Mary Shakila Azariah:

[1] The facts relevant to this reference or dismissal are as follows:

[2] The company is a wholly owned subsidiary of Siebel Systems Inc. whose main business is developing and designing computer software products and marketing and distributing computer software products and related maintenances contracts worldwide. The company was set up in Malaysia to sell the software license and to procure maintenance and service contracts from customer in Malaysia.

[3] But now it is dormant.

[4] On 7 December 2000 the claimant commenced his employment with the company. He was employed as the District Manager vide the letter dated 21 November 2000.

[5] On 8 November 2001 vide the letter dated 8 November 2001 through Terence Chan (COW) informed the claimant that his services with company was terminated on grounds of retrenchment. He was paid the sum of RM30,326.66.

[6] The claimant made representations to the Director - General of Industrial Relations pursuant to the provisions of s. 20(1) of the Industrial Relations Act 1967 and the Director - General having failed to effect a conciliation reported the matter to the Minister who referred the claimant's representations to the Industrial Court.

[7] In his statement of case filed in the Industrial Court the claimant claimed that his termination from employment has been without just cause or excuse. He was employed by the company Siebel System (Malaysia) Sdn. Bhd. ("company") a company incorporated in Malaysia and wholly owned by Siebel Systems Inc. a Delaware Company. The company had engaged the claimant to sell, develop the market in Malaysia for their software products. The claimant was engaged by the Regional Marketing Director for Siebel Systems Inc. in South East Asia and he (the claimant) reported directly to him. The claimant's employment was terminated by the company on 8 November 2001 vide the company's letter of even date on grounds allegedly of redundancy. Needless to say the company in its reply disputes this and sought to justify the claimant's termination on grounds that he had been retrenched in consequence of a restructuring and closing down of the business of Siebel Systems (M) Sdn. Bhd. a decision taken by its parent company Siebel Systems Inc. in order to cut losses. In consequence the claimant's services had become redundant and he was therefore retrenched.

Requisite Law

[8] Redundancy refers to a surplus of labour and could be the result of reorganization of a business of the employer, in any manner for the purpose of economy or convenience or if there is a reduction, diminution or cessation of the type of work the employee is performing. In the above situations, the employer is entitled to discharge the services of some employees which become excess in requirements. In English Law under the Employment Protection (Consolidation) Act 1978, "redundancy" is defined in s. 81(2) of the Act to cover a dismissal attributable wholly or mainly to:

1. (1) the fact that the employer has ceased, or intends to cease, to carry on the business or the purposes for which the employees was employed by him; or

(11) the fact that he has ceased, or intends to cease, to carry on that business in the place where the employee was so employed; or

2. The fact that the requirements of the business for employees to carry out work of a particular kind, or for the employees to carry out work of a particular kind in the place where the dismissed employee was so employed, have ceased or diminished or expected to cease or diminish.

[9] Thus, in Chapman & Others v. Goonvean & Rostowrack China Clay Co, Ltd. [1983] 2 All ER, it was held that the test whether there was redundancy was simply whether there had been a cessation of or diminution in the business to carry out the kind of work on which the appellant had been engaged, ie, the test under the second limb of the definition. On the evidence, the respondents requirements for the employees to carry out that kind of work had neither ceased or