Court chairman D Paramalingam said the budget airline was entitled to depart from the “last-in, first-out” (LIFO) principle prescribed under the Code of Conduct for Industrial Harmony in favour of its own “best fit” policy so long as the selection process employed was fair and reasonable.
“The best fit policy adopted by the company does not have any better footing in law than the LIFO principle.
“Any decision made to retrench employees under the best fit policy is liable to be scrutinised by the courts,” he said in an award handed down last week.
Paramalingam said the airline had failed to show that claimant Wong Zi Chuang had been rendered redundant in his position.
“The claimant was retrenched in June 2020, hardly three months after the (government’s) implementation of a movement control order. All flights were grounded, except those on rescue missions.
“Any selection process under a retrenchment exercise during this period of time would be arbitrary as it was uncertain which of the pilots were truly redundant in their positions,” he said.
In Wong’s case, Paramalingam found the company’s witness to be evasive and unable to confirm whether his flight route had been permanently cancelled or was merely suspended.
In any event, he ruled that Wong had been identified for retrenchment based on his disciplinary record rather than the redundancy of his position.
During the trial, the company’s witnesses had testified that under the best fit policy, an employee would be allotted 100 points at the start of a financial year. Points would then be added or deducted based on merit or demerit that the pilot receives throughout the year.
The final rating given to the pilot will be based on the number of points he had remaining at the end of the financial year.
Paramalingam noted that Wong was rated “poor” in 2019 after receiving a single 35-point deduction for non-compliance with company policy during a January 2019 flight for which he was issued a written warning.
“The company had clearly used the claimant’s past disciplinary and/or performance records (which had already been closed after he was served with a warning letter) to deem his position as being redundant,” the award read.
The court also noted that Wong had volunteered to be placed on furlough, and that he was willing to work for up to six months for a “token sum” until the company’s financial situation improved.
“The company’s finance assistant manager testified during cross-examination that if furlough had been implemented, the company would have saved costs and that the financial impact on the company would have been minimal.
“Despite the claimant’s repeated pleas to be placed on furlough, the company simply ignored and carried out the process in retrenching him,” said Paramalingam.
“Interestingly enough, the company rather belatedly implemented furlough (in January 2021) after the claimant had already been retrenched,” he added.
Paramalingam ruled that the company had failed to prove that Wong had become redundant in his position.
“The retrenchment of the claimant was not done in a bona fide manner and as such his dismissal was done without just cause or excuse,” he said.
Paramalingam said Wong, who was earning RM18,000 per month at the time he was terminated, had been a loyal servant of the company for almost 12 years.
He awarded Wong RM198,000 in compensation in lieu of reinstatement and RM432,000 in back wages, but deducted RM118,800 for post-dismissal earnings and salary in lieu of notice which the company had paid him.