Employers have the right to retrench based on bona fide reasons and are not bound by the Last In First Out principle if other valid criteria justify their decision.

[20] The Court will now have to scrutinize and analyse the reasons that led to the dismissal of the Claimant as stated in the retrenchment notice dated 29 April 2009 by the Company which has been reproduced earlier in the Award. The main reasons stated by the Company are that;

"Following our announcement on 13 April 2009, the restructuring and reorganisation of the Company's overall operations has resulted in certain positions being surplus to the requirement. We regret to inform you that your position as Senior Manager - FCF Export in the Export Department has become redundant."

[21] The crux issue that arose for the Court to deliberate and determine is whether the Claimant's service has become surplus to the requirements of the Company's business and thus creating a redundancy situation.

[22] The Company's Divisional Head for the Polymer Division, Eric Chan Hean Chin ("COW-6") stated in the evidence that the Company's sales started to decline in the year 2008 in the sales of FCF products and forced the Company to cut back on the production of FCF products. Sales and productions continued to plunge down for several months and more declines in 2009 were forecasted.

[23] COW-6 referred to his report that he wrote to the Board of Directors dated 23 March 2009 (p 12 of Bundle COB-4) wherein he states;

"For 1H of FY09, Polymer's Shah Alam Manufacturing Operations made a sales of RM54,195k and PBT of RM2,692k. However, as a result of the global economic downturn, in Q3 FY09 we registered a lower quarterly sales of RM19,011k but loss before tax (LBT) of RM1,482k. In fact, we have been registering four consecutive months of losses from November 8 till February 09. See Table below...."

[24] Weak demand is forecasted by FCF for the foreseeable future. For the last 4 months FCF's volume has declined by 40% to 50% against Plan ....'

[25] That evidence of COW-6 was consistent with Bank Negara Malaysia's Monthly Statistical Bulletin published in October 2010 reporting of the Malaysia economy as follows:

"..in 2009 it contracted by 1.7% because of the global financial crises. In 2010, the economy rebounded and grew at more than 10% in the first quarter of 2010. Thereafter the rate of growth declined to 8.9% in the second quarter of 2010. In the third quarter of 2010 the economy grew at a much slower rate of 5.3%. The economy is expected to perform not better than grow at 5%".

"....Malaysia's exports increased between 2001 and 2008 but in 2009 they declined by more than 16% due to global financial crises and the fall in demand for our manufactured exports in the USA and Europe. As a result of the decline in Malaysia's exports in 2009 the trade balance also declined from RM143,209 billion in 2008 to RM118,355 billion in 2009 or by more than 17%."

[26] According to COW-6, the state of the economy and its impact on the FCF sales were discussed, reviewed and reported in every Senior Management Meeting. This can be traced in the Minutes of Senior Management Meetings as follows:

At the meeting on 19 February 2008 the Claimant's report on his Export Sales was as follows:

"This month's sales of RM1,646k which was below plan by RM1,654k was one of the worst ever recorded in history."

[27] The Claimant's reports during the subsequent 15 months Senior Managers Meeting from 19 February 2008 to 19 May 2009 that his export sales were also bleak as summarized below:

(a) Claimant's March export sales were below plan by 11.

(b) Claimant's April export sales were below the previous financial year by 21.4%.

(c) Claimant's May export sales were below the previous financial year by RM388k.

(d) Claimant's July export sales were below the previous financial year by RM1,372k against last FY.

(e) Claimant's September export sales stated that all product segments were below actual last finan