Union mulls legal action over Holiday Inn closure

Holiday Inn resort in Batu Ferringhi, Penang, will close on June 30 after 40 years.

GEORGE TOWN: A hotel workers’ union, upset with the sudden closure of the Holiday Inn Resort in Batu Ferringhi, is considering legal action over the retrenchment and termination of the hotel workers.

Abu Mohamed Abu Baidah, Penang secretary of the National Union of Hotel, Bar and Restaurant Workers, said some of the workers were told to apply for a voluntary separation scheme (VSS) earlier this month.

This was after the resort’s impending closure on June 30 was made known via a memo to employees that was widely circulated on social media.

Abu Mohamed told FMT that the workers were told to leave the hotel this morning. Those staff who did not opt for VSS were given termination notices and “released from service” with immediate effect and told they would be “paid in lieu of notice”.

Two weeks ago, the workers were given an opportunity to apply for VSS. “Some are not too keen, as the low salary for hotel workers means that the amount of compensation, despite working for many years, would not be worth it,” Abu said.

“We will likely take legal action at the Industrial Court on behalf of the 62 union members affected,” he said.

“Temporarily closed”

The hotel’s parent company, Asia Garden Sdn Bhd, has confirmed that Holiday Inn would close on June 30 after 40 years in service.

“We will be temporarily closed until further notice,” AGSB manager Jeff Yap said when contacted. Without adding anything further, he said there were 194 staff at the resort.

In the termination letters to staff today, Yap had said the decision to close had been reached “after extensive consideration” and had been “an extremely difficult decision for our owners”.

However, the size of the Covid-19 crisis had proven to be overwhelming and a continuation of business was no longer viable, he said.

The Penang chairman of the Malaysian Association of Hotels, Khoo Boo Lim, said Holiday Inn was also a victim of the Covid-19 pandemic.

Jazz Hotel, a hotel in Seri Tanjung Pinang near Tanjung Tokong, was one of the first to shutter in Penang following the Covid-19 lockdown.