This is a reference made under subsection 20(3) of the Industrial Relation Act 1967 arising out of the dismissal of BALASINGAM A/L ARUMUGAM (hereinafter referred to as "Claimant") by PIH MARCO SHOE MANUFACTURING SDN. BHD (hereinafter referred to as "the 1st Company") on the 26 January 1996.

AWARD

Introduction

The matter was heard by Y.A. Dato' Tan Yeak Hui who was then the Chairman of the Industrial Court. The hearing was completed on 7.11.2006. Parties then requested to submit their written submission to the Court. The written submission were submitted by the parties and the last submission which is Claimant's submission in reply was received by the Court on 1st June 2007. Y.A. Dato' Tan Yeak Hui tenure of service ended on 15th December 2007 and an award for the dispute was pending. The matter was transferred to this division by the learned President. I shall now make the award.

The Fact of The Case

The Claimant was appointed as a General Manager by 1st Company with effect from 1st May 1985. By a contract of employment dated 16th November 1990 the 1st Company employed the Claimant as a Managing Director. The 1st Company was a wholly owned subsidiary of Pengkalan Industrial Holdings Bhd.

When Perdana Industri Holdings Bhd (the 2nd Company) took over the board and management of Pengkalan Industrial Holdings Bhd and its subsidiaries on 9th October 1995, it was agreed that the entire board of the Holdings and subsidiaries companies resign. The 1st Company's Board of Directors resigned with effect from 11th October 1995 (page 19 of COB - the Form 49 the Companies Act 1950). The Claimant who was the Managing Director of the 1st Company also resigned with effect from 11th October 1995.

On 13th December 1995, the Claimant was appointed as an Advisor to the 1st Company by the new Board of Directors. The letter of appointment (COB page 1 - 34 at page 22) read:

"Mr. Balasingam s/o Arumugam,

2, Solok Bated Laut Tiga,

Bukit Cemerlang,

Kaw. 16,

41300 Klang,

Dear Sir,

Re: Appointment

The Board of Directors is pleased to appoint you as an Advisor to the Company with effect from 13 December 1995.

All existing terms and conditions enjoyed by you remain unchanged. The Board takes this opportunity to congratulate you on this appointment.

Regards.

Your faithfully,

MARCO SHOE SDN. BHD

KOAY SENG LEE

Managing Director"

The Claimant accepted the said employment.

On 1st April 1996, Board of Directors terminated the Claimant's position as an Advisor to the 1st Company. The reason given was that the 1st Company suffered financial losses due to high overhead cost in the year 1995. According to Mr. Kaoy Seng Lee (COW-1) the 1st Company had to cut cost by not replacing resigned staff and shared the work load amongst the remaining staffs. All the entertainment allowances were also suspended.

"COW1 in examination chief status as follows:

Q: what did the Company terminate Claimant's position as advisor as the letter in COB-page 24.

A: Due to continuously advance results of the Company and high overhead cost.

Q: Was there any replacement.

A: No

Q: How was the financial, position of the PIH Marco Shoe Manufacturing Sdn. Bhd in 1995.

A: The Company suffered a loss RM4.6 million for the year 1995.

Q: What steps were taken by the Company to reduce cost?

A: If any staff resign it would not be replaced and the work is shared by existing staff. All expenses reduced."

The Claimant unhappy with the said decision, lodged a report at the Industrial Relation Department.

Pursuant to s. 20(3) of the said Act, the Minister then referred the matter to this Court for a decision.

The issue

The issues before the Court are as follows:

1) Whether the Claimant was dismissed by the Company and whether the said dismissal was with just cause or excuse;

2) Whether Perdana Industri Holdings Bhd (2nd Company) Wah Seong Corporation Berhad (3rd Company) and Glorious Ruby Development Sdn. Bhd (4th Company) are liable and accountable for the Claimant's claim against the 1st Compan