Court chairman Andersen Ong said airlines are particularly vulnerable to external events such as terrorism, natural disasters, and pandemics which could drastically affect their operations and business.
“The Covid-19 pandemic had adversely impacted the company’s airline business due to travel restrictions and a decimation in demand among travellers,” he said when dismissing an unfair dismissal claim by Neoh Wee Ming against AirAsia Bhd.
Ong noted that the airline had to ground its aircraft when national quarantine measures were implemented.
He said there was a real and urgent need for the company to respond to the Covid-19 crisis promptly by containing its high operating costs.
Retrenchment became a “necessary evil” for the survival of the company’s business, he added.
Ong said he found no evidence of mala fide or impropriety in the airline’s retrenchment exercise.
He said the evidence shows that AirAsia had applied the “best fit” selection criteria objectively to all employees, including Neoh.
“The court finds that the company has successfully proven its case on a balance of probabilities that the claimant’s job became redundant at the material time and the retrenchment exercise was carried out in good faith,” he said in an award delivered on June 22.
Ong said he had also gone through the financial documents tendered and accepted the company’s evidence on the financial hardship that it was going through, especially in 2019 and 2020.
As such, he said there was a real need for business alignment and a company reorganisation was justified at the material time.
Further, he said the work done by Neoh would diminish or become redundant when aircraft are grounded because less maintenance would be required.
He received payment of almost RM42,000 in lieu of three months’ notice of retrenchment.
Unhappy with the termination of his employment on June 14, 2020, Neoh filed representations to the director-general of Industrial Relations.
The dispute over his termination was eventually referred to the Industrial Court for adjudication.
Arun Kumar appeared for Neoh while Sebastian Tay Hanxin and Rebecca Sonali Alfred appeared for AirAsia.