PUTRAJAYA, April 14 — The Court of Appeal has awarded RM147,400 in compensation and back wages to a former AirAsia Berhad (AAB) co-pilot who was terminated during the COVID-19 pandemic in 2020.
A three-member bench comprising Justices Datuk Azmi Ariffin, Datuk Ahmad Fairuz Zainol Abidin, and Datin Paduka Evrol Mariette Peters allowed How Zheng Hong’s appeal to set aside the High Court’s dismissal of his judicial review.
Justice Azmi, who chaired the panel, awarded the sum, which comprises 24 months’ back wages and compensation in lieu of reinstatement.
However, the court deducted RM16,500 previously paid by AAB as retrenchment benefits and RM23,100 from his post-dismissal earnings.
Delivering the court’s unanimous decision, Justice Azmi said the Industrial Court and High Court erred in relying on AirAsia Group Berhad’s (AAGB) consolidated losses to justify retrenching an employee of AAB, which is a separate legal entity.
The separate legal entity principle requires that a subsidiary’s financial position be assessed on its own merits rather than imputed from its parent company.
The court also ordered AAB, a low-cost carrier and a wholly-owned subsidiary of AAGB (now known as Capital A Berhad), to pay RM50,000 in costs.
He added that AAB’s reliance on How’s medical leave record as a basis for retrenchment was fundamentally unjust and amounted to a departure from the ‘Last-In, First-Out’ (LIFO) principle.
“The claimant was contractually entitled to 22 days of sick leave per year. Taking medical leave when unwell is not a performance failure but a safety imperative for pilots, who are legally and professionally obligated to be fit before flying.
“The poor ratings were weaponised retroactively to justify his elimination, which the Industrial Court and High Court erred in accepting as bona fide,” Justice Azmi said.
He noted that How had proposed a reasonable, good-faith solution by voluntarily offering to take two years of unpaid leave to save his job.
Justice Azmi described it as a self-sacrificing proposal from a loyal employee with nearly 11 years of service, to help the company weather the crisis.
How joined AAB in 2009 but was retrenched in June 2020. On May 15, 2023, the Industrial Court dismissed How’s claim, ruling that AAB had proven his termination was with just cause and excuse.
He subsequently filed a judicial review at the High Court to quash the Industrial Court's decision. However, the High Court dismissed the application on October 3, 2024, prompting the appeal.
How’s lawyer Lai Chee Hoe informed the court that his client is currently employed as a pilot with another airline and had previously worked as an e-hailing driver following his termination.
AAB had maintained that the termination was due to financial difficulties caused by travel restrictions and the Movement Control Order.
Lawyers Deyvinah Ganesalingam and Low Yen Hau also represented How, while Wendy Lam Mei Kuan and Wong Jia Ee appeared for AAB.
