Back
2025 MarsdenLR 6391
HIGH COURT MALAYA KUALA LUMPUR
PROTASCO BERHAD & ORS – Appellant
Versus
MOHD NORLI MD SALLEH – Respondent
[Civil Appeal No: WA-16A-60-09-2023]
The court ruled that the respondent was solely employed by KPS-HCM at dismissal, with no obligation on the appellants to rehire, emphasizing separate legal identities of the companies involved.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Wrongful termination of employment - The Industrial Court found the dismissal of the Respondent to be without just cause, ordering the Appellants to pay compensation. However, the Appellants successfully appealed, asserting the Respondent was not their employee at dismissal. (Paras [4], [18])
(B) Employment Status - The court ruled the Respondent was solely employed by KPS-HCM at the time of dismissal, stating that lifting the corporate veil to establish liability on the Appellants was not warranted as the employment relationship was distinct. (Paras [33], [44])
Facts of the case:
The Respondent claimed wrongful dismissal from the intertwined companies and sought reinstatement, while Appellants contended the dismissal was legitimate as the Respondent worked for KPS-HCM.
Findings of Court:
The IC’s conclusions were deemed erroneous, with evidence showing KPS-HCM was the Respondent's employer, dismissing the claim against the Appellants. Responsibilities for dismissal rested solely with KPS-HCM. (Paras [49], [50])
Issues: Determination of the employment status of the Respondent, the need for lifting the corporate veil, expectations of reassignment after redundancy, and the validity of the dismissal.
Ratio Decidendi: The court emphasized that employment status must be clear, and lifting the corporate veil requires just cause which was not established; thus, the claim against the Appellants was dismissed. (Paras [28], [41], [46])
Result: Appeal allowed.
| Table of Content |
|---|
| 1. initial reference and claim of wrongful termination. (Para 1 , 2 , 3 , 6) |
| 2. overview of dismissal and appeal. (Para 4 , 5) |
| 3. details of the employment and transfer circumstances. (Para 7 , 8 , 9 , 10 , 11 , 12) |
| 4. summary of parties' arguments. (Para 13 , 15 , 16) |
| 5. court's findings on employment status and dismissal. (Para 17 , 18 , 19 , 20 , 22 , 27 , 30) |
| 6. analysis of the corporate structure and employment hierarchy. (Para 21 , 23 , 25 , 29) |
| 7. arguments against the lifting of corporate veil. (Para 24 , 26 , 28 , 34) |
| 8. debate over obligation for re-hiring after redundancy. (Para 35 , 36 , 38) |
| 9. final decision and outcome of the appeal. (Para 43 , 44 , 48) |
Introduction
[1] The substantive matter was brought to the Industrial Court (IC) by way of a reference dated 21 March 2022 by the Director General of the Department of Industrial Relations (DGIR) under s 20(3) of the Industrial Relations Act 1967 ( IRA ) for a claim for wrongful termination of employment.
[2] The dispute before the IC is the claim by Mohd Norli Md Salleh (the Respondent) that he was dismissed from his employment without just cause or excuse by Protasco Berhad, the 1st Appellant (Protasco), Roadcare (M) Sdn Bhd, the 2nd Appellant (Roadcare), HCM Engineering Sdn Bhd, the 3rd Appellant (HCM Engineering) and KPS-HCM Sdn Bhd (KPS-HCM) on 1 September 2021.
[3] Upon the application by the Respondent at the IC and pursuant to an Interim Award No: 1942/2022 dated 29 August 2022, the Respondent's case against Protasco, Roadcare, HCM Engineering and KPS-HCM was consolidated and these cases were heard together thereupon.
[4] This is an appeal (Encl 15) by Protasco, Roadcare and HCM Engineering (the Appellants) against Award No 1873 of 2023 dated 5 September 2023 of the Learned Chairman of the IC that found the dismissal of the Respondent by the Appellants as being without just cause and excuse and ordered that the Appellants jointly and/or severally pay the Respondent a sum of RM645,392.00 less statutory deduction (if any) within 30 days from the date of the Award.
[5] After the hearing, I allowed the Appellants' appeal (Encl 15). I will now set out the grounds for my decision.
The Background Facts
[6] The narration of the background facts of the case can be found in the Learned Chairman of the IC Award and reproduced below with suitable modifications.
[7] The dispute before the IC is the claim by Mohd Norli bin Md Saleh (Respondent) that he was dismissed from his employment without just cause or excuse by Roadcare, Protasco, KPS-HCM and HCM Engineering on 1 September 2021.
[8] Protasco is an entity that is involved in a variety of businesses in this country. Under Protasco, there were subsidiaries established to primarily operate road maintenance and related businesses. Amongst the subsidiaries that are relevant to the dispute herein are Roadcare, KPS-HCM and HCM Engineering.
[9] The Respondent was employed by Roadcare and commenced employment on 1 March 2001 as the Area Manager based in Kuantan. The Respondent was subsequently confirmed in the same employment. Amongst the terms of the Respondent's contract of employment with Roadcare, the Respondent was subject to transfer within the Protasco group of companies. On 6 June 2008 through Protasco, Roadcare issued the Respondent a transfer order to HCM Engineering which entailed the promotion of the Respondent to the position of General Manager of a project known as SSRM Project. The Respondent agreed and accepted the transfer.
[10] On 19 December 2007, an entity known as Kumpulan Perangsang Selangor Berhad (KPS) entered into a joint venture agreement (JVA) with HCM Engineering and by virtue of this JVA, KPS-HCM was incorporated and the shares in this entity were jointly held by KPS and HCM Engineering on a 30/70 percentage shareholding wherein the substantial shareholding in KPS-HCM was held by HCM Engineering, a subsidiary of Protasco. By a management agreement between HCM Engineer
