“Whether there was actual redundancy and that the redundancy led to termination of employees with just cause and excuse?”
Case:
MUHAMMAD FIRDAUS MURAD v L & O COLLECTIONS SDN BHD & ANOR [2023 3 MELR 280]
Brief Facts:
- 6 employees of L & O Collections Sdn Bhd [LO] were employed in the LONE PINE Hotel in Penang.
- The 6 employees were all chefs in the Hotel.
- The 6 employees were all retrenched on grounds of redundancy.
- The retrenchment was done due to the closure of the Hotel during the MCO imposed as a result of COVID-19.
- There were multiple memos issued by LO to the employees highlighting the challenges faced by LO.
- Eventually after multiple measures that were taken by LO for the survival of the Hotel proved unsuccessful, the employees were retrenched.
- The Industrial Court [IC] found in favour of LO and held that there was actual redundancy.
- The employees challenged the decision of the IC in the High Court.
THE DECISION OF HIGH COURT (HC) – CHALLENGE DISMISSED
- The HC held that LO had produced documents including EPF records to show that no new employees were employed and operations when resumed were on a skeletal basis.
- Hiring casual workers on an ad hoc basis several months post-retrenchment could not be equated to a contention that the functions were not redundant at the point of termination.
- The HC also found that the Hotel’s restaurant was closed and that all its letters after that alluded to the fact that it was in a dire situation.
- Further the employees admitted that they were indeed informed prior to the retrenchment of the hotel’s dire financial position.
- Therefore, the retrenchments were upheld.
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