Repeated renewals of fixed-term contracts may establish an expectation of permanent employment, thus necessitating just cause for dismissal, especially in the context of union activities.

[1] This matter was referred to the Industrial Court through a reference ordered by the Honourable Minister of Human Resources dated 6 July 2010 and duly received by the Court on 24 August 2010.

The Brief Facts

[2] The 1^st and 2^nd Claimant's commenced employment with the Company by way of a Fixed Term Contract (FTC) for 2 years.

[3] The Company had renewed the 1^st Claimant's initial FTC without fail and/or repeatedly since 20 December 1992 until the dismissal date. The last FTC offered by the Company to the 1^st Claimant was for 2 years commencing from 1 January 2008 to 31 December 2009.

[4] The Company had renewed the 2^nd Claimant's initial FTC without fail and/or repeatedly since 1 March 1998 until the dismissal date. The last FTC offered by the Company to the 1^st Claimant was for 2 years commencing 1 January 2008 to 31 December 2009.

[5] Pursuant to the Final Contract, the Claimants aver that the Company without any plausible reason/reasons transferred the 1^st Claimant to its Malacca Branch. The 2^nd Claimant was transferred to Kuantan Branch. The Company also reduces their sales commission from 3.5% to 1.5% without attributing any reason.

[6] The 1^st and 2^nd Claimants vide their letters dated 7 December 2007, had appealed to the Company with regard to the terms and conditions of the Final Contract especially the transfer and the reduced sales commission.

[7] The Company did not respond to the above appeal, however by its letter dated 17 December 2007 to the 1^st and 2^nd Claimant, the Company terminated their employment with the Company.

[8] The Company submits that both the 1^st and 2^nd Claimant were never dismissed by the Company but their respective contract of employments which were for a fixed term from 1 August 2007 to 31 December 2007 expired on 31 December 2007 upon their refusal to accept the final contract offered.

The Law

[9] When dealing with a reference under s 20(3) of the Industrial Relations Act 1967 (Act 177), the first thing the Court will have to do is ask itself whether there was a dismissal and if so, whether it was with just cause or excuse [see Wong Chee Hong v. Cathay Organisation (M) Sdn Bhd; 1987 MarsdenLR 100 ; [1988] 1 MLJ 92 ; [1988] 1 CLJ (Rep) 298 . [ Wong Chee Hong ]

[10] In the case of Weltex Knitwear Industries Sdn Bhd v. Low Kar Toy & Ors, 1998 MarsdenLR 2286 , YA Dato' Abdul Kadir Sulaiman held as follows:

"When the fact of dismissal is in dispute, it is for the workman to establish that he was dismissed by his employer. If he fails, there is no onus whatsoever on the employer to establish anything for in such a situation no dismissal has taken place and the question of it being with just cause or excuse would not arise. ...."

[Weltex]

The Standard Of Proof

[11] In Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor, 2002 MarsdenLR 1640 , HMR Abdul Hamid (as his Lordship then was) at page 322;

"......the Industrial Court should not be burdened with the technicalities regarding the standard of proof, the rules of evidence and procedure that are applied in a Court of law. The Industrial Court should be allowed to conduct its proceedings as a "Court of arbitration" and be more flexible in arriving at its decision, so long as it gives special regard to substantial merits and decides a case in accordance with equity and good conscience". [Krishnan Kutty]

[12] His Lordship went on at p 326 to say that:

"Where the employee was dismissed on the basis of an alleged criminal offence such as theft of Company property,