Ahmad Zahri Mirza Abdul Hamid

[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 233

A AHMAD ZAHRI MIRZA ABDUL HAMID

v. AIMS CYBERJAYA SDN BHD
FEDERAL COURT, PUTRAJAYA
TENGKU MAIMUN TUAN MAT CJ
MOHD ZAWAWI SALLEH FCJ
B
IDRUS HARUN FCJ
NALLINI PATHMANATHAN FCJ
ABDUL RAHMAN SEBLI FCJ
[CIVIL APPEAL NO: 02(f)-11-02-2019(W)]
28 MAY 2020
C
LABOUR LAW: Employment – Termination – Whether employee employed on
permanent contract or fixed term contract – Former employer consolidated with
present employer – Contract of employment renewed successively without application
by employee and without intermittent break – Whether corporate veil ought to be
D lifted to show continuity of employment – Whether citizenship of employee deciding
factor of nature of employment – Whether dismissal without just cause or excuse
– Industrial Relations Act 1967, ss. 2 & 20
CONTRACT: Termination – Validity – Employment contract – Whether
employee employed on permanent contract or fixed term contract – Former employer
E consolidated with present employer – Contract of employment renewed successively
without application by employee and without intermittent break – Whether
corporate veil ought to be lifted to show continuity of employment – Whether both
employers part and parcel of same group – Whether dismissal without just cause or
excuse
F
At the end of 2008, the appellant was invited to join, invest and then became
a shareholder of the AIMS Data Centre 2 Sdn Bhd (‘ADC’). On 27 May
2009, the appellant received a letter of appointment from ADC for the
position of consultant and on 26 August 2009, the appellant received a
contract for consultancy services from ADC for a fixed term, ie, from
G 1 October 2009 to 30 September 2010 (‘original contract’). On the same day,
the appellant received a letter of appointment as Vice President Product
Development of ADC, from 1 October 2009. The contract was renewed on
12 months basis every year until 1 October 2012, when the appellant’s
contract was renewed as consultant of AIMS Cyberjaya Sdn Bhd,
H (‘the respondent’), due to the phasing out of ADC. All the terms and
conditions of the contract remained the same as the original contract dated
26 August 2009. ADC was subsequently consolidated into the respondent.
In view of the company structure, the appellant was re-designated to assume
the position of Vice President, Product & Solutions, with effect from
I 1 January 2012 in the respondent. On 10 September 2013, the appellant was
offered further employment for one year from 1 October 2012 with the
change in the terms of employment by excluding the performance bonus
234 Industrial Law Reports [2020] 3 ILR

scheme. The appellant informed the respondent that he was not agreeable to A
the new terms and conditions of the contract. On 18 September 2013, the
respondent renewed the appellant’s contract for a period of three months
from 1 October 2013 to 31 December 2013 with the terms and conditions
of the contract remaining unchanged ie, excluding the performance bonus
scheme. The appellant informed the respondent, via an e-mail, that he was B
unable to accept their offers. On 18 October 2013, the appellant received a
letter notifying him that the respondent gave him two months’ notice of
expiry of his contract from 1 November 2013 until 31 December 2013. The
respondent also informed the appellant that they had decided to grant him
an early release from his employment with effect from 19 October 2013. The C
appellant thus made a representation under s. 20 of the Industrial Relations
Act 1967 (‘IRA’). The matter was subsequently referred to the Industrial
Court (‘IC’) for adjudication. The IC held that the appellant was a permanent
employee of the respondent and the purported ‘fixed term contracts’ were not
genuine fixed term contracts and the appellant’s dismissal was without just
D
cause or excuse. The IC lifted the corporate veil of the respondent and held
that the appellant was in fact a permanent employee and there was continuity
of employment from ADC. The High Court (‘HC’) affirmed the IC’s
decision. On appeal, however, the Court of Appeal (‘COA’) allowed the
respondent’s appeal and held, inter alia, that this was not a case where the
corporate veil of the respondent ought to be lifted to reveal that the appellant E
was, at all material times, a permanent employee of the company since
joining AIMS group of companies in 2009 as opposed to an employee on a
fixed term contract. The leave to appeal to the Federal Court was granted on
two questions of law: (i) whether a need for work permit is a material
consideration in determining whether an employment contract is a genuine F
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
key issue in this appeal was whether the appellant was employed on a fixed
term contract or was a permanent employee of the respondent at the material G
time.
Held (allowing appeal with costs)
Per Mohd Zawawi Salleh FCJ delivering the judgment of the court:
(1) ‘Lifting/piercing the corporate veil’ means disregarding the dichotomy
H
between a company and a natural person behind it and attributing
liability to that person where he has misused or abused the principle of
corporate personality. A court may lift/pierce the corporate veil where
the relationship between companies in the same group is so intertwined
that they should be treated as a single entity to reflect the economic and
commercial realities of the situation. An argument of ‘group enterprise’ I
is that, in certain circumstances, a corporate group is operating in such
a manner as to make each individual entity indistinguishable, and
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 235

A therefore it is proper to lift/pierce the corporate veil to treat the parent

company as liable for the acts of the subsidiary. Lifting/piercing the
corporate veil is one way to ensure that a corporate group, which seeks
the advantages of limited liability, must also accept the corresponding
responsibilities. In the employment law perspective, the application of
B the ‘single economic unit’ test or ‘functional integrality’ test is
particularly significant in ascertaining the continuity of employment for
the scope of dismissal protection. (paras 13, 16 & 17)
(2) ADC and the respondent were part and parcel of the same group. There
was ‘an essential unity of group enterprise’. The COA was wrong when
C it held that ADC and the respondent were two separate legal entities and
failed to treat the appellant’s contract of employment as a continuous
one from ADC to the respondent. The doctrine, whether is categorised
as ‘essential unity group enterprise’ or ‘common employer’, its purpose
is to permit the corporate veil to be pierced in order to establish or
D identify the true labour relationship between parties in terms of the
existing labour relation realities. The COA’s failure to identify the
employer-employee relationship ran contrary with the fundamental
purposes of the IRA. (paras 44 & 45)
(3) The COA was wrong in reversing the findings of fact by the IC and
E ruling that the appellant had accepted a three months contract that was
offered to him in September 2013. The facts clearly showed that the
appellant did not accept the offers because the company had removed his
entitlement to the performance bonus scheme in which he was a
participant at all material times since he was in employment with the
F AIMS group of companies in 2009. The COA did not proffer any reason
in reversing the findings of the IC. The findings of fact by the IC were
amply supported by the relevant evidence on record and there was no
material error in the findings of fact by the IC which justified the COA’s
reversion. (paras 46-47)
G (4) A fixed term contract is a contract of employment for a specific period
of time, ie, with a defined end. As a general rule, such contract cannot
be terminated before its expiry date except for gross misconduct or by
mutual agreement. The appellant’s contract of employment beginning
with ADC before being terminated under the respondent, was not
H one-off, seasonal or temporary employment. It was an ongoing and
continuous employment without a break from 2009 to 2013. Hence, the
COA erred in not recognising the industrial law principle of lifting/
piercing the corporate veil in the circumstances and the ongoing nature
of the appellant’s contract of employment with both the companies.
I
(paras 54 & 67)
(5) The citizenship of the appellant had no bearing in deciding whether the
appellant was in permanent employment or in employment under a
fixed term contract. According to the definition of ‘workman’ in s. 2 of
236 Industrial Law Reports [2020] 3 ILR

the IRA, a workman is ‘any person’ employed under ‘a contract of A

employment’, and in the case of a ‘trade dispute’, he is a person whose
dismissal, discharge or retrenchment from employment leads to or is the
cause of the dispute. The combined effect of the definitions of ‘person’,
‘contract of employment’ and ‘trade dispute’ is that a person is a
workman if the contract of employment under which he is employed B
requires him to serve his employer as a workman and, in the case of a
trade dispute, a person is a workman if the dispute between him and his
employer is connected with his employment as a workman. (paras 72,
74 & 78)
(6) Malaysia is a member country of the International Labour Organisation C
(‘ILO’). The ILO Migrant Workers (Supplementary Provisions)
Convention 143 of 1975 (‘ILO Convention’) expressly provides that
States should undertake to promote and guarantee equality of
opportunity and treatment between migrant workers and nationals. The
ILO standards apply to migrant workers and nationals equally and D
therefore, all workers should be treated with fairness, dignity and
equality without distinction whether they are local or foreigners. This
is also consonant with art. 8(1) of the Federal Constitution which
essentially provides that all persons are equal before the law and entitled
to the equal protection of the law. In that light, the decision of the COA E
that a foreign national could not have a permanent contract of
employment could not withstand judicial scrutiny and was liable to be
set aside. (paras 80-84)
Bahasa Melayu Headnotes
Pada akhir 2008, perayu dipelawa untuk menyertai, melabur dan kemudian F
menjadi pemegang saham AIMS Data Centre 2 Sdn Bhd (‘ADC’). Pada
27 Mei 2009, perayu menerima surat lantikan, daripada ADC, ke jawatan
perunding dan pada 26 Ogos 2009, perayu menerima kontrak perkhidmatan
perundingan daripada ADC untuk terma tetap, iaitu dari 1 Oktober 2009
hingga 30 September 2010 (‘kontrak asal’). Pada hari yang sama, perayu G
menerima surat lantikan sebagai Naib Presiden Pembangunan Produk ADC
bermula dari 1 Oktober 2009. Kontrak tersebut dibaharui atas asas 12 bulan
setiap tahun sehingga 1 Oktober 2012, apabila kontrak perayu dibaharui
sebagai perunding AIMS Cyberjaya Sdn Bhd, (‘responden’) kerana ADC
berundur secara berperingkat. Kesemua terma dan syarat-syarat kontrak H
kekal sama seperti kontrak asal bertarikh 26 Ogos 2009. ADC kemudian
digabungkan dalam responden. Berdasarkan struktur syarikat, perayu
dilantik semula ke jawatan Naib Presiden, Produk dan Penyelesaian, berkuat
kuasa dari 1 Januari 2012 dalam responden. Pada 10 September 2013,
perayu ditawarkan lanjutan pekerjaan untuk satu tahun dari 1 Oktober 2012 I
dengan perubahan dalam terma-terma pekerjaan dengan mengecualikan skim
bonus prestasi. Perayu memaklumkan responden dia tidak bersetuju dengan
terma-terma dan syarat-syarat baharu kontrak tersebut. Pada 18 September
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 237

A 2013, responden membaharui kontrak perayu untuk tempoh tiga bulan dari
1 Oktober 2013 hingga 31 Disember 2013 dengan terma-terma dan syarat-
syarat kontrak kekal tidak berubah, iaitu, mengecualikan skim bonus
prestasi. Perayu memaklumkan responden, melalui e-mel, bahawa dia tidak
boleh menerima tawaran mereka. Pada 18 Oktober 2013, perayu menerima
B surat memaklumkan bahawa responden memberinya dua bulan notis
penamatan kontrak dari 1 November 2013 sehingga 31 Disember 2013.
Responden juga memaklumkan perayu bahawa mereka memutuskan untuk
memberi pelepasan awal daripada pekerjaannya berkuat kuasa dari
19 Oktober 2013. Perayu, oleh itu, membuat satu representasi bawah s. 20
C
Akta Perhubungan Perusahaan 1967 (‘Akta’). Perkara itu kemudiannya
dirujuk ke Mahkamah Perusahaan (‘MP’) untuk penghakiman. Mahkamah
Perusahaan memutuskan bahawa perayu adalah pekerja tetap responden dan
‘terma kontrak tetap’ yang dikatakan bukan kontrak terma tetap sebenar dan
penamatan kerja perayu dibuat tanpa alasan atau sebab munasabah.
Mahkamah Perusahaan menyingkap tirai penubuhan responden dan
D
memutuskan bahawa perayu sebenarnya pekerja tetap dan terdapat
kesinambungan kerja daripada ADC. Mahkamah Tinggi (‘MT’)
mengesahkan keputusan MP. Walau bagaimanapun, atas rayuan, Mahkamah
Rayuan (‘MR’) membenarkan rayuan perayu dan memutuskan, antara lain,
ini bukan kes yang mewajarkan penyingkapan tirai penubuhan responden
E untuk mendedahkan bahawa perayu, pada semua masa material, adalah
pekerja tetap syarikat sejak menyertai kumpulan syarikat AIMS pada 2009
berbanding pekerja dengan kontrak terma tetap. Kebenaran merayu ke
Mahkamah Persekutuan diberi atas dua persoalan undang-undang: (i) sama
ada keperluan untuk permit kerja adalah pertimbangan penting untuk
F memutuskan sama ada kontrak pekerjaan adalah kontrak terma tetap sebenar;
dan (ii) adakah kontrak pekerjaan yang dibaharui berturut-turut tanpa
permohonan oleh pekerja dan tanpa henti, sebenarnya adalah pekerjaan tetap.
Isu utama dalam rayuan ini adalah sama ada perayu dilantik atas kontrak
terma tetap atau pekerja tetap responden pada masa material.
G Diputuskan (membenarkan rayuan dengan kos)
Oleh Mohd Zawawi Salleh HMP menyampaikan penghakiman
mahkamah:
(1) ‘Menyingkap/menembusi tirai penubuhan’ bermaksud tidak
mengendahkan pembahagian antara syarikat dan orang biasa di
H
sebaliknya dan mengenakan liabiliti kepada orang itu dan dia
menyalahgunakan prinsip personaliti korporat. Mahkamah boleh
menyingkap/menembusi tirai penubuhan apabila hubungan antara
syarikat dalam kumpulan sama sehingga mereka dianggap sebagai satu
entiti tunggal yang mencerminkan realiti ekonomi dan komersial situasi
I tersebut. Hujah ‘kumpulan syarikat’ adalah bahawa, dalam keadaan
tertentu, kumpulan korporat beroperasi dalam cara yang setiap entiti
individu tidak dapat dibezakan, dan oleh itu adalah wajar untuk
238 Industrial Law Reports [2020] 3 ILR

menyingkap/menembusi tirai penubuhan syarikat untuk menjadikan A

syarikat induk bertanggungjawab atas tindakan anak syarikat.
Menyingkap/menembusi tirai penubuhan syarikat adalah satu cara
memastikan kumpulan syarikat, yang memohon kelebihan liabiliti
terhad, juga harus sama-sama bertanggungjawab. Dalam perspektif
undang-undang pekerjaan, penggunaan ujian ‘unit ekonomi tunggal’ atau B
ujian ‘integriti fungsi’ adalah khususnya penting untuk memastikan
kesinambungan pekerjaan dalam skop perlindungan daripada
pembuangan kerja.
(2) ADC dan responden adalah sebahagian kumpulan yang sama. Terdapat
‘an essential unity of group enterprise’. Mahkamah Rayuan terkhilaf C
apabila memutuskan ADC dan responden adalah dua entiti berbeza dan
gagal mempertimbangkan kontrak pekerjaan perayu sebagai
bersambungan daripada ADC hingga responden. Doktrin tersebut, sama
ada dikategorikan sebagai ‘essential unity group enterprise’ atau
‘common employer’, tujuannya adalah untuk membenarkan tirai D
penubuhan disingkap untuk membuktikan atau mengenal pasti hubungan
pekerjaan sebenar antara pihak-pihak dalam terma realiti hubungan
pekerjaan sedia ada. Kegagalan Mahkamah Rayuan mengenal pasti
hubungan antara majikan-pekerja bertentangan dengan tujuan asas Akta.
(3) Mahkamah Rayuan terkhilaf apabila mengakas dapatan-dapatan fakta E
MP dan memutuskan bahawa perayu menerima kontrak tiga bulan yang
ditawarkan kepadanya pada September 2013. Fakta jelas menunjukkan
perayu tidak menerima tawaran-tawaran tersebut kerana syarikat
menyingkirkan haknya untuk skim bonus prestasi yang diterimanya
pada setiap masa material semenjak bekerja dengan kumpulan syarikat F
AIMS pada 2009. Mahkamah Rayuan tidak memberi apa-apa alasan
untuk mengakas dapatan MP. Dapatan fakta MP disokong penuh dengan
keterangan atas rekod dan tiada kekhilafan nyata dalam dapatan fakta
MP yang mewajarkan pengakasan oleh MR.
(4) Kontrak tempoh tetap adalah kontrak pekerjaan untuk tempoh masa G
spesifik, iaitu, dengan pengakhiran yang ditetapkan. Secara umumnya,
kontrak sedemikian tidak boleh ditamatkan sebelum tarikh luput kecuali
untuk salah laku teruk atau perjanjian bersama. Kontrak pekerjaan
perayu bermula dengan ADC sebelum ditamatkan bawah responden,
bukan pekerjaan sekali, bermusim atau sementara. Pekerjaannya H
berterusan dan dilanjutkan tanpa henti dari 2009 sehingga 2013. Oleh
itu, MR terkhilaf apabila tidak mengiktiraf prinsip undang-undang
perusahaan menyingkap/menembusi tirai penubuhan dalam hal keadaan
kontrak pekerjaan perayu dengan kedua-dua syarikat yang bersifat
berterusan. I
(5) Kewarganegaraan perayu tiada kaitan dalam memutuskan sama ada
perayu adalah pekerja tetap atau pekerja kontrak pekerjaan jangka masa
tetap. Menurut definisi ‘pekerja’ dalam s. 2 Akta, pekerja ialah ‘mana-
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 239

A mana orang’ yang diambil bekerja bawah ‘kontrak pekerjaan’, dan dalam
kes ‘pertikaian perusahaan’, dia adalah orang yang mana pembuangan,
pemberhentian atau pengurangan tenaga kerjanya menjurus pada atau
menjadi sebab pertikaian. Kesan bersama definisi ‘orang’, ‘kontrak
pekerjaan’ dan ‘pertikaian perusahaan’ adalah orang itu adalah pekerja
B jika kontrak pekerjaannya bawah mana dia diambil bekerja memerlukan
dia berkhidmat dengan majikan sebagai pekerja dan, dalam kes
pertikaian perusahaan, orang itu adalah pekerja jika pertikaian antara dia
dan majikannya berhubungan dengan pengambilannya sebagai pekerja.
(6) Malaysia adalah ahli negara Pertubuhan Buruh Antarabangsa (‘ILO’).
C K-143 Konvensyen Pekerja Migran (Ketentuan Tambahan) 1975 ILO
(‘Konvensyen ILO’) jelas memperuntukkan bahawa negara-negara
sepatutnya mengaku janji untuk mempromosi dan menjamin
kesamarataan peluang dan layanan antara pekerja migran dan
warganegara. Standard ILO diguna pakai pada pekerja dan warganegara
D migran dengan sama rata dan oleh itu, kesemua pekerja wajar dilayan
secara adil, dengan bermaruah dan sama rata tanpa perbezaan sama ada
mereka orang tempatan atau warga asing. Ini selari dengan per. 8(1)
Perlembagaan Persekutuan yang pada asasnya memperuntukkan bahawa
semua orang setaraf bawah undang-undang dan berhak mendapat
E
perlindungan sama rata. Oleh itu, keputusan MR bahawa warganegara
asing tidak boleh mempunyai kontrak pekerjaan tetap tidak boleh
dikekalkan bawah penilaian kehakiman dan wajar diketepikan.
Case(s) referred to:
Ang Beng Teik v. Pan Global Textile Bhd, Penang [1996] 4 CLJ 313 CA (refd)
F Assunta Hospital v. Dr A Dutt [1980] 1 LNS 121 FC (refd)
Audrey Yeoh Peng Hoon v. Financial Mediation Bureau [2015] 3 ILR 371 (refd)
Bagby v. Gustavson Int’l Drilling Co Ltd (1980), 24 AR 18 (refd)
Chandler Cape Plc [2012] EWCA Civ 525 (refd)
Charles Aseervatham Abdullah v. The Zenith Hotel Sdn Bhd [2018] 2 LNS 2349 (refd)
Chow Yee Wah & Anor v. Choo Ah Pat [1978] 1 LNS 32 PC (refd)
G Dixon And Another v. British Broadcasting Corporation [1979] 1 QB 546 (refd)
Downtown Eatery (1993) Ltd v. Ontario (2001) 8 CCEL (3d) 186 (refd)
Esterhuizen v. Million Air Services (In Liquidation) & Others (2007) 28 ILJ 1251 (refd)
Footwear Trading CC v. Mdlalose [2005] 5 BLLR 452 (refd)
Gan Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 4 CLJ 309 FC (refd)
Han Chiang High School/Penang Han Chiang Associated Chinese School Association
H v. National Union of Teachers in Independent Schools, West Malaysia & Industrial
Court of Malaysia [1990] 1 ILR 473 (foll)
Harris Solid State (M) Sdn Bhd & Ors v. Bruno Gentil Pereira & Ors [1996] 4 CLJ 747
CA (refd)
Hasni Hassan & Ors v. Menteri Sumber Manusia & Anor [2013] 6 CLJ 74 CA (refd)
Henderson v. Foxworth Investments Ltd And Another [2014] 1 WLR 2600 (refd)
I Holiday Villages of Malaysia Sdn Bhd v. Mohd Zaizam Mustafa [2006] 2 LNS 0812
(refd)
Hong Leong Equipment Sdn Bhd v. Liew Fook Chuan & Other Appeals [1997] 1 CLJ 665
CA (refd)
240 Industrial Law Reports [2020] 3 ILR

Hotel Jaya Puri Bhd v. National Union of Hotel, Bar & Restaurant Workers & Anor A
[1979] 1 LNS 32 HC (refd)
Inchape (M) Holdings Bhd v. RB Gray & Anor [1985] 2 CLJ 305; [1985] CLJ (Rep) 132
SC (refd)
Innoprise Corporation Sdn Bhd, Sabah v. Sukumaran Vanugopal, Sabah [1993] 1 ILR
373B (refd)
Inspector of Awards v. Pacific Helmets (NZ) Ltd [1988] NZILR 411 (refd) B
Jimsburg Services Sdn Bhd v. Rostam Wahidin [1999] 2 ILR 324 (refd)
Law Kam Loy & Anor v. Boltex Sdn Bhd & Ors [2005] 3 CLJ 355 CA (foll)
Malaysia Airlines Bhd v. Michael Ng Liang Kok [2000] 3 ILR 179 (refd)
Malaysia Shipyard & Engineering Sdn Bhd v. Mukhtiar Singh & Ors [1991] 1 ILR 626
(refd)
C
Manley Inc v. Fallis (1977) 2 BLR 277 (refd)
Mc Graddie v. Mc Graddie [2013] WLR 2477 (refd)
Nacap Asia Pacific Sdn Bhd v. Jeffrey Ronald Pearce & Anor [2011] 5 CLJ 791 HC (refd)
Nasha’at Muhy Mahmoud v. Malaysia Airline System Bhd [2013] 2 LNS 1745 (refd)
Orakei Group (2007) Limited v. Doherty [2008] NZEmpC 65 (refd)
Rusli Luwi v. RM Top Holdings Sdn Bhd & Ors [2004] 6 CLJ 353 HC (refd) D
Salomon v. Salomon & Co [1897] AC 22 (refd)
Sime UEP Development Sdn Bhd v. Chu Ah Poi [1996] 1 ILR 256 (refd)
Sinclair v. Dover Engineering Services Ltd [1988] 49 DLR (4th) 297 (refd)
Tay Kheng Hong v. Heap Moh Steamship Co Ltd [1964] 1 LNS 202 HC (refd)
Tengku Dato’ Ibrahim Petra Tengku Indra Petra v. Petra Perdana Bhd & Another Appeal
[2018] 2 CLJ 641 FC (refd) E
The New Straits Times Press (Malaysia) Bhd v. Chong Lee Fah [2003] 2 ILR 239 (refd)
Thompson v. Renwick Group Plc [2014] EWCA Civ 635 (refd)
Toko Inomoto & Ors v. Mahkamah Perusahaan Malaysia & Anor [2017] 1 LNS 201 HC
(refd)
Toko Inomoto & Ors v. Malaysian Philharmonic Orchestra [2015] 2 LNS 1034 (refd)
Wiltshire Country Council v. National Association of Teachers in Further and Higher F
Education and Guy [1980] 1 CR 455 (refd)
Legislation referred to:
Federal Constitution, art. 8(1)
Industrial Relations Act 1967, ss. 2, 20, 30(5)
Interpretation Acts 1948 and 1967, s. 3 G
Other source(s) referred to:
J Farrar, Fraud, Fairness and Piercing the Corporate Veil, (1990) 16 Canadian Business
Law Journal 474, 478
For the appellant - Alex De Silva, VK Raj & Tan Yang Qian; M/s Bodipalar Ponnudurai
De Silva H
For the respondent - Vijayan Venugopal & Jamie Goh Moon Hoong; M/s Shearn Delamore
& Co

[Editor’s note: For the Court of Appeal judgment, please see AIMS Cyberjaya Sdn Bhd v.
Ahmad Zahri Mirza Abdul Hamid [2019] 10 CLJ 787 (overruled).]
I
Reported by S Barathi
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 241

A JUDGMENT
Mohd Zawawi Salleh FCJ:
Introduction
[1] The key issue in this appeal is whether the appellant/claimant was
B 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
C Court and allowed the respondent’s 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
D 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.
E
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:
F 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 May 2009 The appellant/claimant received a letter of
appointment from ADC for the position of the
G
Consultant. The letter was signed by Gan Te-Shen,
the Chief Executive Officer (“CEO”) of ADC.
26 August 2009 The appellant/claimant received a contract for
consultancy services from ADC for a fixed term ie,
H
from 1 October 2009 to 30 September 2010 (“original
contract”). On the same day, the appellant/claimant
received a letter of appointment as Vice President
Product Development of ADC, from 1 October 2009.
According to this original contract, the appellant/
claimant would be entitled for performance bonus
I
scheme. The contract and the letter were signed by
Gan Te-Shen, the CEO of ADC.
242 Industrial Law Reports [2020] 3 ILR

24 September 2010 The appellant/claimant received a renewal contract A

for a further period of 12 months from 1 October
2010 to 30 September 2011. All the terms and
conditions of the contract remained unchanged. The
letter was signed by Chiew Kok Hin, the CEO of
ADC. B

8 October 2011 The appellant/claimant received a renewal contract

for a further period of 12 months, from 1 October
2011 to 30 September 2012. All the terms and
conditions of the contract remained unchanged. The
letter was signed by Chiew Kok Hin, the CEO of C
ADC.
11 October 2012 The appellant/claimant received a renewal contract
for a further period of 12 months, from 1 October
2012 to 30 September 2013. All the terms and
D
conditions of the contract remained unchanged. The
letter was signed by Chiew Kok Hin, the CEO of
ADC.
18 October 2012 The appellant/claimant received a renewal contract
for a further period of 12 months from 1 October
E
2012 to 30 September 2013, as consultant of AIMS
Cyberjaya Sdn Bhd (“respondent”) instead of ADC.
This was due to the phasing out of ADC. All the
terms and conditions of the contract remained the
same as the original contract dated 26 August 2009.
The letter was signed by Chiew Kok Hin, the CEO F
of the respondent.
7 January 2013 ADC was subsequently consolidated into the
respondent. In view of the company structure, the
appellant/claimant was re-designated to assume the
G
position of Vice President, Product, & Solutions
with effect from 1 January 2013 in the respondent.
All the terms and conditions of the contract
remained the same as the original contract dated
26 August 2009. The letter was signed by Chiew
Kok Hin, the CEO of the respondent. H

10 September 2013 The appellant/claimant was given a letter by the

respondent offering him further employment from
1 October 2013 until 30 September 2014. However,
the respondent sought to change the terms of the
I
appellant’s/claimant’s employment by excluding
the performance bonus scheme. The letter was
signed by Chiew Kok Hin, the CEO of the
respondent.
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 243

A 13 September 2013 The appellant/claimant had informed Chiew Kok

Hin, the CEO of the respondent, that he was not
agreeable to the new terms and conditions of the
contract.
18 September 2013 The respondent renewed the appellant’s/claimant’s
B
contract for a period of three months from
1 October 2013 to 31 December 2013. The terms
and conditions of the contract still remained
unchanged ie, excluding the performance bonus
scheme. The letter was signed by Chiew Kok Hin,
C the CEO of the respondent.
1 October 2013 The appellant/claimant informed the respondent
that he was unable to accept their offers, via an
email.
D 18 October 2013 The appellant/claimant received a letter notifying
him that the respondent gave him two months’
notice of expiry of his contract from 1 November
2013 until 31 December 2013. The respondent also
informed the appellant/claimant that they had
decided to grant him an early release from his
E
employment with effect from 19 October 2013. The
appellant/claimant made a representation under
s. 20 of the Industrial Relations Act (1967). The
reconciliation attempts before the Industrial
Relations Department failed and the matter was
F subsequently referred to the Industrial Court for
adjudication.
1 April 2016 The Industrial Court held that the appellant/claimant
was a permanent employee of the respondent and the
purported “fixed term contracts” were not genuine
G
fixed term contracts and the appellant’s/claimant’s
dismissal was without just cause or excuse. The
Industrial Court awarded back wages of 24 months
and compensation of one and a half (1½) month salary
for each year of the appellant’s/claimant’s service in
H lieu of reinstatement.
1 July 2016 Dissatisfied with the award of the Industrial Court,
the respondent filed a judicial review application to
quash the Industrial Court’s award.
I 6 January 2017 The High Court dismissed the respondent’s
application for judicial review.
244 Industrial Law Reports [2020] 3 ILR

27 January 2017 The respondent then appealed to the Court of A

Appeal.
30 November 2017 The Court of Appeal allowed the respondent’s
appeal and set aside the decision of the High Court
and the award of the Industrial Court.
B
26 December 2017 The appellant/claimant then filed the notice of
motion for leave to appeal to the Federal Court.
7 January 2019 Leave to appeal to the Federal Court was granted on
two questions of law. The two questions of law are
as stated in para. [2] of this judgment. C

28 November 2019 After perusing the appeal record, reading the written
submissions and hearing oral submissions from both
parties, this court allowed the appeal. The award of
the Industrial Court was reinstated.
D
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 fixed term contract or was a permanent
employee of the respondent is at the heart of the dispute between the parties. E

[5] The appellant’s/claimant’s 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: F

[46] 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 G
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
H
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 appellant’s/claimant’s function and position were not for a fixed I
duration but had an indefinite amount of time as was within the
reasonable contemplation of parties; and
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 245

A (iv) there was no break in the appellant’s/claimant’s employment with the

respondent as confirmed by the respondent’s 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
B
employee and there was continuity of employment from ADC.
[8] The High Court affirmed the decision of the Industrial Court’s award.
On appeal, however, the Court of Appeal allowed the respondent’s appeal.
The Court of Appeal held, inter alia, that this was not a case where the
C
corporate veil of the respondent ought to be lifted/pierced to reveal that the
appellant/claimant was at all material times a permanent employee of the
company since joining AIMS group of companies in 2009 as opposed to an
employee on a fixed term contract.
[9] The nub of the Court of Appeal’s reasoning is captured as follows at
D paras. [16] and [17]:
[16] Established authorities have held that there must be special
circumstances, where there is either actual fraud at common law or some
inequitable or unconscionable conduct amounting to fraud in equity that
warrants the lifting of the corporate veil by either the Industrial Court or
the High Court. (Refer to Law Kam Loy & Anor v Boltex Sdn Bhd & Ors
E
[2005] 3 CLJ 355).
[17] There is no evidence that the facts of the instant case demonstrate
fraud or unconscionable conduct of the Applicant and neither did the
Learned High Court address this matter in her ‘Grounds of Judgment’.
Thus, there are no grounds for the Industrial Court or the Learned High
F Court Judge to lift the corporate veils of AIMS Data Centre 2 Sdn Bhd
and the Applicant, AIMS Cyberjaya Sdn Bhd to treat the two separate
entities as one i.e. the Applicant, AIMS Cyberjaya Sdn Bhd.
Lifting/Piercing The Corporate Veil

G [10] Learned counsel for the appellant/claimant vehemently argued that

the Court of Appeal had erred and/or failed to appreciate that the Industrial
Courts would, in appropriate cases, more readily lift/pierce the corporate
veil to reveal the true employer and prevent the employer from disclaiming
responsibility for an employee. In support of his submission, reliance was
placed on the Federal Court’s decision in Hotel Jaya Puri Bhd v. National
H
Union of Hotel, Bar & Restaurant Workers & Anor [1979] 1 LNS 32; [1980] 1
MLJ 109 (“Hotel Jaya Puri case”).
[11] Learned counsel further submitted that in the industrial jurisprudence,
the mere description of a contract as a fixed term contract is not conclusive
I of whether an employee was indeed employed as such. The court is duty-
bound to enquire from the evidence adduced what was the real nature of the
246 Industrial Law Reports [2020] 3 ILR

appellant’s/claimant’s employment and if there is a need to lift/pierce the A

corporate veil of the company, then this ought to be done to reveal the true
nature of the appellant’s/claimant’s employment.
[12] Based on the evidence adduced before the Industrial Court, it was
submitted that the Court of Appeal erred when it held that the veil of
B
incorporation of ADC and the respondent could not be lifted/pierced to
reveal that the appellant’s/claimant’s employment was in fact a continuous
employment from the time he was employed in 2009 until his termination
in October 2013.
Our Decision On The Second Leave Question C
[13] Put simply, “lifting/piercing the corporate veil” means disregarding
the dichotomy between a company and a natural person behind it and
attributing liability to that person where he has misused or abused the
principle of corporate personality. Since the decision of the House of Lords
in Salomon v. Salomon & Co [1897] AC 22, which affirmed the legal principle D
that, upon incorporation, a company is generally considered to be a new legal
entity separate from its shareholders, the courts in Malaysia, England and
other Commonwealth jurisdictions have found exceptions to the general
principle stated in Salomon (supra) and have lifted/pierced the corporate veil
to reveal those who controlled the company.
E
[14] The application of the doctrine of veil lifting/piercing the corporate
veil is far from clear from case law. Professor Farrar has described the
Commonwealth authority on piercing the corporate veil as “incoherent and
unprincipled” (See: J Farrar, ‘Fraud, Fairness and Piercing the Corporate Veil’
(1990) 16 Canadian Business Law Journal 474, 478). It would appear that F
the circumstances in which the corporate veil may be lifted/pierced are
greatly circumscribed and the courts tend to take a fact-based approach on
the matter.
[15] Courts have recognised a number of factors that may lead to lifting/
piercing of the corporate veil. Generally speaking, grounds under general law G
for lifting/piercing the corporate veil may be grouped into the following
categories:
(i) agency;
(ii) fraud; H
(iii) sham or facade;
(iv) group enterprise; and
(v) unfairness/injustice.
I
These categories are probably not exhaustive. For the purpose of this instant
appeal, categories (iv) and (v) are relevant.
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 247

A [16] A court may lift/pierce the corporate veil where the relationship
between companies in the same group is so intertwined that they should be
treated as a single entity to reflect the economic and commercial realities of
the situation. An argument of “group enterprise” is that in certain
circumstances a corporate group is operating in such a manner as to make
B each individual entity indistinguishable, and therefore it is proper to lift/
pierce the corporate veil to treat the parent company as liable for the acts of
the subsidiary. Lifting/piercing the corporate veil is one way to ensure that
a corporate group, which seeks the advantages of limited liability, must also
accept the corresponding responsibilities.
C [17] In the employment law perspective, the application of the “single
economic unit” test or “functional integrality” test is particularly significant
in ascertaining the continuity of employment for the scope of dismissal
protection (see Manley Inc v. Fallis (1977), 2 BLR 277 (Ont CA)]. It recognises
the complexity of modern corporate structures and that the corporate veil
D must only be pierced in exceptional circumstances. On the other hand, such
complexity should not be an obstacle to defeat the legitimate entitlements of
wrongfully dismissed employees. This approach has its root on the general
notions of fairness, equality and proportionality in the treatment of
vulnerable employees. It serves to balance fairness with evolving
E
commercial realities.
[18] One of the seminal cases in Malaysia on lifting/piercing the corporate
veil is the Hotel Jaya Puri case. It was a decision in respect of judicial review
application for certiorari against the decision by the Industrial Court ordering
Hotel Jaya Puri Berhad (“the hotel”) to pay compensation of two months
F salaries plus fixed allowances in favour of workmen employed in the
business of Jaya Puri Chinese Garden Restaurant Sdn Bhd (“the restaurant”).
The restaurant, which was a fully-owned subsidiary of the hotel had
56 workers employed and operated its business at the hotel premises by
paying a rental. Subsequently, the restaurant closed its business due to
G
financial losses and the employees were retrenched. It resulted in an
industrial dispute and the matter was referred to the Industrial Court. The
employees claimed that they had been dismissed rather than retrenched as
they were employees of the hotel. The Industrial Court issued an award
directing the hotel to pay compensation.
H [19] The Industrial Court found that the hotel was in fact the employer of
the workers and reasoned that:
(i) The hotel and the restaurant were inter-dependent;
(ii) There was functional integrality and unity of establishment between the
hotel and the restaurant. In other words, functionally the hotel and the
I
restaurant were in fact one integral whole and in terms of management,
they also constituted a single unit; and
248 Industrial Law Reports [2020] 3 ILR

(iii) A number of senior officers including the secretary, personnel manager A

and assistant manager were common to both the hotel and the restaurant.
[20] On appeal, Salleh Abas FJ (as he then was) upheld the decision of the
Industrial Court. His Lordship observed:
It is true that while the principle that a company is an entity separate from B
its shareholders and that a subsidiary and its parent or holding company
are separate entities having separate existence is well established in
company law, in recent years the court has, in a number of cases, by-
passed this principle if not made an inroad into it. The court seems quite
willing to lift the “veil of incorporation” (so the expression goes) when the justice of
the case so demands. The facts of the case may well justify the court to hold C
that despite separate existence a subsidiary company is an agent of the
parent company or vice versa as was decided in Smith, Stone and Knight v.
Birmingham Corporation [1938] 4 All ER 115; Re FG (Films) Limited [1955]
1 WLR 483; and Firestone Tyre & Rubber Co v. Llewelyn [1957] 1 WLR 464.
... D
In my judgment, by giving recognition to this fact, the President did not cause any
violence to the sanctity of the principle of separate entity established in Salomon v.
Salomon ... but rather gave effect to the reality of the hotel and the restaurant as
being in one enterprise .... In my view, the finding by the President is in no
way against the principle of separate entity and I am therefore not
E
prepared to interfere with the award on this account ...
(emphasis added)
[21] The willingness of the Malaysian courts to lift/pierce the corporate
veil by adopting the principle enunciated in the Hotel Jaya Puri case,
particularly in the industrial disputes, is not new. In Rusli Luwi v. RM Top F
Holdings Sdn Bhd & Ors [2004] 6 CLJ 353; [2003] 4 MLRH 352, the High
Court found no difficulty in lifting the veil of incorporation, when the
respondents, one of which was a subsidiary of the other, were operating as
one business enterprise. Another example of this can be found in Jimsburg
Services Sdn Bhd v. Rostam Wahidin [1999] 2 ILR 324. G
[22] In this instant appeal, the Court of Appeal, relying on the case of Law
Kam Loy (supra), held that the corporate veil of the respondent ought not to
be lifted/pierced. Learned counsel for the appellant/claimant submitted that
the Court of Appeal failed to properly consider the context in which the
decision was made. H

[23] We agree with the submission. If the case is properly considered, one
would discover that the Court of Appeal in Law Kam Loy & Anor v. Boltex
Sdn Bhd & Ors [2005] 3 CLJ 355 had endorsed that the Industrial Court may,
in special and appreciate circumstances, lift of the corporate veil to reveal
who is the proper employer, such as in a situation where there is actual fraud I
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 249

A at common law or some inequitable or unconscionable conduct amounting

to fraud in equity. Gopal Sri Ram JCA (as he then was) stated as follows:
... But that is not to say that the court in the Hotel Jayapuri case was wrong
in lifting the veil of incorporation of the facts of that case. The Hotel
Jayapuri case was concerned with the Industrial Relations Act 1967 which requires
B the Industrial Court to disregard the technicalities and to have regard to equity, good
conscience and the substantial merits of a case. Accordingly, in industrial law, where
the interests of justice so demand, it may, in particular cases be appropriate for the
Industrial Court to pierce or to disregard the doctrine of corporate personality. That
is what happened in the Hotel Jayapuri case and no criticism of that case on its
facts may be justified.
C
(emphasis added)
[24] In our considered opinion, the case of Law Kam Loy (supra) simply
stands for the proposition that whilst the approach of the Supreme Court in
the Hotel Jaya Puri case may not be suitable in present times (vis-a-vis current
D company law principles), the practice of the courts in lifting/piercing the
corporate veil may still be accepted in the realm of industrial relations as the
correct approach to reveal who is the employer in the given case in order to
achieve social justice so that the workmen are not adversely affected. In
addition s. 30(5) of the Industrial Relations Act 1967 provides that the court
shall act according to “equity, good conscience and the substantial merits of
E
the case without regard to technicalities and legal form”.
[25] In this connection, perhaps it would be useful to embark on a voyage
cross other Commonwealth jurisdictions to look at persuasive authorities
relevant to the issue under discussion.
F South Africa
[26] In the South Africa, particularly in industrial and labour court
matters, there has been willingness to pierce the veil. In the circumstance
where the company is the agent or alter ego of its shareholders and directors,
the courts are concerned with reality of the situation and not its form. In
G
essence, what important is the manner in which the company operated and
with the individual’s relationship to that operation. In the case of Footwear
Trading CC v. Mdlalose [2005] 5 BLLR 452 (LAC), Nicholson JA noted that:
The abuse of juristic personality occurs too frequently for comfort and
many epithets have been used to describe the abuse against which the
H
courts have tried to protect third parties, namely puppets, shams, masks
and alter ego. However, the general principle underlying this aspect of the
law of lifting the veil is that, when the corporation is the mere alter ego
or business conduit of a person, it may be disregarded. The lifting of the
veil is normally reserved for instances where the shareholders or
I individuals hiding behind the corporate veil are sought to be responsible.
I do not see why it should not also apply where companies and close
corporations are juggled around like puppets to do the bidding of the
puppet master.
250 Industrial Law Reports [2020] 3 ILR

[27] The Labour Appeal Court concluded that although Fila (PTY) Ltd and A
Footwear Trading CC were separate legal personalities, an expose of both
entities would show that they were controlled by the same individuals and
were inextricably interlinked, confirmed that they were in effect joint or
co-employers.
B
[28] In Esterhuizen v. Million Air Services (in liquidation) & Others (2007) 28
ILJ 1251 (LC), the applicant had referred a constructive dismissal dispute to
the Commission of Conciliation, Mediation and Arbitration (“CCMA”) in
2001. The employer (first respondent) failed to appear at both conciliation
and arbitration hearings. The CCMA found in favour of the applicant and
awarded compensation. A warrant of execution was issued. C

[29] When the Deputy Sheriff tried to execute the writ, he was informed
by third respondent, the manager of Million-Air Services Carletonville (Pty)
Ltd (second respondent) which had been incorporated in 2003, that the first
respondent had been liquidated.
D
[30] The applicant applied to the Labour Court to declare that the second
respondent was the same business operations as the first respondent and was
liable, jointly and severally with the third respondent, to pay the amount
awarded to the applicant in a CCMA award. Further, that it be declared that
the third respondent was the real employer of the applicant and that he is
E
liable, jointly and severally with the second respondent, to pay the amount
awarded to the applicant in the CCMA award.
[31] The Labour Court of South Africa found that there were policy
considerations allowing the corporate veil be pierced to reveal who the true
employer was. Francis J, in delivering the judgment of the court, held that F
the conduct of the third respondent was ‘gravely improper’. The court found
that the liquidation of the first respondent was a stratagem of the third
respondent, in a deliberate attempt to thwart the employee’s right to
compensation. The third respondent had absolute control over both of the
companies involved. He was the common denominator in the applicant’s
G
dismissal, the liquidation of the company, and the incorporation of the
second company. The third respondent was the real employer and was liable,
jointly and severally with the second respondent, to pay the amount awarded
to the applicant in the CCMA award.
Canada H
[32] The Canadian law recognises a doctrine known as the common
employer doctrine. Under the doctrine, two or more legal entities can be
employers of a person in relation to the same work where there is a sufficient
degree of relationship between the different entities that act as common
employers. What counts as a sufficient degree of relationship is determined I
on a case by case basis but includes “factors such as individual shareholdings,
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 251

A corporate shareholdings, and interlocking directorships the essence of that

relationship will be the element of common control” (See: Sinclair v. Dover
Engineering Services Ltd [1988] 49 DLR (4th) 297).
[33] The idea of common employers was first recognised in Bagby v.
Gustavson Int’l Drilling Co Ltd (1980), 24 AR 18, but the test was not clearly
B
stated until Sinclair (supra). In Sinclair (supra), the plaintiff was a professional
engineer who wanted to bring a wrongful dismissal claim against two
companies. One company, Dover Engineering Services Ltd (“Dover”), held
itself out as his employer. Another company, Cyril Management Limited
(“Cyril”), was responsible for paying the plaintiff. Cyril also deducted all
C payments from the plaintiff’s salary for income tax, unemployment insurance
and his pension plan. Dover was owned by Mr Vernon Gould and
Mr Donald Keenan. Cyril was effectively a management company that paid
everyone who worked for Dover and the other companies owned by the
Gould partnership.
D
[34] The court held both companies were the common employers of the
plaintiff and it did not matter that the companies were in this complex
business relationship with one another. Wood J stated:
16. I see no reason why such an inflexible notion of contract must
necessarily be imposed upon the modern employment relationship.
E Recognising the situation for what it was, I see no reason, in fact or in
law, why both Dover and Cyril should not be regarded jointly as the
plaintiff’s employer. The old-fashioned notion that no man can serve two
masters fails to recognise the realities of modern-day business, accounting
and tax considerations.
F ...
18. As long as there exists a sufficient degree of relationship between the
different legal entities who apparently compete for the role of employer,
there is no reason in law or in equity why they ought not all to be
regarded as one for the purpose of determining liability for obligations
G owed to those employees who, in effect, have served all without regard
for any precise notion of to whom they were bound in contract.
[35] The case of Downtown Eatery (1993) Ltd v. Ontario (2001) 8 CCEL (3d)
186 (Ont CA), had affirmed that the focus of the common employer doctrine
was the relationship between the employers and not on the relationship
H between the employers and the employee. In this case, the plaintiff was a
manager of a night club. He had been awarded damages for wrongful
dismissal against his employer. However, his employer was insolvent. He
sought judgment against all the companies involved in the nightclub
enterprise, which he claimed belonged to the same corporate group. The
I
court held that all the companies belong to one integrated unit and they were
the plaintiff’s joint employer.
252 Industrial Law Reports [2020] 3 ILR

[36] MacPherson JA stated that although an employer is entitled to A

establish complex corporate structures and relationships, the law should be
vigilant to ensure that permissible complexity in corporate arrangements
does not work an injustice in the realm of employment law.
New Zealand
B
[37] In New Zealand, the first acknowledgement of the concept of having
two employers was in the case of Inspector of Awards v. Pacific Helmets (NZ)
Ltd [1988] NZILR 411. Chief Judge Horn stated:
I see nothing in principle to prevent two people or firms joining together
to employ one man for their respective purposes. And the more so when C
those purposes are closely associated.
[38] The acceptance of the concept of joint employers was confirmed by
Shaw J, in the case of Orakei Group (2007) Limited v. Doherty [2008] NZEmpC
65. The Employment Court confirmed that a person can be employed in the
same employment by two or more companies; but there must be a sufficient D
degree of relationship between the legal entities for them to be joint
employers. Common control by both employers would be usual in joint
employment relationship.
The United Kingdom
E
[39] In the context of employment law, there are two cases which
highlighted the principle that a parent company could owe tortious liability
for the health and safety of its subsidiary’s employees, namely: Chandler Cape
Plc [2012] EWCA Civ 525 and Thompson v. Renwick Group Plc [2014] EWCA
Civ 635.
F
[40] In Chandler (supra), the subsidiary’s employee, who suffered from
disorders caused by asbestos in the workplace, claimed damages against the
parent company. The case appeared to be the first which actually imposed
a duty of care to an employee of a company on that company’s parent
company. Arden LJ applied the three-stage test ie, (i) whether the damage G
was ‘foreseeable’; (ii) whether there was ‘proximity’ between the parties, and
(iii) whether it was ‘fair, just and reasonable’ to impose the duty on the party.
As a result, Her Ladyship recognised the duty of care of the parent company
either to advise its subsidiary about the steps to take or to ensure the
implementation of these steps due to the parent’s knowledge of the working
H
condition and its superior knowledge about the risks. Her Ladyship
summarised her judgment in para. [69] as follows:
[I]n appropriate circumstances the law may impose on a parent company
responsibility for the health and safety of its subsidiary’s employees.
Those circumstances include a situation where, as in the present case,
(1) the businesses of the parent and subsidiary are in a relevant respect I
the same; (2) the parent has, or ought to have, superior knowledge on
some relevant aspect of health and safety in the particular industry; (3)
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 253

A the subsidiary’s system of work is unsafe as the parent company knew,

or ought to have known; and (4) the parent knew or ought to have
foreseen that the subsidiary or its employees would rely on its using that
superior knowledge for the employees’ protection.
Although her approach could have the same effect as piercing the veil, Arden
B LJ rejected the view of this approach as ‘veil-piercing’.
[41] In Thompson (supra), the possibility of a direct duty of care owed by
the parent company was again recognised with the criteria proposed by
Chandler (supra). However, the claim by the employee was rejected due to
lack of sufficient evidence. Tomlinson LJ stated that the four factors
C mentioned by Arden LJ in Chandler (supra) were descriptive rather than
exhaustive. Although the degree of fairness was as high as in Chandler,
Thomlinson LJ rejected the claim of the plaintiff as there was no evidence
of the parent’s knowledge and control related to foreseeability and
proximity. Hence, the parent company’s direct duty of care could not be
D recognised.
[42] From a short review of cases above, it would appear that although the
principle of separate legal entity is at the core of the company law, there are
a number of situations in which a corporate group and its members can be
treated the same. In other words, while the dicta in Hotel Jaya Puri case is
E correct in substance particularly in the context of industrial jurisprudence,
the approach of ‘common employer’ taken by the Canadian, South African
and English courts better explains the rationale in industrial law terms in
order to achieve equity and social justice. This is in keeping with the tenor
and purpose of the Industrial Relations Act 1967.
F
[43] In sum, insofar as employment law is concerned, the circumstances
which are believed to be most peculiar basis under which the court would
lift/pierce the corporate veil and find a group of companies to be common
employers include:

G
(i) Where there is “functional integrality” between entities;
(ii) Unity of establishment between the entities.
(iii) The existence of a fiduciary relationship between the members of the
entities and/or the extent of control;
H (iv) There was essential unity of group enterprise; and
(v) Whenever it is just and equitable to do so and/or when the justice of the
case so demands.
But these circumstances are just guidelines and are by no means being
exhaustive. The circumstances for which the court may lift/pierce the
I
corporate veil are never closed.
254 Industrial Law Reports [2020] 3 ILR

[44] Reverting back to the mainstream of the present appeal, we are of the A
considered opinion that ADC and the respondent were part and parcel of the
same group. There was “an essential unity of group enterprise”. The
uncontroverted evidence established that:
(i) The appellant’s/claimant’s original contract of employment with
B
ADC was dated 26 August 2009;
(ii) Vide letter dated 11 October 2012, ADC informed the appellant/
claimant that his contract as consultant will be renewed for another
12 months from 1 October 2012 to 30 September 2013;
(iii) However, vide letter dated 18 October 2012 from the respondent, the C
appellant/claimant was informed that his contract as a consultant will
be renewed under the respondent, instead of ADC. Further, it was
expressly stated that there will be no change in his designation, grade
and other terms and conditions of his contract dated 26 August 2009;
(iv) In the letter dated 18 October 2012, the respondent expressly stated D
that the appellant’s/claimant’s contract is being renewed under the
respondent instead of under ADC in view of the phasing out of ADC;
(v) The Chief Executive Officer of ADC who signed the letter dated
11 October 2012 and the Chief Executive Officer of the respondent
E
who signed the letter dated 18 October 2012 (ie, seven days later) were
one and the same - Mr Chiew Kok Hin;
(vi) It was a finding of fact by the Industrial Court that ADC was
consolidated into the respondent and vide a letter dated 7 January
2013, in view of the new company structure, the appellant/claimant F
had been re-designated to assume the post of VP, product and solutions
with effect from 1 January 2013;
(vii) It was a finding of fact by the Industrial Court that the appellant/
claimant continued to report to Mr Chiew Kok Hin before and after
the letter dated 18 October 2012; and G

(viii) It was a finding of fact by the Industrial Court that according to the
testimony of the respondent’s witness (COW1) the appellant’s/
claimant’s contract with ADC allowed for the appellant/claimant to
be moved to any of its subsidiaries and/or associate companies. Thus,
the appellant/claimant was asked to assume the position of VP, H
product and solutions with the respondent on 7 January 2013.
[45] For all the aforesaid reasons, we are of the considered view the Court
of Appeal was wrong when it held that ADC and the respondent were two
separate legal entities and failed to treat the appellant’s/claimant’s contract
I
of employment as a continuous one from ADC to the respondent. In our
view, the doctrine, whether is categorised as “essential unity group
enterprise” or “common employer”, its purpose is to permit the corporate
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 255

A veil to be pierced in order to establish or identify the true labour relationship

between parties in terms of the existing labour relation realities. The Court
of Appeal’s failure to identify the employer-employee relationship runs
contrary with the fundamental purposes of the Industrial Relations Act 1967.
[46] Further, the Court of Appeal was wrong in reversing the findings of
B
fact by the Industrial Court and ruled that the appellant/claimant had
accepted a three-month contract that was offered to him in September 2013.
The facts clearly showed that the appellant/claimant did not accept the offers
because the company had removed his entitlement to the performance bonus
scheme in which he was a participant at all material times since he was in
C employment with AIMS group of companies in 2009.
[47] It is an established rule, enunciated in a long line of decisions, that the
appellate court will not disturb the findings of fact made by the trial court
as to the credibility of witnesses in view of its opportunity to observe the
demeanor and conduct of witnesses while testifying and the said findings will
D
generally be accepted or acted upon unless it can be demonstrated that the
trial court’s decision is plainly wrong or the decision is one that no
reasonable judge or tribunal could have reached (see: Tay Kheng Hong v. Heap
Moh Steamship Co Ltd [1964] 1 LNS 202; [1964] 1 MLJ 87; Chow Yee Wah
& Anor v. Choo Ah Pat [1978] 1 LNS 32; [1978] 2 MLJ 41b; Gan Yook Chin
E (P) & Anor v. Lee Ing Chin @ Lee Teck Seng [2004] 4 CLJ 309; [2005] 2 MLJ
1; Tengku Dato’ Ibrahim Petra Tengku Indra Petra v. Petra Perdana Bhd
& Another Appeal [2018] 2 CLJ 641, Henderson v. Foxworth Investments Ltd
And Another [2014] 1 WLR 2600; Mc Graddie v. Mc Graddie [2013] WLR
2477). We observe that the Court of Appeal did not proffer any reasons
F whatsoever in revising the Industrial Court’s finding that the appellant/
claimant did not accept the three months contract that was offered to him.
In our considered opinion, there is no material error in the findings of fact
by the Industrial Court which justifies the Court of Appeal to reverse its
decision. The findings of fact by the Industrial Court are amply supported
G
by the relevant evidence on record.
Fixed Term Contract Or Permanent Employee
[48] We now turn to the issue on whether on the facts and circumstances
of the present appeal, the appellant/claimant was employed on a fixed term
contract or was a permanent employee of the respondent.
H
[49] The Court of Appeal had considered the issue of fixed term contract
in light of its decision on the issue of separate legal entity. The Court of
Appeal concluded that it was wrong for the Industrial Court and the High
Court to have lifted the corporate veil based on the facts of the present
appeal. The Court of Appeal disregarded the earlier contracts of employment
I
between the appellant/claimant and ADC.
256 Industrial Law Reports [2020] 3 ILR

[50] The Court of Appeal held that the appellant/claimant was appointed A
under a fixed term contract of three months and that early termination of the
appellant’s/claimant’s contract employment was effected in accordance with
cl. 8 of the appellant’s/claimant’s contract of employment dated
18 September 2013 which provides as follows:
8. Termination B

Your appointment may be terminated by giving two (2) months notice.

Such notice shall be given by the party that intends to effect the
determination. Where no notice is given, two (2) months salary in lieu of
notice shall be payable by the party effecting such termination.
C
[51] Clause 1(e) of the same contract of employment provides as follows:
This contract shall supersede all other contracts previously issue under
AIMS Data Centre 2 Sdn Bhd and AIMS Data Centre Pte Ltd.
[52] It was submitted on behalf of the respondent that the Court of Appeal
was right in holding that there was no continuity of employment because the D
two companies were two separate legal entities. It was further submitted that
even if a contract of employment was renewed successively without any
application by the employee and without any intermittent breaks in between,
this did not change the character and nature of a fixed term contract into a
permanent contract. And cl. 1(e) of the appellant’s/claimant’s contract of E
employment shows that there is no continuity between the appellant’s/
claimant’s contract of employment and his past fixed term contracts.
Our Decision
[53] Security of tenure in employment or job security is recognised by our
F
Malaysian courts (see Hong Leong Equipment Sdn Bhd v. Liew Fook Chuan
& Other Appeals [1997] 1 CLJ 665; [1996] 1 MLJ 481, Ang Beng Teik v. Pan
Global Textile Bhd, Penang [1996] 4 CLJ 313, The New Straits Times Press
(Malaysia) Bhd v. Chong Lee Fah [2003] 2 ILR 239). This right however, has
to be balanced with the employer’s prerogative to make commercial
decisions for reasons of better economy or better management (see Harris G
Solid State (M) Sdn Bhd & Ors v. Bruno Gentil Pereira & Ors [1996] 4 CLJ 747,
Malaysia Shipyard & Engineering Sdn Bhd v. Mukhtiar Singh & Ors [1991]
1 ILR 626).
[54] The use of fixed term contract employee had become a trend in
H
Malaysia, particularly in the employment of expatriates and also in the
construction industry where employees are commonly engaged on a project
basis. A fixed term contract is a contract of employment for a specific period
of time ie, with a defined end (See: Wiltshire Country Council v. National
Association Of Teachers In Further And Higher Education And Guy [1980] 1 CR
455). As a general rule, such contract cannot be terminated before its expiry I
date except for gross misconduct or by mutual agreement. However, a
contract can still be for a fixed-term if it contains within it a provision
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 257

A enabling either side to terminate it on giving notice before the term expires
(See: Dixon And Another v. British Broadcasting Corporation [1979] 1 QB 546).
In this connection, the main issue that presents itself is whether there is a
genuine fixed term contract or there is an employment on a permanent basis
dressed up as several fixed term contracts.
B
[55] The judicial treatment regarding the question of whether an employer
had a genuine need for the service of an employee for a fixed duration may
be divided into three consideration points:
(i) The intention of parties (see Han Chiang High School/Penang Han Chiang
C
Associated Chinese School Association v. National Union of Teachers in
Independent Schools, West Malaysia & Industrial Court of Malaysia [1990]
1 ILR 473, Hasni Hassan & Ors v. Menteri Sumber Manusia & Anor [2013]
6 CLJ 74);
(ii) Employers’ subsequent conduct during the course of employment
D (see Innoprise Corporation Sdn Bhd, Sabah v. Sukumaran Vanugopal [1993]
1 ILR 373B, Sime UEP Development Sdn Bhd v. Chu Sh Poi [1996] 1 ILR
256, Malaysia Airlines Bhd v. Michael Ng Liang Kok [2000] 3 ILR 179,
Holiday Villages of Malaysia Sdn Bhd v. Mohd Zaizam Mustafa [2006]
2 LNS 0812); and
E (iii) Nature of the employer’s business and the nature of work which an
employee is engaged to perform (see Audrey Yeoh Peng Hoon v. Financial
Mediation Bureau [2015] 3 ILR 371, Charles Aseervatham Abdullah v. The
Zenith Hotel Sdn Bhd [2018] 2 LNS 2349).
The Intention Of Parties
F
[56] In the locus classicus case on fixed term contract, Han Chiang High
School (supra), the court distinguished between a genuine fixed term contract
and one which is a sham. In this case, the material facts are that the school
had employed teachers on fixed term contracts of two years. A number of
teachers who had joined the union of teachers in independent schools were
G
informed that their employment would cease upon expiry of the fixed term
contract. The union applied to the High Court for an interlocutory injunction
restraining the school from terminating the services of the teachers. The High
Court granted the injunction but the then Supreme Court subsequently set
aside the injunction because the forum to deal with complaints of wrongful
H dismissal was the Industrial Court. After the injunction was set aside, the
school proceeded to inform the teachers that their service was no longer
required. The teachers claimed that they were dismissed without just cause
and excuse.
[57] The Industrial Court held that although there might have been a
I
genuine need for fixed term contracts when the school was first inaugurated
in 1951, there did not appear to be such a need when it had been successfully
established as some of the teachers had taught for more than 20 years and had
258 Industrial Law Reports [2020] 3 ILR

their contracts renewed unfailingly during those years. In holding that the A
fixed term contracts were not genuine, the Industrial Court stated that the
system of fixed term contracts in the school was employed not out of genuine
necessity, but as a means of control and subjugation of its teaching
employees.
B
[58] In Hasni Hassan (supra), five employees were migrated to fixed term
contracts in 2003 as part of a transformation plan to improve the
performance of government-linked companies, which in this case Telekom
Malaysia Berhad (“Telekom”). Telekom, had offered all senior management
officers the option of either remaining under current terms as permanent
employment or to accept fixed term contracts. In order to accept the fixed C
term contracts, the employees would have to resign from their permanent
employment.
[59] The dispute arose when five of those officers did not have their fixed
term contracts renewed. They lodged a complaint under s. 20 of the
D
Industrial Relations Act 1967, but the Minister declined to refer the matter
to the Industrial Court. The employees applied for judicial review of the
Minister’s decision. At the High Court, the decision of the Minister was
upheld. Three of the five employees appealed to the Court of Appeal, which
allowed the appeal and referred the matter to the Industrial Court for
adjudication. E

[60] Even though the Court of Appeal held that it is for the Industrial Court
to decide the matter on merit (genuineness of the fixed term contract), the
Court of Appeal went further and stated that the Telekom had genuine
intentions when they offered the fixed term contracts to their senior
management as their intention was to increase performance and productivity F
and, as reward, the senior management would be able to earn higher
incomes. The Court of Appeal also stated that this was part of a business plan
and there was no ulterior or sinister motive on the part of the Telekom when
they offered the fixed term contracts and the fixed term “was not a guise to
shorten the employment of the employees previously on permanent G
contracts”.
Employers’ Subsequent Conduct During The Course Of Employment
[61] We have the opportunity to review several cases decided by the
Industrial Court on this issue and we agree with the approach adopted that H
in determining whether a contract of employment is a fixed term contract or
permanent employment, the employer’s subsequent conduct during the
course of employment is a relevant consideration. The total duration or
length of service with an employer is also a factor that would be considered.
[62] In the case Sime UEP (supra), a clerk was employed for four years on I
a contract that was renewed annually. During his four years there, the
employee was involved in various projects. The Industrial Court held that
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 259

A an employee cannot be considered to be employed for a temporary or one-

off job if he was not employed for a particular project and he had been
involved in various projects during his tenure.
[63] In the case of Malaysia Airlines (supra), the employee was engaged on
a fixed term contract of two years as second officer in the Rural Air Service.
B
He was confirmed in his position as second officer two months later. Eight
months into his employment, he was promoted as a commander and was
confirmed in that position after serving a probationary period of six months.
His fixed term contract was subsequently renewed twice, each time for three
years. When the employee wrote to the company on the forthcoming expiry
C of his third fixed term contract, he was given a three-month contract by the
company. The Industrial Court, in finding that the employee’s employment
had been permanent, considered that the Rural Air Service was not a
temporary operation and that it did not have a definite duration beyond
which the cessation of the business is inevitable.
D
[64] The next case is Holiday Villages (supra). In this case, a resort employed
both seasonal and permanent employees. Seasonal employees had a fixed
term in their contracts which would range from three to six months or for
a season. The resort was not open for the whole year and would be closed
during the monsoon season which falls between November and January of
E each year. The employee had begun employment on a fixed term contract for
one season. He was subsequently employed for six consecutive seasons. The
Industrial Court acknowledged that the resort was only open for nine to ten
months in a year and that there was a genuine need for fixed term contracts
as it was inconceivable to expect the resort to pay salaries when it was closed.
F [65] Notwithstanding the genuine need for fixed term contracts, the
Industrial Court found that the employee was, by the last fixed term contract
in the series of fixed term contracts, a permanent employee of the resort as:
(i) he was employed even during the off-season as a laundry supervisor;
G (ii) he was given a new contract without the need to reapply; and
(iii) he was able to continue in employment even after the alleged expiry of
his penultimate fixed term contract without an extension.
Nature Of The Employer’s Business And The Nature Of Work Which An Employee
H Is Engaged To Perform
[66] Factors that determine the true character of a fixed term contract may
also include the nature of the employer’s business and the nature of the work
which an employee is engaged to perform. In Charles Aseervatham Abdullah v.
The Zenith Hotel Sdn Bhd [2018] 2 LNS 2349, a similar issue with the present
I appeal arose for the court determination: whether or not an employee who
had worked for three separate entities over several years was on a fixed term
260 Industrial Law Reports [2020] 3 ILR

contract. In arriving at its award, the Industrial Court examined the entirety A
of the claimant’s employment history, and came to conclusion that the
contract was not a genuine fixed term contract.
[67] With the principles outlined above in mind and based on the factual
matrix of the instant appeal, we are satisfied that the appellant’s/claimant’s
B
contract of employment beginning with ADC before being terminated under
the respondent, was not one-off, seasonal or temporary employment. It was
ongoing, continuous employment without a break from 2009 to 2013. In our
considered opinion, the Court of Appeal erred in not recognising the
industrial law principle of lifting/piercing the corporate veil in the
circumstances and the ongoing nature of the appellant’s/claimant’s contract C
of employment with both the companies.
Our Decision On The First Leave Question
[68] We now turn our attention to the first leave question. The Court of
Appeal held that an expatriate who requires a work permit to work in D
Malaysia can never be a permanent employee in Malaysia, relying on
Nasha’at Muhy Mahmoud v. Malaysia Airline System Bhd [2013] 2 LNS 1745
and Toko Inomoto & Ors v. Malaysian Phiharmonic Orchestra [2015] 2 LNS
1034.
[69] Learned counsel for the appellant/claimant mounted a spirited attack E
on the decision of the Court of Appeal in respect of this issue. Learned
counsel argued that the Court of Appeal ought to have referred to the Federal
Court case of Assunta Hospital v. Dr A Dutt [1980] 1 LNS 121; [1981] 1 MLJ
115 which held that the citizenship of an employee has no bearing in deciding
whether the applicant was in permanent employment or under a fixed term F
contract.
[70] We agree with the submission. In Assunta Hospital (supra), Dr Dutt was
an Indian citizen and was engaged as a radiologist in the Assunta Hospital,
on a three year contract, which was renewed without any break a number of
times. Later, the Dr’s contract was terminated. The Industrial Court awarded G
a sum of RM522,000 as compensation in lieu of reinstatement. In the Federal
Court, the employment contract of Dr Dutt was not an issue but the court
did make an observation that the last letter of appointment described the
period of engagement as “permanent” and that there was no doubt that the
contract offered a certain security of tenure. On the citizenship matter, the H
court had these to say:
As for the non-citizenship status of Dr. Dutt, we shared the astonishment
of the judge at the relevance of this point. Our views can be stated shortly;
whether Dr. Dutt can get an extension of his visit-pass so as to be able to stay in
this country or the issue of a work-permit in order to be able to take up the I
appointment are not matters that can influence the court in the proper exercise of the
jurisdiction conferred on it by the Minister’s reference of the representations for
reinstatement. If an order is made ordering reinstatement and the workman is unable
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 261

A to obtain either the visit pass or the work-permit, the employer would not be in
contempt of the order. It is for the workman to make the order effective. All that the
hospital had to do is to make the post available to the workman. As for any
suggestion that the order for reinstatement would influence the Ministry
of Home Affairs to issue the visit pass or the work-permit, there cannot
be any truth in it, and it cannot possibly be said that the Ministry of Home
B Affairs is bound to comply with the order for reinstatement. In any event,
it is of no concern to the hospital.
(emphasis added)
[71] In Toko Inomoto & Ors v. Mahkamah Perusahaan Malaysia & Anor
C Between [2017] 1 LNS 201, one of the issues that was dealt with by the
learned High Court Judge was whether or not an employee’s citizenship is
a material consideration in deciding whether an employment is on a
permanent basis. The Learned High Court Judge took the view that the issue
of the citizenship is not a material consideration. At para. 23 of the judgment,
the learned judge said:
D
I agree with the counsel for the applicant that the issue of citizenship was
not a material consideration for the Industrial Court to take into
account.
(emphasis added)
E [72] In our view, the proposition of law propounded above is correct in
law. The citizenship of the appellant/claimant has no bearing in deciding
whether the appellant/claimant was in permanent employment or in
employment under a fixed term contract. We also note that the Industrial
Relations Act 1967 does not make any distinction between the citizens of
F Malaysia and non-citizens.
[73] At this juncture, it is pertinent to consider the definition of
“workman” in s. 2 of the Industrial Relations Act 1967:
‘workman’ means any person, including an apprentice employed by an
employer under a contract of employment to work for hire or reward, and
G
for the purpose of any proceedings in relation to a trade dispute includes
any such person who has been dismissed, discharged or retrenched in
connection with or as a consequence of that dispute or whose dismissal,
discharge or retrenchment has led to that dispute.
[74] According to this definition, a workman is “any person” employed
H under “a contract of employment”, and in the case of a “trade dispute”, he
is a person whose dismissal, discharge or retrenchment from employment
leads to or is the cause of the dispute. But what is the meaning of any
“person”, “contract of employment” and “trade dispute”?
[75] The word “person” is interpreted in s. 3 of the Interpretation Acts
I
1948 and 1967 (Act 388), as including body of person, corporate, or
unincorporated.
262 Industrial Law Reports [2020] 3 ILR

[76] “Contract of employment” is defined by the s. 2 of the Industrial A

Relations Act 1967 as “any agreement whether oral or in writing and
whether express or implied, whereby the person agrees to employ another
as a workman and that other agrees to serve his employer as a workman”.
[77] Meanwhile, “trade dispute” is defined in s. 2 of the Industrial
B
Relations Act 1967 to mean “any dispute between an employer and his
workmen which is connected with the employment or non-employment or
the terms of employment, or conditions of work of any such workmen”.
[78] It is pertinent to understand the combined effects of these definitions.
Salleh Abas LP in the case of Inchape (M) Holdings Bhd v. RB Gray & Anor C
[1985] 2 CLJ 305; [1985] CLJ (Rep) 132; [1985] 2 MLJ 297 said:
The combined effect of these definitions is that a person is a workman if the contract
of employment under which he is employed requires him to serve his employer as a
workman and in the case of a trade dispute a person is a workman if the dispute
between him and his employer is connected with his employment as a workman. The
D
definition, therefore, does not go very far and in fact it goes in circle. I
am still left with the same question: who is a workman? But one thing
is clear in that whilst a contract of employment is part of the definition,
it does not follow that every person who is employed under a contract of employment
or being an employee of another is a workman. To be a workman a person must
be employed as a workman. If he is employed in other capacity he cannot be a
E
workman.
...
Now let me turn to the definition of workman in our IRA. Although it
may appear to be wide, in fact it is limited by its own definition of contract
of employment, which means any agreement whereby (an employer)
agrees to employ his employee as “a workman”, and the (other employee) F
agrees to serve his employer, (also) as “a workman”. We were urged to
disregard the expression “as a workman” as being a mere labelling. I
cannot agree. I have no right to treat it as mere surplusage. It was included there
for good measure just as the words “or otherwise” in the National
Arbitration Tribunal case (supra) were held to extend the definition beyond
G
the natural and common sense meaning of the word “workman”. In my
view the expression “as a workman” indicates the intention of the legislature in that
in construing the term “workman”, the purpose for which a person is employed must
be taken into consideration. In other words, the function and responsibility of an
employee are the criterion and must be looked into. (emphasis added)
H

[79] Further, in Assunta Hospital (supra), the Federal Court also upheld the
finding of the Industrial Court that, Dr A Dutt, a professional radiologist,
who was employed under a contract of service was a workman. The court
rejected the narrow definition of workman adopted by Indian courts because
the expression “in any industry” which is part of the statutory definition of I
workmen in Indian Industrial Disputes Act 1947 is conspicuously absent
from the definition under our Industrial Relations Act 1967.
 Ahmad Zahri Mirza Abdul Hamid
[2020] 3 ILR v. AIMS Cyberjaya Sdn Bhd 263

A [80] One other important point to note is that Malaysia is a member

country of International Labour Organisation (ILO). Article 10 of the ILO
Migrant Workers (Supplementary Provisions) Convention 143 of 1975,
states:
Each Member for which the Convention is in force undertakes to declare
B and pursue a national policy designed to promote and to guarantee, by
methods appropriate to national conditions and practice, equality of
opportunity and treatment in respect of employment and occupation, of social
security, of trade union and cultural rights and of individual and collective freedoms
for persons who as migrant workers or as members of their families are lawfully
within its territory.
C
(emphasis added)
[81] This ILO Convention, to which Malaysia is a party, expressly
provides that States should undertake to promote and guarantee equality of
opportunity and treatment between migrant workers and nationals.
D
[82] This ILO standards apply to migrant workers and nationals equally.
In Nacap Asia Pacific Sdn Bhd v. Jeffrey Ronald Pearce & Anor [2011] 5 CLJ 791,
the learned judge referred to article 9 of the ILO Migrant Workers
(Supplementary Provisions) Convention 143 of 1975 and stated:

E
This ILO Convention, to which Malaysia is a party, expressly provides
that where laws and regulations which control the movement of migrants
for employment - such as the Immigration Act - have not been respected,
the migrant worker shall nevertheless enjoy equality of treatment in
respect of rights arising out of past employment. This is the
international labour standard prescribed by the ILO.
F (emphasis added)
[83] Based on the above reasons, we take the view that all workers should
be treated with fairness, dignity, and equality without distinction whether
they are local or foreigners. This is also consonant with art. 8(1) of the
Federal Constitution which essentially provides that all persons are equal
G
before the law and entitled to the equal protection of the law.
[84] In our judgment, the decision of the Court of Appeal that a foreign
national cannot have a permanent contract of employment cannot withstand
judicial scrutiny and is liable to be set aside.
H Conclusion
[85] We say that the Hotel Jaya Puri case is still good law. The Industrial
Court made a finding of fact that the appellant/claimant work for one group
of companies as one enterprise. Applying the principles enunciated in
Han Chiang (supra), we find that the appellant’s/claimant’s contract of
I
employment is a permanent contract and not a fixed term contract.
264 Industrial Law Reports [2020] 3 ILR

[86] The work permit is a non-issue in the present appeal. The work permit A
was not pleaded in the respondent’s statement-in-reply filed at the Industrial
Court. The respondent also did not raise the matter in its submission before
the Industrial Court. The appellant’s/claimant’s evidence in the Industrial
Court that he had a valid Malaysian Working Pass and did not require a work
permit from the respondent was not challenged. Further, the respondent’s B
witness, COW1, admitted that the respondent had never applied any work
permit for the appellant/claimant. Since the work permit issue was not
canvassed and ventilated, it was right for the Industrial Court and the High
Court not to consider this issue. It is trite that parties are expected to put
before the trial court all questions both of fact and law upon which they wish C
to have an adjudication. Parties to litigation are entitled to know where they
stand and tailor their expenditure and efforts in dealing only with what is
known to be in dispute. In our considered view, the Court of Appeal ought
not to have dealt with the issue at all and should have allowed it to enjoy
its eternal sleep. In any event, it has no application in determining whether
D
the appellant’s/claimant’s contract was a fixed term contract or whether he
was a permanent employee.
[87] In the circumstances of the present appeal, the fact that the appellant/
claimant is a foreigner is irrelevant in determining whether the dismissal is
with just cause or otherwise. E
[88] For all the foregoing reasons, the questions posed for our
determination are answered as follows:
(i) Whether a need for work permit is a material consideration in
determining whether an employment contract is a genuine fixed term
contract; and F

In the negative.
(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 permanent employment? G

In the affirmative.
[89] Consequently, the appeal is allowed with costs. So ordered.