This is a dispute between Koperatif Perumahan Angkatan Tentera Bhd. (hereinafter referred to as the Company) and Meor Othman Lotfi bin Haji Abdul Latiph (hereinafter referred to as the Claimant) which arose out of the dismissal of the latter by the former.

The fact that there was dismissal is not disputed. The letter of dismissal (CL2) dated 14 April, 1992 reads, inter alia:

1. Adalah saya diarah oleh Lembaga Pengarah yang telah bersidang pada 25 Mac 92, iaitu berpandukan kepada tiadanya apa-apa perniagaan atau projek yang sedang dilaksanakan oleh KPAT, maka Lembaga Pengarah telah memutuskan bahawa jawatan Setiausaha Bergaji dimansuhkan mulai O1 Mei 92. Justeru ini saudara akan ditamatkan perkhidmatan saudara pada O1 Mei 92.

2. ...

3. Lembaga Pengarah telah melantik seorang ahli Lembaga, iaitu Encik Yassin sebagai seorang setiausaha tidak bergaji. Maka saudara bolehlah menyerah tugas-tugas saudara kepada beliau pada 16 April 92.

It is well stated by the learned Chief Justice in the Federal Court in the case of Goon Kwee Phoy v. J.P. Coats (M) Bhd. (1981) 2MLJ at page 136 thus.

We do not see any material difference between a termination of the contract of employment by due notice and a unilateral dismissal of a summary nature. The effect is the same and the result must be the same. Where representations are made and are referred to the Industrial Court for enquiry, it is the duty of that Court to determine whether the termination or dismissal is with or without just cause or excuse. If the employer chooses to give a reason for the action taken by him, the duty of the Industrial Court will be to inquire whether the excuse or reason has or has not been made out. If it finds as a fact that it has not been proved, then the inevitable conclusion must be that the termination or dismissal was without just cause or excuse. The proper enquiry of the Court is the reason advanced by it and that Court or the High Court cannot go into another reason not relied on by the employer or find one for it.

From CL2 quoted above it is very clear that the Claimant's services were terminated because the Company abolished the post of a paid secretary on the ground that there was no business or projects currently being carried out by the Company. This is further fortified by paragraph 3 of the statement in reply.

In short the Claimant was retrenched.

I would like to restate the salient points of the accepted general principles in industrial law on retrenchment:

(a) It is for the management to decide the strength of its staff which it considers necessary for efficiency in its undertaking. When the management decides that the workmen are surplus and that there is, therefore, a need for retrenchment, an arbitration tribunal will not intervene unless it is shown that the decision was capricious or without reason or was mala fide or was actuated by victimisation.

(b) It is the right of every employer to reorganise his business in any manner for the purpose of economy or convenience provided he acts bona fide.

(c) An employer has a right to determine the volume of his staff consistent with his business and if by the implementation of the re-organisation scheme adopted for reason of economy and better management, services of some employees become excess of requirements the employer is entitled to discharge such excess.

(d) In the absence of any express agreement on the point, an employer is not obliged to find suitable employment for redundant workers.

(e) In effecting retrenchment, the employer should comply with industrial principle of LIFO unless there are sound and valid reasons for departure. Thus, an employer is not entirely denied the freedom to depart from the principle.

(f) Retrenchment of an employee can be justified if carried out for profitability, economy or convenience of the employer's business. Services of an employee may well become surplus

(See Cycle & C