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EMPLOYMENT – RETRENCHMENT – INDUSTRIAL COURT UPHOLDS GLOBAL RESTRUCTURING: REDUNDANCY VALID DESPITE ONGOING WORK OVERSEAS

1. Summary and Facts:
Sin Leong v BT Systems (M) Sdn Bhd [2025] 4 ILJ 221 concerns on the retrenchment arising from redundancy, particularly in the context of global corporate restricting. The Claimant, employed since 2007 and in July 2022, BT Group’s Global HQ decided to reorganize globally, consolidating Malaysia Access Costing Team and relocating its functions to the India Hub. On 31.10.2022, the claimant received a redundancy notice, and his employment ended 31 December 2022. Further, he was paid; notice pay, accrued entitlements and ex-gratia compensation amount to RM201,454.20.

Therefore, the claimant challenged the retrenchment under Section 20(3) Industrial relations Act 1967.

2. Legal Issues:

  • Whether the termination of the claimants’ employment on the grounds of redundancy was with just cause and excuse.
  • Whether the reorganization was bona fide or victimization.
  • Whether the employer was obliged to redeploy the claimant or offer alternative employment.
  • Whether the Last In First Out (“LIFO”) principle applied, since the entire department was closed.

3. Court’s Findings:

  • The termination of the claimant’s employment on the grounds of redundancy was with just cause and excuse since the employer successfully proved that the claimant’s position becomes redundant due to a genuine restructuring exercise.
  • The claimant’s role ceased to exist in Malaysia after the department’s functions were transferred overseas.
  • No evidence of victimisation was proven.
  • The organization was bona fide and not of an act of victimisation as restructuring was a legitimate business decision aimed at improving efficiency and reducing costs.
  • The employer was not obliged to redeploy the claimant or provide alternative payment as no legal duty to transfer the claimant to another position.
  • The LIFO principle did not apply since the whole department was abolished and no need to select employees for retrenchment.

4. Practical Implications:
This judgment affirms the several principle of laws including:

  • Employer must follow proper procedure before dismising employees.
  • Employees are protected from unfair dismissal.
  • Clear evidence is needed to justify termination.

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