The dispute between the claimant and the company arose out of the dismissal of the claimant of the company on 7 June 1999.

The undisputed facts of the case are as follows

The company was originally known as Kehrli X-Ray Sdn Bhd and in 1980 changed its name first to Contraves Sdn Bhd and then in 1984 to its present name of Contraves Advanced Devices Sdn Bhd. The claimant was employed by Kehrli X-Ray Sdn Bhd on 11 April 1974 in the post of accounts clerk by an undated letter of appointment (COB2). Through an unblemished work record, the claimant rose to the rank of finance manager of the company on 1 January 1980. The company appointed the claimant as the company secretary and to its Board of Directors, both in the year 1983. On 7 June 1999 the claimant's services was terminated by way of a letter dated 2 June 1999 (COB1). These are the undisputed facts

The company is a subsidiary 100% owned by Contraves Switzerland. It manufactures high-end sub-assemblies for European customers Secondly it is the service center for air defence systems of The Royal Malaysian Army which bought several systems from the company in Switzerland. The company is involved in manufacturing including the final assembly and factory acceptance test of the radar systems of the off-shore patrol vessels for the Royal Malaysian Navy in order to achieve the local contents to execute the Malaysian industrial participation of the Malaysian Government. In June 1999 the company had a total of 85 employees in the country.

The claimant was terminated on the ground of redundancy following a restructuring in the company (COB1). The claimant did not accept the severance package offered. The claimant was holding the position of finance manager at the time of her termination. Her last drawn salary was basic RM7,850 per month and a travelling allowance of RM500 per month. She was also entitled to 13th month salary and an additional bonus at the end of the year The claimant did not accept the serverence package as in COB1 because she wanted more money. She was then paid everything except the RM100,000 (COB-3A and COB-3B). The claimant accepted.

The reasons for the retrenchment according to the company are as follows:

COWl, George Schlumpf the executive director of the company testified that the defence industry had been affected by the extreme worldwide economic downturn. Income was low and so was the forecast for the following year Therefore there was a necessity for the European defence companies to restructure and to merge. For such a situation usually the companies outside Europe were expected to close. To save the company in Melaka, he decided to restructure as fast as possible so that it would not be one of the candidates to the closed. He sought an assistance from the company's headquarters

An independent consultant was appointed by the company's HQ to undertake a study on its structure and processes and make appropriate recommendations Following the consultant's report and recommendations, which among others resulted in the introduction of the " LISA " software system, new payroll system, the purchase of a software which replaced the manual keying in of data and budgeting and planning to be prepared between the executive director and Friedrich directly. COW1 also testified that with the purchase of the LISA system, the company was able to transfer the technology to Malaysia. He also testified that with the introduction of the new systems and transfer of technology most of the duties and functions of the claimant, which were largely checking and controlling in nature became redundant or would have become redundant. As such the company decided to merge the administration & finance divisions to one department.

The company in effecting the recommendations, advised the claimant verbally and thereafter vide their letter of 2 June 1999 on their decision to terminate her employment on grounds of restructuring / redundancy and offered to pay her an ex gratia payment for loss of emp