Court throws out unfair dismissal claim against GLC over pipeline projects

The Multi-Product Pipeline and Trans-Sabah Gas Pipeline projects were cancelled in September 2018. (Bernama pic)

KUALA LUMPUR: The Industrial Court today turned down a claim for unfair dismissal by 22 employees, including the company CEO, ruling that the action by the government-linked company was fair.

Industrial Court chairman Noor Ruwena Mohd Nurdin said Suria Strategic Energy Resources Sdn Bhd (SSER) had been able to prove on the balance of probability that the retrenchment exercise was undertaken with just cause.

“The company has shown concrete proof that there was a situation of redundancy as the employees were no longer required to perform the tasks they were initially engaged in,” she said in her 65-page judgment.

She added that the employees had been made redundant by the cancellation of the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects on Sept 6, 2018.

She also noted that the cancellation took place during the employees’ notice period.

She said the decision to terminate the projects was not made in bad faith as it had been beyond SSER’s control.

Twenty of the employees, including CEO Mohammed Azhar Osman Khairuddin, had been on a fixed contract for either one or two years while the remaining two were permanent staff.

Their monthly salaries ranged from RM3,000 to RM90,000.

SSER was represented by lawyers T Thavalingam and Sebastian Tay Hanxin while lawyer Nor Azlan Sharin appeared for Azhar and two others, Mohd Suffian Suboh and Raime Rizal Abdul Aziz. The rest were self-represented.

SSER was set up in 2016 as a wholly-owned subsidiary of Minister of Finance Inc (MoF Inc) with the aim of undertaking the MPP and TSGP projects, which were approved by the then-Barisan Nasional government.

After the 14th general election in May 2018, it was discovered that only 13% of the work was done although 87.7% of the total project value, amounting to RM8.25 billion, had been paid.

The company was also investigated by the Malaysian Anti-Corruption Commission (MACC) over its links with former 1MDB unit SRC International.

Its employees were placed on garden leave throughout the MACC investigation, with Grant Thornton Malaysia (GTM) engaged to manage the company’s financial and administrative functions.

The projects were later suspended and ultimately cancelled in September 2018 after Pakatan Harapan took over federal control.

Given the uncertainty of the projects’ future, the company served notices of retrenchment to all its employees in August, from the CEO and group president to his driver.

After the projects were axed, 31 employees filed a claim for unfair dismissal.

Of these, nine eventually withdrew their claims. The remaining 22 however maintained that their services were still required for “project closure work”.

They also claimed that GTM had taken over their jobs.

However, Ruwena said GTM had played only an administrative role and did not have the technical capability to carry out any operations related to the two projects.

She also said the last-in, first-out principle was not applicable in this case as all of the employees had been retrenched.

She added that employers are not obliged to transfer employees to other companies to avoid retrenchment or to consult or warn them ahead of their retrenchments.

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