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2025 MarsdenLR 3294
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 employee's dismissal was unjustified due to the intertwined relationship of the companies, but ultimately found he was not an employee of the appellants at the time of dismissal.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Wrongful termination of employment - Claim by employee dismissed without just cause or excuse by multiple companies - Court ruled that the employee's dismissal was not justified as the interrelation of the companies indicated a single employer status. (Paras 4, 44, 49)
(B) Corporate Veil - Lifting of corporate veil - The court found no legal basis to lift the corporate veil as the employee was not an employee of the appellants at the time of dismissal. (Paras 29, 30)
(C) Legitimate Expectation - The court held that the employee had no legitimate expectation to be transferred back to the appellants after redundancy in KPS-HCM. (Paras 34, 39)
(D) Redundancy - The court concluded that the employee's job functions did not exist in the appellants at the time of retrenchment. (Paras 43, 44)
Facts of the case:
The respondent claimed wrongful dismissal by the appellants, asserting he remained their employee despite being transferred to KPS-HCM. The appellants contended he was solely employed by KPS-HCM at the time of dismissal.
Findings of Court:
The court found the appellants failed to prove the respondent was dismissed with just cause or excuse and ruled that the dismissal was unjustified.
Issues: Whether the respondent was an employee of the appellants at the time of dismissal; whether the corporate veil should be lifted; whether the respondent had a legitimate expectation of reassignment; and whether his job function existed within the appellants.
Ratio Decidendi: The court determined that the intertwined relationship of the companies warranted treating them as a single employer, but ultimately found the respondent was not an employee of the appellants during dismissal.
Result: Appeal allowed.
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 Engineering and KPS-HCM, HCM Engineering was to provide management services to KPS-HCM. HCM Engineering then transferred the Respondent to KPS-HCM to work on the projects given to KPS-HCM namely the SSRM project in early 2009, previously under HCM Engineering. Despite the 'transfer' from HCM Engineering to KPS-HCM, the Respondent was not given any transfer order in a properly documented form with all details to bring certainty and clarity on what the transfer entails on the Respondent's security of tenure as KPS-HCM is not solely owned under the Protasco group. The Respondent proceeded to obey the instruction of Protasco, Roadcare and HCM Engineering to be further placed in KPS-HCM
