Listed firm can’t disguise dismissal as redesignation, says court

A listed company cannot escape liability for an unjustified dismissal by calling it a redesignation, the High Court has ruled.

Justice Alice Loke upheld an RM756,000 Industrial Court award to Minetech Resources Bhd’s former executive director of finance, Abdul Farid Abdul Kadir, after finding that the company’s own letter clearly terminated his employment.

She dismissed the company’s judicial review application challenging the award and ordered Minetech Resources, which has been renamed as Aizo Group Bhd, to pay Farid RM10,000 in costs.

In her grounds, the judge rejected Minetech’s argument that Farid was merely redesignated from executive director of finance to non-independent non-executive director.

Loke said the contents of the company’s Nov 16, 2020 notice, read with Farid’s letter of appointment, could only reasonably be understood as terminating his employment.

“I disagree with the contention of the company on the characterisation of the letter as a mere re-designation,” she said.

Farid was appointed executive director of finance in June 2020, reporting to executive chairman Awang Daud Awang Putera. He was paid RM45,000 a month, together with allowances.

On Nov 13, 2020, Minetech’s board redesignated him as a non-independent non-executive director, reducing his remuneration to a RM3,000 director’s fee.

Three days later, the company informed Farid that his service as executive director of finance had ceased and offered him RM128,330.77 in lieu of notice.

Farid treated the move as a dismissal without just cause or excuse.

The Industrial Court found his dismissal unjustified and awarded him RM756,000.

Minetech argued before the High Court that Farid remained an employee and was only removed as a director at an extraordinary general meeting (EGM) in June 2021.

Loke rejected this argument, saying the EGM related to his removal as a director and did not alter the earlier termination of his employment.

She also noted that the Industrial Court found no evidence supporting Minetech’s allegation of poor performance.

She said no warning letters or evidence was produced before the Industrial Court, setting out Farid’s alleged shortcomings or job scope.

Loke said the evidence supported the Industrial Court’s findings and disclosed no error warranting judicial review.

Alex Gan and Sharifah Nur Aneesa Al Aidid Habib Abdullah appeared for Minetech, while Colin Andrew Pereira and Shareef Basil Mohammad represented Farid.

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