TOPIC REVIEW ACTIVITY TWO : TERMINATION AND RETRENCHMENT

Othman was an employee in Rimatech Bhd. He started working in 2013 as a clerk before moving up and eventually was promoted to be the Senior Technician in the Control and Implementation (CI) unit with the salary of RM3800.

On the morning of 26th June 2020, all workers in the CI unit were told to attend a town hall meeting with the manager. In that meeting they were informed about the closing of the unit effective 27th June 2020. In other words, tomorrow Othman and his colleagues will be out of job.

Shocked and enraged, Othman and his friends refused to accept the termination and demand a meeting between the top management and their union to get further explanation about the situation.

The following are facts that were revealed during the meeting between the union, in which Othman and his friends were members, and the companys management.

i. There were 14 employees in the CI unit, 10 Malaysian and 4 foreign workers. Only the 10 were terminated by the company while the 4 foreign workers were transferred to various departments. The reason given by the company was that the foreign workers were hired on a temporary basis, and they used to do work in other departments while Othman and his colleagues in the unit have only worked in CI since joining the company.

ii. The company maintained that the reason for termination was redundancy, and the business was also suffering losses for the past three years. The company needed to restructure the business to stay profitable and decided to shut down the CI unit because the tasks carried out in the unit are now outsourced to a third-party company.

iii. The number of employees currently working for the company, including Othman and his colleagues is 180. Thirty of those workers are hired on fixed term contracts of between one to two years. Othman and his terminated friends were permanent workers of the company, with duration of service ranging from 5 to 13 years.

iv. The company has recently spent RM 2.2 million in upgrading the manufacturing facilities in the company.

After hearing all that has transpired in the meeting, Othman is even more determined that he has been wrongly terminated. However, some of his friends think otherwise. They now believed that the company did have good reason to retrench them and do not want to waste time and money suing the company. Othman who had previously attended a short course on labour law and industrial relation is determined to convince his friends that they have a chance to challenge Rimatech in court.

QUESTION

1) Assume that you are Othman. Write down and elaborateTHREE (3) points that you would use to convince your friends that their termination is without just cause and excuse.

(12 Marks)

2) Assumed that Othman won the case against Rimatech, and the award was handed down in October 2022. Explain and calculate the amount of compensation that he may get from the company as remedy for the unjust termination. You may make any necessary assumptions to assist you in coming up with a complete answer. (6 Marks)