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Case Significance

Illustrates how the courts assess and quantify a group of employees' entitlement to accrued service charges and pay in lieu of notice on retrenchment, and the proof required to establish such a claim against a former employer.

This High Court decision at Kuala Lumpur, delivered by Suzana binti Muhamad Said JC, concerns a claim by a large group of former employees against their former employer and related parties for sums said to be due on and after the termination of their employment. Several of the plaintiffs sued in their own right and one sued as the lawful administrator of the estate of a deceased colleague. The plaintiffs' claim, pleaded against the first defendant employer and, in the alternative, other defendants jointly and severally, comprised unpaid service charges to which they said they were entitled up to the time of their retrenchment, together with damages in lieu of notice.

The Court examined the plaintiffs' entitlement to the service charges and the calculation of the sums claimed. Service charges collected in a hospitality or property operation and distributed to employees form part of the remuneration to which entitled employees may lay claim, and the dispute required the Court to fix the amount properly due and the defendant answerable for it. It accepted the revised quantum of the service-charge claim, which factored in the service charges accrued as at February 2018 — the month immediately before the plaintiffs were retrenched the following month — as reflected in the schedule annexed to a witness statement, acknowledging that although there were minor variations in the figures the overall quantum was accurately presented, and it addressed the plaintiffs' alternative entitlement to damages in lieu of one month's notice, calculated on the plaintiffs' basic salaries.

On the totality of the evidence, the Court held that the plaintiffs had successfully proven their claim against the first defendant, their former employer, and ordered accordingly, awarding the service charges due and damages in lieu of one month's notice. The judgment is a useful illustration of how the courts assess and quantify a group of employees' entitlement to accrued service charges and pay in lieu of notice on retrenchment, and of the proof required to establish such a claim against a former employer.