DALAM MAHKAMAH RAYUAN DI MALAYSIA (BIDANG KUASA RAYUAN)
RAYUAN SIVIL NO.P- 02(A)-1263-07/2016
ABU BAKAR BIN SALLEH & 36 YANG LAIN …PERAYU-PERAYU
1. LANGKASUKA RESORT SDN. BHD. (LANGKAWI BEACH RESORT & LANGKAWI AIRPORT SDN. BHD. (HOTEL HELANG)
2. MAHKAMAH PERUSAHAAN …RESPONDEN-RESPONDEN
[Dalam Mahkamah Tinggi Malaya di Pulau Pinang Permohonan Bagi Kajian Semula Kehakiman No. 25-41-04-2015
Abu Bakar Bin Salleh & 36 Yang Lain
1. Langkasuka Resort Sdn. Bhd. (Langkawi Beach Resort &
Langkawi Airport Sdn. Bhd. (Hotel Helang)
2. Mahkamah Perusahaan …Responden-Responden
HAMID SULTAN ABU BACKER, JCA ZAMANI BIN A RAHIM, JCA ASMABI BINTI MOHAMAD, JCA
(Asmabi Binti Mohamad JCA, delivering Judgment of the Court)
JUDGMENT OF THE COURT
 This is an appeal by the Appellants (the Applicants in the High Court) against of the decision of the High Court dated 26.5.2016 that upheld the Industrial Court’s Award No.50 of 2015.
 We heard this appeal on 1st December 2016. After hearing the respective parties we adjourned the matter for our consideration and decision. Before we adjourned the same, we ordered the parties to further submit on the issue of whether a company can transfer its employees to an associate company, which submission was to be delivered to our respective secretaries within a week from the date of hearing.
 We now give our decision and the reasons for the same.
 We will refer to the parties as they were described in the High Court.
BRIEF BACKGROUND FACTS
 The facts are elucidated from the various affidavits, the Award of the 2nd Respondent, judgment of the learned High Court Judge and the submissions of the respective parties. In order to save judicial time, some of the facts as highlighted by the respective parties in the above-
mentioned documents are adopted herein with and / or without modifications.
 The subject matter of this case was a reference under section 20 (3) of the Industrial Relations Act 1967 (“IRA”). The Applicants who were employees of Langkasuka Hotel and members of a union known as the National Union of Hotel, Bar & Restaurant Workers, Peninsular Malaysia (“Union”) had lodged a complaint to the Department of Industrial Relations (“DIR”) pertaining to their dismissal from the employment of Langkasuka Hotel without just cause and excuse. The Minister referred the representation to the Industrial Court for an award. On 15th January 2015, the Chairman of the Industrial Court, after a trial, found that the Applicants were dismissed with just cause and excuse and dismissed the Applicants’ claims.
 The Applicants then moved the High Court by way of a judicial review to quash the 2nd Respondent’s Award and that too was dismissed by the High Court. Aggrieved by the said decision the Applicants then filed their appeal to this Court.
 The Applicants were the employees of a hotel known as Langkasuka Resort Sdn. Bhd / Langkasuka Beach Resort (“Langkasuka Hotel”) in Pulau Langkawi, Kedah. The particulars of each Applicant were as set out in Exhibit A annexed to the Applicants’ Affidavit in Support of the application for judicial review sworn by Abu Bakar Bin Salleh (see pages 60 to 94 of Jilid 2 of Appeal Record Part B & C). These employees were paid salaries and benefits in accordance with the terms
and conditions as set out in the Collective Agreement (“CA”) entered into between Langkasuka Hotel and the Union (“Union”) dated 1st October 2006 (see pages 133-153 of Jilid 2 of Appeal Record Part B & C).
 On 2nd April 2010, Langkasuka Hotel had notified the Applicants that it had temporarily ceased operations with effect from 1st April 2010 for the purpose of renovation and repair works. The Applicants were also notified that whilst the renovation and repair works were being carried out, these employees would be temporarily relocated at another Hotel known as Helang Hotel, also owned by the 1st Respondent, subject to the same terms and conditions of employment.
 Based on the above understanding, the Applicants and other employees relocated themselves at Helang Hotel.
 On 8th May 2010, the Union on behalf of the Applicants wrote a letter to Langkasuka Hotel alleging that their relocation to Helang Hotel was done mala fide based on the following reasons:
(a) The decision to relocate the employees to Helang Hotel was done without prior consultation with the Union under Article 4 of the CA pertaining to settlement of dispute and failure to adhere to the articles in Code of Conduct For Industrial Harmony 1975;
(b) The relocation of its members would result in excess of workers in Helang Hotel thereby causing the value of the service charge points to drop drastically; and
(c) The decision of Langkasuka Hotel to relocate its employees was motivated by ulterior and / or collateral motive in order to avoid payment of retrenchment benefits to the employees, provided under Article 28 of the CA.
(see page 132 of Jilid 2 of Appeal Record Part B & C).
 Subsequently Langkasuka Hotel had failed to pay the service charges to the employees as promised in its letter dated 2nd April 2010 and in accordance with Article 12 of the CA (see page 138 of Jilid 2 of Appeal Record Part B & C).
 As a result of Langkasuka’s Hotel failure to resolve outstanding issues faced by the employees, the Union lodged a complaint with the DIR under section 18 of the IRA.
 On 26th August 2010, a conciliation meeting was convened with the assistance of the DIR. In this meeting, and in the presence of the DIR, both the Union and Langkasuka Hotel had agreed to sign a Memorandum of Agreement (MoA) (see pages 154-155 of Jilid 2 of Appeal Record Part B & C) with the following terms:
(a) Langkasuka Hotel was scheduled to be reopened on 31st October 2010 and all employees of the said Hotel would be
relocated back to work at the said Hotel (see Clause 2 (i) of the MoA);
(b) The employees of Langkasuka Hotel would be paid all service charge entitlements from the time they worked in Helang Hotel until they are relocated back to the original Hotel i.e. Langkasuka Hotel (see Clause 2 (ii) of the MoA); and
(c) The outstanding service charge entitlements due to employees of Langkasuka Hotel from April 2010 to June 2010 would be paid within 2 weeks from the date of the MoA and to be paid before Hari Raya Aidil Fitri (see Clause 2 (iii) of the MoA).
 Pursuant to the MoA, it was also agreed that the dispute between the parties was deemed resolved upon the terms and conditions stated therein having been complied with.
 Despite having signed the MoA and given the assurance to the Applicants that their outstanding service charges would be paid within 2 weeks from the date the MoA was executed, i.e. 26th August 2010, Langkasuka Hotel failed to honour Clause 2(iii) of the MoA. The same was not paid within 2 weeks as promised. Instead the Applicants were only paid their basic salaries on 8th September 2010 just before Hari Raya Aidil Fitri.
 About twenty three (23) days after the signing of the MoA, i.e on 18th September 2010, Langkasuka Hotel called for an emergency meeting with the Applicants without informing the Union. In this meeting the following was announced:
(a) That Langkasuka Hotel was sold to Global Upline Sdn Bhd (a Third Party). As such Langkasuka Hotel would not be in a position to relocate the Applicants back to the said Hotel as promised; and
(b) Langkasuka Hotel had made an offer to relocate the Applicants permanently in Helang Hotel also owned by the same owner subject to the same terms and conditions of employment.
 The employees were not happy with the sudden turn of event and requested Langkasuka Hotel to abide by the terms of the MoA. This was because just about 23 days prior to this meeting, i.e. on 26th August 2010, Langkasuka Hotel had given the assurance that these employees would be relocated at their original place of employment once it reopened for business, i.e. on 31st October 2010. This assurance was made in the presence of the Director of Industrial Relations Kedah/Perlis. The Applicants informed in the meeting that they were willing to discuss the problem in the presence of the Union and left the meeting.
 Langkasuka Hotel on the other hand alleged that it could not reinstate the Applicants in Langkasuka Hotel as it was “legally rendered impossible” and was beyond the “control and purview” of Langkasuka Hotel because the property had been transferred to a new owner, Global Upline Sdn Bhd (Global Upline) and the said Hotel had been given a new name, “Four Points By Sheraton Langkawi Resort” (“Sheraton Langkawi”).
 On 21st September 2010, Langkasuka Hotel called all the employees for a meeting and at this meeting all the Applicants were given a letter of dismissal dated 20th September 2010, signed by Tan Sri Datuk Ting Pek Khiing, the original owner of Langkasuka Hotel (see page 89 of Jilid 2 of Appeal Record Part B & C). Langkasuka Hotel viewed the refusal of the Applicants to accept the offer made during the emergency meeting and the alleged walk-out staged by them from the meeting as a rejection of the offer for their permanent relocation in Helang Hotel. The dismissal letter was issued by Tan Sri Ting Pek Khiing on behalf of Helang Hotel. Up to this point in time, there was no written offer made either by Sheraton Langkawi, the new Hotel or Helang Hotel to the Applicants.
 As at 21st September 2010, Langkasuka Hotel had not officially terminated the Applicants’ employment to enable these Applicants to take up a fresh offer from Helang Hotel. Neither had Helang Hotel made any official and / or written offer to each of the Applicant for these Applicants to consider working for Helang Hotel permanently.
 Despite the existence of the CA between Langkasuka Hotel and the Union, the Union was not notified and / or consulted pertaining to the events which we highlighted above.
 Before us, the issue for determination was whether the decision of the 2nd Respondent dated 15th January 2015 was tainted with illegality, irrationality and procedural impropriety.
IN THE HIGH COURT
 The Applicants filed their application for judicial review under Order 53 of the Rules of Court 2012 (RoC) on 17th April 2015.
 In their Statement filed pursuant to Order 53 (3) of RoC, the Applicants had cited irrationality, unreasonableness and procedural impropriety as the basis to challenge the decision of the 2nd Respondent which dismissed their claim that they were dismissed without just cause or excuse.
THE APPLICANTS’ CASE
 Before the High Court, the Applicants contended that in arriving at Award No. 50 of 2015 dated 15th January 2015, the 2nd Respondent erred as:
(a) It had failed to take relevant matters into consideration;
(b) It had taken irrelevant matters into consideration;
(c) It had disregarded the law which are applicable to the factual matrix of the case before it; and
(d) The decision of the 2nd Respondent was so perverse and devoid of plausible justification that no reasonable tribunal could have arrived at such decision.
 The Applicants further contended that they had never staged a walk out and / or had rejected Langkasuka Hotel’s offer at the meeting held on 18th September 2010 as alleged by the said Hotel. They merely requested Langkasuka Hotel to abide by the terms in the MoA which was signed by both the Union and Langkasuka Hotel on 26th August 2010 and in the presence of the Director of Industrial Relations Kedah/Perlis.
 The Applicants submitted that in arriving at the said Award, the 2nd Respondent had failed to consider the following factors:
(a) There was no offer from the new owner, Sheraton Langkawi to employ the Applicants in its new Hotel;
(b) Langkasuka Hotel had breached the terms of the MoA dated 26th August 2010;
(c) The Applicants had lost about 80% in terms of their monthly service charges; and
(d) There was no proof that Langkasuka Hotel had in fact been sold to a Third Party and / or that it had changed hands as claimed.
 In view of the above, the Applicants submitted that Langkasuka Hotel could not rely on Regulation 8 of the Employment (Termination and Lay-off Benefit) Regulations 1980 (“1980 Regulations”) to claim that a change has occurred within the said establishment. Further as there was no offer made by Sheraton Langkawi under Regulation 8 of the 1980 Regulations, Langkasuka Hotel could not rely on Regulation 8.
 It was also contended by the Applicants that Langkasuka Hotel had failed to honour the terms of the MoA, in that, its promise to relocate back all the Applicants to their original employment with Langkasuka Hotel once it reopened for business on 31st October 2010.
 In addition to the above the Applicants submitted that as there was already a CA entered into between Langkasuka Hotel and the Union, pursuant to the IRA the CA is binding on both the Union and Langkasuka Hotel. Therefore, it was mandatory for Langkasuka Hotel to abide by the terms and conditions stated in the CA. Hence any dispute or matters affecting the Union members must be resolved in a harmonious manner and with prior consultation with the Union especially matters as serious
as this, touching their rights to livelihood, as guaranteed by the Federal Constitution.
THE RESPONDENT’S CASE
 The 1st Respondent contended that the reinstatement of the Applicants in Langkasuka Hotel was “legally rendered impossible” and was “beyond the control and purview” of the Langkasuka Hotel as the Property had passed to its new owner, Global Upline.
 It was further submitted by the 1st Respondent that the Applicants had staged a walk out on 18th September 2010 at the emergency meeting which was held to announce their permanent relocation at Helang Hotel. By their conduct to stage a walk out during the said meeting, the Applicants had rejected the offer of permanent employment in Helang Hotel. Therefore, their dismissal was with just cause and excuse.
 Regulation 8 of the 1980 Regulation was applicable to the factual matrix of this case. A change has occurred in the ownership of the business of Langkasuka Hotel. As the Applicants were offered permanent employment at Helang Hotel by Langkasuka Hotel which they rejected via their conduct to walk out of the meeting dated 18th September 2010, it was sufficient justification for the dismissal of the Applicants.
 We were mindful of the limited role of the appellate court in relation to findings of facts made by the court of first instance.
 In the course of that, we had sought guidance from the very often quoted case of Lee Ing Chin @ Lee Teck Seng v Gan Yook Chin  2 MLJ 97 where the Court of Appeal held as follows:
“an appellate court will not, generally speaking, intervene unless the trial court is shown to be plainly wrong in arriving at its decision. But appellate interference will take place in cases where there has been no or insufficient judicial appreciation of the evidence. ”
 Reference is also made to the decision of the Federal Court in Gan Yook Chin v Lee Ing Chin @ Lee Teck Seng  4 CLJ 309 where the Federal Court held that the test of “insufficient judicial appreciation of evidence” adopted by the Court of Appeal was in relation to the process of determining whether or not the trial court had arrived at its decision or findings correctly on the basis of the relevant law and the established evidence.
 We were also mindful of our role in dealing with the appeal at hand which originated by way of a judicial review application. The issue on the proper approach to deal with the appeal was ventilated by both the
respective parties. We do not propose to deal with the law pertaining to the scope of judicial review at great length as the law is trite. We were guided by a plethora of cases which ruled that judicial review is not an appeal from the decision but a review of the manner in which the decision was made and that the High Court in hearing the judicial review is not entitled to consider whether the decision itself, on the merits of the facts, was reasonable and fair. Suffice for the court to refer to the recent Federal Court case of Ketua Pengarah Hasil Dalam Negeri v Alcatel-Lucent Malaysia Sdn Bhd & Anor 2 CLJ 1, where his Lordship Suriyadi Halim Omar FCJ had stated as follows:
“ A judicial review is a court proceeding where a challenge is made on the decision of the relevant authority or entity (in this case the appellant) ie, by challenging the lawfulness of the decisionmaking process. This is trite law. Generally, the court dealing with the judicial review application in a supervisory capacity is not to delve into the merits of the case. In other words, the evidence is not reassessed. The court is merely to quash the decision of the relevant authority, if need be, and not to substitute with what it thinks is the correct decision. We are not here to usurp the powers of the designated authority.”
 Notwithstanding the above, we were also aware that the law on judicial review had developed so as to give the power to the court hearing a judicial review matter to scrutinize such decision not only for process, but also for substance to determine the reasonableness of the decision. Therefore, the conventional concept that judicial review is concerned only with the review in the manner a decision is made is no longer the correct
approach to be adopted by the Court in dealing with judicial review cases. (see R.Ramachandran v. The Industrial Court of Malaysia & Anor  1 MLJ 145 ; Titular Roman Catholic Archbishop of Kuala Lumpur v Menteri Dalam Negeri & Ors  8 CLJ 629; Datuk Justine Jinggut v Pendaftar Pertubuhan  3 MLJ 212 ; Ranjit Kaur S. Gopal Singh v Hotel Excelsior (M) Sdn Bhd  8 CLJ 629).
 These principles were reiterated in the recent Federal Court case of Ketua Pengarah Hasil Dalam Negeri v Alcatel-Lucent (supra)
above in the following terms:
 However, the Federal Court in the landmark decision of R Rama Chandran v. Industrial Court of Malaysia & Anor  1 CLJ 147;  1 MLJ 145 held that the decision of an inferior tribunal may be reviewed on the grounds of “illegality”, “irrationality” and possibly “proportionality”, which not only permits the courts to scrutinise the decision-making process but also the decision itself. In short, it allows the courts to delve into the merits of the matter.
 The approach of illegality and irrationality was recognised and applied by Malaysian Trade Union Congress & Ors v. Menteri Tenaga, Air dan Komunikasi & Anor  2 CLJ 525;  3 MLJ 145. This court in succinct terms said:
On the facts of this case, we find MTUC had failed to show that the Minister’s decision was illegal, irrational andflawed on the grounds of procedural impropriety.
 It is now clear, and here to stay, that the decision of an inferior tribunal may also be reviewed on the grounds of illegality and irrationality. The distinction between a review application and an appeal thus appears to no longer exist (see also Ranjit Kaur S Gopal Singh v. Hotel Excelsior (M) Sdn Bhd 120101 8 CLJ 629).
 Guided by the above established principle, we had therefore carefully examined the documents that were placed before us in the form of the record of appeal to ascertain if the learned High Court Judge had arrived at her decision correctly on the basis of the relevant law and evidence before her.
 It would be apt at this juncture for us to examine the basis of the 2nd Respondent’s decision to dismiss the Applicants’ claim for dismissal without just cause and excuse to enable this Court to scrutinise the decision not only for process but also for substance.
 The basis of the 2nd Respondent’s decision to dismiss the Applicants claim for dismissal without just cause and excuse were as follows:
(a) Section 12 (3) of the Employment Act 1955 recognises closure of business as a valid ground for termination of employee. The termination is found to be as a result of a bona fide closure of business, therefore the Industrial Court would have no jurisdiction to award any form of compensation (reliance on the case of Malaysia Baggage
Transport Agency Sdn Bhd vs National Union of Commercial Workers  11LR 13);
(b) Regulation 8 of the 1980 Regulations is applicable to the factual matrix of this case. Regulation 8 states that in the event there is a change due to a sale, other disposition or operation of law in the ownership of the business for the purpose of which an employee is employed, and an offer is made by the person who had taken ownership of the business to the employee within 7 days of the change of ownership under the terms and conditions of employment not less favourable than the original employment, and if the employee had unreasonably refused the offer, there is sufficient justification for the dismissal;
(c) As Langkasuka Hotel had been operating as a new legal entity since 31st October 2010 with full compliment of staff, it would not be justified for the Court to order reinstatement of the Applicants at the said Hotel; and
(d) The Applicants had walked out from the meeting and this clearly indicated that the Applicants declined the employment with the Hotel under the same terms and conditions. Therefore, the termination of employment was with just cause and excuse.
 We now turn to the reasons advanced by the learned High Court Judge in upholding the Award of the 2nd Respondent:
(a) The Applicants’ demand to be relocated at Langkasuka Hotel was impossible to be fulfilled because the new Hotel is a new entity. The Applicants could not force Sheraton Langkawi to reinstate them as their employees because the MoA is no longer in existence. The MoA had become a frustrated contract. Langkasuka Hotel no longer existed. Although the new Hotel did not offer employment to the Applicants, Helang Hotel did;
(b) Although the service charges were very much reduced, this was due to the fact that the service charges were to be shared with a large number of employees. This is not a situation where Langkasuka Hotel had purposely reduced the service charges without any valid reasons;
(c) In considering whether Regulation 8 of the 1980 Regulations applies, the learned Judge ruled that it mattered not who offered alternative employment, there was alternative employment offered. As such, it was without doubt that the Applicants were offered permanent employment. Therefore, Regulation 8 applies to the case at hand;
(d) It was proven that the Applicants staged a walk-out from the meeting on 18th September 2010 and the Applicants’ conduct
by staging a walk out must be construed to evince an intention of rejecting the offer;
(e) The Applicants could not show Langkasuka Hotel had acted mala fide in dismissing the Applicants from their employment;
(f) The 2nd Respondent’s decision was supported by evidence, in that, the Applicants were dismissed because they rejected the offer of alternative employment at Helang Hotel. As such their dismissal was justified; and
(g) There was no error of fact and law committed by the 2nd Respondent in dismissing the Applicants’ claim that their dismissal was with just cause and excuse.
 Having stated both the findings of the 2nd Respondent as well as those of the learned Judge, our next task was to scrutinise those reasoning and decide if the decision was tainted with “illegality”, “irrationality” and “procedural impropriety” as claimed by the Applicants to merit curial intervention by this Court.
 We propose to deal with the first issue relating to the findings of the 2nd Respondent that the reinstatement of the Applicants in Langkasuka Hotel was “legally rendered impossible” and was “beyond the control and purview” of Langkasuka Hotel as the property had passed to its new owner, Global Upline, which had renamed the said Hotel as “Four Points By Sheraton Langkawi Resort”.
 The above findings had been affirmed by the learned Judge who had stated when the construction works at the said Hotel was completed several months later, Langkasuka Hotel was taken over by Global Upline and the new management had renamed Langkasuka Hotel as “Four Points By Sheraton Langkawi Resort”. The franchise to manage and run the new Hotel was given to Starwood Asia Pacific Hotels & Resort Pte Ltd. The learned Judge went on to say that this was a business decision that was made by the owner of Langkasuka Hotel, one Tan Sri Ting Pek Khiing. As such the demand by the Applicants for them to be reinstated at Langkasuka Hotel was impossible to be fulfilled because the new Hotel is a new entity. Hence the Applicants could not force the new Hotel, to reinstate the Applicants as their new employees because the MoA is with Langkasuka Hotel and this Hotel was no longer in existence. As a result of this, the MoA has become a frustrated contract.
 Having perused the Record of Appeal we found that the decision by the learned Judge as stated above was not supported by evidence. In deciding so, the learned Judge had failed to take into consideration relevant consideration apparent from the records before her that on 26th August 2010, the day the meeting was called and the claim that the offer was purportedly made to the Applicants, Langkasuka Hotel had given the assurance to the Union vide the MoA made pursuant to section 18 of the IRA, amongst others, that it would reinstate the Applicants at Langkasuka Hotel on 31st October 2010. Despite this guarantee and / or assurance in just about 23 days, i.e. on 18th September 2010 after the MoA was executed by both the Union and Langkasuka Hotel pursuant to section 18 of the IRA, the Applicants were notified that as there was change in
the ownership of the said Hotel, they could not be reinstated in Langkasuka Hotel. In doing so the learned Judge failed to consider the following:
(a) Common sense would tell one that it is impossible to negotiate and finalise the sale of the hotel with the size of Langkasuka Hotel within 23 days as there are many processes involved in the sale of the property and in the running of a hotel business. The learned Judge failed to consider this point and was under the misapprehension of fact because the take-over was said to have been finalized by 18th September 2010, as per the announcement made by the said Hotel on 18th September 2010, and not several months later as stated in the learned Judge’s Grounds of Judgment. This could not be correct as only on 26th August 2010, Langkasuka Hotel had given the assurance to the Applicants that they would be relocated at the said Hotel on or by 31st October 2010 and shortly after that, i.e. on 18th September 2010, the Applicants were told that the said Hotel had changed ownership; and
(b) Even if the sale of the said Hotel had actually been finalized within 23 days, the learned Judge failed to appreciate the fact that this was indicative of mala fide on the part of Langkasuka Hotel because after agreeing to reinstate these Applicants by 31st October 2010 at the said Hotel vide the MoA, the said Hotel was actually working behind the Applicants’ back to
negotiate the sale of the said Hotel to defeat Clause 2(i) of the MoA.
 We are of the view that both the 2nd Respondent as well as the learned Judge fell into an error of both fact and law because they had failed to consider that Langkasuka Hotel’s claim that it had changed ownership was merely a bare assertion unsupported by evidence. If it is true as alleged that it had changed ownership there would be some form of evidence of the sale and purchase agreement of the said Hotel and / or Form 14A to indicate the transfer had taken place or any other form of documentary evidence. From the ROC search there was nothing to connect Global Upline and the ownership of the said Hotel.
 Both the 2nd Respondent and the learned Judge had failed to properly evaluate the evidence placed before the 2nd Respondent as Langkasuka Hotel’s own witnesses had confirmed that at the material time, the owner of the Helang Hotel and Sheraton Langkawi was one and the same, Tan Sri Ting Pek Khiing. COW1 admitted he was the author of the letter dated 19th April 2012 (see page 131 of Jilid 2 of Appeal Record Part B & C) which had confirmed that Helang Hotel is under the same ownership and management as Sheraton Langkawi Beach Resort. COW1 was also the author of CLB and vide CLB he had stated that Sheraton Langkawi is under the same ownership and management as Sheraton. The owner of these Hotels is none other than Tan Sri Ting Pek Khiing (see page 303 of Jilid 2 of Appeal Record Part B & C).
 The fact that COW1 could not support Langkasuka Hotel’s claim and gave contradictory evidence as to the ownership of Sheraton Langkawi (see pages 302-303 of Jilid 2 of Appeal Record Part B & C) proved that Langkasuka Hotel did not have the documentary evidence pertaining to the change of ownership, otherwise it would not be difficult for Langkasuka Hotel to prove the same. COW2 in his evidence confirmed that his witness statement vide Question 15 which stated that the property had changed hands was based on hearsay evidence from the management and there was no documentary evidence to support this. In short, there was no evidence tendered by Langkasuka Hotel that there was change of ownership. Therefore both the 2nd Respondent and the learned Judge erred in holding that there was change of ownership. Further, the ROC search showed that the nature of Global Upline’s business was “construction and letting of heavy equipment” and nothing to do with hotel business. In the upshot, the claim by Langkasuka Hotel that it had changed ownership was a bare assertion with no basis in reality. This proved that there was in fact no change in the ownership.
 There was a CA entered into by the Union and Langkasuka Hotel and this CA is binding on both parties. Any dispute which arises between the Union and Langkasuka Hotel must be resolved pursuant to the terms and conditions as encapsulated in the CA. Pursuant to Article 1 of the CA, the terms and conditions contained in the CA shall be binding on Langkasuka Hotel and its successors, assignees or transferees. Therefore, the terms and conditions stated in the CA shall be equally binding on Sheraton Langkawi under Article 1 of the CA.
 The court also refers to section 17 of IRA which provides as follows:
(1) A Collective Agreement which has been taken cognizance of by the Court shall be deemed to be an award and shall be binding on:
(a) The parties to the agreement including in any case where a party is a trade union of employers, all members of the trade union to whom the agreement relates and their successors, assigns or transferees; and
(b) All workmen who are employed or subsequently employed in the undertaking or part of the undertaking to which the agreement relates.
 In interpreting this provision, the Court of Appeal in the case of Abdul Aziz Abdul Majid & Ors V Kuantan Beach Hotel Sdn Bhd & Ors  1 LNS 1294 held as follows:
“ Quite independent of the second respondent having agreed to take over liability in respect of the appellants, the question whether the second respondent will be bound by the Collective Agreement will depend on whether it can be regarded as a “successor assign or transferee” of the first respondent within the meaning of s. 17(1) of the Industrial Relations Act 1967.
 In our judgment the second respondent is such a successor, assign or transferee within the meaning of s. 17(1). We say so for the following reasons.
 In Kesatuan Kebangsaan Wartawan Malaysia & Anor v.
Syarikat Pemandangan Sinar Sdn Bhd & Anor  3 CLJ547 the Federal Court in considering the provisions of s. 17(1) held atp. 544
that the words “their successors, assigns or transferees” contained in 17(1)(a) must be taken to mean the successors, assigns and transferees of both parties to the Collective Agreement and not only to the members of a trade union… We agree with the appellants that the decision of the Federal Court shows that a purchaser of a business would be bound by a Collective Agreement if it is established that the purchaser is a successor, assign or transferee of either of the parties to a Collective Agreement.
 For the reasons given by us earlier, it is our view that as the business of the hotel owned and operated by the first respondent was effectively transferred to the second respondent under the sale and purchase agreement, the second respondent was a successor, assign or transferee of the first respondent within the meaning of s. 17(a) Industrial Relations Act and is bound by the Collective Agreement entered into between the first respondent and the appellants.
 Therefore, even assuming that there was change of ownership from Langkasuka Hotel to Sheraton Langkawi as claimed, Hotel Sheraton is still bound by the CA pursuant to section 17 of IRA and Article 1 of the CA.
 There was already in place a mechanism provided under the IRA, by way of a negotiation and / or conciliation process which must be adhered to by the contracting parties. By way of Article 4 of the CA which relate to Settlement of Dispute, Stage 4 makes provision for the matter to be referred to DIR for conciliation or mediation process. The MoA executed by both the Union and Langkasuka Hotel must be treated as
sacrosanct as this is a solution provided by the law and as agreed between parties.
 The MoA is admissible and binding under section 54 (1) and (2) of the IRA. Under subsection 54(1) no evidence shall be given in proceedings before the Court of any negotiation and / or conciliation other than a written statement agreed to and signed by the parties to the dispute. Under subsection 54 (2) no evidence shall be given of any proceedings before DGIR under section 20 (2) other than a written statement agreed to and signed by the parties to the reference.
 It would appear from the evidence, the whole process leading to the termination of the Applicants from the employment of Langkasuka Hotel was hapzardly done. The issue faced by the Applicants was a serious issue involving their rights to livelihood. A matter as serious as this ought to be dealt with in a more harmonious and diplomatic manner rather than hurriedly done as reflected in the records before us. Despite the CA, Langkasuka Hotel had merely called the Applicants by giving them no notice and / or short notice and without the Union being present. In fact there was no discussion with the Union pertaining to matters affecting the livelihood of the Applicants.
 We also observed that the contract of employment of the Applicants with Langkasuka Hotel which according to said Hotel, had changed its ownership, was not terminated in writing to enable fresh offers in writing to be made by Helang Hotel. A reasonable employer would have discussed the matter with the Union and / or would have issued fresh
letters to the Applicants to convey to the Applicants their terms and conditions of service. There was in fact procedural non-compliance of the mechanism as agreed between parties. As such the failure on the part of the 2nd Respondent in taking this fact into consideration had resulted in the decision to be tainted with procedural impropriety and / or unfairness. There was clear breach of the CA.
 We were of the view that the learned Judge was plainly wrong when she decided that Regulation 8 would apply to the factual matrix of the case at hand as according to the learned Judge it was without doubt that the Applicants were offered alternative employment with Helang Hotel. It is our considered view that Regulation 8 was wrongly applied by the learned Judge as well as the 2nd Respondent. For ease of reference Regulation 8(1) & (2) are reproduced below as follows:
(1) Where a change occurs (whether by virtue of a sale or other disposition or by operation of law) in the ownership of a business for the purposes of which an employee is employed or ofpart of such business, the employee shall not be entitled to any termination benefits payable under these Regulations, if within seven days of the change of ownership, the person by whom the business is to be taken over immediately after the change occurs, offers to continue to employ the employee under terms and conditions of employment not less favourable than those under which the employee was employed before the change occurs and the employee unreasonably refuses the offer.
(2) If the person by whom the business is to be taken over immediately after the change occurs does not offer to continue to
employ the employee in accordance with paragraph (1), the contract of service of the employee shall be deemed to have been terminated, and consequently, the person by whom the employee was employed immediately before the change in ownership occurs shall be liable for the payment of all termination benefits payable under these Regulations.
 Regulation 8 would be applicable only if a change in ownership of the business occurred either by virtue of a sale or other disposition or by operation of law for which the employees would not be entitled to termination benefits and within 7 days after the change of ownership had taken place, the person who had taken over the business offers the employee to continue under the terms and conditions of employment not less favourable than those under which the employee was employed before the change occurs and the employees unreasonably refuses the offer. The purported offers to the Applicants were not made by Sheraton Langkawi as envisaged by Regulation 8 but by a different entity, Helang Hotel. The importance of this distinction had been ventilated by the Supreme Court in the case of Kumpulan Kamuning Sdn Bhd v Rajoo Thangaveloo & Ors  CLJ Rep 207 where the court held as follows:
“Another material distinction between the two provisions is that the offer under reg. 4(3) must come from the same employer not less than 7 days before the date with effect from which his service is to be terminated; whereas under reg. 8 it is the new owner who must make the offer within 7 days of the change of ownership. Thus, where the termination of service is occasioned by a change of
ownership of the employer’s business, termination benefits are payable if the new owner failed to make the offer within the prescribed time….”
 Therefore, even assuming for a moment that there was in fact a change of ownership, there was no offer from the new owner in this case to absolve liability under Regulation 8 above. In any event, as stated above, it is our finding that there was no change of ownership as there was no evidence to support such a suggestion. Therefore, Langkasuka Hotel could not rely on Regulation 8 to terminate the Applicants and / or deny them of their rights to termination benefits.
 We also observe that there was no real or proper offer of employment made on 18th September 2010 when the emergency meeting was called, for the Applicants to reject anything as claimed. The whole process viewed from the perspective of a reasonable employer was to deny the Applicants of their entitlement to negotiate pursuant to the CA and / or to refer such dispute in accordance with the scheme provided by the IRA which is already in place.
 From the facts placed before us, Langkasuka Hotel had shown clear intention not to be bound by the CA which was binding on them especially, among others, Clause 4 for Settlement of Dispute which recognized the importance of the full discussion in clearing misunderstanding and to take reasonable effort to preserve harmony. The next matter concern Clause 12 relating to Service Charge and
matters related to Service Charge and Clause 28 for Retrenchment and Retrenchment Benefits.
 In the Book Law of Dismissal co-authored by Nallini Pathmanathan, Sivakumar Kanagasabai and Selvamalar Alagaratnam (see page 225 of Jilid 2 of Appeal Record Part B & C) it was stated that “the law allows an employer to terminate an employee for good reason and closure of business is a valid reason”. This principle is entrenched in section 12 (3) of the Employment Act 1955. Unlike in the case at hand, we could not find any evidence to support the contention that the termination of the Applicants’ employment with Langkasuka Hotel was for good reason. The Applicants were terminated on 21st September 2010, one day after the termination notice dated 20th September 2010 was issued in an emergency meeting without giving them any notice and / or any monetary compensation in lieu of notice based on the ground that they had staged a walk-out. At that point in time, there was no proper and clear offer made to them. Helang Hotel had not employed them properly and Langkasuka Hotel had not terminated the services of the Applicants officially. Helang Hotel had not made any offers in writing and given time to these Applicants to ponder, discuss or counter offer. The whole exercise was an arbitrary act on the part of Langkasuka Hotel to the detriment of the Applicants. Further, Langkasuka Hotel failed to give notice to the Union members and / or it failed to provide the environment for discussion and / or conciliation.
 Even assuming we were wrong in our understanding of Regulation 8, and that there were in fact offers made by Helang Hotel, we were of
the view that the offers made were less favourable than the terms and conditions under which the Applicants were employed in Langkasuka Hotel. We said so because the Applicants entitlement for service charges was very much lower than what they obtained under their original employment. This was confirmed by the learned Judge herself where the learned Judge had stated in her Grounds of Judgment (see page 35 of Jilid 1 of Appeal Record Part A) that although the service charges received by the Applicants was significantly reduced, this was due to the fact that the service charges was to be shared with a large number of employees.
 The learned Judge went further to say that this was not a situation where Langkasuka Hotel or Helang Hotel had purposely reduced the service charges without any valid reason. It is apparent from this finding of the learned Judge that the Applicants’ purported terms and conditions of employment offered to them was much less favourable than what was enjoyed by the Applicants before as stated in Clause 12 of the CA. It is a known fact that employees of the hotels were dependent on service charges because their basic salary is rather low. It is also an acknowledged fact accepted in the hotel industry that the service charges is very important component of the employee’s wages. The Applicants’ entitlement to service charge is recognized and form the main attraction to lure anybody to join the hotel industry. Service charge is considered as wages and the Industrial Court in Kesatuan Pekerja-pekerja Hotel, Bar & Restoran, Semenanjung Malaysia v. Hotel Equatorial (M) Sdn Bhd 3ILR had regarded as trite law that service charge is treated as part of wages and constituted 60% to 80% of the employees monthly
income. Hence Clause 2(ii), Clause 2(iii) of the MoA had been breached. In the Court of Appeal case of Abdul Aziz Abdul Majid & Ors (supra), the Court accepted that service charge is part of wages and held as follows:
“In the first place it is settled law that service charge is part of the wages of an employee. See Hotel Equatorial (M) Sdn Bhd v. Thomas George, High Court Rayuan Sivil R2-16-6-95 which was affirmed by the Court of Appeal; and Bukit Jambul Hotel Development Sdn Bhd v. Kesatuan Kebangsaan Pekerja-Pekerja Hotel, Bar dan Restoran, SemenanjungMalaysia  2ILR 927 atp. 943.”
 The rationale behind this approach had been explained in the case of Crystal Crown Hotel & Resort Sdn Bhd v Kesatuan Kebangsaan Pekerja-pekerja Hotel, Bar & Restoren Semenanjung Malaysia  1 LNS 1450, where the court held that:
“39. The concept of service charge had been discussed in the case of National Union of Hotel, Bar and Restaurant Workers, Peninsular Malaysia v. Masyhur Mutiara Sdn. Bhd  1MELR 286). The rationale for the introduction of the service charge in the hotel industry was to replace the practice of tipping which only benefited the guest service employees of the hotels but not others who were not in direct contact with the customers or patrons of the hotel. In order to provide a more equitable scheme to be enjoyed by the eligible employees, guest service or non-guest service alike, a collection system which could be shared by all eligible employees of the hotel was introduced by the leading hotel, known as Merlin Hotel and this had set the standardfor other hotels to adopt. This service
charge system had become the norm in the hotel industry and become an important component of wages paid to hotel employees. ”
 Therefore, clearly the decision of Langkasuka Hotel was not only a breach of Clause 2 (ii) of the MoA but in fact a clear deprivation of wages to the Applicants and hence a violation of the Employment Act 1955 which requires the wages of any one month to be paid by the 7th day of the following month, at the latest. This had caused injustice to the Applicants.
 There was evidence placed before the 2nd Respondent that the average monthly service charge per point in Langkasuka Hotel for 2009 was RM257.92 whereas it was a mere RM28.79 in Helang Hotel. This was about 11.2% of that in Langkasuka Hotel. Besides that there were instances that these service charge had not been paid at all. As at 18th September 2010, the service charge for May and June 2010 had not been paid and the April 2010 service charge was paid only in September 2010. This had been highlighted by the Union in its letter dated 8th May 2010 to Langkasuka Hotel (see page 132 of Jilid 2 of Appeal Record Part B & C). The particulars pertaining to service charge had also been highlighted by the Applicants in their Written Submission filed in Court which we fully endorsed.
 We have also noted the submission of the learned Counsel for Langkasuka Hotel that the Applicants were in fact transferred to from Langkasuka Hotel to Helang Hotel. However we found that there was no merit in this line of submission. Firstly, it was never the pleaded case of Langkasuka Hotel at the Industrial Court and this issue of transfer was
never put before the Industrial Court for determination. We could not find any evidence to indicate the whole exercise was in fact a transfer from Langkasuka Hotel to Helang Hotel. Pursuant to the letter dated 20th September 2010, Helang Hotel had notified the Applicants its intention to call for the meeting on 18th September 2010 was to reconfirm the Applicants’ employment with Helang Hotel. It was also stated in the same letter that the reason the 18th September 2010 meeting was called was to offer the Applicants permanent employment at Helang Hotel. Therefore, it was not a transfer exercise as submitted by the learned Counsel for the Respondent. Premised on the above reason, the submission by the learned Counsel that this exercise was a transfer ought to be rejected by us.
 There was no notice of termination issued by Langkasuka Hotel and / or termination effected by the said Hotel as required by the law. The termination was in fact effected by Helang Hotel which had not shown that it had made a written offer to the Applicants which was rejected. In Radtha d/o Raju & 358 Ors v. Dunlop Estates Bhd  1 CLJ 755 the Court of Appeal upheld the Labour Court decision that in view of the takeover of the estate by a new owner, the employees were entitled to notices of termination from Dunlop Estate Bhd. despite all of them being offered and accepted continued employment by the new company. This indicates that the original employer is required to give advance notice of any termination by the original owner due to any change in ownership, even though there was a job offer from the new employer. In the case at hand, there was no job offer from Sheraton Langkawi. There was also no notice of such change in ownership ever given to the Applicants by
Langkasuka Hotel. As such, the 2nd Respondent had committed error of law in not taking these facts and grounds into consideration.
 We are of the view that when the findings of the 2nd Respondent had been arrived by taking into consideration irrelevant matters and / or had failed to take into consideration relevant consideration as illustrated above, such findings are always amenable to judicial review on the ground commonly referred to as “Wednesbury’s unreasonableness” (see Associated Provisional Picture House Ltd v Wednesbury Corporation  1 KB 223). The 2nd Respondent must exercise its power reasonably.
 We have perused the appeal record and the written submissions of the respective parties we found that the decision of the 2nd Respondent was so unreasonable and predicated on unsupported evidence and / or law. As illustrated above, from the outset the decision making process was tainted with the elements stated by the Applicants in their Order 53 (3) Statement, namely, illegality, irrationality and procedural impropriety.
 We found that the learned Judge had relied on grounds proffered by the 2nd Respondent in arriving at her decision to affirm the 2nd Respondent’s Award without making her own analysis and evaluation of the facts surrounding the appeal and / or without appreciating the relevant law applicable to the factual matrix of this case. Based on the facts that
we had alluded herein, no reasonable tribunal would have come to the conclusion as reached by the 2nd Respondent.
 Having examined the appeal record and perused the written submission and heard the oral arguments, we were constraint to hold that the learned Judge failed to judicially appreciate the evidence and / or the law presented before her so as to render her decision plainly wrong and upon curial scrutiny merit our appellate intervention.
 Based on the aforesaid, we unanimously allowed this appeal with costs. The decision of the High Court was set aside. We grant the application for judicial review in terms of prayers (i), (ii) and (iv) as follows:
(i) An order of certiorari to be issued to quash the Award of the of the 2nd Respondent vide Award no. 50 of 2015 dated 15th January 2015;
(ii) An order of Mandamus being issued to direct the 2nd Respondent to assess compensation in lieu of reinstatement in accordance with the normal practice adopted in Industrial Court as it is not feasible to reinstate the Applicants in 1st Respondent; and
(iii) costs of the proceedings herein and below in the sum of RM20,000.00 to be paid by the Respondent to the Applicants subject to Allocator.
 We further ordered for the costs awarded by the High Court in the sum of RM5,000.00 to be refunded to the Applicants and the deposit to be refunded.
 We therefore ordered accordingly.
(ASMABI BINTI MOHAMAD)
Court of Appeal, Malaysia
Dated: 30th March 2017.
1. Messrs Hong, Cheah & Co Advocate & Solicitor For and on Behalf of the Appellant Suite 7.05, Sri Weld 3A Pengkalan Weld 10300 Penang
[Ref: HCC/ABS/203/16/ec] … Mr Alex Keong
Mr Eric Cheah
2. Messrs Darshan & Jaswant Advocate & Solicitors For and on Behalf of the Respondents No. 199 Tingkat 2 Jalan Lagenda 7 Lagenda Heights 08000 Kedah
[Ref: No. 009/VK/SAF] … Mr Darshan Singh
Madam Jaswant Kaur