Background

This reference emanates from a claim by Cheong Kok Leng (hereinafter referred to as "the claimant") against Siemens Malaysia Sdn Bhd (formerly known as Siemens Electrical Engineering Sdn Bhd) (hereinafter referred to as "the company") for terminating the claimant's services from 3 March 2000.

The brief undisputed facts of the case as per the statement of agreed facts are as follows The claimant joined the company on 17 May 1995 as a senior engineer The claimant's last drawn salary was RM9425 per month together with benefits of Employee Provident Fund contribution, RM100,000 group personal accident insurance, RM1200 car insurance, RM2000 medical care, RM1500 car maintenance and 18 days paid annual leave (ABOD p 1-4). The claimant was confirmed in his position vide letter dated 9 January 1996 (ABOD p 5). The claimant did receive salary increments of RM710 on January 1997 and RM500 in January 1998 (ABOD p 6-8). The claimant did receive bonus at the following times in the following amounts: on 1 January 1996 the sum of RM11,235, on 1 January 1997 the sum of RM8200, on 1 January 1998 the sum of RM8200 and on 1 January 1999 the sum of RM8200 (ABOD p 9-11). The company retrenched the claimant vide a letter dated 2 March 2000 (ABOD p 27-28). It is also not an issue that the claimant was attached to the Overhead AC Power Line Department of the company, which is a department in the Power Transmission and Distribution Division (PTD). The claimant's department is designated as Cost Center 10570-EVH Transmission Business Line. The claimant's duties and responsibilities are:-

preparation of tenders, sourcing of materials, negotiating prices and testing of materials at manufacturers' premises (locally and overseas) to ascertain their quality before they were accepted for use in the projects, providing technical and logistical support to the site management team during the implementation of power transmission line projects, preparation of project documentation, liasing and providing service to the clients in resolving problems related to the projects

(see Q and A of claimant's evidence-in-chief (CLWS 1; para 4.1 of statement in reply (SIR); para 1 of ABOD p 1 (letter of appointment).

The issue before the court is whether the claimant's termination by the company vide letter dated 2 March 2000 is with just cause or excuse.

The company's case is primarily grounded on the basis that the claimant's position was surplus to the company's operating requirements and was thus redundant, whereby the claimants services and duties became redundant and/or would have diminished to such an extent that the purpose of his employment ceased and his position in the company was no longer tenable (see para 5.6 statement in reply). The claimant opposed this ground as being made without just cause or excuse and alternatively that his dismissal was contrary to the principles of natural justice, equity, good conscience and unfair labour practice.

The Law

The employer's right to retrench in industrial jurisprudence is well settled as can be seen from existing case law and textbook authorities The principle has been alluded to by Tuan Steve LK Shim (nor chief Judge of Sabah and Sarawak) in Firex Sdn Bhd v. Ng Shoo Waa; [1990] 1 ILR 226, a case involving the retrenchment of a sales manager In dismissing the claimant's claim, his Lordship referred to a passage in Ong Lean Phaik v. CF Sharp & Co (M) Sdn Bhd; [1980] 1 ILR 284 (Award No 121/80) at p 227:-

It is the right of every employer to reorganise his business in any manner for the purpose of economy or convenience provided he acts bona fide. He should not carry out the reorganisations for the purpose of victimising any of his employees and getting rid of his services Victimisation in this context means punishment by way of dismissal of an innocent workman who has in some way incurred the displeasure of his employer.... In other words, if the employer goes through the exercise of a reorganisation only for the pu