Reference no: EM132936186

Norshahirah versus Systemic Glove Holdings Berhad

Norshahirah was awarded compensation after the Court ruled that she had been unfairly dismissed by Systemic Glove Holdings Berhad. She received a retrenchment notice on Aug 20, 2019 and the reasons are the company had been suffering a severe decline in profits and a reduction in business due to a significant drop in global oil prices. Several cost-cutting measures had been taken but no positive changes happened. The company added that they had no choice but to release Norshahirah from her employment with one month salary in lieu of notice. The Court said that the dismissal was without just cause or excuse and the retrenchment act was not "bona fide" and no redundancy had been proven by the company. The principle of "last in, first out" was not carried out and instead adopted its own criteria. No misconduct and below expectations of performance had been committed by Norshahirah to warrant the dismissal. Indeed it was proven that the company failed to gain profits but they failed to show the proof on its inability to continue the operations to The Court as well. The court also said employers must take all measures under the Code of Conduct for Industrial Harmony before conducting a retrenchment exercise. Norshahirah joined the company on April 1, 2010. Her last drawn salary was RM2000.

Question

a) Based on your own understanding, why is it important for the retrenchment process to be done in bona fide?

b) Based on the situation above, please identify the issue / problem occurred that lead to such judgement made by the Court which awarded Norshahirah a compensation.

Answers as soon as possible, please. Need to submit it now.