Unjust Dismissal: A Case Study of Nova Melandi Jamal v. Malindo Airways Sdn. Bhd.

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Introduction

In the Industrial Court of Malaysia case Nova Melandi Jamal v. Malindo Airways Sdn. Bhd. (Award No. 790 of 2025, Case No. 21/4-1401/23), the court addressed a dispute concerning the dismissal of the claimant, Nova Melandi Jamal, by Malindo Airways Sdn. Bhd. on grounds of redundancy. This case, adjudicated on May 20, 2025, highlights critical principles of Malaysian industrial law, particularly regarding retrenchment, redundancy, and the burden of proof on employers to justify dismissals. The court's decision provides valuable insights into the legal standards for establishing bona fide retrenchment and the remedies available for unjust dismissal.

Background of the Case

Nova Melandi Jamal, employed as Senior Manager - Engineering & PPC since November 1, 2016, was terminated by Malindo Airways on February 28, 2023, with the company citing redundancy due to a post-COVID-19 restructuring exercise. The claimant’s role included coordinating the e-MRO system, a project assigned on September 8, 2022, with a completion timeline of February 1, 2023. The company argued that, following the project’s completion and a departmental reorganization, the claimant’s role became redundant, leading to his termination with three months’ salary in lieu of notice, as per his employment contract.

The claimant disputed the redundancy, alleging that his job functions persisted after his dismissal, were performed by other employees, and that the retrenchment was a mala fide attempt to remove him. He further claimed that the company failed to provide adequate justification or evidence for the redundancy and sought reinstatement to a self-proclaimed position of Deputy General Manager, along with an extraordinary claim of RM20,000,000 per month for seven years to cover various allowances and living costs.

Claimant’s Perspective

The claimant, Nova Melandi Jamal, argued that his dismissal was unjust and lacked legitimate grounds. He contended that the redundancy was a pretext, asserting that his job functions as Senior Manager - Engineering & PPC remained essential and were taken over by other employees post-dismissal. He highlighted his willingness to undertake assignments, such as the proposed role in Jakarta, which he accepted but was delayed due to logistical issues, including visa arrangements and family accommodations, which the company failed to address adequately. The claimant also pointed to an incident on April 8, 2022, where the company attempted to downgrade his position to Controller Material Planning without justification, suggesting a pattern of unfair treatment. He maintained that his track record was exemplary and that the company’s actions constituted victimization, with no prior notice or consultation regarding the retrenchment. His claim for RM20,000,000 per month was based on perceived losses, including allowances for fuel, utilities, travel, and living costs, reflecting his belief that the dismissal caused significant financial and personal hardship.

Respondent’s Perspective

Malindo Airways Sdn. Bhd. defended the dismissal as a legitimate exercise of its managerial prerogative to reorganize its business in response to financial challenges caused by the COVID-19 pandemic. The company argued that the Movement Control Order (MCO) and subsequent economic restrictions severely impacted its operations, necessitating a restructuring to ensure financial sustainability. It claimed that the claimant’s role became redundant after the completion of the e-MRO project and that no suitable positions were available within the Maintenance & Engineering Department. The company emphasized that it complied with the employment contract by providing three months’ salary in lieu of notice (RM30,000), which the claimant accepted without protest. Malindo Airways further asserted that the retrenchment was conducted in good faith, driven by economic necessity rather than any intent to victimize the claimant, and that local resources were utilized to handle remaining job functions, aligning with the company’s cost-saving measures.

Legal Framework and Issues

The Industrial Court’s inquiry was guided by Section 20(3) of the Industrial Relations Act 1967 (IRA), which mandates the court to determine whether a dismissal is with just cause or excuse. The court relied on established precedents, such as Goon Kwee Phoy v. J & P Coats (M) Bhd. [1981] and Telekom Malaysia Kawasaki Vara v. Krishnan Kutty Sanguni Nair & Anor. [2002], which emphasizes that the employer bears the burden of proving the grounds for dismissal on a balance of probabilities.

The court identified three key issues, as outlined in Woo Vain Chan v. Malayawata Steel Bhd. [2013]:

1. Whether the retrenchment was justified by the circumstances.

2. Whether the grounds for retrenchment were true, specifically, whether there was a genuine reduction in business necessitating the dismissal.

3. Whether the retrenchment was motivated by bad faith or a desire to victimize the employee.

Additionally, the court referred to William Jacks & Co (M) Bhd v. Balasingam [1997] and Firex Sdn Bhd v. Cik No Shoo Waa [1990], which affirm that employers have a managerial prerogative to reorganize their business, provided such actions are bona fide and not capricious, mala fide, or driven by unfair labor practices.

Court’s Findings

The court found that Malindo Airways failed to discharge its burden of proving a bona fide retrenchment. Key observations included:

• Lack of Evidence for Redundancy: The company did not provide evidence, such as an organizational chart or financial records, to demonstrate a surplus of staff or a diminished need for the claimant’s role. The court noted that the claimant’s job functions continued to be performed by other employees post-dismissal, undermining the claim of redundancy.

• Impact of COVID-19: While the company cited financial difficulties due to the Movement Control Order (MCO) and subsequent economic challenges from the COVID-19 pandemic, it failed to substantiate how these affected the claimant’s department or necessitated his retrenchment.

• Good Faith Questioned: The absence of evidence regarding the company’s financial losses or a broader retrenchment exercise raised suspicions about the bona fides of the claimant’s dismissal. The court found no proof that the reorganization genuinely rendered the claimant’s role redundant.

The court rejected the claimant’s exaggerated claim for RM20,000,000 per month, criticizing it as an attempt at unjust enrichment. It also clarified that the claimant was never appointed Deputy General Manager, as he had alleged, and his position remained Senior Manager.

Decision and Remedies

The court concluded that the claimant’s dismissal was without just cause or excuse, as the company failed to establish a genuine redundancy. Reinstatement was deemed inappropriate due to strained relations between the claimant and the company. Instead, the court awarded:

• Compensation in Lieu of Reinstatement: RM60,000, calculated as six months’ salary (RM10,000 per month) for six completed years of service.

• Backwages: RM50,000, based on five months’ salary, within the discretionary limit of 24 months under the Second Schedule of the IRA 1967.

• Total Award: RM110,000, less statutory deductions, with 8% annual interest from the 31st day after the award until full payment.

The decision was grounded in equity, good conscience, and the substantial merits of the case, as mandated by Section 30(5) of the IRA.

Conclusion

The case of Nova Melandi Jamal v. Malindo Airways Sdn. Bhd. underscores the stringent requirements for employers to justify retrenchment on grounds of redundancy under Malaysian industrial law. The claimant’s perspective highlighted perceived unfair treatment and lack of transparency, while the respondent argued that economic necessity drove the decision. However, the court’s ruling emphasized the employer’s burden to provide concrete evidence of redundancy, failing which the dismissal was deemed unjust. While the claimant succeeded in proving the dismissal was without just cause, the court’s rejection of his excessive compensation claim reflects its commitment to equitable remedies. This case serves as a reminder to employers of the importance of transparency and substantiation in retrenchment exercises to avoid legal and financial repercussions.

References

• Ayudurai, D., 1998. Industrial Relations in Malaysia: Law and Practice. 3rd ed. Kuala Lumpur: Malayan Law Journal.

• Badariah Sharudin v Mudra Resources Sdn Bhd [2022] 2 ILR 539.

• Bayer Sdn Bhd v Ng Hong Pau [1999] 4 CLJ 155.

• Firex Sdn Bhd v Cik No Shoo Waa [1990] 1 ILR 226.

• George Kent (M) Sdn Bhd v Tan Tai Wai, Mak Kin Kung & Wong Khoon Sana [1988] 2 ILR 140.

• Goon Kwee Phoy v J & P Coats (M) Bhd [1981] 1 LNS 30; [1981] 1 MLJ 129.

• Hotel Jayapuri Bhd v National Union of Hotel, Bar & Restaurant Workers & Anor [1979] 1 LNS 32.

• Prabakaran E Tharrumah v JLW Management Services Sdn Bhd [2018] 2 LNS 0052.

• Stamford Executive Centre v Puan Dharsini Ganesan [1986] 1 ILR 101.

• Telekom Malaysia Kawasaki Vara v Krishnan Kutty Sanguni Nair & Anor [2002] 3 CLJ 314.

• Tham Chee Ark & Anor v Santomas Sdn Bhd [2015] 2 LNS 1165.

• Thomas Hans Raab v Nokia Services And Network Malaysia Sdn Bhd [2022] 3 ILR 371.

• Vithyalingam Letchumanan v Ice Room Food & Beverage Management Sdn Bhd [2015] 4 ILR 655.

• William Jacks & Co (M) Bhd v Balasingam [1997] 3 CLJ 235.

• Woo Vain Chan v Malayawata Steel Bhd [2013] 1 ILR 382.

• Woo Vain Chan v Malayawata Steel Bhd [2016] 10 CLJ 176.

• Yusoff Othman v Felda Engineering Services Sdn Bhd [2022] Award 7780.

Counsel Information

For the Claimant: Nova Melandi Jamal.

For the Respondent: Jeyendran Ramachandran, Messrs. Deva & Jeyen, Counsel for Malindo Airways Sdn. Bhd.