Court president Wan Jeffry Kassim said Koperasi Belia Nasional Sdn Bhd (Kobena) cannot rely on its poor financial standing to justify its failure to pay complainant Redzuan Majid the sum of RM250,000 under an award handed down two years ago.
Wan Jeffrey said there was no evidence before the court as to how Kobena ran into its present financial problems.
“This court finds that the excuse given by (Kobena) does not constitute ‘special circumstances’ within the meaning of Section 56(2)(c) of the Industrial Relations Act 1967 (IRA).
“(Kobena’s) financial difficulties do not justify the variation or setting aside of the terms of the award,” he said in an award dated May 9, sighted by FMT.
In accordance with Section 56(2)(a)(i) of the IRA, the court ordered Kobena to immediately pay Redzuan the full sum of the award, subject to statutory deductions.
Under Section 56(3) of the IRA, any person who fails to comply with such an order may be fined up to RM50,000 or jailed for up to one year, or both. They may also be made liable to a continuing fine of up to RM500 for each day that the offence continues.
The court, however, disallowed Redzuan’s request that interest at 5% per annum be imposed on the sum awarded.
Also on the panel hearing the complaint were Hidzir Yussof, the panel member appointed to represent workmen, and Terence Raj, the employers’ representative.
Redzuan had lodged representations to the director-general of industrial relations claiming he had been constructively dismissed by Kobena in 2020.
In 2022, Industrial Court chairman Rajeswari Karupiah ruled that his dismissal was without just cause or excuse.
She awarded Redzuan backwages of 24 months, totalling RM150,000.
Rajeswari also awarded him the equivalent one month’s salary of RM6,250 for each of his 16 years of service, totalling RM100,000, as compensation in lieu of reinstatement.
In the non-compliance proceedings, Kobena said its failure to comply with the award was “unintentional”.
Kobena said it was placed under an administrator appointed by the Malaysia Co-Operative Societies Commission on account of financial irregularities and poor management between 2016 and 2019.
It said that in 2019, it was allowed to manage its own affairs beginning 2019.
However, its cashflow was affected by the Covid-19 pandemic as tenants of its properties began to default on rental payments.
Due to its poor financial standing, Kobena proposed to settle the RM250,000 award by way of monthly instalments of RM500.
Redzuan rejected Kobena’s proposal, saying it was tantamount to humiliating him.