JUDGMENT

Lee Swee Seng JCA:

[1] Three employees of Perodua Sales Sdn Bhd ("Perodua/the Company") found themselves in a quandary. They had all served between 9 and 22 years with the Company, one being employed as a mechanic and the other two as service advisors. Together with some 20 other employees in Perodua's Branch in Bukit Beruntung and its Sales Service Centre in Sungai Choh, Rawang, they were each given a letter explaining that one Nagoya Automobile Malaysia ("NAM") had taken over Perodua's business operations at Bukit Beruntung and Sungai Choh. The letter further stated that they should take up the employment offer made by NAM.

[2] Like most contracts and correspondences, the devil is in the details. Upon closer scrutiny of the relevant documents, it became apparent that all employees taking up the offer would be engaged for a fixed term of 2 years and they would first be required to tender their resignation from Perodua. After the 2-year term with NAM is over, NAM would have the sole discretion whether to retain them and if not, it would appear that they would have to reapply to Perodua and the Company would then decide whether they would be taken back as that decision would depend on availability of vacancies and the needs of Perodua then.

[3] The 3 employees felt that it was a raw deal as what was to them a permanent position is now being subject to a 2-year fixed term contract with NAM with no certainty of being retained by NAM nor re-employed by Perodua and there was also a deafening silence on what would happen to the years of service that they had each put into the Company Perodua.

[4] There were various rounds of meetings between Perodua and the employees affected by this corporate restructuring exercise involving the transfer of business in these 2 branches to NAM. Perodua obviously would want all the employees to take up the offer from NAM as it would release Perodua from any further contractual obligations to its employees. However, the 3 employees resisted the move for what they perceived to be their legal rights to choose to remain with Perodua for any offer of employment in a business takeover should be on terms no less favourable.