In a significant ruling by the Industrial Court, Widad College has been ordered to compensate 17 lecturers nearly RM1.4 million for unfair dismissal. The court concluded that the retrenchment of these educators lacked justification and was not conducted in good faith.
According to FMT, court chairman Nur Fauzah Mokhtar stated that Widad College failed to substantiate the redundancy of the lecturers positions, which was cited as the reason for their dismissal. According to Nur Fauzah, Widad Education Sdn Bhd, the operator of Widad University College and Widad College, did not present sufficient evidence of significant cost-cutting measures that would warrant the retrenchment.
Nur Fauzah expressed dissatisfaction with the evidence provided, pointing out that no real efforts, other than dismissing the lecturers, were made to reduce operational costs. She emphasized that the company did not offer any alternative solutions such as salary reductions, fewer working days, or transfers within the organization.
The court also noted the absence of clear criteria for selecting which lecturers to retrench. Despite the involvement of the management committee in making the dismissal decisions, none of the witnesses could conclusively explain the selection process. This further undermined the credibility of the retrenchment process.
The lecturers, who had served the college between four and twenty years and earned monthly salaries ranging from RM2,100 to RM3,950, were retrenched on June 30, 2021, following a three-month notice period. The court awarded the dismissed lecturers compensation ranging from RM51,150 to RM114,767 each. This compensation covers reinstatement in lieu, back wages, and unused annual leave.
In their statements, the lecturers expressed shock at their abrupt dismissal, noting the absence of prior discussions or warnings about the college's financial difficulties. They also highlighted that no cost-saving measures other than their dismissal were proposed, nor were they offered transfers or alternative roles within the institution.
The lecturers further alleged that the company continued to spend on events, such as a corporate dinner party at Sri Manja Boutique Hotel in December 2021, despite claiming financial distress. However, Widad Education countered this by stating that the events were funded by staff and student contributions, not the colleges finances.
Widad Education acknowledged experiencing significant financial difficulties, citing RM19 million in losses over four consecutive years. The company also faced a decline in student intake from 2016 to 2020, further straining its finances. It reported being unable to pay employee salaries, monthly tax deductions, EPF, and Socso contributions, resulting in arrears amounting to RM5.89 million prior to the lecturers retrenchment.
This ruling by the Industrial Court underscores the importance of transparency and fairness in employment practices. Employers must ensure that retrenchment processes are justified and conducted in good faith, with clear communication and alternatives provided to affected employees. The compensation awarded to the 17 lecturers serves as a reminder of the legal and ethical obligations employers have toward their staff, especially during financial hardships.
Source: FMT
