Case Update: Another company’s retrenchment of employees due to COVID-19/MCO deemed unfair by Industrial Court

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.

There was a very sharp rise in retrenchment numbers in Malaysia in 2020, particularly in the aftermath of the first Movement Control Order (MCO), which started in March 2020. We are now seeing Industrial Court decisions as a result of unfair dismissal complaints lodged by employees who had their employment terminated in the first half of 2020, and I expect we will continue to see a steady succession of these decisions in the coming months.

As I have often explained, while employers are legally entitled to dismiss employees where the retrenchment is for genuine reasons, employers must be able to show that the termination was not improperly motivated. I recently highlighted one case where the Industrial Court decided that the retrenchment of an employee, which the employer said was due to the challenges caused by the COVID-19 pandemic, was an unfair dismissal: “Case Update: Industrial Court finds retrenchment due to effects of COVID-19/MCO was unfair”.

In this article, I summarise four recent awards involving retrenchments carried out at the same time by the same employer, which the employer said was due to the effects of the MCO and pandemic:

  1. Mohamad Sahrul Bin Kahulan v. Lourdes Medical Services Sdn Bhd (Award No. 1295 of 2021).
  2. Gawri A/P Muthadakan v. Lourdes Medical Services Sdn Bhd (Award No. 1296 of 2021).
  3. Lalitha A/P Subramaniam v. Lourdes Medical Services Sdn Bhd (Award No. 1297 of 2021).
  4. Rasalechumi A/P Kanagaratnam v. Lourdes Medical Services Sdn Bhd (Award No. 1298 of 2021).
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COVID, MCO, and the Malaysian legal industry — Part 2: Work culture, mental health, jobs, and the future

This market report is brought to you by The Malaysian Lawyer, co-founded by Lee Shih and Marcus van Geyzel.

This is Part 2 of our special market report on the effects of the COVID-19 pandemic and the various MCOs on the Malaysian legal industry. Before reading on, you should read Part 1, where we addressed the financial issues (paycuts, volume of legal work, and revenues), remote working, and technology.

In this second part, we report on the impact of the pandemic on office/work culture, how law firms addressed employee mental health issues, and examine how the industry could have done better in dealing with the various challenges, and what the future holds. Again, these findings are not our own conclusions, but are a collection of the views of several lawyers who very kindly took the time to share their experiences with us. Some have asked to remain anonymous.

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COVID, MCO, and the Malaysian legal industry — Part 1: Money (paycuts, revenue), remote working, and technology

This market report is brought to you by The Malaysian Lawyer, co-founded by Lee Shih and Marcus van Geyzel.

If asked to think back to March 2020, when Malaysia first went into “lockdown” or a “Movement Control Order” (MCO), Malaysians may feel like the period of time that has passed has been the equivalent of several lifetimes. Or that it now seems to have gone quickly, and certainly doesn’t seem like it was 18 months ago. Or perhaps that it simultaneously feels like both a very long time and a very short time ago, in that time-bending perspective-warping haze that the pandemic seems to have permanently brought into our lives.

For the Malaysian legal industry, much has happened. If we cast our minds back to those early-MCO days, there was a scramble for lawyers to figure out how to operate outside of the office, without access to printed documents and files.

To be honest, some lawyers still haven’t quite figured it out, but there has been much progress overall. Compelled by the judiciary, lawyers shuffled out of the Stone Age and into conducting video trials online. The National and State Bars successfully convened their AGMs online (after a huge COVID scare from the in-person KL Bar AGM). Law firms rolled out pay-cuts, and freezed hiring, increments, and bonuses. As work dried up in some areas, many lawyers pivoted into new practice areas. Call ceremonies also moved online. Aspiring lawyers had to deal with huge delays to CLP exams and results.

There were lots of new law blogs launched (21 are still active), and law students, lawyers and firms were noticeably more active on LinkedIn (when TML wrote about Malaysian law firms on LinkedIn in 2019, we could only find 8 active accounts; when researching our latest law firm LinkedIn list, we found almost 80!) and Clubhouse (the biggest Malaysian legal Clubhouse club Malaysian legal community has 3,600+ members).

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HR Minister says employees could face fines or jail for refusing vaccinations. Is this legal?

Malaysia’s Human Resources Minister M. Saravanan caused a stir late last week when he was widely reported (see Bernama, Malay Mail, The Star) as saying that action could be taken against employees who refuse to be vaccinated. While recognising that vaccinations have not been made mandatory under Malaysian law, Saravanan said that the authorities could take action under the Occupational Safety and Health Act 1994 (“OSHA”).

The legal position regarding mandating employee vaccinations has been widely-discussed in recent weeks, and I’ve previously shared my views on this blog (“Is it legal for Malaysian employers to make vaccinations mandatory for employees?”), as well as with the media (“Can Malaysian employers make Covid-19 vaccinations mandatory for their staff? Lawyers explain.”).

So what exactly does OSHA provide, and can the authorities really rely on OSHA to take action against employees who refuse to be vaccinated?

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Is it legal for Malaysian employers to make vaccinations mandatory for employees?

The COVID-19 pandemic has brought up seemingly endless unique legal challenges for businesses and employers for the past 18 months, and counting. Beginning with lockdown and restrictions, remote working, paycuts, retrenchments and reorganisations, businesses in Malaysia and many other jurisdictions are now focusing on reopening, and hopefully moving into a post-pandemic future.

In recent weeks, we have been reading about the issue of mandating vaccines for employees. The legality of so-called “no jab no job” policies continues to be debated in major jurisdictions such as the UK, US, and Europe, where the reopening of the economy is at a more advanced stage than Malaysia, and where many companies have been implementing mandatory vaccination policies. Multinational companies with a Malaysian presence are now looking to roll out those policies in their Malaysian offices too. However, the law can be very different across jurisdictions, and employers will need to tread with caution and consider not just the legal but practical repercussions before making vaccinations mandatory for their employees.

In this article, I set out the legal position on this issue, and the key issues employers need to consider. I’ve also previously shared some of my views on this with The Malay Mail in their piece earlier this month — “Can Malaysian employers make Covid-19 vaccinations mandatory for their staff? Lawyers explain.”

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Case Update: Industrial Court finds retrenchment due to effects of COVID-19/MCO was unfair

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 Industrial Court recently decided that the retrenchment of an employee, which the employer said was due to the challenges caused by the COVID-19 pandemic, was an unfair dismissal. This decision shows that, while the courts will uphold genuine retrenchments as an option available to employers to ensure the financial viability and survival of their businesses, employers cannot simply cite the pandemic as an excuse to retrench employees without proper justification.

The award in Joseph Lim Chien Shiuh v. DTTLT Sdn Bhd (Award No. 1052 of 2021) dated 19 May 2021 should serve as a cautionary tale for employers. I expect we will see many more employees successfully challenging terminations carried out in 2020 and 2021 by businesses claiming to have been affected by the various lockdowns or Movement Control Orders (MCOs) and related restrictions.

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