Soo Ai Lin:

[1] In this reference, Shahirman bin Sahalan and 21 others ("the claimants") claim that their dismissals by way of retrenchment on the ground of redundancy by and from the service of Natseven TV Sdn Bhd ("the company"), effective 31 November 1998, were without just cause or excuse.

[2] In stating that their dismissals were without just cause or excuse, the claimants vide their respective and standard Statement of Case (SOC) contended that there was no justification or necessity for the retrenchment, that they were infact not redundant, and that the retrenchment was effected in breach of the Code of Conduct for Industrial Harmony.

[3] The company's case is that the claimants were genuinely retrenched as they were redundant in consequence of the company's restructuring of its business operations and reorganisation of its manpower requirements

[4] In its Statement in Reply, the company pleaded the following as the basis for the retrenchment:-

3.1 In 1996, the company obtained a license to operate a private television station and thereafter the company incurred substantial expenditure to set up and operate the new television station. The company officially commenced transmission on 7 April 1998.

3.2 When the company was first set up, it placed much emphasis on in-house production of local content/programmes and towards achieving this end, the company recruited suitably qualified personnel, including the claimant.

3.3.........

3.4 The income for the company's television station was to be derived substantially from the airing of advertisements once transmissions commenced.

3.5 At the time that the company commenced transmission, the existing television stations were already facing a marked decline in advertisement revenue due to the regional financial crisis and economic slowdown. The company's entry into TV broadcasting increased competition for the already limited advertisement revenue.

3.6 Since the commencement of transmission, the company was unable to achieve its expected share of the advertisement revenue. The company's operating costs were exceedingly high and the company was facing severe financial constraints These financial constraints made it difficult for the company to meet its statutory and contractual obligations, which includes the payment of EPF contributions, Income Tax deductions and the provision of some fringe benefits to its employees The company was also faced with difficulties in paying its other creditors Accordingly, the company was obliged to revamp and rationalise its operations to address this situation.

3.7 With effect from 1 July 1998, the company implemented pro-active steps to rationalise its business and organisation. As part of the reorganisation, the company closed down its programme production operation as it was financially not viable to continue making in-house productions The Information Technology Unit was also closed down and other departments in the company had to be downsized.

3.8 Arising out of the reorganisation of the company's operations, about 85 employees, including the claimant, were surplus to the requirements of the company. The company was compelled to review the continued retention of these redundant employees

3.9 The financial constraints faced by the company did not make it possible for it to continue to retain employees who were surplus to its requirement and the company was obliged to undertake a retrenchment exercise.

3.10 The claimant was by a letter dated 31 October 1998 retrenched with effect from 30 November 1998 and paid compensation of 1 month's basic salary for each year of service together with 2 months' salary in lieu of the shortfall in notice.

[5] The company denies the claimants' abovementioned contentions and avers that the claimants' dismissals were for just cause and excuse in the circumstances of the case.

The Issue

[6] The main issue before this court is whether the reasons for the claimants' termination as given by the company have been made out. (See Goon Kwe