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2025 MarsdenLR 4707
INDUSTRIAL COURT PULAU PINANG
TAN KIAN CHUAN – Appellant
Versus
KHIAN3 INDUSTRIES SDN BHD – Respondent
Award No: 764 Of 2025 [Case No: 18/4-1694/23]
The court determined that the Claimant was not an employee under the Industrial Relations Act as he lacked an employer-employee relationship at the time of his removal, and thus, no unfair dismissal occurred.
Headnote:(A) Industrial Relations Act 1967 - Section 2 and Section 20(1) - Claimant's status as an employee - The Claimant, a director and founder of the Company, claimed unfair dismissal after being removed as a director during an Extraordinary General Meeting (EGM) - The Company contended that the Claimant was not an employee under the Act as he held no official executive position at the time of removal - The Court found that the Claimant failed to establish an employer-employee relationship and that there was no dismissal on the date of the EGM. (Paras 1, 6, 57)
Facts of the case:
The Claimant was dismissed from his role as Managing Director on 24 May 2022 due to alleged misconduct and later removed as a director in an EGM on 22 March 2023. The Claimant claimed unfair dismissal, asserting he was still an employee. (Paras 2, 34)
Findings of Court:
The Claimant was not a workman as defined under the Act, as he did not hold an executive role at the time of the EGM, and thus the claim for unfair dismissal was dismissed. (Paras 57, 58)
Issues: Whether the Claimant was an employee under the Act and if his removal at the EGM constituted a dismissal. (Paras 6, 34)
Ratio Decidendi: The Court held that the Claimant's role as a non-executive director did not qualify him as a workman under the Act, and his removal at the EGM was not a dismissal as he had already been terminated from his executive role. (Paras 57, 58)
Result: Claimant's case dismissed.
| Table of Content |
|---|
| 1. claimant's employment history and company background. (Para 1 , 2) |
| 2. company's response to claimant's allegations. (Para 3 , 4) |
| 3. arguments regarding claimant's employment status. (Para 5 , 6 , 7) |
| 4. court's approach to determining employment status. (Para 8 , 9 , 10) |
| 5. evidence and absence of employment contract. (Para 11 , 12 , 13) |
| 6. definition of 'workman' under the act. (Para 14 , 15) |
| 7. court's findings on claimant's roles. (Para 16 , 17 , 18) |
| 8. importance of evidence in employment disputes. (Para 19 , 20 , 21) |
| 9. court's reasoning on dismissal and jurisdiction. (Para 22 , 23 , 24) |
| 10. court's conclusions on claimant's employment status. (Para 25 , 26 , 27) |
| 11. final determination of claimant's claims. (Para 28 , 29 , 30) |
| 12. conclusion regarding dismissal and employment relationship. (Para 31 , 32 , 33) |
| 13. clarification of the nature of dismissal. (Para 34 , 35) |
| 14. summary of legal principles applied. (Para 36 , 37) |
| 15. final ruling on the claimant's case. (Para 38 , 39) |
Reference
[1] This is a reference made on 20 November 2023 by the Director-General of Industrial Relations Department to the Industrial Court of Malaysia under S 20(3) of the Industrial Relations Act 1967 ('the Act') arising out of the dismissal of TAN KIAN CHUAN (hereinafter referred to as 'the Claimant') by KHIAN3 INDUSTRIES SDN. BHD. (hereinafter referred to as 'the Company'). The Director-General's reference in this case before the Court requires the Court to hear and determine the Claimant's complaint of dismissal by the Company on the 22 March 2023.
Brief Background Facts Of The Case
[2] The Claimant's pleaded case as contained in his Statement of Case dated 7 February 2024 is as follows:
(i) The Claimant pleaded that the Company was founded in 2017 by his efforts, together with the financial contribution of other shareholders.
(ii) The Claimant averred that he commenced employment with the Company as a Sales and Marketing Director, while another shareholder, one Ronny Lee Khee Nien, is the Account and Operations Managing Director.
(iii) The Claimant averred that although there was no employment contract between him and the Company, however, he was assigned a portfolio in the Company's Sales and Marketing department and had successfully discharged his duties.
(iv) The Claimant averred that during his employment with the Company, he had fulfilled his job scope, and the financial growth of the Company improved yearly due to his efforts and contribution.
(v) The Claimant averred that he received the following monthly salaries from the Company:
(1) From 1 September 2018 till 30 March 2020, the Claimant had been receiving the following monthly salary from the Company:
Basic Pay: RM13,000.00
Allowance: RM3,000.00
(2) From 1 April 2020 till 31 July 2020, the Claimant had been receiving the following monthly salary from the Company:
Basic Pay: RM7,800.00
Allowance: RM1,800.00
(3) From 1 August 2020 till 31 August 2020, the Claimant had been receiving the following monthly salary from the Company:
Basic Pay: RM10,400.00
Allowance: RM2,400.00
(4) From 1 September 2020 till 31 May 2022 the Claimant had been receiving the following monthly salary from the Company:
Basic Pay: RM13,000.00
Allowance: RM3,000.00
(5) From 1 June 2022 till 28 February 2023, the Claimant had been receiving the following monthly salary form the Company whereby the Claimant's last drawn basic salary by the Company calculated as of 22 March 2023 was RM,406.45 on a pro-rate basis of RM4,800.00:
Basic Pay: RM4,800.00
(vi) The Claimant added that his monthly salary was subject to EPF and SOCSO contributions.
(vii) Subsequently, the Claimant stated that on 25 March 2022, he was accused by the Company of being in conflict of interest with the Company as he was also the director and majority shareholder of Trimax Supply Sdn Bhd, (hereinafter referred to as 'Trimax') and hence, the Claimant had approved special pricing for Trimax without informing the Company's board of directors.
(viii
