On 14 February 2022, the Kuala Lumpur Labor Court (case no. 14/4-2988/20) ruled that the dismissal of an employee should be the last step in cost-cutting measures and, although the financial constraints stemming from the pandemic could result in outright dismissal, employers must still carry out resizing with due process.

The Court upheld the appeal of a manager who had been hired on 13 January 2020 as General Manager of its International Sales Department, with the task of developing the sector of international real estate sales, and who had complained of having been unfairly fired on 19 April 2020 under the pretext of the COVID-19 pandemic.

The Malaysian government had established restrictions on 18 March 2020, and the Court noted that a decrease in turnover had not happened yet between that moment and its firing. The company was still profitable, and subsequently appointed three new directors, demonstrating that it was in a financially active state. Finally, there was no evidence that the company had tried to scale back its financial constraints prior to the forced layoff: there had been no wage cuts or other forms of cost reductions at a time of crisis.

Therefore, the Court sentenced the company to reinstate the employee to finish the probationary period and to pay him compensation.

Full text of the decision available at kuekong.com en