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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Top 5 Construction Cases in Malaysia for 2020

Our guest author, Kevin Wong, writes on the top 5 construction cases in Malaysia for 2020. The areas covered include when does time run for the calculation of liquidated damages, the Controller of Housing, and cases on the Construction Industry Payment and Adjudication Act 2012 (CIPAA).

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The 10 Amendments to the Rules of Court 2012

 

I set out the ten amendments to the Rules of Court 2012 (ROC 2012) which comes into force on 15 December 2020. Some of these changes include service of court papers by electronic means, virtual hearings, and the restrictions on adjournments of trials. There are also minor additions to the Rules of the Court of Appeal 1994 (see the Rules of the Court of Appeal (Amendment) 2020) and to the Rules of the Federal Court 1995 (see the Rules of the Federal Court (Amendment) 2020).
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9 Upcoming Judicial Reforms for 2020

Today was the Opening of the Legal Year 2020 for Malaysia. This annual ceremony would see speeches delivered by the heads of the Attorney-General’s Chambers, the Malaysian Bar and the Judiciary.

Pic credit: bernama.com

 

The Chief Justice of Malaysia, Tan Sri Tengku Maimun binti Tuan Mat, set out in her speech the upcoming reforms to the judicial system. I cover nine of the areas below, ranging from limiting appeals on interlocutory applications, environmental law provisions and the full digitalisation of courts.

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Case Update: Court of Appeal Rules on Removal and Remuneration of Liquidator

The Court of Appeal issued its Grounds of Judgment dated 11 December 2018 in the case of Ong Kwong Yew and others v Ong Ching Chee and others. It is a cautionary tale for liquidators on the grounds for their removal as liquidator and their conduct in terms of seeking fees for work done.

The conduct of the liquidator was serious enough for the Court of Appeal to remark that the liquidator ought to be sanctioned by the Malaysian Institute of Accountants or the Director-General of Insolvency.

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Case Update: Court of Appeal on Staying the Dismissal of Judicial Management Application

The Court of Appeal in the Wellcom Communications case has decided on certain significant issues relating to a judicial management application (see the grounds of judgment dated 13 February 2019). This is Malaysia’s first appellate decision relating to judicial management.

In summary, upon the filing of a judicial management application, an automatic moratorium applies. This will stay all legal proceedings from continuing or from being commenced against the applicant company. The Court of Appeal has held that once the judicial management application is dismissed, there cannot be a grant of any stay order to stay the dismissal of the application in order to revive the moratorium effect. Continue reading