The dispute before this court is pursuant to a reference made by the Honourable Minister of Human Resources under s 20(3) of the Industrial Relations Act 1967. The reference is with regards to dismissal of Encik Mohamad bin Shafie and 48 others by the company.

The company dismissed all the claimants by an identical letter on the 6 September 2001. The reason being:

severely affected by the economic downturn since 1998. In view of the above there is a need to restructure and reorganise our company in order to reduce the cost and this necessitates a reduction in head counts.

The claimants were employed by the company to produce pre-cast concrete products such as Piles, Reinforced Concrete (RC) products, pre-stressed concrete beams, vertical case piles and spun pipes.

The company manufactured the above products from four different locations namely:

(1) Hume Industries (M) Bhd at Beranang, Selangor.

(2) Hume Industries (M) Bhd at Prai, Penang.

(3) Hume Industries (M) Bhd at Pasir Gudang, Johor.

(4) Hume Industries (M) Bhd at Kuantan, Pahang.

The 49 claimants were employed at the company's plant at Beranang, Selangor.

As early as 1990, the company used a contractor known as Kum Sang. He was employed by the company then to do minor jobs like tying wires and to do house keeping. He was not involved in production work.

Sometime in 1997, the contractor Kum Sang, operated two other plants known as Beranang two and at Rinching. The company allowed the contractor to produce company products. In early 2001, the contractor opened another factory at Sungai Choh in Rawang. This time, the company had transferred all it's product moulds to the contractor's factory at Rawang, even before the company signed the agreement with Kum Sang. (See CO pp. 91 to 111).

The claimants aver that the action by the company had resulted in Malaysian permanent workers losing their normal work, when the contractor started producing the company's products, which the claimants were employed to do. There was no excess of Malaysian permanent workers, but the job functions of those local workers were contracted to the contractor, who employed foreign contract workers, to produce the company's products.

The claimants also say that the moment the company's products were produced by the contractor, the company started it's reduction of permanent Malaysian workers. In the month of April 2001, the company by VSS and LIFO, retrenched 85 workers. In July 2001, the company again retrenched 38 workers and in September 2001, the company retrenched another 88 workers including the claimants.

In the submissions of the claimants' representative, they have stated that the company had systematically reduced its workforce from 211 to 30 by September 2001, but all the company's products are to date still produced by the Kum Sang contractor from it's Rawang plant using the company's logo.

As to date the company did not cease producing the same products which the claimants were producing since their employment with the company. The only change is that the works formerly carried on and conducted by the claimants is given to a contractor, Kum Sang who does the work with the assistance of foreign contract workers.

Mr. Brabakarun says it is trite law that where the company gives a reason for terminating the services of the workman, it is incumbent upon the employer to justify the reason advanced. Where the employer gives redundancy as a reason, therefore, it is bound to prove redundancy by adducing cogent evidence before the court. Further, on a finding that there was no redundancy, the inevitable conclusion would be that the termination of employee' services is without just cause or excuse. This was so held by the Federal court in Goon Kwee Phov v. J & P Coats (M) Bhd, [1981] 2 MLJ 129, in the following manner. (Please see p. 8 Bundle of Authority).

If the employer chooses to give a reason for the action taken by him, the duty of the Industrial court will be to enquire whether that excuse or reason has