Back
2024 MarsdenLR 2857
INDUSTRIAL COURT IPOH
TAJUL AHMAD IDRIS NOR YUSOF – Appellant
Versus
RAHMAN HYDRAULIC TIN SDN BHD – Respondent
Award No: 597 Of 2024 [Case No: 10/4-1018/23]
Fixed-term employment contracts automatically terminate upon expiry, and employees have no legitimate expectation of renewal unless explicitly stated in the contract.
Headnote:(A) Industrial Relations Act 1967 – Section 20(3) – Employment termination – Claimant's employment ended upon expiry of fixed-term contract – Claimant's claim of unfair dismissal rejected as employment was on a fixed-term basis, subject to Company discretion – Claimant's applications for renewal were not guaranteed approval. (Paras 59, 60, 106)
(B) Employment Contracts – Fixed-term contracts – The nature of fixed-term contracts requires clear understanding that they end automatically upon expiry – Claimant's expectation of renewal was not legitimate as it was subject to Company discretion. (Paras 45, 63, 106)
(C) Retirement Age – Claimant retired at 55, and subsequent employment was on a fixed-term basis – Company had the right to not renew contracts post-retirement. (Paras 33, 64, 106)
Facts of the case: The Claimant, employed as an Administration Officer, had his employment terminated upon the expiry of a fixed-term contract after reaching retirement age. He claimed unfair dismissal, asserting that his contract should have been renewed based on past practices.
Findings of Court: The Court found that the Claimant's employment was on a genuine fixed-term basis, and the Company acted within its rights not to renew the contract.
Issues: Whether the Claimant's contract was permanent or fixed-term, whether he had a legitimate expectation of renewal, and whether he was dismissed without just cause.
Ratio Decidendi: The Court ruled that fixed-term contracts end automatically upon expiry, and the Claimant's expectation of renewal was unfounded as it was subject to Company discretion.
Result: Claim dismissed.
AWARD
Reference
[1] This is a reference by the Director General of Industrial Relations Department of Malaysia dated 29 May 2023 pursuant to s 20(3) of the Industrial Relations Act 1967 which was received by the Industrial Court of Malaysia on 1 June 2023 arising out of the alleged dismissal of TAJUL AHMAD IDRIS BIN NOR YUSOF (hereinafter referred to as "the Claimant") by RAHMAN HYDRAULIC TIN SDN BHD (hereinafter referred to as "the Company") on 30 June 2022.
Factual Background
[2] The Claimant was employed as an Administration Officer with a monthly salary of RM2,450.00 when the Company became part of the Malaysian Smelting Corporation Group after the acquisition by Malaysia Smelting Corporation. As part of the agreed arrangement for the acquisition, the Claimant's employment with the Company was terminated on 22 November 2004 and the Claimant was paid severance benefits in recognition of his long years of service with the Company before the acquisition.
[3] Thereafter the acquisition took effect and the Company became part of the Malaysia Smelting Corporation group, the Claimant was offered fresh employment with the Company as the Administrative Officer effective 23 November 2004.
[4] The Claimant retired from the Company on 14 September 2008 as he attained the age of 56 years old which was the retirement age of the Company at that material time. The retirement age was made known to all employees via cl 26.1 of the Human Resources Manual (p 143 of COB-1) and he was informed by the Company of his retirement by way of letter dated 28 July 2008 (p 16 of COB-1).
[5] The Claimant had by way of letter dated 30 August 2008 (p 17 of COB-1) applied for employment post-retirement and that his position at the time of retirement was an Administration Officer. As his 2 years post-retirement fixed term contract would expire on 21 September 2010, the Claimant had by way of letter dated 23 August 2010 (p 25 of COB-1) applied for employment for a fixed term of 2 years, in which due to further consideration, the Company agreed to employ the Claimant for a fixed term of 14 months.
[6] After a break in employment, the Claimant commenced employment pursuant to a 14 months' post-retirement fixed term contract from 1 October 2010 to 31 December 2011 as the terms and conditions of the fixed term contract of employment dated 8 September 2010 (pp 26-30 of COB-1).
[7] The Claimant was by way of post-retirement fixed term contract dated 14 December 2021 (pp 6-11 of COB-1), offered a 6 months' employment from 1 January 2022 to 30 June 2022 as the Claimant's post-retirement fixed term of employment was due to expire on 31 December 2021 when he had by way of letter dated 11 November 2021 (p 114 of COB-1) applied to be considered for renewal and for a further fixed term employment with the Company for the year 2022.
[8] Since the Claimant's successor had already been identified and the Company had put in place the transition plan, the Claimant was offered a fixed term employment for 6 months from 1 January 2022 to 30 June 2022 as the terms and conditions of his 6 months' post-retirement fixed term employment are stated in the employment contract dated 14 December 2021 (pp 6-11 of COB-1).
[9] With due regards, the Claimant's applications for post-retirement fixed terms contract are subject to final aypproval by the Senior Management from the Company's Corporate HQ. In the circumstances that the Senior Management was not agreeable to offering the Claimant a new post-retirement fixed term contract, the decision was communicated to the Claimant on 20 May 2022. A letter dated 7 June 2022 (p 14 of COB-1) was issued by the Company informing the Claimant of the decision and accordingly his last day of service on 30 June 2022. His last held position was the Human Resource & Administration Manager. The Company's Corporate HQ did not approve his application for further employment and hence, his employment ended on 30 June 2022 when the post-retirement fixed term
