A strong performer. Can you still be retrenched?

Meeting or exceeding sales targets is important to an employee’s record. It does not necessarily answer whether the employer still requires the same role after restructuring. Equally, calling an exercise a restructuring does not, by itself, prove that retrenchment is justified.

Mohd Bakri Mohd Ali Hanafiah v Nokia Service and Networks Malaysia [2026] MELRU 1249

What led to the dispute?

The employee joined Nokia in November 2022 as a Customer Team Head handling Celcom and Digi accounts. He relied on his sales achievements and an award for sales performance when challenging the subsequent termination of his employment.

The company said that its global restructuring dissolved the Customer Experience organisation and abolished his generalist role. Customer responsibilities were reorganised into specialist business groups. The employee disputed genuine redundancy and argued that his work had effectively been taken over by others.

A mutual separation proposal was offered but not accepted. The company subsequently issued a termination letter. The dispute before the Industrial Court was whether the retrenchment was carried out with just cause or excuse.

Why did the Industrial Court uphold the retrenchment?

In its award dated 15 June 2026, the court accepted that the restructuring was genuine and that the employee’s former role had been abolished. It found that the employer had proved a fair and bona fide retrenchment, and dismissed the employee’s claim.

The court considered the evidence of the restructuring, financial pressure and changes to the organisation. The case was not decided merely by comparing the employee’s sales results with the company’s decision. The inquiry concerned the continued need for his role and the fairness of the exercise.

The company also relied on opportunities for the employee to apply for other roles through its internal job market. The court took into account that he had been advised to use that channel but had not applied. It considered these circumstances together with the restructuring evidence.

These findings do not mean that rejecting a mutual separation proposal amounts to resignation, or that failing to apply for another role automatically makes a dismissal fair. The court still required the employer to establish its justification for retrenchment.

What should businesses and employees take note of?

Performance and redundancy are different questions. An employee may perform well in a role that is genuinely no longer required. Conversely, an employer cannot establish redundancy merely by changing a job title while retaining substantially the same staffing need.

For an employer, the practical evidence includes the business reasons, organisation charts before and after restructuring, changes in duties, selection criteria and available alternatives. A general statement about group restructuring should be supported by an explanation of its actual effect on the relevant employment.

For an employee challenging retrenchment, strong performance may be relevant background, but the claim should also address the alleged redundancy: whether the role truly disappeared, how the work changed, who now performs it and how the selection was made.

The lesson is that neither a good appraisal nor a restructuring announcement settles the dispute on its own. The evidence must show what changed in the business and whether that change justified the particular retrenchment.

Read the Industrial Court award on eLaw

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