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2020 MarsdenLR 110

FEDERAL COURT PUTRAJAYA
AHMAD ZAHRI MIRZA ABDUL HAMID – Appellant
Versus
AIMS CYBERJAYA SDN BHD – Respondent
[Civil Appeal No: 02(f)-11-02-2019(W)]



Petitioner Advocates:Alex De Silva,VK Raj,Tan Yang Qian ,Respondent Advocate: Vijayan Venugopal,Jamie Goh Moon Hoong

The nature of employment contracts must reflect continuity and genuine intention, regardless of fixed-term designations, ensuring just treatment of employees under labor law.

Headnote:In determining the nature of the appellant's employment status, the Industrial Court ruled that the appellant was a permanent employee, and not on a genuine fixed-term contract, finding continuity of employment and lifting the corporate veil appropriate. The Court of Appeal reversed this conclusion, questioning the necessity of lifting the veil and the implication of work permits. The Supreme Court ultimately restored the Industrial Court's findings, emphasizing the standard for continuous employment. The appeal was allowed following significant legal analysis of corporate relationships and employment reality.

Table of Content
1. nature of employment disputed: fixed-term vs permanent. (Para 1 , 2 , 4 , 5 , 6)
2. principles for lifting veil established in prior cases. (Para 8 , 9 , 19 , 22)
3. lifting corporate veil appropriate in employment law for justice. (Para 10 , 11 , 12 , 14)
4. lifting the corporate veil requires substantial evidence of underlying fraud or inequity. (Para 24 , 85)
5. work permit status irrelevant in determining permanent employment. (Para 40 , 41 , 57 , 58)
6. continuity of employment must be recognized irrespective of contract labels. (Para 44)
7. implications of work permit on employment status. (Para 68)

[1] The key issue in this appeal is whether the appellant/claimant was employed on a fixed-term contract or was a permanent employee of the respondent at the material time. The Industrial Court and the High Court found that the appellant/claimant was a permanent employee of the respondent and his dismissal from his employment was without just cause or excuse. On appeal, the Court of Appeal set aside the decision of the High Court and allowed the respondents appeal.

[2] On 7 January 2019, this Court granted the appellant/claimant leave to appeal on the following questions of law:

(i) Whether a need for work permit is a material consideration in determining whether an employment contract is a genuine fixed- term contract; and

(ii) Does a contract of employment which is renewed successively without application by the employee and without any intermittent breaks in between, is in reality a permanent employment.

The Factual Background And Antecedent Proceedings

[3] We do not propose to narrate the detailed factual background and antecedent proceedings of the case. They may be recounted in chronological order as follows:

The Second Leave Question

[4] We will first deal with the Second Leave Question which is the determinative and central question in this appeal. The issue whether the appellant/claimant was employed on a fixed-term contract or was a permanent employee of the respondent is at the heart of the dispute between the parties.

[5] The appellants/claimants case before the Industrial Court was that his contract of employment with the respondent was permanent in nature and not a genuine fixed-term contract. The Industrial Court found in favour of the appellant/claimant and vide its award dated 1 April 2016 concluded as follows:

"[45] Based on the totality of the evidence before this Court, the conclusion that is reached is that the claimant was a permanent employee of the company and the purported "fixed-term contracts" were not genuine fixed- term contracts. Since the company had terminated the claimant on the ground that his contract had expired, the dismissal is therefore found to be without just cause and excuse."

[6] In arriving at its decision, the Industrial Court made the following findings of fact:

(i) all contracts of employment of the appellant/claimant were automatically renewed upon the initiative of the Company and not based on any application by the appellant/claimant;

(ii) the appellant/claimant was not a Consultant but an employee of the company;

(iii) the appellants/claimants function and position were not for a fixed duration but had an indefinite amount of time as was within the reasonable contemplation of parties; and

(iv) there was no break in the appellants/claimants employment with the respondent as confirmed by the respondents own witness in her testimony.

[7] The Industrial Court lifted/pierced the corporate veil of the respondent and held that the appellant/claimant was in fact a permanent employee and there was continuity of employment from ADC.

[8] The High Court affirmed the decision of the Industrial Courts award. On appeal, however, the Court of Appeal allowed the respondents appeal. The Court of Appeal held, inter alia, that this was not a case where the corporate veil of the respondent ought to be lifted/pierced to reveal that the appellant/ claimant was at all material times a permanent employee

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