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2020 MarsdenLR 318
FEDERAL COURT (PUTRAJAYA)
TENGKU MAIMUN TUAN MAT, CJ, MOHD ZAWAWI SALLEH, FCJ, IDRUS HARUN, FCJ, NALLINI PATHMANATHAN, FCJ, ABDUL RAHMAN SEBLI, FCJ
Ahmad Zahri bin Mirza Abdul Hamid – Plaintiff
Versus
Aims Cyberjaya Sdn Bhd – Defendant
RAYUAN SIVIL NO.: 02(f)-11-02/2019(W)
Alex De Silva (V. K. Raj & Tan Yang Qian together with him) (Bodipalar Ponnudurai De Silva) for the Appellant.
Vijayan Venugopal (Jamie Goh Moon Hoong together with him) (Shearn Delamore & Co.) for the Respondent.
Fixed term contracts may not reflect true employment status; continuity, corporate structure, and interests of justice dictate treatment as a permanent employee, irrespective of work permit status.
Headnote:(A) Industrial Relations Act, 1967 - Employment - Permanent employee versus fixed term contract - The court found the appellant was a permanent employee, not a genuine fixed term contract, stating: "the purported 'fixed term contracts' were not genuine fixed term contracts" (paras [5], [46]). The Industrial Court awarded back wages and reinforced this finding by demonstrating continuity of employment and corporate unity (paras [47], [86]). The appeal was allowed due to erroneous findings by the Court of Appeal (paras [88], [89]).
(B) Corporate Veil - The court upheld the principle of lifting the corporate veil in employment matters to ascertain true employment relationships, reiterating that "where the interests of justice so demand, it may ... be proper to pierce the corporate veil" (paras [25]).
(C) Work Permit - The court ruled that a work permit's necessity is not a material consideration in determining permanent employment status (paras [68], [88]).
Facts of the case:
The appellant worked continuously from 2009 under various contracts with ADC and its successor. His position was re-designated, and his employment was asserted as permanent by the Industrial Court.
Findings of Court:
The court reinstated the Industrial Court’s award, highlighting facts indicating ongoing employment and overlooking the separation created by formal contracts.
Issues: The main issues included determining if the appellant was on a fixed term contract versus permanent employment and the relevance of work permits in decision-making.
Ratio Decidendi: The court concluded that the nature of continuous employment and corporate structure necessitated recognizing the appellant as a permanent employee, ultimately championing the principles of justice in employment law.
Result: Appeal allowed with costs.
| Table of Content |
|---|
| 1. a determination on employee status. (Para 1) |
| 2. questions regarding employment contract nature. (Para 2) |
| 3. chronological background of employment contracts. (Para 3) |
| 4. findings from industrial court. (Para 4 , 5) |
| 5. findings of fact regarding employment nature. (Para 6 , 7) |
| 6. court of appeal's rationale on corporate veil. (Para 8 , 9) |
| 7. counsel's argument on corporate veil lifting. (Para 10 , 11) |
| 8. legal concept of piercing the corporate veil. (Para 12 , 13) |
| 9. factors for piercing the corporate veil. (Para 14 , 15) |
| 10. corporate relationships and lift necessity. (Para 16 , 17) |
| 11. case law on piercing the corporate veil. (Para 18 , 19) |
| 12. established willingness to pierce the veil. (Para 20 , 21) |
| 13. court of appeal's approach to facts. (Para 22 , 23) |
| 14. jurisdictional scope of veil piercing. (Para 24 , 25) |
| 15. comparing jurisdictional practices. (Para 26 , 27) |
| 16. joint employer concept noted. (Para 28 , 29) |
| 17. legal findings on employer relationships. (Para 30 , 31) |
| 18. recognition of complex employer relationships. (Para 32 , 33) |
| 19. policy considerations for veil piercing. (Para 34 , 35) |
| 20. key factors for judicial consideration. (Para 36 , 37) |
| 21. fixed term contracts versus permanence. (Para 38 , 39) |
| 22. conditions for employment validity. (Para 40 , 41) |
| 23. legislative clarity on employment. (Para 42 , 43) |
| 24. conclusion on claimant's employment status. (Para 44) |
Mohd Zawawi Salleh FCJ:
JUDGMENT OF THE COURT
Introduction
[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 respondent’s appeal.
[2]On 7.1.2019, 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:
| End of 2008 | The appellant/claimant was invited to join, invest and then became a shareholder of the AIMS Data Centre 2 Sdn Bhd (“ADC”). |
| 27.5.2009 | The appellant/claimant received a letter of appointment from ADC for the position of the Consultant. The letter was signed by Gan Te-Shen, the Chief Executive Officer (“CEO”) of ADC. |
| 26.8.2009 | The appellant/claimant received a contract for consultancy services from ADC for a fixed term i.e., from 1.10.2009 to 30.9.2010 (“original contract”). On the same day, the appellant/claimant received a letter of appointment as Vice President Product Development of ADC, from 1.10.2009. According to this original contract, the appellant/claimant would be entitled for performance bonus scheme. The contract and the letter were signed by Gan Te-Shen, the CEO of ADC. |
| 24.9.2010 | The appellant/claimant received a renewal contract for a further period of twelve (12) months from 1.10.2010 to 30.9.2011. All the terms and conditions of the contract remained unchanged. The letter was signed by Chiew Kok Hin, the CEO of ADC. |
| 8.10.2011 | The appellant/claimant received a renewal contract for a further period of twelve (12) months, from 1.10.2011 to 30.9.2012. All the terms and conditions of the contract remained unchanged. The letter was signed by Chiew Kok Hin, the CEO of ADC. |
| 11.10.2012 | The appellant/claimant received a renewal contract for a further period of twelve (12) months, from 1.10.2012 to 30. |
