AirAsia gets final shot to overturn RM147,400 payout to ex-pilot

AirAsia Bhd has secured a final chance to challenge a Court of Appeal ruling that awarded RM147,400 to a former co-pilot who was retrenched during the Covid-19 pandemic.

In a split decision, the Federal Court today granted AirAsia leave to appeal after two of the judges on the three-member panel found that seven questions of law warranted consideration.

Justice Rhodzariah Bujang, who chaired the bench, and Justice Lee Swee Seng allowed the application, while Justice Azimah Omar dissented.

AirAsia’s lawyer Wendy Lam said the questions involved important legal principles and matters of public interest.

The issues include whether a company can rely on its corporate group’s financial position to justify retrenchment, or whether the actual employing company’s financial standing must be considered.

The Federal Court will also consider whether statutory or contractual medical leave can be used as a negative factor in selecting employees for retrenchment, and whether employers must first consider measures such as unpaid leave or salary reductions.

Another question concerns whether an employer can rely on an employee’s previous performance ratings in a retrenchment exercise without first giving the employee an opportunity to improve.

In April, the Court of Appeal unanimously ruled in favour of former co-pilot How Zheng Hong, finding that AirAsia had unlawfully retrenched him.

Justice Azmi Ariffin, who chaired the three-member panel, said the Industrial Court and High Court erred by relying on the consolidated losses of AirAsia’s parent company, AirAsia Group Bhd, a separate legal entity.

He said AirAsia failed to produce its own financial statements for the first two quarters of 2020 to establish financial hardship.

Azmi also found it fundamentally unjust for AirAsia to rely on How’s medical leave record as a basis for his retrenchment.

How, who joined AirAsia in 2009, was retrenched in June 2020.

The Court of Appeal awarded him RM147,400, comprising back wages and compensation instead of reinstatement, after taking into account his previous compensation and post-dismissal earnings.

Lawyers Lai Chee Hoe, G Deyvinah and Low Yen Hau appeared for How, while Wong Jia Ee also acted for AirAsia in today’s proceedings.

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