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Case Update: Court of Appeal Clarifies PERKESO's Powers in Employee Transfer

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30 November 2023

ADMINISTRATIVE LAW
Transfer Directive – Contract of Employment – Judicial Review – Public Body – Abdication of Duty – Appeal

Dr. Thomas Samuel v Pertubuhan Keselamatan Sosial (PERKESO) & Anor
Civil Appeal No. W-01(A)-681-11/2021 | Court of Appeal
- see the grounds of judgment here

Facts By a letter of offer of employment, Pertubuhan Keselamatan Sosial (the ‘1st Respondent’) offered Dr. Thomas Samuel (the ‘Appellant’) a position as “Pegawai Perubatan Gred 27” in the organization and the Appellant accepted the said offer. In 2014, the 1st Respondent wrote to the Appellant to confirm his position as a “Pegawai Perubatan Gred 27”. In 2017, the Appellant wrote to the 1st Respondent to apply for study leave (without pay) from 20.2.2017 until July 2019 to pursue a Masters of Social Sciences degree at Waikato University Hamilton, New Zealand. By a memorandum dated 13.2.2017, the 1st Respondent informed the Appellant that his application for study leave (without pay) from 20.02.2017 until 31.07.2019 was not approved. The Appellant wrote to appeal to the 1st Respondent against the non-approval of his application for study leave (without pay) however, the 1st Respondent informed the Appellant that it was unable to consider the Appellant’s appeal. The Appellant wrote once again to the 1st Respondent to reconsider his appeal however, it was not approved on the basis of “kepentingan perkhidmatan”.  The Appellant then wrote to the then Minister of Human Resources to appeal against the 1st Respondent’s decision to not approve his application for study leave (without pay). The Appellant did not receive any reply from the then Minister of Human Resources. In 2018, the 1st Respondent transferred the Appellant to Pusat Rehabilitasi PERKESO Tun Abdul Razak in Melaka. The Appellant then proceeded to file an application for judicial review proceedings to seek the following reliefs, amongst others, an Order of Certiorari to quash the decision of the 1st Respondent in transferring the Appellant to PERKESO Tun Abdul Razak Rehabilitation Centre in Melaka and an Order of Mandamus to compel the 1st Respondent to transfer the Applicant back to the 1st Respondent’s Head Office in Kuala Lumpur. The Learned High Court Judge dismissed the application on the grounds that it was unsustainable as this case is purely a contractual and employment matter and is not suitable for judicial review. Hence, this appeal.

Issue 1. Whether the transfer of Dr. Thomas Samuel to the Melaka Centre is legal, specifically considering the terms of his employment contract and the governing statute.

Held In allowing the appeal, the Court of Appeal held that the Transfer Directive suffered from illegality and was contrary to the contract of employment entered into by the Appellant. The Court of Appeal concluded that the 1st Respondent did not have the authority to transfer the Appellant to a private entity, as it was not within the powers vested in the 1st Respondent by the governing statute, the Employees Social Security Act 1969. The Court rejected the Learned High Court Judge's conclusion that the transfer was lawful, emphasizing that the Melaka Centre was a separate legal entity and not an office of the 1st Respondent as per the terms of employment. The Court of Appeal further held that the 1st Respondent, as a public body, must function within the confines of its prescribed powers and the Employees Social Security Act 1969 did not empower the 1st Respondent to use public funds to employ an individual for the benefit of a private corporation. Additionally, the Court of Appeal held that the 2nd Respondent (Lembaga Pertubuhan Keselamatan Sosial) erred by abdicating its decision-making responsibility and deferring to the 1st Respondent, which was a non-delegable duty under the Employees Social Security Act 1969. As a result, the Court of Appeal held that the transfer suffered from illegality and contractual wrongfulness therefore warranting appellate intervention and the decision of the High Court was set aside.

Zul Rafique & Partners
{30 November 2023}

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