Court: Lifo principle applies to all

KUALA LUMPUR: The Industrial Court has ruled that the "last in, first out'' (Lifo) principle is applicable to all employees in a company during a retrenchment exercise and should not be by job function or category.

Chairman Siti Saleha Abu Bakar said this in ordering the reinstatement of Mohamat Ali Hashim, Syed Othman Syed Ibrahim, Mat Sen Mat Salleh and Kamaruddin Man in Golden Plus Granite Sdn Bhd.

In the award dated Feb 26, she said that the Non-Metallic Mineral Products Manufacturing Employees Union had argued that the four should not be retrenched because they were more senior than others who were retained in service.

Golden Plus, however, had submitted that surplus of a type of work was one of the considerations taken into account in a retrenchment exercise, said Siti Saleha.

She said the company had used the example that a welder's work was different from that of a heavy equipment operator, and that when there was a surplus of employees, the seniority of the employee in that type of work or category was considered and not his seniority in the service.

Dismissing the company's arguments, Siti Saleha ruled that the company had not complied with the Lifo principle.

She said the claimants should not have been retrenched over the others who were more junior to them in service.

"The court is of the view that the company's contention that what is intended by Article 29 (of the Collective Agreement) is the seniority in the type of work done is unfair and unjust.

"This would mean that a very senior employee who has just been transferred to do a different type of job in another category will be retrenched over another employee who has been in the service for a shorter period of time,'' said Siti Saleha.

The court also ordered Golden Plus to pay the four all arrears of wages and any other monetary benefits due and owed to them.

She added, however, that the retrenchment benefits received by all of them were to be deducted from the payment.

Mohamat Ali, Syed Othman, Mat Sen and Kamaruddin received RM23,849.42, RM30,013.08, RM8,213.10 and RM19,742.09, respectively when they were retrenched.