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1999 MarsdenLR 963

COURT OF APPEAL, KUALA LUMPUR

GOPAL SRI RAM JCA SITI NORMA YAAKOB JCA MOKHTAR SIDIN JCA


AMERICAN INTERNATIONAL ASSURANCE CO LTD
versus
DATO LAM PENG CHONG

CIVIL APPEAL NO: W-04-15-97

Decided On : 04-05-99

Advocates:
For the appellant - Dato Dominic Puthucheary (Asmet Nasaruddin & Feroz Husseinwith him); M/s Puthucheary, Asmet & Feroz For the respondents - KP Gengadharan (Hector Sankey with him); M/s Genga, MahaWong & Co

JUDGMENT

Gopal Sri Ram JCA:

The sole question at issue in this appeal is whether the Industrial Court exceeded its jurisdiction in holding the respondents to be workmen within the Industrial Relations Act 1967 ("the Act"). The background against which that question arises is as follows.

The appellant is a company whose business is life insurance. The respondents were engaged by the appellant in two capacities; as agents and as agency leaders. In the former capacity, the respondents sold policies issued by the appellant to members of the public desirous of having their lives insured. They derived a commission from the appellant for such sales on a prescribed scale. In the latter capacity, the respondents had divers duties according to the particular designation each held. The designations were "Agency Supervisor", "Agency Manager", "District Manager", "Manager" and "Senior Manager". The duties of the respondents as agency leaders included the recruitment, training and supervision of agents who were in the business of selling the appellant's policies. In the performance of these duties, the respondents were under the appellant's control and supervision. The appellant paid each respondent emoluments for the performance of their respective duties as agency leaders. Each respondent had two separate contracts with the appellant; an agent's contract and an agency leader's contract. The former contract had a specific provision which negated the creation of an employer/employee relationship. The latter contract did not contain any such term. In 1981, the appellant wanted to replace the existing agency leaders contract with a new contract. This new contract contained an additional clause which had the effect of negating any employer/employee relationship between the appellant and each of the respondents. The respondents were not prepared to accept the new contract. The appellant then terminated their contracts as agency leaders. A dispute arose. The respondents considered themselves to have been dismissed without just cause or excuse. They set in motion the machinery provided by s. 20 of the Act. On 8 June 1985, 1 July 1985 and 19 August 1985, the Minister referred the dispute between the parties to the Industrial Court. The parties exchanged pleadings and the matter was set down for hearing on 9 November 1985. At the outset, the appellant took a preliminary objection that the respondents were not workmen so that the Industrial Court lacked jurisdiction to adjudicate upon the dispute. After a hearing that lasted 67 days spread over almost three years, during which evidence was led and comprehensive submissions were made, the learned chairman of the Industrial Court dismissed the appellant's preliminary objection. In his award dated 31 October 1988, he held that the respondents were workmen within the Act. The appellant then moved the High Court for certiorari to quash the award. The High Court declined certiorari. It is against this refusal that the present appeal has been brought.

In support of the appeal, Dato Dominic Puthucheary of counsel for the appellant argues that the Industrial Court fell into error because it misunderstood the evidence led before it. It is his submission that the totality of the evidence, both oral and documentary, reasonably supports the conclusion that the respondents were independent contractors engaged under contracts for services and not workmen employed under contracts of service. Counsel submits that the agency leaders contract of each of the respondents had merged into the agency contracts that they had with the appellant so that in truth and fact each respondent had only one contract with the appellant. That single contract excluded any relationship of employee so that the respondents were at all material times independent contractors of the appellant. He says that if the award in the present case is permitted to stand, it would have a serious impact upon the insurance industry because persons in th

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