KUALA LUMPUR, March 23 ― The Industrial Court has ruled that a now-defunct unit under the Proton Group had not wrongfully dismissed several expatriates, including those previously involved in designing national carmaker's Gen-2 and Satria Neo models.

In dismissing the claim by the six claimants, the Industrial Court said Lotus Engineering Malaysia Sdn Bhd had proved that the termination of their employment was due to “genuine reasons of financial losses” which had also caused the company to shut down in 2012.

The court concluded that the six expatriates had failed to show documentary evidence to support their claim that their termination was unlawful without just cause or excuse.

“Nor were they able to show that the company had bad motives or acted capriciously in not finding them alternative employments within the group and in dismissing them,” the Industrial Court chairman Datuk Mary Shakila G. Azariah wrote in her judgment dated March 15 and sighted by Malay Mail Online this week.

The claim was brought by the company's system team leader Andrew David Nicolson, general manager Ian Maxwell, Asean key account manager and bid management team leader Stuart Ian Worrow, system team leader Lee Michael Jones, group chief engineer Douglas Robert Chester, and quality manager Matthew Clive Walton.

Worrow said his responsibility included project planning for Proton’s vehicle design and development projects for various car models including the Gen-2 and Satria Neo, enhancement of the Saga model, test and development of the Jumbuck model, the Proton rally model, and Proton Waja’s ride and handling development.

Jones said he and his team had in the early 2000s designed the Gen-2, Satria Neo, and MSX concept car models; while Chester said Proton had hired him and the other claimants to design and develop the Gen-2, Satria Neo, and Waja models.

In the events leading to the wrongful termination claim, Lotus Engineering Malaysia was said to have notified the six on September 24, 2012 that it would cease operations from September 28 onwards and that alternative positions within the group of companies of DRB-Hicom, Proton and Lotus would be offered; and had a few days later summarily dismissed them with effect from September 30 the same year.

DRB-Hicom Bhd fully owns Proton Holdings Bhd, which in turn owns Lotus Cars since 1996.

The court said it was satisfied that Lotus Engineering's closing down was justified and due to its debts arising from its inability to collect money owed by its main customer ― Chinese automotive manufacturer Youngman, noting that financial statements showed 99 per cent of its trade was from Youngman.

“The claimants had not tendered any evidence to show that the retrenchment was motivated by bad faith and a desire to victimise or harass the claimants,” the court said, adding that the six had also failed to show the company's closure was aimed at victimising employees by depriving them of their fundamental right to earn a livelihood.

“Perhaps the company suffered losses as a result of bad management decisions but this does not disentitle it from retrenching its workmen,” it said, adding that it was satisfied that the company's closure was due to cogent financial considerations and the six's retrenchment was in good faith.

The court also noted that Lotus Engineering Malaysia had testified that it had briefed the six on September 10 that the company would be shutting down, and that other companies within the group had hired its 58 local employees but alternative employment could not be found for the six claimants who had specialised roles.

The court found the six to have been employed under fixed term contracts and not as permanent staff, also saying an employer is not obliged to find or offer alternative suitable employment if the retrenchment exercise is genuine and carried out properly.

Noting that it would be difficult to find suitable alternative jobs for them due to their specialised skills and the need to apply for fresh work permits preventing a simple transfer unlike their local colleagues, the court said it would not have been reasonable for the six to be redeployed within the Proton Group or the shuttered Lotus Engineering Malaysia.

Lotus Engineering Malaysia was represented by lawyer Datuk T. Thavalingam, while the six were represented by lawyer Felicia Ho.