[1] The claimant was employed as a security manager by the company since 1 August 2001 until his dismissal on 15 March 2004 by way of retrenchment hence leading to this reference. In his statement of case, the claimant has fundamentally pleaded that the termination of his services was under the guise of a retrenchment ie, that the purported retrenchment was not valid and justified while the company has contended that retrenchment was justified due to heavy losses which necessitated the company to restructure and reorganise it operations

[2] Retrenchment simply means the company's business still continues but a portion of the staff is discharged as surplus or redundant in order to reduce costs Dunston Ayadurai in "Industrial Relations In Malaysia" at p 121 defines it this way:-

Redundancy refers to a surplus of labour and is normally the result of a reorganisation of the business of an employer; and its usual consequence is retrenchment, ie, the termination by the employer of those employees found to be surplus to his requirements after the reorganisation. Thus, there must first be redundancy or surplus of labour before there can be retrenchment or termination of the surplus

[3] In the Court of Appeal judgement in William Jacks & Co (M) Sdn Bhd v. S. Balasingam, [2000] 7 MLJ 1, Gopal Sri Ram JCA spelt out the test to justify retrenchment:-

'Retrenchment' has been defined as the discharge of surplus labour or staff by an employer for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action. Whether the retrenchment exercise in a particular case is bona fide or otherwise is a question of fact and of degree depending on the peculiar circumstances of the case. It is well-settled that the employer is entitled to organise his business in the manner he considers best. So long as the managerial power is exercised bona fide, the decision is immune from examination even by the Industrial Court. However, the Industrial Court is empowered and indeed duty-bound, to investigate the facts and circumstances of the case to determine whether the exercise of power is in fact bona fide.

[4] Consequently it is pertinent to consider whether there was in fact a redundancy situation that led to the retrenchment of the claimant before determining whether the dismissal was with just cause or excuse. The burden explicitly lies on the company to prove actual redundancy. In Bayer (M) Sdn Bhd v. Ng Hong Pau, [1999] 4 MLJ 361, the Court of Appeal states at p 160:-

On redundancy it cannot be gainsaid that the appellant must come to the Court with concrete proof. The burden is on the appellant to prove actual redundancy on which the dismissal was grounded. (See Chapman and Others v. Goonvean and Rostawvack China Clay Co Ltd [1983] 2 All ER).

[5] The company manages and operates the Ipoh City and Country Club ("the Club") that provides recreational facilities to its members The company in its letter of 8 March 2004 dismissing the claimant gave the reason for the dismissal as being "with the contracting out of the security section to a third party company, your services with the Club as a security manager has become redundant as your position has been abolished". The company had decided to contract out the security section of the Club to a third party security company as part of its reorganisation plan for better efficiency and productivity (see p 11 COB1). In other words the company outsourced its security services which it did to Gemilang Security Services (M) Sdn Bhd with effect from 16 March 2004 (see p 124 to 131 COB1 for the service agreement by which Gemilang Security Services (M) Sdn Bhd would provide guards to guard and patrol the premises of the Club). This meant the entire security force engaged by the company was extinguished. This however must be distinguished from surplus of employees in any particular category of workers when a company chooses to reorganise his business for economic purposes in order