The obligation to provide notice of termination under the Employment Act 1955 ensures employees retain their choice of employer during changes in business ownership.

[1] An elaborate argument has been addressed in support of this appeal. In essence it is an invitation for us to depart from the majority judgments of this court in Radtha Raju & Ors v. Dunlop Estates Bhd, [1996] 1 MLJ 561. The background against which the invitation rests consists of facts that are not in serious dispute.

[2] The respondents; and there are 336 of them; were at all material times employed by the first appellant on two estates. These were the Ulu Yam Estate and the Bukit Beruntung Estate. The first appellant owned both estates. But the second appellant managed them. In September 1990, the first appellant sold both estates to a company known as Prospell Enterprise Sdn Bhd, or Prospell for short. On 6 November 1990, the first appellant wrote a letter to the respondents. It informed the respondents of the sale of the estates to Prospell. It said that the change of ownership would not affect the terms and conditions of the respondents' service. The letter went on to say that the respondents' employment would continue as if there had been no change in the employer.

[3] On the very next day, ie, 7 November 1990, Prospell wrote to the respondents. Its letter is similar to that written by the first appellant. Apart from informing the respondents that it was the new owner of the two estates, it offered the respondents, with effect from 7 November 1990, to continue their employment with no change in their terms and conditions of service, as if there had been no change in the employer.

[4] All the respondents accepted Prospell's offer Later, they commenced an action against the appellants. They claimed an indemnity under s 13(1) of the Employment Act 1955 ("the Act") on the ground that the appellants had failed to give them notices of termination of their contracts in accordance with s 12 of the Act.

[5] The appellants resisted the claim principally on the ground that there had been no break in the continuity of their contracts of service. The respondents had therefore suffered no actual loss of employment. Since there was no loss, no question of an indemnity arose.

[6] These rival contentions were presented before James Foong J, at a trial in which witnesses were called by both sides. However, the issue that emerged at the conclusion of the trial resolved itself into a question of law. It is whether, on the facts as found by the learned judge, the appellants were obliged to indemnify the respondents under s 13(1) of the Act. The learned judge answered that question in the respondents' favour Accordingly, he entered judgment for the respondents. In arriving at his conclusions, he considered himself bound by the majority decision of this court in Radtha Raju & Ors v. Dunlop Estates Bhd, [1996] 1 MLJ 561. We must say at once that the learned judge was entirely correct in his approach since he acted in obedience to the doctrine of stare decisis and judicial discipline.

[7] Before us, it has been argued that the construction that the learned judge placed on ss 12 and 13 of the Act amounts to a misdirection in law. This is, as we said earlier, a frontal attack on the correctness of the majority view expressed in Radtha Raju's case. It therefore behoves us to reconsider the question afresh with a view of ascertaining whether this is an appropriate case for us to depart from an earlier decision of this court.

[8] The circumstances in which we may embark upon such course is not in doubt. They are set out in the judgment of Lord Greene MR in Young v. Bristol Aeroplane Co Ltd [1944] 2 All ER 293, at p 298:

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