Denys Roberts CJ:

Introduction

This action is brought by 23 former employees of the defendant ("Shell") for a total amount of B$1,381,696.72, being the sum of redundancy payments, to which the plaintiffs claim to be entitled, by virtue of the conditions of their employment with he defendant.

Plaintiffs 1-19, inclusive, belong to the category of Technical and Administrative Staff ("TAS") and plaintiffs 20-23 to the category of Supervisory and Specialist Staff ("SSS"). All plaintiffs were employed on pensionable terms, for which the normal retiring age is 55 years.

Some of the terms of the plaintiffs' employment were sent out in a manual published by Shell called the "Personnel Administration Manual ("PAM"). This Manual was amended, with effect from 16 November 1981, to include the following, intended to be applicable to both TAS and SSS:

9.07 Termination for reasons of Redundancy

In cases of redundancy as much advance warning as possible should be given and formal notice in writing of not less than 1 month given to the employees concerned.

Redundancy payment is made on the following basis:

1½ months's basis salary for each year of service; with a maximum of 36 months' basic salary irrespective and independent of other end of service benefits. However, in no case shall the maximum amount payable exceed 40% of the employee's last drawn basis monthly salary, multiplied by the number of months left in the period between his date of release and the date on which the employee would have reached full retirement age.

In addition, the employee concerned receives his entitlement due to him from the Brunei Shell Provident Fund and Brunei Shell Retirement Benefit Fund (refer ss. 9.01 and 9.02 and respective subsections).

Payments is made for proportionate home leave due at the date of expiry of work and for proportionate annual bonus based on the date service is completed, i.e., date of expiry of work is extended by the number of days of proportionate leave due.

Redundancy payments do not apply to employees on Short Term Contract.

On 31 January 1985, the Superintendent of the Marine Department, on behalf of Shell, issued to each plaintiff, individually, a letter warning him that Shell had been carrying out a study of its marine operations, in view of the general decline in company activity. It stated that it had been decided to run down the Shell fleet and to rely to a greater extent on the use of privately owned vessels.

The letter informed the addressees that their employment with the company "may be terminated during the implementation of these changes", and stated that it was intended as a general notification and did not constitute formal notice of termination of employment.

The letter promised that Shell would give six months notice of termination to those affected and would also make ex gratia payment, equivalent to two months' basic salary, as a resettlement allowance, payable at the date of leaving the service. Other end of service benefits would be applied at the time at which employment terminated and employment benefit, such as housing, allowances and medical treatment would be continued until the date when the employee left the service.

On various dates between 28 February and 25 July 1985, each of the plaintiffs received a formal notice of termination of employment. Each such notice gave the plaintiffs six months' notice with pay and stated that an ex gratia resettlement allowance of the months basic pay would be paid, as would all employment and end of service benefits.

Neither the warning letter of 31 January nor the later letter terminating employment made any mention of redundancy payments and none have been made.

The plaintiffs say that the general effect of the warning letter and of the subsequent notice of termination was to terminate their services by reason of redundancy, which is not disputed by Shell, and that they are therefore entitled to redundancy payments, which is disputed.

SSS Employees

Unlike TAS,