The collective agreement mandates continuity of employee entitlements upon a change in ownership, binding successors and ensuring day-to-day operations remain unaffected regardless of ownership shifts.

[1] This appeal has its origin in the Industrial Court. Kuantan Beach Hotel Sdn Bhd (2nd appellant) was the registered owner of the lands in Telok Chempedak Kuantan where the hotel, known as Hyatt Regency Kuantan is situated. Alam Venture Sdn Bhd (1st appellant) is the current registered owner of the said lands having purchased them together with the buildings thereon and all the assets from the 2nd appellant. The respondents were former employees of the 2nd appellant, who claimed to have been dismissed without just cause or excuse.

[2] The 2nd appellant was then facing financial difficulty. Its lands on which the hotel is sited on had been subjected to foreclosure proceedings Its shareholder, Pasdec Resources Sdn Bhd had been wound up. Thus on 25 April 2005 it executed a sale and purchase agreement ('SPA') with the 1st appellant to sell its lands and assets to the latter Some of the terms of the SPA were later varied by way of two supplemental sale and purchase agreements executed between the parties, dated 11 November 2005 and 22 March 2006 respectively. We will revert to the relevant terms of these agreements later

[3] On 23 August 2005 the 2nd appellant was placed under receivership by the debenture holder, AM Merchant Bank Bhd and PricewaterhouseCoopers was appointed as the Manager and Receiver of the 2nd appellant.

[4] The respondents were represented by their union, the National Union of Hotel, Bar & Restaurant Workers, Peninsular Malaysia ('the Union'). On 15 November 2005 the Manager and Receiver informed the Union that due to the 2nd appellant's financial position, it was no longer a feasible option for the 2nd appellant to continue its hotel operations and to remain in the hotel industry. It has no alternative but to sell its assets and to carry out a termination exercise.

[5] The respondents were in due course served with notices of termination which contained therein offers to pay them specified sums of money as "termination benefits and other payments" in accordance with the terms of their employment. The respondents acknowledged receiving the notices and payments offered to them.

[6] Nevertheless they remained unsatisfied and took their case to the Industrial Court claiming that they were dismissed without just cause or excuse, in breach of the collective agreement entered into between the 2nd appellant and the Union. In their claims, they sought to be reinstated without any loss of wages, allowances, service, seniority, privileges or benefits of any kind and/or such other order or alternative relief as the Court deems fit and proper

[7] The 1st appellant was added as a party by order of the Industrial Court.

[8] The Industrial Court, after a full hearing, dismissed the respondents claims against the appellants The Industrial Court held that the 2nd appellant had terminated the services of the respondents with just cause or excuse. In respect of the 1st appellant the Industrial Court held that it was not a party to the collective agreement and that the respondents were never employed by the 1st appellant and hence their services were never terminated by the 1st appellant.

[9] The respondents, being aggrieved by the decision of the Industrial Court, applied to the High Court for judicial review pursuant to O 53 of the Rules of the High 1980 ('RHC') seeking the following orders:-

(i) an order of certiorari to quash the award of the Industrial Court;

(ii) a declaration or order that the respondents were dismissed without just cause or excuse and that they be reinstated to their former positions in the hotel, now being operated by the 1st appellant without loss of salary and all other benefits or compensation in lieu thereof and backwages to be paid by the