Fixed-term contract employees are entitled to termination benefits upon contract expiry, as per the 2009 amendments to the Labour Rules, removing previous exemptions for such contracts.

Introduction

[1] Both Respondents who were employed by the Appellant by Contracts for the purposes of the Appellant's "SC168 Package B4, Proposed Construction Highway from Proposed Batang Lupar Bridge No 2 at Sri Aman Town to Betong Interchange, Betong Division, Sarawak" project had commenced a formal complaint against the Appellant, Verde FM Sdn Bhd in the Department of Labour, Sarawak, after being terminated without any termination benefit paid by the Appellant.

[2] The claims by both Respondents were allowed by the Labour Court and Judgment was entered against the Appellant.

[3] The Appellant vide a Notice of Appeal dated 17 October 2024 appealed to the High Court against the whole decision of the Director of Labour, Tuan Anand Anak Asvester Ujan, given on 5 September 2024, ordering the Appellant to pay to the Respondents the sum of RM5,102.65 as termination benefits, with such payment to be made within 30 days from the date thereof ("said Order").

[4] I have heard and considered the appeal and based on the Records of Appeal and the submissions and arguments from the Appellant and both Respondents, I dismissed the appeal on 9 April 2025 and maintained the decision and awards of the Labour Court.

[5] Dissatisfied with my decision, the Appellant filed Notice of Motion for leave to appeal to Court of Appeal dated 8 May 2025.

[6] Below are the grounds for my decision.

Brief Background Facts

[7] Following their termination, a total of sixteen (16) employees filed formal complaints with the Labour Department against the Appellant on 4 July 2024. However, during the hearing held on 13 August 2024 at the Labour Office in Sri Aman, the claims of fourteen (14) of those employees were withdrawn, as only the Respondents were present at the hearing.

[8] The brief backgrounds and chronology of events leading to the appeal by the Appellant are as stated in the respective Labour Court's Ground of Judgment (Refer paras 8 - 14 of the said Grounds).

[9] To summarise, both Respondents were employed by the Appellant under the following contracts:

[10] The Appellant, upon being dissatisfied with the Director of Labour's decision handed down on 5 September 2024, filed the appeal to the High Court contending that the Labour Court erred in allowing the Respondents' claim against the Appellant and in ordering the Appellant to pay to the Respondents the sum of RM5,102.65 as termination benefits, with such payment to be made within 30 days from the date thereof.

Grounds Of Appeal

[11] The grounds of appeal can be found in the Memorandum of Appeal filed. There are nine (9) grounds on which the Director of Labour was said to have erred in allowing the Respondents' claims:

(a) The Director erred in law and in fact in allowing both the Respondents' claims for termination benefits in the total sum of RM5,102.65 and ordering the Appellant to pay the said amount to the Respondents.

(b) The Director erred in law and in fact in failing to take into account that the Respondents had been engaged and employed by the Appellant on fixed-term contracts, the periods and/or tenure of which had all expired and/or lapsed and/or come to an end.

(c) The Director erred in law and in fact in failing to take into account and recognise that no termination benefits are payable to an employee in situations where fixed-term contracts come to an end and/or lapse and/or expire.

(d) The Director erred in law and in fact in failing to find that the Respondents had all reached the end of their respective fixed term contracts upon which their employment with the Appellant ceased and/or came to an end, upon which they were not entitled to be paid terminat