Raus Sharif J:

This is an application by the applicant for an order for certiorarito quash the decision of the Industrial Court in Award No. 115 of 2001 dated 23 February 2001. The Industrial Court held that Oh Swee Choo (the first respondent) was entitled to treat herself as being constructively dismissed and ordered the applicant to pay the first respondent back wages of 44 months from 9 November 1996 to 2 July 2000 totaling RM191,730. The Industrial Court also ordered the applicant to compensate the first respondentin lieuof reinstatement a one month's salary for every year of service from 1 February 1995 to 2 July 2000 totaling RM31,125. Thus, the total sum ordered by the Industrial Court due and payable to the first respondent was RM222,855.

The factual background giving rise to this application are as follows:

The applicant, Pelangi Enterprises Sdn. Bhd. was the operator of Taman Desa Medical Centre (TDMC) located at Jalan Kelang Lama, Kuala Lumpur. The idea of setting up the TDMC was conceived by Dr. Ismail Abdul Rashid sometime in early 1993. Dr. Ismail had requested a friend by the name of Dr. Wong Wai Peng (Dr. Wong) to help him and established the TDMC. The first respondent, joined the services of TDMC in 1995 in the capacity of General Manager. At that material time, she was 53 years of age and was a state registered nurse by profession. She had served the government from 1961 to 1991 and optionally retired at the age of 50. After retirement, she was employed by Pantai Medical Centre from 1 November 1991 up until January 1995, thereafter commenced employment with the applicant's company effective 1 February 1995.

The first respondent's offer of employment dated 1 February, 1995 was signed by one Dr. Wong in his capacity as Managing Director of TDMC. It was a two page document outlining the first respondent's terms and conditions of employment. Clause 9 (Rules & Regulations) of the offer letter expressly provides as follows:

Your appointment shall be governed by the Service Regulations for Confirmed Employees of this Medical Centre.

The first respondent was confirmed in her appointment with effect from 1 May 1995. Subsequently, by letter dated 13 July 1995, TDMC offered to sponsor the first respondent a part-time two year course leading to the Master of Science in Healthcare Management awarded by the University of Wales, Swansea. Under the terms of the sponsorship, TDMC would pay for the course fees including the examination fees. In addition to this, the first respondent was to continue working full time for TDMC and to be paid her monthly salary and allowances as usual (the course was conducted locally and classes were held in the evenings). It was also an express term of the sponsorship letter that the first respondent will be obliged to serve TDMC for three years on completion of her course (which was due to be completed in April 1997), by which the first respondent would be 56 years old.

About 10 months after the first respondent and TDMC entered into sponsorship, TDMC underwent changes in the management through a notice issued by Dr. Ismail Rashid dated 21 May 1996. Due to the changes, the first respondent has to resign from TDMC effective 1 June 1996 and accepted re-employment with the applicant, now called Pelangi Enterprises Sdn. Bhd. with immediate effect and without any loss of benefit under her earlier terms of employment. However, on 11 October, 1996, the first respondent received a letter dated 7 October 1996 informing her that she has to retire on reaching her 55th birthday in accordance with the "service regulations for confirmed employees" and freeing her of any obligation to serve the company on the completion of her Master of Science course and treated its letter of 13 July 1995 (the sponsorship agreement) as cancelled. On 31 October 1996 (which was on the first respondent's birthday), the applicant issued a letter titled "re-employment" offering the first respondent employment on a contr