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.
Retrenchments and redundancies have been a regular occurrence across the world in recent years, and Malaysia has not been exempted. In the past 6 months alone, we have seen employers across various industries implementing reductions-in-force or “right-sizing” exercises in two noticeable waves — one at the end of 2022, another one in the first quarter of 2023, and one more currently in the planning stage likely to be rolled out in April/May.
While the general legal position is that the Malaysian courts acknowledge an employer’s prerogative in organising its business in the manner it considers best, this prerogative must be exercised in good faith, and carried out with the proper process. As can be seen from the many retrenchment-related articles I have published, many employers still don’t get this right. Here are some of my previous articles on the subject:
- Case Update: Justifying a retrenchment and departure from LIFO
- Case Update: Another company’s retrenchment of employees due to COVID-19/MCO deemed unfair by Industrial Court
- Case Update: Industrial Court finds retrenchment due to effects of COVID-19/MCO was unfair
- Case Update: Court of Appeal sets out key legal principles for retrenchments
- Retrenchments in Malaysia — some recent cases
- Case Update: Relevant issues when an employer uses financial difficulties as a reason for retrenchment
- What you need to know about the law on retrenchment of employees
The recent Industrial Court award in Collin Toh Mer Vin v Black & Decker Asia Pacific (Malaysia) Sdn Bhd (Award No. 578 of 2023) provides another example of potentially costly missteps when carrying out a retrenchment.
