Post by : Rohit Dhiman

Malaysia’s Court of Appeal has upheld a compensation award of RM402,172.46 for former group human resource manager Cha Poh Onn after dismissing an appeal by cement manufacturer Tasek Corporation Bhd. The court found no reason to overturn the earlier ruling that the company had failed to establish that his position had genuinely become redundant. The three-member appellate bench unanimously rejected the company’s appeal and ordered Tasek Corporation to pay RM30,000 in legal costs. The decision leaves the compensation award made by the Industrial Court in place. The dispute centres on Cha’s dismissal in 2018. At the time, the company maintained that his position had become unnecessary. Cha challenged that explanation, arguing that human resource responsibilities continued to be handled by other employees after he left. The case subsequently moved through Malaysia’s industrial dispute and judicial review process. The High Court found that the company had not adequately demonstrated a genuine redundancy situation and ruled that the retrenchment was carried out in bad faith.

Court of Appeal Rejects Tasek Corporation’s Challenge

The Court of Appeal bench comprised Justices Azizul Azmi Adnan, Ong Chee Kwan and Radzi Harun. All three judges agreed to dismiss the appeal. In delivering the decision, Justice Azizul said the High Court had been correct to conclude that Tasek Corporation failed to prove that Cha’s position had genuinely become redundant. The central issue was whether the company had established a real business need to eliminate the role or whether the retrenchment was used to remove the employee while his responsibilities continued within the organisation. A company may restructure its workforce for legitimate operational reasons. However, the dispute in this case concerned whether the explanation provided for Cha’s dismissal was supported by the circumstances and evidence.

Why Was Cha Poh Onn Dismissed in 2018?

Cha Poh Onn was serving as Tasek Corporation’s group human resource manager when he was dismissed in 2018. The company said his position had become redundant as part of its retrenchment exercise. Cha disputed that explanation. He argued that the human resource functions associated with his position did not disappear after his dismissal and continued to be performed by other employees. This issue became a key part of the legal dispute. If the work previously assigned to a particular position continues to be performed, the circumstances may raise questions about whether the role was genuinely eliminated. However, the continuation of some duties does not automatically establish that every retrenchment is unlawful. The circumstances of the restructuring, the responsibilities involved and the evidence presented must be considered. In Cha’s case, the High Court concluded that Tasek had failed to establish genuine redundancy. It also found that the retrenchment was mala fide, a legal term referring to bad faith.

High Court Had Earlier Ruled Against the Company

The dispute took a significant turn last year when the High Court allowed Cha’s application for judicial review. The court quashed the Industrial Court’s earlier award and sent the matter back to the Industrial Court to determine the compensation payable to him. The High Court’s decision was based on its finding that Tasek had failed to prove genuine redundancy and that the retrenchment had been carried out in bad faith. Following the matter being returned to the Industrial Court, the tribunal assessed the compensation and awarded Cha RM402,172.46. Tasek Corporation then challenged the High Court’s decision through an appeal. The company’s latest attempt to overturn the ruling was unsuccessful, as the Court of Appeal unanimously dismissed its appeal. With the appellate court leaving the compensation award intact, the case has reached another important stage in a dispute that began with Cha’s dismissal in 2018.

How Much Compensation Will the Former HR Manager Receive?

The Industrial Court awarded Cha RM402,172.46 following the High Court’s decision to return the matter for compensation assessment. The Court of Appeal did not overturn that award. It also ordered Tasek Corporation to pay RM30,000 in costs associated with the appeal. These are separate amounts: the RM402,172.46 is the compensation awarded to Cha, while the RM30,000 relates to legal costs ordered by the appellate court. The compensation award remains in place following the dismissal of Tasek’s appeal. The report does not specify a separate payment deadline or provide further details about how the compensation was calculated. The outcome reinforces the findings reached in the earlier proceedings, but it should not be interpreted as a rule that every employee whose duties continue after a retrenchment is automatically entitled to the same compensation. Each employment dispute depends on its own facts, applicable law and court findings.

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Can Tasek Corporation Appeal to the Federal Court?

Tasek Corporation may seek to challenge the Court of Appeal’s decision before Malaysia’s Federal Court. However, the company must first obtain leave, or permission, to proceed with a further appeal. This means a further appeal is a possibility rather than a confirmed next step. The available report does not state that Tasek has already filed such an application or that the Federal Court has agreed to hear the case. If the company seeks leave, the next stage will depend on the applicable legal requirements and the court’s decision on whether the appeal may proceed. Until a higher court changes the outcome, the Court of Appeal’s decision leaves the existing findings and the RM402,172.46 compensation award intact.

Lawyers Representing Both Sides

Neoh Jian Kiat and Daphne Aw represented Tasek Corporation Bhd during the proceedings. S Raam Kumar and Norleena Jamal appeared for Cha Poh Onn. The Court of Appeal’s ruling concludes the company’s appeal at that level, while leaving open the possibility of a further challenge subject to the Federal Court’s permission.

What the Ruling Means for Retrenchment Disputes

The case highlights the importance of evidence when an employer claims that a position has become redundant. A company’s stated reason for dismissing an employee may be examined against what happened to the role and its responsibilities after the dismissal. In this dispute, Cha argued that other employees continued carrying out his human resource functions. The High Court found that Tasek had failed to prove genuine redundancy, and the Court of Appeal upheld that conclusion. For employers, the case illustrates why restructuring decisions should be supported by clear business reasons and relevant documentation. For employees, it demonstrates that a retrenchment decision can be challenged through the appropriate legal process when there are grounds to dispute the employer’s explanation.

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