In a merger, an employee's contract terms cannot be unilaterally altered; existing agreements must be honored unless consented otherwise, reinforcing contractual sanctity.

[1] The background facts to this dispute are not contentious and we are grateful to counsel of both parties for having highlighted them in their respective written submissions. Suffice that we adopt those relevant facts as found in the appellants written submission, with some editing:

1.1 The respondent was an employee of Affin-ACF Finance Berhad ("Affin-ACF") a company within the Affin Group of Companies.

1.2 In March 2005, all the employees of Affin-ACF including the respondent, were informed by its Chief Executive Officer in respect of an impending change of ownership of Affin-ACF wherein the appellant was to take over the business of Affin-ACF in which it will integrate with the appellant in April 2005, ie a merger exercise was in the offing.

1.3 On 26 May 2005, pursuant to the Business Transfer Agreement between Affin-ACF and the appellant, and on their joint application, a Vesting Order was obtained from the High Court, transferring all of the formers assets and liabilities to the latter. The effective date of the vesting was on 1 June 2005.

1.4 Affin-ACF then informed the respondent of the impending merger as a result of which the respondents employment with Affin-ACF would cease with effect from the date of merger. In the same letter Affin-ACFs Chief Executive Officer had noted that the appellant had offered employment to the respondent through an earlier letter of offer by the appellant dated 26 March 2005.

1.5 The respondent was further informed by Affin-ACF that if he chose to accept the appellants offer of employment made vide the appellants letter dated 26 March 2005 and left the employment of Affin-ACF on or before the date of the Vesting Order, ie 26 May 2005, Affin-ACF was prepared to waive the requirement for the respondent to give notice of termination of the respondents employment. The 26 March 2005 letter had set out the terms of employment offered to the respondent, amongst other, that the retirement age is 55 years old.

1.6 The respondent in the reply slip which was undated, wrote to the CEO of Affin-ACF stating that he was accepting the applicants offer of employment under protest; although no reason was given for that qualified acceptance. The respondent signed the letter of offer on 3 June 2005 under protest and worked with appellant under the now less favourable terms for eight months. He was terminated on 23 February 2006 on attaining the retirement age of 55.

1.7 The respondent had, previous to his acceptance, communicated with the appellant when he raised his unhappiness in respect of the retirement age of 55 as stipulated in cl 6 of the offer letter dated 26 March 2005. He had also informed the appellant of his concern in respect of some outstanding loans he had with Affin-ACF wherein he had agreed with Affin-ACF to service the loans until he attained the age of 60. The loans were taken by the respondent during his employment tenure with Affin-ACF.

1.8 The appellant in its e-mail communications with the respondent had informed him in no uncertain terms that the retirement age for all the appellants employees was 55 years old and not 60 years old. The respondent was also informed that when he reached his retirement age all outstanding loans that he may have at that juncture will be converted to those of commercial rates as applicable to all employees of the appellant.

1.9 The appellant subsequently notified the respondent on 21 October 2005 that he would be attaining the age of retirement on 23 February 2006 and was reminded that he will be retired by the appellant on the said date. The appellant later again notified the respondent through a letter dated 16 January 2006 that he was attaining the age 55 on 23 February 2006 and therefore the respondent would be retired fro