BIR3084 Industrial Relations

Trimester 1, 2022/2023
CASE ANALYSIS
Date of Submission : 16/1/2023

Title: CHARLES SELVAM A/L ANDREW FRANCIS and KEBABANGAN PETROLEUM

OPERATING COMPANY SDN.BHD

No Names ID Signature Marks /20

1. Heshvienie Vijayaratnam 1191101589 HESH

2. Sandra Petrina Nonis 1191100901 Sandra

3. Lee Khang Yong 1191101257 Royce Lee

4. Muhammad Shahan Ali 1191302369 Shahan Ali

5. Tan Kok Young 1181203268 Young

Assessment Criteria

No Criteria Total Marks Marks Received

1 Introduction 10
2 Case Synopsis 10
3 Case Chronology 20
4 Case Analysis 20
5 Award 20
6 Presentation 20
Total Marks 100
Weightage / 20

Signature and Stamp of Lecturer:

Date : 16 th January 2023
Remarks :

1
ASSESTMENT RUBRICS

Score Written Report

17-20 • Well organised
• No grammatical or structural errors
• Good formatting
• Report is prepared in a professional manner
• All references are properly included
• All submission requirements are met
13-16 • Well organised
• Minimal grammatical or structural errors
• Proper formatting but not outstanding
• Evidence that report is carefully and thoughtfully prepared
• All references are properly included
• All submission requirements are met
9-12 • Lacks organisation
• Some grammatical or structural errors
• Rather poor formatting
• Lack evidence that report is carefully and thoughtfully prepared
• Some references are missing
• Some submission requirements are not met
5-8 • Lacks organisation
• Apparent grammatical or structural errors
• Formatting issues
• Evidence that report is carelessly prepared
• Some evidence of plagiarism
• Significant submission requirements are not met
0-4 • No organisation
• Apparent grammatical or structural errors
• Very poor formatting
• Evidence that report is carelessly prepared
• Clear evidence of plagiarism
• Submission requirements are not met

2
TABLE OF CONTENT

NO TITLE PAGE NUMBER

1.0 Introduction 4
2.0 Case Synopsis 5
3.0 Case Chronology 6
4.0 Case Analysis 6–8
5.0 Award 9
6.0 References 10

3
1.0 INTRODUCTION

This case is between CHARLES SELVAM A/L ANDREW FRANCIS and KEBABANGAN
PETROLEUM OPERATING COMPANY SDN.BHD (No:20/4-88/19). This case was filed in the Malaysian
Industrial Court under Section 20(3) of the Industrial Relations Act 1967 ("the Act") for an award in relation
to a dispute arising from Charles Selvam A/L Andrew Francis' ('the Claimant') dismissal by his employer,
Kebabangan Petroleum Operating Company Sdn. Bhd. ('the Company').

The company’s Case: Due to the firm's financial troubles at the time of the claimant's termination, the
company downsized which led the corporation to advocate organisational reorganisation and resulted in the
claimant's role being redundant. The claimant was fired from the firm because the job he had at the time of his
termination from employment with the company was no longer required. The company provided 6 witnesses.

The claimant’s case: On 15.08.2018, four months after the firm sustained a revenue loss, the claimant
unexpectedly got a termination letter notifying him that his employment with the company had terminated,
without being granted a three-month notice period. Company claimed that the firing was allegedly due to
redundancy, according to the company. His workplace access card and e-mail were cancelled the next day,
and he turned in his laptop. The claimant provided 2 witnesses.

Major issues involved in the case: Based on the facts, it is evident why the PIP was wrongly imposed on him
and how his performance rating for 2017 was changed reportedly owing to an audit issue, despite the fact that
he was cleared of any misconduct in relation to the audit situation. The Company's activit ies were meant to
put pressure on him to leave the Company, notwithstanding the Company's demoralising tactics. Despite the
fact that he had not set any particular objectives, Claimant had managed to progress in all of the development
criteria included in the PIP notification.

Major changes observed: After Mike Richardson left the company, the SM of technical services rated the
claimant a rating of “3” as a satisfactory performer in December 2017 followed by the GM of operations
Jeffery Spencer Mitchell who gave the claimant a rating of “4” and changed the claimant’s performance to
unsatisfactory.

4
2.0 CASE SYNOPSIS

The claimant joined the company on a fixed term contract as Lead Project in the operations division
from 14.11.2014 until 13.111.2016. On 01.11.2016, the claimant was made a permanent employee with the
same title and 6 months of probation period. Claimant did a remarkable job in his prohibition period and
became a permanent employee of the company from 01.05.2017. The Company presented the Claimant with
a Special Recognition Award. The Claimant earned praise from his senior manager and a Special Recognition
Award. The Company appreciated the Claimant's expertise, perseverance and outstanding involvement in it.
In December 2017 claimant’s senior manager judged his performance satisfactory and awarded him a grade
of "3". Following the departure of the claimant's senior manager, the claimant began reporting to his GM of
operations (COW-4), who changed the claimant's rating from "3" to "4". (Satisfactory to unsatisfactory).
Claimant learned of this on February 20. 2018, when he did not get his bonus for 2017.
On March 20, 2018, the claimant received notification through email that he had been placed on a
Performance Improvement Plan (PIP). The PIP was granted because certain aspects of the Claimant's job
needed to be addressed. However, no explanation was provided as to what was lacking in the Claimant's
performance. The PIP was to be in force from 20.03.2018 to 20.06.2018, with COW-4 monitoring the
Claimant's progress daily and reviewing it bi-weekly until the PIP was completed. Apart from four general
objectives, the Company provided no comprehensive plan of action or goal deadlines to assist the Claimant.
In addition, no quantifiable targets were provided in the PIP notification. Despite COW's commitment to
monitoring the Claimant's progress daily and holding bi-weekly meetings to track the Claimant's progress,
COW had only two review sessions with the Claimant over the three months of PIP.
During the PIP, the Company's CEO, En. Tarmizi Munir, notified the Company's staff through email
that the Sabah-Sarawak Gas Pipeline, which was shut down due to a gas leak, had caused in income loss for
the Company. As a result, the corporation advocated organisational reorganisation. Employees were requested
to submit their individual competency assessments so that the selection panel may review them. Based on the
number of posts removed, a 20% reduction was expected. The Claimant also completed his competence
assessment. The Claimant was not notified of the outcome of the PIP and instead received a new single-page
PIP notice to help him bridge his performance gaps (and that he requested this PIP). The Claimant responded
in detail, stating that he had neither consented to nor sought an extension of his PIP. The Claimant produced
documentation proof that the PIP was unlawfully imposed on him and that his performance rating for 2017
was changed supposedly owing to an audit issue, despite the fact that he was cleared of any wrongdoing and
received no reply on this email.
The Company terminated the Claimant's employment on August 15, 2018. The Company stated that
the termination was due to redundancy. The Claimant filed a claim with the Industrial Relations Department
under Section 20(3) of the Industrial Relations Act 1967 because he was dissatisfied with the Company's
reaction and the loss of his livelihood.

5
3.0 CASE CHRONOLOGY

4.0 CASE ANALYSIS

Based on this case, the evidence adduced indicates that termination due to redundancy has occurred.
Retrenchment is defined as "the dismissal of excess labour or staff by the employer for any cause whatsoever
other than as a penalty administered through way of disciplinary action." In other words, redundancy or a
labour surplus must exist in order to implement retrenchment.
As per Section 12(3) of EA, there are several rules that need to be obliged in order for the company to
carry out retrenchment. Firstly, there needs to be evidence that an excessive number of workers actually exists
for the termination to be done. Besides, in order to reduce their workforce, employers are required by Section
60N of EA to lay off any foreign workers before doing the same with domestic workers. The positions held
by the foreign employees must be comparable to those held by local employees. However, this was not the
case in the claimant’s story as he was appointed as a permanent employee after being in probationary period
for 6 months under fixed term contract. The claimant’s working ethics and performance also indicates that he
has been having an upwards graph. This is supported by the facts that he was awarded with a Special
Recognition Award as well as completing 400 plus projects in the span of 4 years in the company alongside
earning good performance rating and appraisals by his past three managers.
On the other hand, despite having a good job performance throughout his tenure in the company, the
claimant performance was degraded and questioned by the General Manager of Operations, Mr Jeffery
Spencer Mitchell without any suffice explanation or data. For an instance, if an employee performs poorly,

6
they may be fired. Here, poor performance refers to a certain kind of inability. It is frequently defined as
incapacity, a lack of knowledge or skill, negligence, inaccurate work, unfinished job. The main point is that
the worker is unable to complete his tasks as demanded by the employer. Typically, the Key Performance
Indicators are used to measure this (KPI). The legal principles for a valid termination for poor performance
was laid out in the case of Amsteel Mills Sdn Bhd v Koh Cheng Siew. In this case, the court looked into
three elements. Firstly, the workman must be warned about his poor performance. Secondly, the workman
must be accorded sufficient opportunity to improve. Thirdly, the workman must have failed to improve his
performance.
In the present case, although the performance appraisal was done by the company, it was not informed ,
advised or shown to the claimant. With that being said, no warning in the form of letter pointing out his poor
performance was given to the claimant at all and only after a month of after him releasing about his bonus
absence, the claimant received an email dated 20.03.2018 stating that he has been put under Performance
Improvement Plan (PIP). Not only that, but the company also did not bother to advise the claimant on the
aspects that need to be improved nor sufficient monitoring on his progress throughout his PIP was done. Hence,
this is deemed to be insufficient as the company failed to tick the boxes for all the three elements stated above.
It is believed that by nature, the claimant was not fully aware of what is required out of him and the change in
rating which indirectly indicates an allegation on his performance was not substantiated with evidence by the
manager in service. Besides, the change in performance rating to “Unsatisfactory” is deemed invalid because
as per the claimant’s evidence submitted and dated 01.08.2018, it is shown that it was merely an auditing error.

Thirdly, the Last In First Out (LIFO) principle needs to be followed. Employee layoffs based on
seniority are frequently accomplished through the usage of LIFO in the workplace. Retrenching workers based
on seniority is a widespread industrial practice called LIFO. First laid off is the employee with the shortest
service history in a given category. The idea of the rule is to provide a sound defence against treating workers
unfairly when facing layoffs. However, in the relevant case, the appellant went against the principles. The
claimant was suddenly emailed stating that he did not comply in meeting the expectations or targets set in the
PIP even though there were not any given to him too. On top of that, the claimant was also not reverted back
despite sending an email to the superiors including the company’s Human Resource Business Partner
regarding the allegations. Exactly 5 days after receiving the email regarding the claimant not fulfilling the PIP,
on 15.08.2018, he received a notice of termination for redundancy. Despite stating that the reason behind his
termination was solely due to redundancy, yet the performance factor was taken into account as there is where
the dispute originated from.
A termination of redundancy usually occurs when the employer feels that the employees’ services are
no longer needed and the position is no longer available. Typically, redundancies occur when the company
wants to save money, modify the way it’s doing things or relocate. A dismissal through redundancy will be
fair in most circumstances if a genuine reasoning is given and appropriate procedure has been followed. The
legal principles for an invalid termination by notice was laid out in the case of Bond Electrical (Kl) Sdn Bhd
7
v Abu Bakar Bin Chik & Lain-Lain. In this instance, although working for less than two years, the
respondents who were electricians received a notice of termination from the appellant four days prior to the
actual firing. The appellant had violated the requirements of Section 12(2)(a) of the EA, which requires the
appellant to give a four-week notice, according to the court, by giving a four-day notice of resignation. In the
present case, despite being employed for 4 years, the appellant has breached the provisions of Section 12(2)
of EA which compels the appellant to notify 3 months in advance. The reason for cutting down 20% of the
workforce was due to the incident of SSPG gas leak as per the company’s statement.

The last rule that should be taken into consideration is that termination should be done in good faith.
The claimant has all the rights to fight as per Section 20(1) of IRA, as he was dismissed without just cause or
excuse. The company has the rights to reorganise the company to maximise their efficiency, however it should
not be tainted with mala fide. The cause of the claimant’s termination was due to redundancy. However, there
was a malicious intent to get rid of the claimant because there was no sufficient proof that the right procedure
had been followed in arriving at that decision.

As per the Principles of Natural Justice, “Principles of Fairness” is implied in this case. This is said so
because, dismissal must be made for a justifiable reason and must be carried out in accordance with a just
process. The "Rules of Natural Justice," which consist of two principles—the audi alteram partem rule, which
means "hear the other side" and therefore is primarily the right to a proper trial, and the nemo judex in causa
sua rule, that also means "no man is a judge in his own cause" and is essentially a rule against bias—were the
inspiration for this requirement. It is legally required for the employer to operate impartially throughout the
entire disciplinary procedure, whether official or informal; otherwise, the employee will have the option to
appeal the decision.

Hence to conclude, the relevant statements clearly indicates that the claimant’s position, which is Mr
Charles Selvam A/L Andrew Francis holding the position of the Lead, Project in the Operations Division, was
not a surplus to the company’s needs. In addition, the company has not been able to successfully prove that
the claimant had been unsuited for the enhanced role of Lead, Project. The claimant’s dismissal had been done
without just cause or excuse. The company’s action showcases that the termination was unfair and was not
done bona fide.

8
5.0 AWARD

The claimant’s dismissal took effective on 1 September 2018 and the case was referred to the Court
st

by Ministerial Reference under Section 20(3) of the Industrial Relations Act 1967. After the final discussion,
the Court orders the company to pay compensation to the claimant. The company need to pay the total amount
of compensation to claimant are stated below:

Back wages of 24 months = RM 27,055.40 x 24 months = RM 649,320.00

Besides that, minus:

I. 10% for Post Dismissal Earnings = RM 64,932.00

II. Termination benefits received from the Company = RM 164,331.33

RM 649,320.00 - RM 64,932.00 - RM 164,331.33 = RM 420,056.67

Total RM 420,056.67

Compensation in lieu of Reinstatement: RM 27,055.00 x 2 years of service = RM 54,110.00

RM 420,056.67 + RM 54,110.00 = RM 474,166.67

Total RM 474,166.67

The total payment of the company needs to pay to the claimant is RM 474,166.67, the company must pay the
compensation within 30 days from the date of the Award.

In conclusion, the claimant has the right to fight for themselves, because he was terminating without a
proper reason. Besides that, the claimant did not break any rules and regulations, he did his job with high
performance and was rewarded with a Special Recognition Award in the company. On the company side, the
company has to give any proof or evidence to show that the claimant's performance is performing well or not
well, and have to be honest to give the real result. Although claimants have gone through the Performance
Improvement Plan (PIP) with good performance, the company still gives a poor performance rating to the
claimant. Besides that, they also change the claimant’s performance from “satisfactory” to “unsatisfactory”.
This shows that the company is not honest to the result. Next, the company must give a termination letter with
at least four-week notice. It is wrong to give a termination letter and tell the claimant to terminate the next
day.
9
6.0 REFERENCES

1. -,A. D., By, -, Dhingra, A., & here, P. enter your name. (2022, January 26). Principles of Natural
justice. iPleaders. Retrieved January 15, 2023, from https://blog.ipleaders.in/natural-justice/

2. Syafawani Mahadi Follow Student at International Islamic University Malaysia. (n.d.). Section 12 &
14 of employment act 1955. Share and Discover Knowledge on SlideShare. Retrieved January 15,
2023, from https://www.slideshare.net/syafawanimahadi/section-12-14-of-employment-act-1955

3. Termination - whether can terminate for poor performance poor performance refers to an
employee's. Studocu. (n.d.). Retrieved January 15, 2023, from
https://www.studocu.com/my/document/multimedia-university/labour-law/termination/11172423

10