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2025 MarsdenLR 4396
INDUSTRIAL COURT KUALA LUMPUR
LIM SWEE CHAI – Appellant
Versus
ADVANCECON HOLDINGS BERHAD – Respondent
Award No: 1100 Of 2025 [Case No: 7/4-737/23]
Non-renewal of a fixed term contract does not constitute termination unless proven otherwise; the employer retains managerial discretion in this regard.
Headnote:(A) Industrial Relations Act 1967 - Section 20(3) - Non-renewal of fixed term contract - Claimant alleged unlawful termination; however, evidence showed contract expired by effluxion of time without renewal agreement - Court emphasized managerial prerogative in non-renewal decisions and burden of proof on employer to establish just cause for dismissal. (Paras 13, 20, 32)
(B) Employment Law - Fixed term contracts - The expiry of a fixed term contract does not constitute termination unless there is a dispute regarding the contract's nature - Claimant's failure to provide evidence of mutual agreement for automatic renewal led to dismissal of claims. (Paras 26, 31)
Facts of the case:
The Claimant was unlawfully removed from his position as Deputy Group CEO without a formal termination or reason provided. The Company asserted the contract expired naturally and was not subject to renewal. (Paras 7, 32)
Findings of Court:
The Court found that the Company had the discretion not to renew the Claimant's contract and that there was no malafide intent in the non-renewal. (Paras 32)
Issues: The primary issue was whether the non-renewal of the Claimant's contract was justified, considering the absence of a formal termination. (Paras 13)
Ratio Decidendi: The Court ruled that the non-renewal of a fixed term contract is not equivalent to termination; the employer's discretion is paramount in such cases, and the burden of proof lies with the employer to demonstrate just cause for dismissal. (Paras 32)
Result: Claim dismissed.
| Table of Content |
|---|
| 1. court's jurisdiction under the industrial relations act. (Para 1 , 2) |
| 2. factual background of the claimant's employment. (Para 3 , 4 , 5 , 6 , 7) |
| 3. company's position and employment terms. (Para 8 , 9 , 10 , 11) |
| 4. issue of non-renewal of contract. (Para 12 , 13) |
| 5. legal standards for dismissal and burden of proof. (Para 14 , 15 , 16 , 17 , 19) |
| 6. arguments regarding mutual understanding and termination. (Para 20 , 21 , 22 , 23 , 25) |
| 7. court's reasoning on non-renewal and contract terms. (Para 26 , 27 , 28 , 29 , 30 , 31) |
Reference
[1] This is a reference by Director General of Industrial Relations to this Industrial Court under s 20(3) of the Industrial Relations Act 1967 ("The Act") for an award in respect of the dispute arising out of the alleged termination of LIM SWEE CHAI ("the Claimant") by his employer ADVANCECON HOLDINGS BERHAD ("Company").
[2] This Court takes cognizance of the following bundles, statements, submission and cause papers filed:
Documents In Court Files
I. Statement of case dated — 8 June 2023.
II. Statement of reply dated — 4 July 2023.
III. Amended Statement of Reply — 20 June 2024.
IV. Rejoinder dated — 11 July 2023.
V. Claimant's Bundle of Document — (CLB1, CLB2, CLB3, CLB4, CLB5, CLB6)
VI. Company's Bundle of Document — (COB1, COB2, COB3)
VII. Witness Statement of the Claimant — YAP CHEE HOONG (CLWS1)
VIII. Witness Statement of the Claimant — YEO AN THAI (CLWS2)
IX. Witness Statement of the Claimant — LIM KHAI CHUAN (CLWS3)
X. Witness Statement of the Claimant — LIM SWEE CHAI (CLWS4)
XI. Witness Statement of the Company — DATO' PHUM ANG KIA (COWS1)
XII. Company's Written Submission dated — 14 April 2025
XIII. Claimant's Written Submission dated — 14 April 2025
XIV. Company's Written Submission in Reply dated — 30 April 2025
XV. Claimant's Written Submission in Reply dated — 30 April 2025
XVI. Company's Bundle of Authorities
XVII. Claimant's Bundle of Authorities
The Claimant's Case
[3] The Claimant was the Deputy Group Chief Executive Officer of the Company, and his last drawn salary was RM74,500.00. In year 1981, the Claimant was working as the water work contractor in Low Hoo & Son. In 1985, the Claimant joined Teguh Kaya Sdn Bhd as Contract Manager. The Claimant knew Phum Ang Kia ("CEO") somewhere in 1990s where Phum Ang Kia was the sub-contractor for Teguh Kaya Sdn Bhd Vide a common friend of both parties named Eng See Teck, the Claimant and Phum Ang Kia decided to form a joint venture. Both parties co-founded the Company Advancecon Sdn Bhd in year 2020.
[4] The Claimant's job scope were:
i) The Group's overall strategic management and strategic corporate planning;
ii) Overseeing contracts and operations related matters;
iii) Overall contract management functions and managing office operations for projects undertaken.
[5] The corporate structure was that Phum Ang Kia to be the CEO and the Claimant to be the Deputy CEO. Both parties had mutually agreed to continue to lead the Company until they voluntarily step down. The renewals of contract between them were agreed to be just a formality. The Claimant and Phum Ang Kia have been business partners for almost 30 years until the Claimant was unlawfully removed in 2022.
[6] Sometime in 2019, the relationship between the Claimant and Phum Ang Kia became strained over the issue of a company called Advancecon Solar Sdn Bhd (wholly owned subsidiary of the Company) which was managed by Phum Ang Kia's son Phum Boon Lim and Teh Heng Wee. The Board of Directors questioned these two people due to serious compliance issues and later both resigned from the Company and Phum Ang Kia was very unhappy. This made the relationship between the Claimant and Phum Ang Ki became strained.
[7] On 28 April 2022, Phum Ang Kia single handedly signed the End of Contract of Service Notification and terminate the contract of the Claimant. The Claimant was not given the reason for the non renewal of the contract and there was no warning or show cause letter issued. The
