Red Sea Housing Malaysia Sdn. Bhd. v Chew Soon Beng

Case Significance

Illustrates the limited grounds, namely error of law, perversity or lack of judicial appreciation of the evidence, on which the High Court will disturb an Industrial Court award under section 33C of the Industrial Relations Act 1967, and the requirement of concrete proof to establish a genuine redundancy.

This High Court decision at Johor Bahru is an appeal under section 33C of the Industrial Relations Act 1967 against an Award of the Industrial Court. The company, Red Sea Housing Malaysia Sdn Bhd, which carries on a modular-building business, had dismissed its Managing Director; by a notice of termination issued in May 2020 it attributed the dismissal to restructuring and redundancy, placing him on garden leave and paying a sum representing salary during that period and accrued leave. The former Managing Director lodged a representation, and the Industrial Court, after hearing the evidence, including documentary exhibits and a recorded telephone conversation between him and the company's representative, found that the dismissal was without just cause or excuse and ordered backwages and compensation in lieu of reinstatement. On appeal the company contended that the Award was flawed. The High Court reviewed the Award against the limited grounds on which such an award may be disturbed, namely an error of law, perversity, or a lack of judicial appreciation of the evidence. It held that the Industrial Court had correctly directed itself on the law, in particular the requirement of concrete proof of a genuine redundancy, had weighed the oral and documentary evidence, including the influence of an incoming shareholder on the decision, in some detail, and had given coherent reasons for its conclusions on both liability and relief. Finding no error of law, perversity or manifest excess in the relief, the court declined to intervene, dismissed the appeal with costs of RM8,000, and affirmed the Award. The court also rejected the suggestion that the backwages and compensation ordered amounted to double recovery, holding that the Industrial Court had a wide discretion as to relief and had exercised it within permissible limits. The judgment illustrates the deference an appellate court gives to the Industrial Court's findings of fact and the requirement of concrete proof to establish a genuine redundancy.