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Industrial Court Upheld Genuine Fixed Term Contract

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Ms Teoh Alvare and Ms Teh Jovaynne from ZUL RAFIQUE & partners’ Employment & Industrial Relations team, succeeded in defending MMC Gamuda KVMRT (T) Sdn Bhd (the ‘Company’) in an unfair dismissal claim in the case of Noorberi bin Yusoff v MMC Gamuda KVMRT (T) Sdn Bhd (Industrial Court Award No 1194 of 2020).

The Claimant was in civil service with the Government of Malaysia for 25 years before he took up his employment as the Head of Environmental in the Company for the KVMRT SSP Line Underground Works Project (the ‘Project’), for a period of two (2) years from 2017 to 2019 (hereinafter referred to as the ‘Fixed Term’). As per clause 12.1 of the Contract, it is stated that it may be terminated by either party giving the other prior written notice of 2 months or by paying salary in lieu of the notice. However, it further mentioned that notice is not required and termination of the Contract will be without compensation upon the expiry of the Fixed Term or the Handing-over Period[1]. Close to 2 months before the Fixed Term ended, the Company had notified the Claimant that the Contract will not be extended. Being dissatisfied with the decision of the Company to end the Contract, the Claimant filed a representation under Section 20[2] of the Industrial Relations Act 1967 to seek reinstatement to his former post in the Company without any loss of salary and benefits.

In this case, the Industrial Court found that the terms of the Contract which had mentioned that the Claimant was employed for a specific duration and for a particular type of work in the Project are indicative that the Claimant and the Company were entering into a fixed-term contract. The Court had further stated that the nature of the Company’s business and the Claimant’s work to increase the liaison between the Company and the Government in matters pertaining to the environmental issues affecting the Project, made it clear that the parties were not intending to have a long-term relationship. In addition to that, the nature of the Project was clearly impermanent.

The Court also found that the issue of alleged unfair dismissal by the Company does not arise as the Claimant was notified of the expiry of the Contract which was close to 2 months before his term ended. As such, he was fully aware and had accepted that his employment was for a fixed duration. Thus, the Industrial Court upheld that the Claimant's contract of employment was in fact a genuine fixed term agreement.



For more insight into this area of law, please contact our Partners in Employment & Industrial Relations Practice Group:
P Jayasingam
Wong Keat Ching
Thavaselvi Pararajasingam
 
[1] Clause 3 - Duration of Contract
3.1 The Company shall have the option to extend this Contract for a further period of two (2) years or to be determined at the sole discretion of the Company.
[2] Representations on dismissals.