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2021 MarsdenLR 3543
INDUSTRIAL COURT KUALA LUMPUR
MOHAMED NAZMI SALLEHHUDIN – Appellant
Versus
GOODWAY RUBBER INDUSTRIES SDN BHD – Respondent
Award No: 1784 Of 2021 [Case No: 5/4-1139/20]
Joinder of parties in industrial disputes requires a reasonable nexus, and the inability to comply with an award must be demonstrated for effectiveness.
Headnote:(A) Industrial Relations Act 1967 – Sections 20(3), 29(a), (b), (g), 30(5), 32(1)(a) – Joinder application – Claimant sought to join Holding Company to the proceedings with the argument that both companies operated as a single unit – Court found no reasonable nexus between Holding Company and Claimant's employment with Subsidiary Company. (Paras 1, 22)
(B) Joinder Standards – The court established that factors must be met to justify joining any parties, particularly the necessity for effective adjudication. (Paras 11, 12)
Facts of the case: The Claimant was dismissed by the Subsidiary Company, with claims of unlawful dismissal prompting a joinder application against the Holding Company which was opposed. (Paras 2, 3)
Findings of Court: The Court concluded that the Holding Company was not the actual employer and joining it was unnecessary to ensure effective adjudication. (Paras 16, 22)
Issues: The main issues involved whether the Holding Company was necessary to effectively adjudicate the dispute and if the Subsidiary Company represented the employer's interests fully. (Paras 11, 12)
Ratio Decidendi: The court referred to established legal standards for joinder in industrial proceedings, emphasizing the need for a reasonable nexus and the ability of the Subsidiary to address any awards granted. (Paras 6, 16, 17)
Result: Application to join the Holding Company dismissed.
AWARD
(In Respect Of Joinder Application)
Reference
[1] This is a reference made under s 20(3) of the Industrial Relation Act 1967 (the Act) arising out of the dismissal of Mohamed Nazmi Bin Sallehuddin (hereinafter referred to as "the Claimant") by Goodway Rubber Industries Sdn Bhd (hereinafter referred to as "the Subsidiary Company") on 25 November 2019.
The Application
[2] The Applicant/Claimant had filed a Notice of Application (encl 26(A)) dated 4 December 2020 pursuant to s 29(a), (b) and (g) of the Industrial Relations Act 1967 read together with r 12 of the Industrial Rules 1967, and/or s 30(5) of the IRA for the following orders:
a) that Goodway Rubber Integrated Industries Berhad (the Holding Company); the holding company of Goodway Rubber Industries Sdn Bhd (the Subsidiary Company), be summoned, joined and/or added as party to this case:
b) that the Holding Company files its Reply to the Claimant's Statement of Case dated 13 October 2020 within 14 days of this Honourable Court's Order; and
c) Any such other orders and/or reliefs that this Honourable Court deems fit.
Backgrounds Of The Claimant's Notice Application (Enclosure 26(A)):
[3] This is a reference by the Honourable Minister of Human Resources pursuant to s 20(3) of the Industrial Relations Act 1967 arising out of the alleged dismissal of the Claimant from his position as Senior Manager Business Development by the Subsidiary Company with effect from 25 November 2019. The Claimant contends that his dismissal is without just cause and excuse and was not in accordance with the rules of natural justice and established industrial practice.
Based on Claimant's Joinder Application, Affidavit In Support dated 13 November 2020 and submissions, it can be summarized that the Claimant relied on the following grounds for the Claimant's Joinder Application (Enclosure 26(A)):
i) That there is nexus and/or relationship between the Holding Company and the Subsidiary Company:
ii) the Holding Company and the Subsidiary Company were inter-dependent as management wise, they were single unit. There was unity of operations and common control:
iii) the employees of the Holding Company and the Subsidiary Company were part of the same group enterprise called the "GIBB Group":
iv) there was functional integrity and unity of establishment between the Holding Company and the Subsidiary Company. Both Holding and Subsidiary Companies are a single economic unit:
v) the relationship of both Holding and Subsidiary Companies is so intertwined that they should be treated as a single entity to reflect the economic and commercial realities of the situation principle that the Claimant had been employed by a joint on common employer; and
vi) the joinder of the Holding Company is necessary to render the adjudication and/or determination of this matter effective, valid and enforceable. If the Holding Company is not joined as a party to this suit, there will be substantial injustice to the Claimant and the Court would not be able to adjudicate this matter effectively and justly.
[4] The Subsidiary Company vide Affidavit In Reply affirmed by Tai Qiyao dated 6 January 2021 had objected to the joinder application on the following grounds:
a) Notwithstanding the SSM's Corporate Information Sheet of both companies, Wong Ping Kiong was never appointed as the Director in both companies, but for the Subsidiary Company only.
b) Both of the companies are separate legal entity in law and there is no justification for the lifting of corporate veil. The joinder of the Holding Company is unnecessary in law.
c) From the Company's "Summary of Financial Statements" for the financial year end 30 June 2019, the Company is able to meet and comply with any award made by the Industrial Court after all legal avenues available to parties in this case having been exhausted.
[5] The Holding Company vide Affidavit In Reply affirmed by Tai Qisheng dated 27 May 2021 had objected to this application based on the following grounds:
a)
