The employer must comply with industrial relations standards when conducting retrenchments, even in bona fide redundancy situations.

In this regard, management should bear in mind the succinct words in the award handed down in East Asiatic Company (M) Bhd v. Valen Noel Yap ; [1987] 1 ILR 363 as follows:-

For it is the right and privilege of every employer to reorganise his business in any manner he thinks fit for the purpose of economy or even convenience; and if by implementing a reorganising scheme for genuine reasons for better management and economy the service of some employees become excess of requirements, the employer is entitled to discharge such excess But this right of the employer is limited by the rule that he must act bona fide and not capriciously or with motives of victimisation or unfair labour practice. Nor does this right for instance entitle an employer under the cover of reorganisation, to rid himself of employees who have offended him in some way or to promote the interests of some favoured employees to the detriment of others

Once that first question is answered, the second is posed to wit whether the consequential retrenchment was made in compliance or in conformity with accepted standards and principles of good industrial relations practice. In respect of the second question, the court has generally adopted the principles contained in the document intituled "Areas for Co-operation and Agreed Industrial Relations Practices" annexed to the Code of Conduct for Industrial Harmony (hereinafter referred to as the "Agreed Practices" for the sake of brevity). It is also important to bear in mind that the concern underlying the said Agreed Practices is that the management of the redundancy situation should be fair and just.

It has been held that the Code has "no legal force or sanction" (Penang & S. Prai Textile & Garment Industry Employees' Union v. Dragon & Phoenix, Penang, & Anor , ). The court has, however, received into its jurisprudence some of the Agreed Practices The incremental adoption of other practices will go a long way towards creatively establishing more binding and effective norms and standards in the interest of industrial peace and harmony. In doing so, the court has to carefully develop principles for their application, the permitted departure therefrom and the consequences for any breaches of the said practices The authority for their reception is found in s 30(5A) of the Act which provides that:-

In making its award, the court may take into consideration any agreement or code relating to employment practices between organisations representative of employers and workmen respectively where such agreement or code has been approved by the Minister

Learned counsel for the claimant challenges the company's basis for asserting the redundancy of the claimant expressed in exh CO1 and the justification of the termination of his services on two grounds; firstly, that the company's statement that it had no plans to go to Sabah is false, and secondly, that the claimant was not redundant. It is also alternatively contended on the claimant's behalf that even if the claimant was indeed redundant, the company had failed to manage the redundancy situation in accordance with accepted principles and practices of good industrial relations

On the issue of redundancy, the claimant contends that the company's statement in the letter of termination (Exhibit COW1) that it had no plans to go to Sabah is not genuine and is baseless The company had been doing business in Sabah and the Sabah office had been in existence since 1990. The claimant says that the decision of the company to retrench him on such ground was therefore capricious or mala fide or actuated by motive of victimisation to get rid of him and an unfair labour practice as he had managed the Sabah office since 1 May 1990. The claimant gave an account of all the business activities he had procured for the company while he was the business development manager What the claimant is really saying is simply that as the company had all along been operating in Sabah it was wholly baseless to say tha

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