimant’s learned counsel reminded the Court that it is settled law
that the Respondent Company is to bear the burden of proving the reasons
advanced for the dismissal of her client.
She contended vehemently that the Company had failed to adduce cogent
and convincing evidence that at the date of the Claimant’s dismissal its major
projects had been deferred as alleged. In fact at that material time the
Claimant’s job duties were still on-going because in December 1997 and January
1998, he continued to attend meetings concerning the Lebuhraya Damansara-
Puchong Project . (LDP) (CLB; pages 14,21 and 28). If the Company had
wanted to prove that the Gamuda Headquarters Project (Gamuda HQ); the Kuala
Lumpur Elevated Highway or others had been deferred or shelved, it ought to
have produced their monthly progress reports. It was contended strongly that the
Gamuda HQ was not shelved in January 1998 since no documentary evidence
was shown to the Court. Siew Pak Thai (CLW 2) a former Senior Engineer of
the Company involved in the LDP Project testified that the Company was still
working on this uncompleted Project in January 1998.
The learned counsel for the Claimant argued that from the Superior
Court’s standpoint, it is not sufficient to merely claim the existence of
reorganization in the Company. She cited the case of Bayer (M) Sdn. Bhd. v. Ng
Hong Pau [1999] 4 MLJ 361 where the Court of Appeal held that:-
“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”.
The Company did not lead cogent evidence like documentary evidence to
show that the implementation of projects for example the Sprint Highway Project,
had been delayed. On the contrary, the LDP Project was not delayed at all. It
was further argued that the Company’s decision to choose whom it wished to
retain on its payroll was not motivated by the alleged shelving or deferment of
projects. It was contended that the decision to dismiss the Claimant and retain
other managers like Wong Yin Kiong, a Grade B3 engineer who was the
Claimant’s subordinate officer was made arbitrarily. He was working alongside
the Claimant for a specific project on the HUKM Project and yet when the HUKM
Project came to an end; he was retained throughout the entire period from
January 1998 until March 1999 when the Sprint Highway supposedly got
underway.
There was also no documentary proof produced by the Company to show
that it had actually embarked on cost-cutting measures like salary reduction.
Instead what is more, the Company’s own newsletter for November 1997
depicted that it had achieved a pre-tax profit of RM131 million. It was not
experiencing any losses at the time of the Claimant’s dismissal.
The Claimant’s learned counsel argued that the Company has not proven
its claim that there was then a surplus of manpower. The burden was on the
Company to prove that the services of the Claimant was redundant or surplus. It
was not sufficient for the Company just to produce only Exhibits CO 4 and CO 5.
The Claimant himself had testified that his workload had not decreased after the
completion of the HUKM Project. By transferring him to the D &T Division and in
view of the fact that he was not employed for a specific project and that he was a
permanent employee; this only reflected that the Company still needed his
services.
The learned counsel also drew the Court’s attention to the fact that the
Company had not abided by the LIFO Principle. Engineers junior to the Claimant
were not retrenched. She contended that there should not be a distinction
between Grade B2 and Grade B3. In the law of redundancy, it is important to
note that it is the services of the employee which must be redundant and not his
position or his title. The Industrial Court is not concerned with job title or label.
She urged the Court to find that the Claimant was in the same category of
workman as that of other engineers whatever their grades because basically they
were all engineers doing M & E works.
She also argued that the Management had not complied with Clause 20 of
the Code of Conduct for Industrial Harmony which provides that enforced
retrenchment is always a last resort measure. It was highlighted that just three
10
days before the Letter of Retrenchment was issued to the Claimant; the
Company had reduced his salary by 3%. The Company did not even wait to see
the result from the pay-cut exercise instead it dismissed him the very same
month. Apart from this, the Company had also recruited new employees.
She submitted that the Company had failed to discharge the reasons
advanced by it for dismissing the Claimant. There was no actual redundancy.
Hence her client’s dismissal was without just cause or excuse.
THE LAW
In Goon Kwee Phoy v. J & P Coats (M) Bhd. [1981] 2 MLJ 129 the
Federal Court held that:-
“Where representations are made and are referred to the Industrial
Court for enquiry, it is the duty of that court to determine whether
the termination or dismissal is with or without just cause or excuse.
If the employer chooses to give a reason for the action taken by
him the duty of the Industrial Court will be to enquire whether that
excuse or reason has or has not been made out. If it finds as a fact
that it has not been proved, then the inevitable conclusion must be
that the termination or dismissal was without just cause or excuse.
The proper enquiry of the court is the reason advanced by it and
that court or the High Court cannot go into another reason not
relied on by the employer or find one for it.”
11
In the Court of Appeal case of William Jacks & Co (M) Sdn. Bhd. v. S.
Balasingam [1997] 3 CLJ 235 it defines “retrenchment” as:-
“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 SK Das J in Hariprasad v. Divelkar AIR
[1957] SC 121 at p. 132).
His Lordship went on to say:
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 organize his
business in the manner he considers best. So long as that
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.”
In Bayer Sdn Bhd. v. Ng Hong Pau [1999] 4 CLJ 155 ; the Court of
Appeal held that the Company is to bear the burden of proof to prove
redundancy:-
“On redundancy it cannot be gainsaid that the appellant must come
to the court with concrete proof. The burden is on the appellant to
12
prove actual redundancy on which the dismissal was grounded.
(See Chapman & Ors v. Goonvean & Rostawvack China Clay Co.
Ltd. [1983] 2 All ER). It is our view that merely to show evidence of
a re-organisation in the appellant is certainly not sufficient.”
In Industrial Relations in Malaysia; Law and Practice 1992 on page 172
by Dunston Ayadurai; “redundancy” is defined as:-
“Redundancy refers to a surplus of labour and is, normally, the
result of a reorganisation; and its usual consequence is
retrenchment, i.e. the termination by the employer of those
employees found to be surplus to the requirements of the
organization.”
In the High Court case of Kaolin (M) Sdn BHd v. Samba Sirvang
Thanimalai [2001] 1 CLJ 491, the learned High Court judge held that…….
“…… In retrenchment cases, the duty of the Industrial Court is to
investigate the facts and circumstances involved in determining
whether or not the dismissal is fair.”
In “Understanding Dismissal Law” by Martin Edwards ( 1984 ) on page 49;
the learned author stated that:-
“Redundancy also occurs where the employer’s requirements for
employees to carry out work of a particular kind has ceased or
diminished. Where the same number of employees is no longer
13
required by the employer’s business, then there seems to be
redundancy. There is redundancy where:
(i) the number of employees required to carry out work of a
particular kind is reduced, or expected to be reduced and a
particular employee is then dismissed; or
(ii) the work itself ceases or diminishes either permanently or
temporarily, or is expected to do so, so that fewer
employees are needed and a particular employee is then
dismissed”
In Harris Solid State (M) Sdn Bhd v. Bruno Gentil s/o Pereira & 21 ors [1996] 4
CLJ 747 :- Whether the particular exercise of managerial power was exercised
bona fide or for collateral reasons ?
In Moem Sdn Bhd v. Yap Fong Fai [2004] 3 ILR 745 where the LIFO
principle had not been strictly complied with in regard to redundancy. The
learned Chairman, Datin Siti Saleha bt. Dato’ Sheikh Abu Bakar referred to LC
Malhotra “Dismissal, Discharge, Termination of Service and Punishment” (7th
edn) where it is stated that:
But the rule of “Last in, first out” would have obviously no
application in the case of retrenchment of the employee in a
particular category of workmen. In such a case, it is retrenchment
of the post itself and therefore, if for reasons of economy and any
14
genuine interest of reorganization , the services of a single
employee of a category have to be dismissed, there is no scope for
the application of this principle.”
In the case of Guoman Port Dickson & Anor. v. Ahmad Akmal Mohd.
Yunus [2001] 1 ILR 875; Soonavala’s “The Supreme Court on Industrial Law”
Vol. 2 2nd edn. page 424 was being referred:-
“Retrenchment is a necessary incidence of running an industry, but
retrenchment is justified only when due to shrinkage of work,
whether permanently or for an indefinite or indetermine period,
there has arisen a surplus in the number of workmen in the
employment of the company ….”
FINDINGS
Deferment / shelving of major projects – No documentary evidence.
The thrust of the learned counsel’s arguments for the Claimant is that the
Respondent Company has failed to discharge its burden of proof to prove the
contents stated in the Letter of Retrenchment stated the 22nd of January 1998
(COB page 8) as seen here ;-
15
“Strictly Private & Confidential
Our Ref: HRO/PA/021-01 (GB0325)/LTM/bf
22 January 1998
CHEN THAN WOOI

Design & Technical (DTWG)
Present
Dear CHEN THAN WOOI
RETRENCHMENT
As you are aware, the current economic slowdown has severely
affected the whole country and many businesses and Gamuda
Bhd. is no exception. With this slowdown, many major infra-
structural projects have been deferred while others have had
difficulties in funding. Some of our major projects has unfortunately
been similarly affected and has been be deferred.
Due to the delay in the project implementation, we now have a
surplus in manpower that we are unable to re-deploy. We are
therefore left with no alternative but to inform you with regrets that
your employment with us will be terminated and your last
employment date will be 1 March1998. The balance notice of 2
months will be paid salary in lieu. However, to allow you, as much
time as possible to seek alternate employment, you will not be
required to report for work with effect from tomorrow. You will
however remain an employee of the Company during this notice
period.
16
In view of the retrenchment, you will be paid the following benefits :
i. Retrenchment benefit (1/2 month salary x
years of service) : RM18,966.36
ii. Pay in lieu of notice (2 months) : RM17,660.00
iii. Pay in lieu of balance annual leave (actual no. to be
confirmed)
You will receive your this month’s salary as normal and pay in lieu
of balance annual leave will be paid together with your February
1998 salary. Payment of the rest of the benefits shall be paid to
you once the exit clearance form is obtained from your Division /
Project Head. In the meantime, please return all documents, keys
and properties belonging to the company to your Superior
immediately.
We understand that this will be a trying time for you and your
family. As such please be assured that we will, on a best effort
basis, assist you as far as possible to make this transition bearable.
In the meantime, we wish you the very best in all your future
endeavors.
Yours sincerely,
Signed.
LAI TAK MING
Assistant General Manager
Head, Human Resource & Administration Division”
17
The Court takes note that she had put painstaking effort in conducting this
case for her client. According to her the Claimant and his witness ( CLW 2 ) had
given evidence that at the time of the retrenchment the Gamuda HQ Project had
still not been shelved in January 1998. No documentary evidence had been
produced to show that it was shelved. Even the Company’s own News Bulletin
did not announce the shelving of any project. She emphasized that her client
was not employed for a particular project but was a permanent employee of the
Company.
She also said that for instance the LDP Project was still not completed in
January 1998. COW 2 said that it was completed in December 1998. Thus it
was not true for the Company to assert that implementation of projects had been
delayed. The point to note is that for each project, there were then monthly
progress reports and the like made denoting its status but no such reports were
adduced as evidence.
The Company also did not lead documentary evidence to prove that
overhead expenses at the headquarters were reduced to support its statement
that it implemented cost-saving measures like salary and bonus deductions.
Although there was no documentary evidence led to show the deferment
or shelving of such projects, nonetheless the Company’s witnesses COW 1;
COW 2 and COW3 had given evidence to that effect. This Court finds no reason
18
to doubt the credibility of them despite the fact that they gave evidence for their
employer, especially in view of the fact that it is a public-listed Company. The
Company had adduced evidence that from October 1997 the economic recession
began to set in and an economic downturn had affected the whole country.
COW 1 had said that many major infrastructural projects had been deferred like
the South Klang Expressway; New Pantai Expressway; West Coast Highway;
Sprint Highway and the Wisma Gamuda Headquarters. The Respondent
Company was affected like others in the same field where the construction sector
became a non priority. It encountered problem with funding.
The Court take judicial notice of this notorious fact. In “Evidence – Practice
and Procedure” 2nd. Edn; on pages 500 and 501; the learned author his lordship
stated that:-
“Judicial notice based on notoriety and knowledge.
(a) What constitutes common knowledge.
The matters of which the court may take judicial notice must be the
subject of common and general knowledge and its existence or
operation is accepted by the public without qualification or
contention. The test is that the facts involved must be so
sufficiently notorious that it becomes proper to assume its existence
without proof.
per Abdul Hamid J (as he then was) in Lee Chow Meng v Public
Prosecutor [1976] 1 MLJ 287, 288 (HC):
19
What matters constitute common and general knowledge may be
gathered from Sarkar on Evidence (12th Ed), where the learned
author, speaking of common knowledge, at page 575, said:
‘The matter of which a court will take judicial notice must be a
subject of common and general knowledge. In other words,
judicial knowledge of facts is measured by general knowledge
of the same facts. A fact is said to be generally recognized or
known when its existence or operation is accepted by the
public without qualification or contention. The test is whether
sufficient notoriety attaches to the fact involved as to make it
proper to assume its existence without proof.’”
Moreover in December 1997 the Central Bank of Malaysia that is Bank
Negara, had even made an official announcement on restriction of funding to the
construction sector as well as the deferment of major infrastructural projects.
Therefore in the light of the foregoing, the contention of the Claimant that
the absence of such documentary evidence means that the Respondent
Company has not discharged its burden of proof to show the delay or shelving of
the said projects is baseless. In fact in re-examination COW 3 had testified that
the Gamuda HQ is still shelved until today. What is more in the “The Star”
newspaper dated the 5th of March 2007 on page 10; it was reported that work on
the West Coast Highway Project connecting Taiping in Perak and Banting in
20
Selangor would take off soon. Works Minister Datuk Seri S. Samy Vellu said
yesterday that Konsortium LPB Sdn Bhd would carry out the 215.8 km project
which had been postponed for over ten years.
Was there then really existed a surplus of manpower which the Company
was unable to deploy?
The learned counsel for the Claimant submitted that the Company has not
proven this claim. According to her the law is clear that the burden is on the
employer to prove that the service of the individual workman is redundant or
surplus. It is for the Management to convince the Court that the services of the
Claimant were redundant. She further said that some other Grade B2 Managers
were not retrenched. By merely producing Exhibits CO 3 and CO 4 listing out
employees who were purportedly retrenched or deployed is not sufficient
evidence. Even though the HUKM Project had been completed, the Company
still needed the Claimant’s services. That was why he was transferred to the D &
T Division in the headquarters.
COW 2 in his evidence told the Court that four other Grade B2 Managers
who were not retrenched were Koh Pek Eng, Lee Seng Hor, Ong Kuang Kit and
Murali. The three Chinese Managers were all civil and structural engineers for
highway design coordination and implementation. Murali was a civil engineer
with postgraduate specialization in traffic planning. Later the said Ong Kuang Kit
21
and one Madhu Dharan who was recruited for the Kuala Lumpur Elevated
Highway were both also retrenched.
CLW 2 said that the Claimant’s job functions were re-distributed among
other staff after his dismissal. The LDP Project which was then still on-going was
not denied by the Company. Thus his services could not said to be redundant.
One Wong Yin Kiong a subordinate officer of the Claimant was then transferred
to the LDP Project. Although designated as an engineer, Wong does not
possess a professional qualification and is actually a wireman. He was sent
there to do the minimal amount of works, mainly supervision. The Company said
that it did not require the skill and expertise of the Claimant to handle that job.
Moreover the toll equipment was outsourced. The Claimant said that apart from
that the Company also recruited new staff comprising local and foreign
candidates during that material time. With some familiarization, the Claimant
said that he could also perform the job for example in the Quality Department,
Litrak Holdings Bhd and others where the new employees were posted.
Evidence had been adduced that the economic slowdown which began in
October 1997 had badly affected the construction sector. The Company had
emphasized that the Claimant possesses special skill and experience. COW 2
had testified that the scope and nature of M & E works do not require the level of
skill that the Claimant possesses. COW 1 said that the Claimant’s position was
never filled by any new recruit. COW 3 had also testified that after the Gamuda
22
HQ was shelved, the other areas then did not require the Claimant’s experience,
expertise and skill.
Although the LDP Project was then still on-going nonetheless COW 2 had
said in his evidence that in early 1998 this project was already 80% completed.
He further said that The Sprint Highway Project was deferred by a year and only
started around March 1999 and finally completed in May 2001; a year later than
initially planned. COW 1 had said that the Kuala Lumpur Elevated Expressway
(KLEE) was approved in 1998 but it was never carried out even until today.
COW 1 when being cross-examined answered that in the first quarter of
1998, the Company did not hire any new employee. In the second quarter of
1998 some low -level employees including three plant and site engineers were
recruited. One Poh Yan Ping and one Chow Keng Loong were then the
Company’s scholars and it was contractually obliged to employ them. The
former was posted to be a low–level plant engineer and the latter was assigned
to the LDP Project since at that material time it was the only on-going project.
From the Claimant’s own Supplementary Bundle of Documents (CLB 1)
on page 39 the Courts notes that one Tan Kuan Hong joined the Company on 1st
of November 1997 as a General Manager of Business Development. He is a
graduate in accountancy with extensive experience in corporate finance,
planning and direct investment. One Branislav Simovic joined the Company as
23
Senior Manager of Quality on the 6th of October 1997. He holds a Masters
degree in Structural Engineering and is a member of the International Registrar
of Certified Auditors and the Quality Society of Auditors. At that point of time he
had 14 years experience in civil and structural engineering in which the last 5
years was in Quality Auditing for highways, bridges, tunnels and motorways.
One Harrison Lam assumed the position of Senior Manager of Quality in the
Company on the 6th of October 1997. He has a Bachelor of Science in
Mathematics and a Bachelor of Civil Engineering. He has 13 years of diverse
experience in building, construction and civil engineering of which 6 1/2 years
were spent specializing in Quality Assurance/Quality Control. On the 20th of
October 1997, one Mohd. Fuad bin Kamal Ariffin joined Litrak Berhad as a Toll
Manager. He holds a Bachelor of Arts, majoring in Economics. He had 10 years
of experience in the administration and toll coordination having worked previously
with Lembaga Lebuhraya Malaysia and PLUS Bhd. Azizah bt. Mohd. Radzi
joined Litrak Berhad as Assistant Manager of Communications on the 15th of
September 1997. She graduated with a diploma in Mass Communications.
From this random sample of the recruits taken in by the Company, it shows
that the new employees’ qualifications and work experiences are vastly different
from that of the Claimant’s qualification and job experiences. The Claimant
obtained a Bachelor of Applied Science (Electrical Engineering) degree with
Honours from the University of Windsor, Ontario, Canada. From August 1983 to
24
June 1991 he was the Project Manager for Loong Fuat Electrical Engineering
Sdn Bhd in charge of projects like :- ( Please see COB; pages 30 and 31 )
1) 22 Storey Menara MPPJ, Petaling Jaya. (Office Block)
2) 21 Storey Amoda Building, Kuala Lumpur (Office Block)
3) 12 Storey Wisma KUMB, Kuala Lumpur (Office Block)
4) Maktab Perguruan Islam, Bangi, Selangor (Teacher’s Training Campus)
5) Carcosa Seri Negara, Kuala Lumpur (Hotel Block) and
6) Park Royal Hotel, Batu Ferringhi, Penang (Hotel Block)
In 1991 the Claimant was also Project Manager for 3 Blocks, 150 units
Condominum Project, Subang Indera in UEP, Subang Jaya and Project
Manager for PGU ll, Gas Processing Plant ll, lll and the export terminal in
Kertih, Terengganu.
From March 1992 to July 1992, the Claimant assisted his Singapore
counterpart in the completion of the 66 storey UOB Plaza in Singapore.
Thus gleaning from the Claimant’s work experiences it cannot be disputed
that he possesses special skill and expertise in building electrical and
mechanical services in connection with high-rise buildings as pointed out by
the Management. In fact under cross- examination, the Claimant admitted
that he had no highway project experiences. Furthermore when the Claimant
was first employed by the Company in November 1993, he was assigned to
25
work on the HUKM Project where his services could bring about optimum
results. When the HUKM Project was completed on the 30th of January 1997,
the Claimant was transferred to work on the 10 storey-high Gamuda HQ
Project which was later shelved.
Therefore in January 1998 when the Claimant was retrenched as the
Company’s evidence had adduced that the only on-going project was the
LDP Project which was 80% completed by early 1998 and full completion took
place in June 1998. The noteworthy point is that there was no evidence led
of any new building projects being embarked on at that material time. After
the completion of the HUKM Project and the shelving of the Gamuda HQ
Project due to the economic downturn, the Company did not have any more
building projects. The Company was finding it difficult to get funding from the
banks. The construction industry remained in the doldrums and it appears
that there was diminution of such activity in the country. The chain reaction
saw the Claimant’s services became redundant. In fact when being crossed
by the Company’s learned counsel: -
“Your area of specialization based on COB; page 31 revolves
around high-storey buildings?
The Claimant answered “Yes”.”
Thus from all this, it is clear that the Claimant’s forte is in building M & E
services. Due to the economic slowdown, the Company did not have any more
26
building projects which required the expertise of the Claimant. Consequently his
services became surplus to the Company’s requirements.
Failure to comply with LIFO ( Last in; First Out ) Principle
The Court finds that the Claimant was the only Grade B2 M & E Senior
Coordinator holding the position of a Manager, hence it did not breach the LIFO
Principle. The contention of the Claimant that See Hun Hei (Grade C2 engineer);
Wong Yin Kiong (Grade B3 senior engineer) and Yeow Yew Chee (Grade C1
engineer) were not retrenched and were all junior to the Claimant is baseless.
This is not a valid comparison to be made for the application of the LIFO
Principle since all of them were not in the same grade category as the Claimant.
The Claimant and the others have different qualifications, competence and
experience.
In the case of Kumpulan Perangsang Selangor Bhd v. Zaid Mohd Noh
[1997] 2 CLJ 11 at p. 28 the Supreme Court cited with approval the following
passage from Malhotra’s “Dismissal, Discharge, Termination and Punishment” ;
“But the rule of ‘last come, first go’ could have obviously no
application to the case of retrenchment of the only employee
in a particular category of workmen because in such a case it
is retrenchment of the post itself, and therefore, if for reasons of
economy and any genuine interest of reorganization, the services
27
of a single employee of a category have to be dispensed with, there
is no scope for the application of this principle.”
Undertaking Cost Cutting Measures
The Claimant argued that there was no convincing evidence to show that the
Company was taking steps to reduce operating costs. In fact in November 1997
the Company had announced that it had made a pretax profit of RM 131 million.
The Company had explained that this profit was made prior to the recession in
1997. As submitted by the Company’s learned counsel, the law does not dictate
that a company must first be suffering from losses before it can embark on a
retrenchment exercise. The Court has no reason to doubt the evidence of the
Company that cost-cutting measures like salary and bonus reduction including
recruitment reduction were undertaken; bearing in mind again that it is a public-
listed Company. The Company is accountable to its shareholders.
Compliance with Code of Conduct for Industrial Harmony
The Claimant argued that the Company had not complied with the Code of
Conduct for Industrial Harmony in that the Claimant was given the Letter of
Retrenchment three days just after he received the letter of salary reduction. The
Company being aware of the impending hardship that retrenched employees
would encounter had tried its best to cushion the blow as can be seen in the
28
concessions given to such employees in the said letter. (COB page 8). The
director of the D & T Division, Paul Ha, had even helped the Claimant to obtain
another job in Signtech Malaysia SDn Bhd on the 16th of February 1998 as a
Senior Manager, Electrical Engineer at a salary of RM8000 per month.
Thus it can seen that the Company was humane in their treating the
retrenched employees.
After analyzing and evaluating all the facts and evidence from the Pleadings,
documentary evidence, testimonies of all the witnesses including the Claimant as
well as the Written Submissions of both learned counsels and guided by the
relevant law, the Court finds that the retrenchment of the Claimant was bona fide.
It has looked into the facts and circumstances leading to the dismissal. The
dismissal was with just cause or excuse. There was also no victimization. The
Court also concurs with the arguments and law in the Written Submission filed by
the Respondent Company’s learned counsel. At the risk of repetition the Court
wishes to thank the Claimant’s learned counsel for her painstaking effort in the
preparation and the conducting of this case which had to a certain degree lighten
the burden of the job.
Therefore, the Claimant’s claim is hereby dismissed.
29
HANDED DOWN AND DATED THIS 15TH DAY OF MARCH 2007.
(MOHD. AMIN FIRDAUS ABDULLAH)

CHAIRMAN
INDUSTRIAL COURT
30

Industrial Court Award - Retrenchment Case Gamuda Vs Chen Than Wooi

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Industrial Court Award - Retrenchment Case Gamuda Vs Chen Than Wooi

Uploaded by

Copyright:

Available Formats

IN THE INDUSTRIAL COURT OF MALAYSIA

CASE NO. 9(23)(15)/4-677/01

CHEN THAN WOOI

AWARD NO. 557 OF 2007

Before : MOHD. AMIN FIRDAUS ABDULLAH

Venue : Industrial Court of Malaysia, Kuala Lumpur

Date of Reference : 5TH OF JUNE 2001

Dates of Mention : 2ND OF AUGUST 2001, 5TH OF AUGUST 2002, 7TH OF

Dates of Hearing : 10TH – 11th OF NOVEMBER 2005, 14TH OF

Representation : Miss L.G. Seah, the learned counsel from

Miss Wong Keat Ching, the learned counsel from

by the Honourable Minister of Human Resources Malaysia, is regarding the

dismissal of Chen Than Wooi ( “the Claimant” ) by Gamuda Berhad

Registry on the 28th of June 2001.

2006 in Court No. 23 in Kuala Lumpur.

together with both parties’ Written Submissions from the headquarters.

Respondent Company on the 15th of November 1993 where his initial

appointment was as a Senior Mechanical and Electrical Coordinator (Senior M &

Coordinator (Manager) being upgraded to Grade B2.

Pursuant to his appointment, the Claimant was assigned to work on the

Hospital Universiti Kebangsaan Malaysia Project (HUKM Project) which involved

need to trim overhead expenses in order to maintain financial viability, the

Company was forced to undertake retrenchment exercise. In doing so it

Law principles contrary to the Claimant’s claim that he was retrenched on

grounds of victimization and unfair labour practice.

Basically both learned counsels agreed on the four issues:-

i) Has the Company proven the reasons stated in the Claimant’s

letter of dismissal dated 22/1/98?

ii) Do those reasons given by the Company to dismiss the Claimant

constitute just cause or excuse for his dismissal?

iii) Was the Claimant’s services truly redundant?

compliance with established industrial law principles such as the

“LIFO principle” and the Code of Conduct for Industrial Harmony?

provided it is bona fide.

The essence of the Company’s case is that beginning from October1997

as a non-priority by the government. The Company was badly hit by the

in December 1997 Bank Negara Malaysia announced a restriction in funding to

had to be deferred or aborted. The Wisma Gamuda Headquarters; the Kuala

project implementation resulted in a surplus of manpower in the Company.

functions of the Claimant were surplus to the Company’s requirements mainly

due to his expertise in building electrical and mechanical services in connection

with high-rise buildings. The Claimant has no background in civil engineering. At

funding. This Project was finally completed in June 1998.

circumstances can justify the departure from applying the principle.

Bhd. where he commenced employment on the 16th of February 1998 as a

Senior Manager (Electrical Engineer) on a monthly salary of RM8000.00.

time. She referred to the Restructuring Exercise Lists (CO 4 and CO 5) to

and recruitment reductions in order to reduce overhead expenditure. It was

of the Claimant was done with just cause or excuse.

advanced for the dismissal of her client.

1998, he continued to attend meetings concerning the Lebuhraya Damansara-

Lumpur Elevated Highway or others had been deferred or shelved, it ought to

Gamuda HQ was not shelved in January 1998 since no documentary evidence

working on this uncompleted Project in January 1998.

Court’s standpoint, it is not sufficient to merely claim the existence of

to the court with concrete proof. The burden is on the appellant to

prove actual redundancy on which the dismissal was grounded”.

Claimant’s subordinate officer was made arbitrarily. He was working alongside

There was also no documentary proof produced by the Company to show

that it had actually embarked on cost-cutting measures like salary reduction.

experiencing any losses at the time of the Claimant’s dismissal.

between Grade B2 and Grade B3. In the law of redundancy, it is important to

were all engineers doing M & E works.

advanced by it for dismissing the Claimant. There was no actual redundancy.