Unfair dismissal of expatriate on fixed-term contract tied to work permit upheld without just cause where remote work long accepted, no warnings given, and termination unilateral breaching mutual agreement clause; remedy limited to back wages for renewed permit period.

Headnote:(A) Industrial Relations Act 1967 - Sections 20(3) and 30(5) - Unfair dismissal reference - Expatriate general manager on fixed-term contracts tied to work permit - Termination upon alleged expiry of work permit and refusal to reside full-time in country of employment despite long-accepted remote work arrangement from abroad - No prior warnings, show cause letters or domestic inquiry - Unilateral termination breaches contract clause requiring mutual written agreement - Company failed to prove reason on balance of probabilities or establish just cause or excuse due to procedural unfairness and afterthought justifications - Back wages awarded for period corresponding to renewed valid work permit duration. (Paras 21-26, 27, 62-66)

(B) Dismissal cases - Employer bears burden of proof on balance of probabilities to show misconduct, poor performance or just cause - Cannot rely on post-dismissal reasons or matters not operating on mind at time of termination - Prior acceptance of work practices precludes sudden insistence without warnings - Remote work feasibility post-pandemic recognized; physical absence alone not misconduct without express prohibition. (Paras 24-26, 50, 53-57)

Facts of the case:
Expatriate employee employed as general manager on successive fixed-term contracts from 2014, each tied to work permit validity, with salary increments and benefits. Worked intermittently remotely from abroad with company knowledge and consent for years, including during pandemic travel restrictions. Company issued renewed appointment shortly before board meeting where residency demand raised; terminated employment citing permit expiry and need for full-time resident manager after employee refused full relocation. New work permit approved post-termination but valid for 24 months.

Findings of Court:
Dismissal without just cause or excuse; company failed burden of proof; procedural impropriety in lacking warnings and inquiry; remote work historically accepted without objection; termination unilateral contrary to contract terms.

Issues: (i) Whether dismissal reason (non-residency post-probation and permit expiry) proven on balance of probabilities; (ii) Whether such reason constituted just cause or excuse. (Para 27)

Ratio Decidendi: Industrial Court enquires into employer-stated reason for dismissal; must find proven misconduct or poor performance with procedural fairness; long acquiescence to remote work negates insubordination claim; fixed-term nature limits remedy to back wages for unexpired renewed permit period, no reinstatement.

Result: Claim allowed; back wages of RM360,000 (RM15,000 x 24 months) ordered payable within 30 days, subject to statutory deductions.

Reference:

This is a Reference by the Director General of Industrial Relations Department Malaysia dated 22.01.2024 pursuant to section 20(3) of the Industrial Relations Act 1967 which was received by the Industrial Court of Malaysia on 29.01.2024 arising out of the alleged dismissal of JAMES MARK NG (hereinafter referred to as “the Claimant”) by E-RETE (MALAYA) SDN. BHD. (hereinafter referred to as “the Company”) on 23.06.2023.

AWARD

Factual Background:

[1] At all material time, Ng Teow Yeong Realty Sdn Bhd (hereinafter referred to as “NTYR”) is the largest major shareholder of the Company and has controlling interest in the Company due to the fact that Ng Teow Yeong is the founder of NTYR and the Company. He is also the Claimant’s paternal grandfather who passed away on 1999. E-Rete (Malaya) Sdn Bhd (hereinafter to be referred as “the Company”) is a company incorporated in Malaysia with a manufacturing factory in Chemor, Ipoh manufactures concrete products for the construction industry.

[2] The Claimant is an Australian citizen who was employed as a General

Manager of the Company. He was appointed on 19.04.2014 for a fixed term contract which was renewed periodically for further fixed term of two (2) years each and his term of employment was expressly pursuant to a valid working permit in all of his letter of offer. The Claimant is the son of Tenny Ng Eng Hwa who was the Executive Chairman of NTYR from 2013 until August 2023. Via an appointment letter dated 21.03.2014 issued by the Company to the Claimant (page 25, CLB-1), he was offered employment as a General Manager of the Company with a basic salary of RM8,000.00 together with the benefits of having a Company car and accommodation. Thereafter, the Claimant was re-confirmed his position as the General Manager of the Company with the same basic salary and benefits with more detailed job scope and conditions in a detailed appointment letter dated 15.05.2014 (page 26-27, CLB-1) issued by the Company.

[3] The Company contends that the Board of Directors became aware during pandemic Covid-19 that the Claimant had started to work remotely without approval and informing the Board of Directors and continued to stay away from the Company without good reason and convened a board meeting to discuss his prolonged absence on 27.06.2022. As a result, the Company, on 27.06.2022 at the Board meeting where the Claimant was present and defended himself, asked the Claimant to be more physically present in Malaysia as was

their requirement. The Claimant was put on probation for six (6) months. On 11.06.2023, the Claimant wrote a letter (page 94, CLB-1) to the Board saying he had been in Malaysia since June 2022, which was untrue. It is the Company’s position that the Company decided not to renew the Claimant’s working permit as he refused to be based in Malaysia.

[4] The Company convened another Board meeting on 12.06.2023 inter alia to discuss the Claimant’s performance, which the Claimant also attended and defended himself. The Claimant informed the Board of Directors of the Company that he will not move to Malaysia full time as required by the Company. The Board gave the Claimant one (1) year to remedy his behavior from 27.06.2022 – 12.06.2023 before deciding not to apply to renew his permit. At the end of the Board meeting on 12.06.2023, the Company decided to terminate the Claimant’s employment with the expiry of his work permit which was due to expire on 25.06.2023. After the Board of Directors meeting on 12.06.2023, the Claimant was allegedly unfairly dismissed by the Company from his position as a General Manager upon the alleged expiration of the Claimant’s employment pass. The letter of termination of the expiry of his tenure with his work permit by the Company was issued on 23.06.2023 and which he refused to accept personally and do a handover and was then emailed to him on 23.06.2023. The

reason given by the Company to terminate the Claimant’s employment based on the following

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2026 MarsdenLR 1857

Unfair dismissal of expatriate on fixed-term contract tied to work permit upheld without just cause where remote work long accepted, no warnings given, and termination unilateral breaching mutual agreement clause; remedy limited to back wages for renewed permit period.

Cases Referred (4)

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