Employers must adhere to proper procedural standards and collective agreements when terminating employees, especially during ownership changes, to ensure just cause.

[1] This is an appeal by the appellants (the applicants in the High Court) against of the decision of the High Court dated 26 May 2016 that upheld the Industrial Court's Award No: 50 of 2015.

[2] We heard this appeal on 1 December 2016. After hearing the respective parties, we adjourned the matter for our consideration and decision. Before we adjourned the same, we ordered the parties to further submit on the issue of whether a company can transfer its employees to an associate company, which submission was to be delivered to our respective secretaries within a week from the date of hearing.

[3] We now give our decision and the reasons for the same.

[4] We will refer to the parties as they were described in the High Court.

Brief Background Facts

[5] The facts are elucidated from the various affidavits, the Award of the 2nd respondent, judgment of the learned High Court Judge and the submissions of the respective parties. In order to save judicial time, some of the facts as highlighted by the respective parties in the above-mentioned documents are adopted herein with and/or without modifications.

[6] The subject matter of this case was a reference under s 20(3) of the Industrial Relations Act 1967 (" IRA "). The applicants who were employees of Langkasuka Hotel and members of a union known as the National Union of Hotel, Bar & Restaurant Workers, Peninsular Malaysia ("Union") had lodged a complaint to the Department of Industrial Relations ("DIR") pertaining to their dismissal from the employment of Langkasuka Hotel without just cause and excuse. The Minister referred the representation to the Industrial Court for an award. On 15 January 2015, the Chairman of the Industrial Court, after a trial, found that the applicants were dismissed with just cause and excuse and dismissed the applicants' claims.

[7] The applicants then moved the High Court by way of a judicial review to quash the 2nd respondent's award and that too was dismissed by the High Court. Aggrieved by the said decision, the applicants then filed their appeal to this Court.

[8] The applicants were the employees of a hotel known as Langkasuka Resort Sdn Bhd/Langkasuka Beach Resort ("Langkasuka Hotel") in Pulau Langkawi, Kedah. The particulars of each applicant were as set out in exh A annexed to the applicants' Affidavit in Support of the application for judicial review sworn by Abu Bakar Salleh (see pp 60 to 94 of Jilid 2 of Appeal Record Part B & C). These employees were paid salaries and benefits in accordance with the terms and conditions as set out in the Collective Agreement ("CA") entered into between Langkasuka Hotel and the Union ("Union") dated 1 October 2006 (see pp 133-153 of Jilid 2 of Appeal Record Part B & C).

[9] On 2 April 2010, Langkasuka Hotel had notified the applicants that it had temporarily ceased operations with effect from 1 April 2010 for the purpose of renovation and repair works. The applicants were also notified that whilst the renovation and repair works were being carried out, these employees would be temporarily relocated at another Hotel known as Helang Hotel, also owned by the 1st respondent, subject to the same terms and conditions of employment.

[10] Based on the above understanding, the applicants and other employees relocated themselves at Helang Hotel.

[11] On 8 May 2010, the Union on behalf of the applicants w