The parties in this dispute are Malaysia Shipyard & Engineering Sendirian Berhad (the company) and Encik Mukhtiar Singh and 16 others (the claimants). In their joint statement of case dated 3 February 1989, they have pleaded inter alia that at all material times, they were employees of the company; that their services were terminated by the company by way of retrenchment on the ground of redundancy; that the retrenchment exercise was carried out in violation of accepted procedures in particular the Code of Conduct for IndustrialHar-mony; that the selection criteria adopted by the company was wrong, unfair and improper. They therefore pray for reinstatement without loss of seniority, benefits and arrearsof salaries, etc. The company has through its solicitor filed the statement in reply dated 3 April 1989 denying the allegations and claims pleaded in the statement of case aforesaid contending in effect that the retrenchments of the claimants were necessary as a direct result of huge losses sustained by the company and that they were based on a selection criteria devised and formulated by the company having due regard to the Industrial Relations Act 1967 , para 22 of the Code of Conduct for Industrial Harmony and its objectives of cutting costs and improving productivity. During the course of these proceedings, the claims of 6 of the claimants were struck off. They were those of Encik Abdullah bin Puteh, Encik John Chong, Encik Mohamed bin Md. Yasin, Encik Subakir bin Heran, Encik Yahya bin Abu Bakar and Encik Tham Meng Sein. The case therefore proceeded against the remaining claimants namely, Encik Mukhtiar Singh, Encik Lee Keng Bee, Encik Ang Boon Beng, Encik Wagirin bin Haji Ibrahim, Encik Chow Sek Poey, Encik Hoo Kem Hong, Encik Abu Bakar bin Omar, Encik Mohamed Yunos bin Idris, Encik Abu Bakar bin Ahmad, Encik Jangir Singh and Encik Chee Kum Cheng. Now, the principles relating to redundancy and retrenchment are well settled namely that it is the prerogative of management of a company to decide the strength of its staff which it considers necessary for efficiency in its undertaking; that when management decides that employees are surplus thereby necessitating retrenchment, the Industrial Court will not intervene unless it is shown that the decision was capricious or without reason or was mala fide or was actuated by victimisation or unfair labour practice: see Sharikat Eastern Smelting Bhd. v. Kesatuan Pekerja-pekerja Perusahaan Peleboran Logam Malaysia (Award No. 16/68); Ong Lean Phaik v. C.F. Sharp & Co. (M) Sdn. Bhd. (Award No. 121/ 80). In National Union of Cinema & Amusement Workers v. Shaw Computer & Management Services Sdn. Bhd. (Award No. 27/78), the Industrial Court had established the principle that where it was necessary for some employees to be dismissed because of redundancy, the Court would ordinarily require the employer to show how, by whom and on what basis selection was made; that the burden of proof was on the employer and he must discharge it to the satisfaction of the Court. The same stand was also adopted in England as reflected in the following cases: Bristol Channel Ship Repairs Ltd. v. O'keef & Lewis [1978] ICR 691; Cox v. Widdt Mellov Bromley Ltd. [1978] ICR 736. It is for the employer to show the factors he has relied upon in selecting the employee and these factors may vary but he must act reasonably. In this connection, the case of N.C. Watling Ltd. v. Richardson [1978] IRLR 255 (EAT) had propagated the following benchmarks:

What the authorities including Vickers Ltd. v. Smith have decided is that ... the Industrial Tribunal, while using its own collective wisdom, is to apply the standard of the reasonable employer, that is to say, the fairness or unfairness of the dismissal is to be judged not by the hunch of a particular Industrial Tribunal which (though rarely) may be whimsical or eccentric, but by the objective standard of the way in which a reasonable employ