26 January 2022

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“High Court holds that expiry of fixed term contracts of service does not entitle individual to termination benefits”

P. Jayasingam and P. Thavaselvi from our Employment & Industrial Relations Practice Group had successfully represented Deleum Primera Sdn Bhd (the “Appellant”) in the High Court in its appeals against the Labour Court’s decision in relation to the claims made by 4 Respondents for termination benefits payment under Regulations 3 and 4 of the Employment (Termination And Lay-Off Benefits) Regulations, 1980 (“1980 Regulations”).

Brief Facts
The Respondents in this case were employed with the Appellant under fixed term Contracts of Service which, respectively, ended upon the expiry of the specified period stated in the contract. The Respondents subsequently filed claims for termination benefits under Regulations 3 and 4 of the 1980 Regulations pursuant to s.69(1) of the Employment Act 1955. The Learned Assistant Director of Labour (“ADL”) allowed the Respondents’ claims. Being dissatisfied with the decision of the ADL, the Appellant appealed to the High Court.

The issue before the High Court was whether the Respondents were eligible to receive termination benefits under Regulations 3 and 4 of the 1980 Regulations given that the fixed term contracts of service ended upon expiry of the contract period and was not otherwise terminated in accordance with the contract terms.

Appellant’s Submission
The Appellant successfully argued that the Respondents’ respective contracts were not “terminated” but simply ended on expiration of the specific contract period pursuant to s.11 of the Employment Act 1955.

Decision of the High Court
The High Court agreed with the Appellant’s submission and allowed the appeals.

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
Teoh Alvare

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