Case Update: Local Authority’s Assessment Rates is Not a Priority Debt in Liquidation

In the High Court decision of Re SG & Sons Sdn Bhd (grounds of judgment dated 10 February 2021), the Court has confirmed that the local authority’s assessment rates is not a priority debt in a winding up.
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Spartacus Order: Self Identification Order against Persons Unknown

A self-identification order, otherwise known as a Spartacus order, is an order to compel the unknown defendant to identify himself and provide an address of service.

In the ongoing case of Zschimmer & Schwarz v Persons Unknown, Ong Chee Kwan JC in the High Court granted Malaysia’s first-ever Spartacus order recently . You can access the grounds of judgment dated 13 February 2021 for the grant of the Spartacus order. Continue reading

Case Update: Court of Appeal sets out key legal principles for retrenchments

In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

Retrenchment exercises have been a regular occurrence in the Malaysian industrial relations landscape for many years now. This looks set to continue deep into 2021, as employers respond to the challenges created by the on-going pandemic. Despite this prevalence, many employers often mishandle retrenchment exercises, with significant consequences.

The recent Court of Appeal (“the COA”) case of Ng Chang Seng v. Technip Geoproduction (M) Sdn Bhd & Anor [2021] 1 CLJ 365 usefully sets out some key legal and practical principles that all employers should consider when embarking on a retrenchment exercise. Among others, the judgment in the Ng Chang Seng case covered the following issues:

  1. What issues does the court consider when deciding whether the employer has proved a genuine redundancy?
  2. How can an employer justify not using Last-In First-Out (“LIFO”) for employee selection?
  3. Does an employer always have to retrench all foreign employees before retrenching Malaysian employees?
  4. Does the rehiring of some retrenched employees on a contract basis mean that there was no genuine redundancy?
  5. How much weight does the court give to non-compliance with the Code of Conduct for Industrial Harmony (“the Code of Conduct”)?

You can find all our previous posts on retrenchments by clicking on the tag here. Some of my earlier articles have been very popular and should prove useful:

  1. Retrenchments in Malaysia — some recent cases (29 May 2020).
  2. Case Update: Insufficient justification and improper handling of Voluntary Separation Scheme may give rise to unfair dismissal (20 March 2019).
  3. What you need to know about the law on retrenchment of employees (22 January 2016).

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Case Update: Federal Court Decides on Threshold for Winding Up Based on Illegality

In Tan Keen Keong @ Tan Kean Keong v Tan Eng Hong Paper & Stationery Sdn Bhd & Ors and other appeals [2020] MLJU 2204 (grounds of judgment dated 17 December 2020), the Federal Court dealt with an important question of law for a just and equitable winding up.

What is the threshold for winding up a company based on allegations of illegality or breach of statute? Continue reading

Case Update: Unfair dismissal due to poor handling of mutual separation agreement

In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

The COVID-19 pandemic has resulted in constant pressure on employers across almost all industries. There have been widespread measures to manage the financial fallout from the global effects of the pandemic, including salary reductions, employee redesignations, retrenchments, and separation schemes.

It has become a common practice for employers to use Mutual Separation Agreements (MSAs) — which also go by various other names such as “settlement agreements”, “separation agreements”, and “termination agreements” — to bypass or shortcut the usual termination processes. Many employers, as well as employees, view MSAs as a “cleaner” way of ending the employment relationship — instead of feeling like s/he has been “sacked”, the employee can be made to feel that the exit is on his/her terms, and employers prefer the certainty of clearly documented and mutually-agreed terms.

However, it is not uncommon for MSA exits to be improperly handled, resulting in a successful unfair/constructive dismissal claim by an employee, and a high financial cost to the employer. Some of my earlier articles would also be relevant for readers interested in this topic:

  1. Retrenchments in Malaysia — some recent cases (29 May 2020).
  2. Case Update: Insufficient justification and improper handling of Voluntary Separation Scheme may give rise to unfair dismissal (20 March 2019).
  3. Case Update: Can an employee bring an unfair dismissal claim after accepting a severance payment? (16 November 2017).
  4. What you need to know about the law on retrenchment of employees (22 January 2016).
  5. Handling employee dismissals properly under Malaysian law (13 January 2016).

In this article, we will review the Industrial Court case of Thanasegaran C Munusamy v. Vale Malaysia Minerals Sdn Bhd (Award No. 1647 of 2020), where the employee, Thanasegaran (the Employee) had signed an MSA, but then lodged an unfair dismissal claim against the employer, Vale Malaysia (the Company).

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Case Update: Factors for Deciding Between Competing Liquidator Nominees

The High Court in Re Rentak Arena Development Sdn Bhd (In Liquidation); Ex Parte Spanland Sdn Bhd and Another Case [2020] MLJU 2133 (see the grounds of judgment dated 18 November 2020)  provided useful guidance on factors considered when there are competing nominees to be appointed as liquidator of a company.

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