Khairu Norliza Khairudin [2020] MELRU 396 v. Kool Fm Radio Sdn Bhd pg 1
KHAIRU NORLIZA KHAIRUDIN v. KOOL FM RADIO SDN BHD
Industrial Court, Kuala Lumpur Augustine Anthony Award No: 396 Of 2020 [Case No: 4/4-301/19] 14 February 2020
Case(s) referred to: Aminah Zaiton Amir & Anor v. Star RFM Sdn Bhd [2008] 1 MELR 209; [2008] 1 ILR 562 (refd) Dr James Alfred (Sabah) v. Koperasi Serbaguna Sanya Bhd (Sabah) & Anor [2001] 1 MELR 17; [2001] 1 MLRA 305; [2001] 3 MLJ 529; [2001] 3 CLJ 541 (refd) Han Chiang High School Penang Han Chiang Associated Chinese Schools Association and National Union Of Teachers In Independent Schools, W M'sia [1988] 2 MELR 637; [1988] 2 ILR 611 (refd) Hoh Kiang Ngan v. Mahkamah Perusahaan Malaysia & Anor [1995] 1 MELR 1; [1995] 2 MLRA 435; [1995] 3 MLJ 369; [1996] 4 CLJ 687; [1996] 3 AMR 3693 (refd) Ireka Construction Berhad v. Chantiravathan Subramaniam James [1995] 1 MELR 373; [1995] 2 ILR 11 (refd) K A Sanduran Nehru Ratnam v. I-Berhad [2006] 1 MELR 74; [2006] 1 MELR 114; [2006] 2 MLRA 467; [2006] 2 MLRA 778; [2007] 2 MLJ 430; [2007] 1 ILR 257; [2007] 1 CLJ 347 (refd) Lian Ann Lorry Transport & Forwarding Sdn Bhd v. Govindasamy Palanimuthu [1982] 1 MELR 1; [1982] CLJ 173 (refd) Malaysia Airlines Bhd v. Michael Ng Liang Kok [2000] 2 MELR 302; [2000] 3 ILR 179 (refd) Milan Auto Sdn Bhd v. Wong Seh Yen [1995] 2 MLRA 23; [1995] 3 MLJ 537; [1995] 4 CLJ 449; [1996] 1 AMR 049 (refd) Omar Othman v. Kulim Advanced Technologies Sdn Bhd [2019] 6 MLRA 756; [2019] 1 MLJ 625; [2019] 7 CLJ 18 (refd) Wong Mei Yoke v. Tien Wah Press (Malaya) Sdn Bhd [2017] 3 MELR 709; [2018] 1 ILR 20 (refd) Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor [2002] 1 MELR 4; [2002] 1 MLRA 188; [2002] 3 MLJ 129; [2002] 3 CLJ 314; [2002] 3 AMR 2898 (refd)
Legislation referred to: Industrial Relations Act 1967, ss 2 ,20, 30(5), (6A)
Counsel: For the claimant: S Muhendaran (together with Chong Wan Loo); M/s Muhendaran Sri Khairu Norliza Khairudin pg 2 v. Kool Fm Radio Sdn Bhd [2020] MELRU 396
For the company: Abdullah Abdul Karim (together with Prema Kesavan); Malaysian Employers Federation (MEF)
[Order accordingly.]
AWARD
Augustine Anthony:
[1] The parties in this matter filed their respective written submissions dated 18 November 2019 (Company's Written Submissions), 25 November 2019 (Claimant's Written Submissions), 2 December 2019 (Claimant's Written Submissions in Reply) and 0.12.2019 (Company's Written Submission in Reply).
[2] This Court considered all the notes of proceedings in this matter, documents and the cause papers in handing down this Award namely:-
(i) The Claimant's Amended Statement of Case dated 13 September 2019;
(ii) The Company's Amended Statement in Reply dated 23 September 2019;
(iii) The Claimant's Rejoinder dated 11 June 2019;
(iv) The Claimant's Bundle of Documents - CLB1, CLB2 & CLB3;
(v) The Company's Bundle of Documents - COB1;
(vi) Claimant's Witness Statement - CLW1-WS;
(vii) Company's Witness Statement - COW1-WS (Anida binti Mohd Tahrim); and
(viii) Company's Witness Statement - COW2-WS (Sathiaseelan Paul Thurai).
Introduction
[3] The dispute before this Court is the claim by Khairu Norliza binti Khairudin (the Claimant) that she was dismissed without just cause or excuse by Kool FM Radio Sdn Bhd (the Company) on the 8 August 2018.
[4] On the 22 December 2013 the Claimant became the first prize winner in a TV reality show organized by an entity known as Media Prima Berhad. Arising out of this achievement, the Claimant was offered employment as Radio Announcer in a programme known as Radio Hot FM by an entity known as Synchrosound Studio Sdn Bhd which is wholly owned subsidiary of Media Prima Berhad. The Claimant commenced employment with Radio Hot Khairu Norliza Khairudin [2020] MELRU 396 v. Kool Fm Radio Sdn Bhd pg 3
FM commencing January 2014. The Claimant was then offered a written contract of employment for a period of one year beginning 1 April 2014 to 31 March 2015 by Synchrosound Studio Sdn Bhd with a further extension of this contract until 31 March 2016. Before the expiry of this contract of employment, the Claimant was offered another contract of employment by the same entity on the 8 March 2016 with the commencement date of the contract from the 1 April 2016 to 31 March 2019 wherein in this contract of employment the Claimant was assigned to work as Radio Announcer by Synchrosound Studio Sdn Bhd for an entity known as Radio Kool FM. The Claimant commenced employment with Radio Kool FM on the 3 March 2016 notwithstanding the contract of employment dated 8 March 2016.
[5] Sometime in mid year 2017, the Claimant alleged that one Puan Nik Nor Azura Nik Mahmood had told the Claimant that the Claimant must now set up a company in order to continue her employment as Radio Announcer with Radio Kool FM wherein the Claimant would also be required to enter a new contract. Left with no choice in order to continue her employment with Radio Kool FM, the Claimant complied with what she was directed to do in that the Claimant had now set up a company known as LKD Empire Sdn Bhd. On the 27 December 2017 Kool FM Radio Sdn Bhd (the Company) entered into an agreement with LKD Empire Sdn Bhd wholly owned by the Claimant for the service of Radio Announcer Performance Agreement (The Said Agreement) wherein the commencement period of this contract was from 1 December 2017 to 31 March 2019 being the same expiry time as stipulated in the agreement between the Claimant and Synchrosound Studio Sdn Bhd dated 8 March 2016 which agreement was never terminated nor brought to an end by the parties.
[6] By a letter dated 1 August 2018, the Company invoked clause 7.3 of The Said Agreement between the Company and LKD Empire Sdn Bhd in order to terminate the Radio Announcer Performance service rendered by the Claimant. The said clause 7.3 under The Said Agreement stipulates that the Company may terminate The Said Agreement at any time by giving 7 days' prior notice without giving any reasons and without any liability for compensation and/or damages for the termination. Under clause 6 of The Said Agreement the Radio Announcer is also deemed an independent contractor who is not to be construed as an employee of the Company. Under The Said Agreement between the Company and LKD Empire Sdn Bhd, the Claimant was paid a remuneration of RM7,000.00 per month which sum was paid directly and personally to the Claimant.
[7] The Claimant now claims that she is a workman within the definition of s 2 of the Industrial Relations Act 1967 (The Act) and was employed under a contract of service and that she had been dismissed without just cause or excuse. The Company on the other hand contends that the Claimant was an independent contractor under a contract for services and as such is not a workman falling within the definition under The Act.
[8] The Claimant gave evidence under oath and remained the sole witness for her case. The Company's evidence was led by COW1 (Anida Mohd Tahrim) Khairu Norliza Khairudin pg 4 v. Kool Fm Radio Sdn Bhd [2020] MELRU 396 who is the Group General Manager in charge of content, production and marketing of the Company and COW2 (Sathiaseelan Paul Thurai) who is the Chief Executive Officer who is responsible for the issuance of the termination letter to the Claimant.
The Claimant's Case
[9] The Claimant's case can be summarised as follows:-
(i) On the 22 December 2013 the Claimant became the first prize winner in a TV reality show organized by an entity known as Media Prima Berhad.
(ii) Arising out of this achievement, the Claimant was offered employment as a Radio Announcer in a programme known as Radio Hot FM by an entity known as Synchrosound Studio Sdn Bhd which is wholly owned subsidiary of Media Prima Berhad.
(iii) The Claimant commenced employment with Radio Hot FM commencing January 2014.
(iv) The Claimant was then offered a written contract of employment for a period of one year beginning 1 April 2014 to 31 March 2015. by Synchrosound Studio Sdn Bhd with a further extension of this contract until 31 March 2016.
(v) Before the expiry of this contract of employment, the Claimant was offered another contract of employment by the same entity on the 8 March 2016 with the commencing day the of the contract from the 1 April 2016 to 31 March 2019 wherein in this contract of employment the Claimant was assigned to work as Radio Announcer by Synchrosound Studio Sdn Bhd for an entity known as Radio Kool FM.
(vi) The Claimant commenced employment with Radio Kool FM on the 3 March 2016 notwithstanding the contract of employment dated 8 March 2016 which was never terminated.
(vii) The Claimant alleged that sometime in mid year 2017, one Puan Nik Nor Azura Nik Mahmood had told the Claimant that the Claimant must now set up a company in order to continue her employment as Radio Announcer with Radio Kool FM wherein the Claimant would also be required to enter a new contract.
(viii) As the Claimant was left with other no choice in order to continue her employment with Radio Kool FM, the Claimant complied with what she was directed to do in that the Claimant had now set up a company known as LKD Empire Sdn Bhd.
(ix) On the 27 December 2017, Kool FM Radio Sdn Bhd (the Khairu Norliza Khairudin [2020] MELRU 396 v. Kool Fm Radio Sdn Bhd pg 5
Company) entered into The Said Agreement with LKD Empire Sdn Bhd wholly owned by the Claimant for the service of Radio Announcer Performance wherein the commencement period of this contract was from 1 December 2017 to 31 March 2019 being the same expiry time as stipulated in the agreement between the Claimant and Synchrosound Studio Sdn Bhd dated 8 March 2016 which agreement was never terminated nor brought to an end by the parties.
(x) Despite the Company entering into an agreement with LKD Empire Sdn Bhd the Claimant was the person specifically selected by the Company from LKD Empire Sdn Bhd as the one and only person to provide her exclusive service as the Radio Announcer of the Company.
(xi) The Claimant continued with her service/employment as Radio Announcer for the Company performing the same duties and responsibilities throughout the whole period commencing from the first day she commenced her employment in January 2014 with no break in her service as Radio Announcer.
(xii) On the 1 August 2018 the Company issued and served a seven days' notice of termination on the Claimant in exercise of the Company's rights under clause 7.3 of The Said Agreement between the Company and the Claimant through LKD Empire Sdn Bhd which states that the Company may terminate The Said Agreement without giving any reasons and without any liability for compensation and /or damages for such termination.
(xiii) The Claimant claims that she is a workman for the Company within the meaning of s 2 of The Act and the termination of the Claimant from her employment with the Company without any reasons whatsoever is a dismissal without just cause or excuse.
(xiv) The Claimant further claims that the Company's action of converting the Claimant's employment contract into a purported contract for services agreement was a sham device designed purely for the purpose of eliminating the Claimant's status as an employee in order to deprive the Claimant's basic and fundamental rights and entitlement as an employee that enjoins amongst other the right to security of tenure under The Act.
(xv) The Claimant now prays that she be reinstated to her former position in the Company.
The Company's Case
[10] The Company's case can be summarised as follows:-
(i) The Claimant is an independent contractor pursuant to The Said Agreement between a company known as LKD Empire Sdn Bhd Khairu Norliza Khairudin pg 6 v. Kool Fm Radio Sdn Bhd [2020] MELRU 396
(which is wholly owned by the Claimant) and the Company.
(ii) The Said Agreement between the Claimant's company and the Company is one of contract for services as opposed to a contract of service and therefore the Claimant is not a workman within the meaning of s 2 of The Act.
(iii) The Claimant's services to the Company through her company was as an independent contractor pursuant to cl 6 of The Said Agreement.
(iv) The Claimant was mainly engaged to host the Petang Kool segment between the hours of 3.00 pm to 7.00 pm.
(v) The Claimant's relationship with the Company was none other than a business relationship wherein the Claimant assumed the role of an independent contractor by virtue of the incorporation of her company known as LKD Empire Sdn Bhd through which she carried out services for the Company.
(vi) The Said Agreement signed by the Company was with LKD Empire Sdn Bhd which is a business entity registered under the Suruhanjaya Syarikat Malaysia (SSM) and not with the Claimant. Thus it was LKD Empire Sdn Bhd 's services that was terminated and as such there was no termination or dismissal of the Claimant under an employer - employee or master and servant relationship.
(vii) The Claimant has no basis to commence this action in the Industrial Court of Malaysia for a dismissal without just cause or excuse as she is an independent contractor through LKD Empire Sdn Bhd.
The Law
Preliminary Issue: Whether The Claimant Is A Workman As Defined Under Section 2 Of The Industrial Relations Act 1967 (The Act)
[11] Before this Court proceeds to deal with the issues and make a finding whether the Claimant was dismissed with or without just cause or excuse, it is incumbent upon this Court to first determine whether the argument put forth by the Company on the preliminary issue that the Claimant is not a workman within the definition of s 2 of the Industrial Relations Act 1967 (The Act) has any merits considering the peculiar facts of this case.
[12] In the event this Court finds that the Claimant is not a workman as defined under s 2 of The Act, then it will be incumbent upon this Court to conclude that the Claimant do not possess the right to make representation under s 20(1) of The Act.
[13]Section 2 of The Act defines a contract of employment to mean any Khairu Norliza Khairudin [2020] MELRU 396 v. Kool Fm Radio Sdn Bhd pg 7 agreement, whether oral or in writing and whether express or implied, whereby one person agrees to employ another as a workman and that other agrees to serve his employer as a workman.
[14]Section 2 of The Act further states that a workman means any person, including an apprentice, employed by an employer under a contract of employment to work for hire or reward and for the purposes 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.
[15] Whether the Claimant is a workman within the definition of s 2 of The Act can be determined by simply looking at the facts of the case in order to determine if the Claimant was hired under a contract of service (workman) or a contract for services (independent contractor).
[16] The Federal Court in the case ofHoh Kiang Ngan v. Mahkamah Perusahaan Malaysia & Anor [1995] 1 MELR 1; [1995] 2 MLRA 435; [1995] 3 MLJ 369; [1996] 4 CLJ 687; [1996] 3 AMR 3693 laid down the determining factor between the contract of service and contract for services in the following manner:-
In our judgment, the correct test to be applied in determining whether a claimant is a workman under The Act is that enunciated by Chang Min Tat FJ in Dr A Dutt v. Assunta Hospital [1981] 1 MLRA 472; [1981] 1 MLJ 304 at p 311. We accordingly hold that a workman under The Act is one who is engaged under a contract of service. An independent contractor who is engaged under a contract for services is not a workman under The Act. We take this view because it provides, as earlier observed, for a flexible approach to the determination of the question. It is fairly plain to see why flexibility is achieved by having resort to this test.
In all cases where it becomes necessary to determine whether a contract is one of service or for services, the degree of control which an employer exercises over a claimant is an important factor, although it may not be the sole criterion. The terms of the contract between the parties must, therefore, first be ascertained. Where this is in writing, the task is to interpret its terms in order to determine the nature of the latter's duties and functions. Where it is not then its terms must be established and construed. But in the vast majority of cases there are facts which go to show the nature, degree and extent of control. These include, but are not confined to, the conduct of the parties at all relevant times. Their determination is a question of fact. When all the features of the engagement have been identified, it becomes necessary to determine whether the contract falls into one category or the other, that is to say, whether it is a contract of service or a contract for services.
Khairu Norliza Khairudin pg 8 v. Kool Fm Radio Sdn Bhd [2020] MELRU 396
[17] This Court will now revert to the relationship between the Claimant and the Company. In doing so this Court is not limited to the terms contained therein in The Said Agreement signed by the Claimant through the company known as LKD Empire Sdn Bhd in order to ascertain the relationship between the parties. The nature of the Claimant's duties and functions in the Company are very important factors for this Court to consider too in order to determine the true nature of the relationship between the Claimant and the Company. This Court in the course of interpreting the terms of The Said Agreement, will also take into account the conduct of the contracting parties in this case from the very day the Claimant commenced employment as a Radio Announcer with Media Prima Berhad subsidiary from the period of January 2014. This of course is a question of fact to be determine by this Court by considering all the evidence presented in this Court.
[18] The Claimant's history of employment leading to the eventual signing of The Said Agreement between the Company and the entity known as LKD Empire Sdn Bhd in which entity the Claimant is a director presents to this Court a rich and interesting yet an inseparable relationship between the Company and the Claimant in which relationship the Claimant is so intensely and intrinsically connected with all the main business the Company was engaged in.
[19] There is no dispute that on the 22 December 2013 the Claimant became the first prize winner in a TV reality show organized by an entity known as Media Prima Berhad and arising out of this achievement, the Claimant was offered employment as Radio Announcer in a programme known as Radio Hot FM by an entity known as Synchrosound Studio Sdn Bhd which is wholly owned subsidiary of Media Prima Berhad. The Claimant commenced employment with Radio Hot FM commencing January 2014.
[20] The Claimant was then offered a written contract of employment for a period of one year beginning 1 April 2014 to 31 March 2015 by Synchrosound Studio Sdn Bhd with a further extension of this contract until 31 March 2016.
[21] Before the expiry of this contract of employment, the Claimant was offered another contract of employment by the same entity on the 8 March 2016 with the commencing day of the contract from the 1 April 2016 to 31 March 2019 wherein in this contract of employment the Claimant was assigned to work as Radio Announcer by Synchrosound Studio Sdn Bhd for an entity known as Radio Kool FM. The Claimant commenced employment with Radio Kool FM on the 3 March 2016 notwithstanding the contract of employment dated 8 March 2016 was never terminated. There is also no dispute that Synchrosound Studio Sdn Bhd owned Radio Hot FM and Radio Kool FM and the Radio Announcer Performance Agreement was prepared by the Media Prima Berhad. The previous agreement dated 8 March 2016 between the Claimant and Synchrosound Studio Sdn Bhd which is wholly owned by Media Prima Berhad remains without any termination.
[22] There is no dispute that the Claimant was already working as an employee through the previous agreements signed as stated above before the Khairu Norliza Khairudin [2020] MELRU 396 v. Kool Fm Radio Sdn Bhd pg 9
Company entered into the agreement dated 27 December 2017 with the Claimant through LKD Empire Sdn Bhd. There were no reasons given by the witnesses who appeared for the Company who are also the same people connected with other entity under Media Prima Berhad as to why there is even a need for the Claimant to enter into a new agreement with the Company by forming a separate legal entity when the Claimant was already doing the same duties and function before signing The Said Agreement with the Company using the entity known as LKD Empire Sdn Bhd. Even despite forming the company knowns as LKD Empire Sdn Bhd it was not disputed that the Claimant was still the person who was specifically chosen to provide her exclusive service as the Radio Announcer for the Company resulting the Claimant or LKD Empire Sdn Bhd having no option to choose who should be working for the Company selected from within LKD Empire Sdn Bhd If the Company had entered into the agreement with LKD Empire Sdn Bhd and if the Company claims that LKD Empire Sdn Bhd is an independent contractor, then the Company ought not to have dictated that the service must and only be done by the Claimant and nobody else.
[23] This Court is mindful that in determining whether the relationship between the Claimant and the Company can be construed as an employer - employee relationship, the degree of control the Company had over the Claimant is a very important factor though it may not be the sole criterion. Having said that, this Court having perused The Said Agreement namely clauses 2A & 5 read together with schedule 1 and 2 cannot but agree with the submission of the learned counsel for the Claimant that the extent and degree of control the Company had over the Claimant can only be construed as one that creates an employer - employee/workman relationship. If not, how else would one construe the tasks of the Claimant for a period of 8 to 10 hours a day and on a daily basis which places the Claimant under absolute control of the Company for which she was paid a fix income of RM7,000.00 per month. Item 1 Schedule 1 under the scope of services include but not limited to the following in which the Claimant must cause daily execution of the on-air product of any of the Company's radio station as assigned. Further the Claimant must execute the formats, music and promotional policies as directed by the Company. Looking at the schedule of The Said Agreement in light of the surrounding circumstances of the case makes it abundantly clear to this Court that the Claimant is nothing but a person employed by an employer under a contract of employment to work for hire or reward in that it is clearly intended to be a contract of service as opposed to a contract for services.
[24] This Court also took notice of the facts and circumstances of this case where the Claimant apart from the work as a Radio Announcer as stipulated in The Said Agreement also undertook office work and this can be seen from the Company's own documents wherein between the period of 21 & 22 June 2018, 02 - 06 July 2018, 09 - 13 July 2018, 16 -20 July 2018 and 30 July 2018 the Claimant is shown to have undertaken office work on behalf of the Company. Exactly what this office work is and to what extent this office work is carried out by the Claimant is not fully explained by the Company. Further the Company's own Statement In Reply in paragraph 1(f) clearly shows that the Claimant was mainly engaged to host the Petang Kool segment between Khairu Norliza Khairudin pg 10 v. Kool Fm Radio Sdn Bhd [2020] MELRU 396 the hours of 3.00 pm to 7.00 pm although her work is for 8 to 10 hours a day. What the Claimant does in the remainder period of time in the office of the Company is also not adequately explained by the Company since by The Said Agreement signed between the parties, the Claimant is to work for the Company for 8 to 10 hours a day. Surely she has office work to do as the Company's own documents shows. In any event if the position taken by the Company that the Claimant is an independent contractor is to be acceptable then the question arises as to why this independent contractor is now doing office work for the Company during the duration of the contract especially between Monday to Friday which is commonly known as the period an employee of a Company would work in any given entity. There are also other features and facts of this case that suggest that the Claimant cannot be regarded as an independent contractor. The Company although insisting that it signed the agreement with LKD Empire Sdn Bhd was however remitting payments directly to the Claimant and not to LKD Empire Sdn Bhd for the Claimant's remuneration. Does a Company that is transacting with third parties not aware that such act on part of the Company is improper even if the Claimant insisted that the payment was to be paid directly to her if the assertion of the Company that the Company at all times was only dealing with LKD Empire Sdn Bhd and not the Claimant in her personal capacity is to be believed. In any event it was the evidence of the Claimant that the tax invoice under LKD Empire Sdn Bhd was prepared and issued on the Company's instruction and despite of this tax invoice under the name of LKD Empire Sdn Bhd the Company proceeded to make payment to the Claimant in her personal capacity. Further regardless of the extent of work done by the Claimant, her remuneration is fixed at RM7,000.00 per month clearly indicating that this Claimant was in fact earning a fixed monthly salary of RM7,000.00 per month and that she was not paid remuneration according to the work or services render by an independent contractor.
[25] The wording contained in clause 6 of The Said Agreement is also unusual and inconsistent with what the Company now alleges in its case against the Claimant. It is unusual for the Company to define LKD Empire Sdn Bhd as The Radio Announcer in the introduction of The Said Agreement but at clause 6 breath life into this artificial legal personality/body corporate and turning it into a natural person (human being). This is evident when reading clause 6 as a whole and in particular the line which states that It is not the intention of the Company or the Radio Announcer...... creating between them a relationship of employer - employee. The Act only defines a natural person (human being) as a workman and excludes any artificial legal person or personality/body corporate. Thus if the Company was truly transacting with LKD Empire Sdn Bhd then it would be totally unnecessary to include as its terms the so called exclusion of employer - employee relationship and the obligations of the Company contained therein in clause 6 of The Said Agreement towards the Radio Announcer. It is without a doubt that the true and actual person being referred to in clause 6 of The Said Agreement is not LKD Empire Sdn Bhd but the Claimant herself consistent with the definition of the workman as defined under s 2 of The Act. It is quite apparent that the Company had little or no regard for the very documents that it is now relying to prove that LKD Empire Sdn Bhd or the Claimant is an independent Khairu Norliza Khairudin [2020] MELRU 396 v. Kool Fm Radio Sdn Bhd pg 11 contractor.
[26] This Court will now refer to the case ofLian Ann Lorry Transport & Forwarding Sdn Bhd v. Govindasamy Palanimuthu [1982] 1 MELR 1; [1982] CLJ 173 wherein the Federal held that:-
In our view, the duration and nature of an employment, be it temporary or permanent, is immaterial for the purpose of determining the existence of a contract of service. As long as there exists a relationship of a master and servant or that of an employer and employee, the law will infer a contract of service existing between them, notwithstanding the fact that the service or the employment is intended by the person in the position of master to be temporary or of a short duration only. And the law will imply the existence of such relationship where a person is hired by another as an integral part of the latter's business.
[27] This Court having perused the documents namely The Said Agreement signed between the Claimant and the Company and further taking into account the fact that apart from the functions of Radio Announcer, the Claimant also carried out office work for the Company, would therefore arrive at the inevitable conclusion that the Claimant by the nature of the work and duties performed, formed as an integral part of the Company's business. (Pls see also the case of Aminah Zaiton Amir & Anor v. Star RFM Sdn Bhd [2008] 1 MELR 209; [2008] 1 ILR 562 which also involves a radio Announcer/Presenter).
[28] It is clear to this Court that the Claimant was employed as part of the Company's overall business of radio broadcasting and this forms an integral part of the Company's business. Regardless of how the Company had coined the words in clause 6 of The Said Agreement suggesting that the Claimant/LKD Empire Sdn Bhd is an independent contractor, the evidence led in the Court does not show that the parties especially the Claimant had intended that the contract will be anything but one that creates an employer - employee relationship. The business registration of the LKD Empire Sdn Bhd which was produced in Court to show that the Claimant through LKD Empire Sdn Bhd was an independent contractor was done at the insistence of the Company before the Claimant's employment with the Company could be continued. The Claimant too was placed in a position where she had to sign the agreement in order to continue her employment with the Company. It was very clear that the Claimant had a very weak bargaining power at that time when The Said Agreement was signed and the Company had taken advantage of the Claimant's weak position to cause the signing of The Said Agreement which to this Court is clearly a scheme engineered by the Company through improper and intricate manoeuvres through sham device just to defeat the legitimate rights of the Claimant as an employee and the protection that she is entitled to through The Act which was legislated for the protection of a workman who enjoys security of tenure. Having said this, this Court is also of the view that despite the signing of The Said Agreement purportedly converting the Claimant from one being an employee to an independent Khairu Norliza Khairudin pg 12 v. Kool Fm Radio Sdn Bhd [2020] MELRU 396 contractor through LKD Empire Sdn Bhd, the totality of the facts of the case and the evidence adduced in Court does not in any way negate the unique circumstances of this case which clearly shows that there is no mistake that the relationship between the Claimant and the Company is one of employer - employee relationship under a contract of service.
[29] Accordingly, this Court now makes a finding that the Claimant is a workman pursuant to s 2 of The Act and employed by the Company under a contract of employment/service.
[30] Now this Court will proceed to deal with the dispute between the parties on the issue of termination of the Claimant from employment with the Company and whether this termination amounts to a dismissal without just cause or excuse.
The Role And Function Of This Court In Determining The Dispute Between The Parties
[31] The role of the Industrial Court under s 20 of the Industrial Relations Act 1967 is succinctly explained in the case Milan Auto Sdn Bhd v. Wong Seh Yen [1995] 2 MLRA 23; [1995] 3 MLJ 537; [1995] 4 CLJ 449; [1996] 1 AMR 049, his Lordship Justice Tan Sri Haji Mohd Azmi bin Kamaruddin FCJ delivering the judgment of the Federal Court had the occasion to state the following:-
As pointed out by this Court recently in Wong Yuen Hock v. Syarikat Hong Leong Assurance Sdn Bhd & Another Appeal [1995] 1 MLRA 412; [1995] 2 MLJ 753; [1995] 3 CLJ 344; [1995] 2 AMR 2145 the function of the Industrial Court in dismissal cases on a reference under s 20 is two-fold firstly, to determine whether the misconduct complained of by the employer has been established, and secondly whether the proven misconduct constitutes just cause or excuse for the dismissal. Failure to determine these issues on the merits would be a jurisdictional error ...
[32] Also in the case of K A Sanduran Nehru Ratnam v. I-Berhad [2006] 1 MELR 74; [2006] 1 MELR 114; [2006] 2 MLRA 467; [2006] 2 MLRA 778; [2007] 2 MLJ 430; [2007] 1 ILR 257; [2007] 1 CLJ 347 where the Federal Court again reiterated the function of the Industrial Court:-
The main and only function of the Industrial Court in dealing with a reference under s 20 of the Industrial Relations Act 1967 is to determine whether the misconduct or irregularities complained of by the management as to the grounds of dismissal were in fact committed by the workman. If so, whether such grounds constitute just cause and excuse for the dismissal.
The Burden Of Proof
[33] The law is settled in cases where the dismissal is caused by the Company. It follows that whenever the Company caused the dismissal of the workman, it Khairu Norliza Khairudin [2020] MELRU 396 v. Kool Fm Radio Sdn Bhd pg 13 is the Company that must now discharge the burden of proof that the dismissal is with just cause or excuse.
[34] This long settled principle was demonstrated in the case ofIreka Construction Berhad v. Chantiravathan a/l Subramaniam James [1995] 1 MELR 373; [1995] 2 ILR 11 where the Court opined that:-
It is a basic principle of industrial jurisprudence that in a dismissal case the employer must produce convincing evidence that the workman committed the offence or offences the workman is alleged to have committed for which he has been dismissed. The burden of proof lies on the employer to prove that he has just cause and excuse for taking the decision to impose the disciplinary measure of dismissal upon the employee. The just cause must be, either a misconduct, negligence or poor performance based on the facts of the case.
The Standard Of Proof
[35] In the case of Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor[2002] 1 MELR 4; [2002] 1 MLRA 188; [2002] 3 MLJ 129; [2002] 3 CLJ 314; [2002] 3 AMR 2898 the Court made it clear that the standard of proof that is required is one that is on the balance of probabilities.
Thus in hearing a claim of unjust dismissal, where the employee was dismissed on the basis of an alleged criminal offence such as theft of company property, the Industrial Court is notrequired to be satisfied beyond a reasonable doubt that such an offence was committed. The standard of proof applicable is the civil standard, ie, proof on a balance of probabilities which is flexible so that the degree of probability required is proportionate to the nature and gravity of the issue.
Whether The Dismissal Of The Claimant Is With Just Cause Or Excuse
[36] By a letter dated 1 August 2018, the Company exercised its purported right to terminate the services of LKD Empire Sdn Bhd by invoking clause 7.3 of The Said Agreement which states that the Company may terminate the agreement at any time by giving 7 days prior notice in writing without giving any reasons and without liability for compensation and/or damages for such termination. This Court now rules that the termination of the purported services by LKD Empire Sdn Bhd in effect is a termination directed to the Claimant personally. In view of the position taken by the Company pursuant to clause 7.3 wherein no reason for the termination of the Claimant was given by the Company, this Court holds that the dismissal of the Claimant from her employment was effected by the Company without just cause or excuse. It is also too late now for the Company to advance any other reasons apart from the pleaded grounds and the contents as contained in the letter dated 1 August 2018 to suggest that there exist other reasons for the termination of the contract of service of the Claimant, as is now attempted by the Company through the evidence of the Company's witnesses namely COW1.
Khairu Norliza Khairudin pg 14 v. Kool Fm Radio Sdn Bhd [2020] MELRU 396
[37] In coming to a conclusion that the Company had caused the dismissal of the Claimant without just cause or excuse, this Court will refer to the case of Omar Bin Othman v. Kulim Advanced Technologies Sdn Bhd [2019] 6 MLRA 756; [2019] 1 MLJ 625; [2019] 7 CLJ 18 where his lordship Justice Hamid Sultan Abu Backer JCA delivering the judgment of the Court of Appeal had the occasioned to state the following:-
[3] It is now well-established that 'termination simpliciter' a concept of common law is not part of industrial jurisprudence of Malaysia - under the s 20 of the Industrial Relations Act 1967 (IRA 1967). The concept may be relevant in limited circumstances under the Employment Act 1955.
[4] Termination simpliciter relates to the absolute common law right of an employer to terminate the employee pursuant to the terms of the contract. This common law right has been arrested by virtue of s 20 of IRA 1967 which reads as follows:
20. (1) Where a workman, irrespective of whether he is a member of a trade union of workmen or otherwise, considers that he has been dismissed without just cause or excuse by his employer, he may make representations in writing to the Director General to be reinstated in his former employment; the representations may be filed at the office of the Director General nearest to the place of employment from which the workman was dismissed.
[9] In essence, the employer's reason for termination was based on a contractual right to terminate pursuant to 'art. 3'. The termination was not based on poor performance, misconduct, redundancy, etc so as to demonstrate a prima facie case to terminate on just cause and excuse pursuant to s 20 of IRA 1967.
[11] The notice of termination impinges on s 20 of IRA 1967 as well as settled principles enunciated by case laws. Whether it is probationary period, fixed term contract, etc where termination takes place before the expiry of the term, etc; it was incumbent on the employer to demonstrate that the dismissal was based on just cause and excuse. Otherwise, the termination is unlawful and cannot stand.
[38] The above decision of the Court of Appeal clearly demonstrates that the common law termination simpliciter by an employer of an employee has no place in a reference by the Minister under The Act since pursuant to this Act, the Company must show that the employee's termination is for reasons of just cause or excuse. It is the essence of this Act that an employee under a contract of service enjoys security of tenure of her employment with the Company and that the employee can only be dismissed by the employer for just cause or excuse.
[39] Pursuant to s 30(5) of The Act and guided by the principles of equity, Khairu Norliza Khairudin [2020] MELRU 396 v. Kool Fm Radio Sdn Bhd pg 15 good conscience and substantial merits of the case without regard to technicalities and legal form and after having considered the totality of the facts of the case, the Statement in Reply and the pleaded ground therein, all the evidence adduced and by reasons of the established principles of industrial relations and disputes as mentioned above, this Court finds that the Company had failed to prove to the satisfaction of this Court, on the balance of probabilities that the dismissal of the Claimant from her employment with the Company was with just cause or excuse.
The Claimant's Employment With The Company: Whether Permenent Employment Or A Genuine Fixed Term Contract
[40] The Industrial Court had the occasion to observe what amounts to genuine fixed term contract of employment as opposed to an ordinary contracts of employment in the case of Han Chiang High School Penang Han Chiang Associated Chinese Schools Association and National Union Of Teachers In Independent Schools, W M'sia [1988] 2 MELR 637; [1988] 2 ILR 611 wherein the Industrial had this to state:-
10. The Court, however, is aware that on the other hand there are genuine fixed term contracts, where both parties recognise there is no understanding that the contract will be renewed on expiry. The Court realises that such genuine fixed-term contracts for temporary, one-off jobs are an important part of the range of employment relationships. Some such jobs are found in seasonal work, work to fill gaps caused by temporary absence of permanent staff, training, and the performance of specific tasks such as research projects funded from outside the employer's undertaking. These are the types of work envisaged in s 11 of the Employment Act, 1955, which may be embodied in contracts of service for a specified period of time. This type of fixed-term contracts are therefore to be differentiated from the so-called fixed-term contracts which are in fact ongoing, permanent contracts of employment.
11. In deciding whether a contract is genuinely fixed-term or not, English tribunals were told:
The great thing is to make sure that the case is a genuine one......
On the one hand, employers who have a genuine need for a fixed-term employment which can be seen from the outset not to be ongoing, need to be protected. On the other hand, employees have to be protected against being deprived of their rights through ordinary employments being dressed up in the form of temporary fixed-term contracts. What we are saying in this judgment is that there is no magic about fixed-term contracts; that they are not...... excluded from The Act. (Terry v. East Sussex County Council, 1976, ICR 536, per Phillips J.)
Khairu Norliza Khairudin pg 16 v. Kool Fm Radio Sdn Bhd [2020] MELRU 396
[41] This Court will further add that in determining whether a contract is a genuine fixed term contract, this Court is duty bound to enquire the circumstances of this case as to whether the Company was honest in wanting to employ the Claimant on a genuine fixed term contract or whether the contract of employment by its nature was permanent in nature. This of course will depend much on the facts of this case. The Industrial Court case of Malaysia Airlines Bhd v. Michael Ng Liang Kok [2000] 2 MELR 302; [2000] 3 ILR 179 serves as a useful guide to this Court in embarking on an inquiry on the determining features of genuine fixed term contract wherein the Industrial Court in the above case had the occasion to state the following:-
The question before the court is whether the claimant's employment was under a genuine fixed-term contract or not. The mere description of a contract as one for a fixed-term or a similar label attached to it is not determinative of the matter. The court must undertake an inquiry into the question whether an employer genuinely had a need for the services of an employee for a fixed duration and thereby employed the employee for the said term stipulated in the contract.
[42] This Court having examined the facts of this case concludes that the Claimant was not employed on a genuine fixed term contract of employment. The contract of employment of the Claimant with the Company is certainly one which is permanent in nature giving rise to the Claimant enjoying the minimum retirement age of 60 years (See Wong Mei Yoke v. Tien Wah Press (Malaya) Sdn Bhd [2017] 3 MELR 709; [2018] 1 ILR 20). There are cogent reasons for this Court to conclude in this manner. The Claimant was employed as a Radio Announcer on or about January 2014 even before a formal contract is signed by the Claimant with Synchrosound Studio Sdn Bhd which is wholly owned subsidiary of Media Prima Berhad. The Claimant was then offered a written contract of employment for a period of one year beginning 1 April 2014 to 31 March 2015 by Synchrosound Studio Sdn Bhd with a further extension of this contract until 31 March 2016. The contract was then renewed further until 31 March 2019 by Synchrosound Studio Sdn Bhd. When the Claimant entered another agreement with the Company on the 27 December 2017 through LKD Empire Sdn Bhd, the agreement of the Claimant with Synchrosound Studio Sdn Bhd dated 8 March 2016 that is due to expire on the 31 March 2019 was not even formally brought to an end before a new agreement was entered and signed between the Claimant and the Company on the 27 December 2017. This Court having concluded that the agreement that was designed by the Company with Media Prima Berhad's participation in preparing the agreement which entity wholly owns Synchrosound Studio Sdn Bhd is a sham device and was brought into existence purely to defeat the Claimant's legitimate rights as a permanent employee of the Company and as employee of Synchrosound Studio Sdn Bhd with years of service rendered, now must not allow the Company to avail these sham device to defeat the Claimant's entitlement including the years of service rendered to Synchrosound Studio Sdn Bhd for which the Company must account for and must be made to take into account of the years of service rendered simply because it is an undisputed fact that the Claimant's service as a Radio announcer was without any break in service since January 2014 under Khairu Norliza Khairudin [2020] MELRU 396 v. Kool Fm Radio Sdn Bhd pg 17 the first contract of employment and following through to the date when her service was terminated. COW1, the head of the Radio Kool FM (owned by Synchrosound Studio Sdn Bhd) informed the Claimant to set up a new company to continue her employment with the Radio Kool FM station. The word continue must necessarily mean that the Claimant to continue without any break in service from the earliest contract of employment in January 2014 entered with Synchrosound Studio Sdn Bhd to the date when the Claimant was terminated since the Claimant was performing the same role and duties despite the change that was brought about by the Company entering into this sham device to defeat the Claimant's rights as an employee. It is even more so for this Court to rule as such, on the continuation of the Claimant's service because it is in the evidence that when the Claimant enquired from COW1 as to why she had to enter a new contract of employment without any benefits that she as an employee is entitled to, COW1 could only say that it was the instruction of COW2 who is the CEO of Radio Media Prima Chain known as Ripple. COW1 did not make it clear to the Claimant that her previous years of service will come to an end by virtue of this new agreement and offer the Claimant an option to decide before entering this new agreement by disregarding the previous years of service. As such when the Claimant was told that this new agreement is to ensure that the Claimant would have continuation of her employment it must therefore take into account the previous years of service since January 2014.
[43] Thus a proper reading of these agreements between the Claimant and Synchrosound Studio Sdn Bhd, the Claimant (through LKD Empire Sdn Bhd) with the Company coupled with the conduct of the parties shows to this Court that the Claimant's years of service under the contract of employment with Synchrosound Studio Sdn Bhd was taken over by the Company without any break in the contract of service/years of service that the Claimant had put in Synchrosound Studio Sdn Bhd, bearing also in mind the manner in which this sham device was premeditated and executed by the Company with the aid of Media Prima Berhad and Synchrosound Studio Sdn Bhd.
[44] This Court also took into account that there was no evidence that these renewals of the agreement between the parties are a design intended for temporary purposes. If the evidence adduced is scrutinized further, it clearly shows that the Company was constantly creating new programmes signifying expansion that required the Claimant's role as the Radio Announcer consistently for a long period of time. The Radio broadcasting business of the Company is also one that is continuous in nature. In any event the Claimant was also doing office work for the Company. Evidence in Court also reveals that the work of the Claimant was taken over by another Radio Announcer employed by the Company soon after the termination of the Claimant who was performing all the roles and duties of the Claimant and this work of the Claimant existed even whilst this case is ongoing in this Court.
[45] As a corollary to the above this Court now makes a finding that the Claimant's contract of employment with the Company is one of permanent employment and that the Claimant's years of service commenced since January 2014 and the computation will be based along this line when Khairu Norliza Khairudin pg 18 v. Kool Fm Radio Sdn Bhd [2020] MELRU 396 considering the appropriate remedy for the Claimant.
Remedy
[46] This Court having ruled that the Claimant was dismissed without just cause or excuse, will now consider the appropriate remedy for the Claimant. On the 08 August 2018, the Claimant was terminated from her employment by the Company without just cause or excuse. It is now an undisputed fact that the Claimant's employment had been taken over by another Radio Announcer. Further the totality of the facts of this as stated above also makes reinstatement of the Claimant to her former position in the Company not a suitable remedy. As such the appropriate remedy in the circumstances of this case must be compensation in lieu of reinstatement. The Claimant is also entitled for back wages in line with s 30(6A) Industrial Relations Act 1967 and the factors specified in the Second Schedule therein which states:-
1. In the event that backwages are to be given, such backwages shall not exceed twenty-four months' backwages from the date of dismissal based on the last-drawn salary of the person who has been dismissed without just cause or excuse;
[47] The Claimant's last drawn salary was RM7,000.00.
[48] Pursuant to s 30(5) of The Act, equity, good conscience and substantial merits of the case without regard to technicalities and legal forms remains the central feature and focal point of this Court in arriving at its decision and final order and this principle will be adhered by this Court at all times leading to the final order of this Court.
[49] This Court is further bound by the principle laid down in the case ofDr James Alfred (Sabah) v. Koperasi Serbaguna Sanya Bhd (Sabah) & Anor [2001] 1 MELR 17; [2001] 1 MLRA 305; [2001] 3 MLJ 529; [2001] 3 CLJ 541 where his Lordship Justice Tan Sri Steve Shim CJ (Sabah & Sarawak) in delivering the judgment of the Federal Court opined:-
In our view, it is in line with equity and good conscience that the Industrial Court, in assessing quantum of backwages, should take into account the fact, if established by evidence or admitted, that the workman has been gainfully employed elsewhere after his dismissal. Failure to do so constitutes a jurisdictional error of law. Certiorari will therefore lie to rectify it. Of course, taking into account of such employment after dismissal does not necessarily mean that the Industrial Court has to conduct a mathematical exercise in deduction. What is important is that the Industrial Court, in the exercise of its discretion in assessing the quantum of backwages, should take into account all relevant matters including the fact, where it exists, that the workman has been gainfully employed elsewhere after his dismissal. This discretion is in the nature of a decision-making process.
[Emphasis Is This Court's] Khairu Norliza Khairudin [2020] MELRU 396 v. Kool Fm Radio Sdn Bhd pg 19
[50] This Court must take into account the post dismissal earnings of the Claimant in order to make an appropriate deduction from the back wages to be awarded. The Claimant had given unchallenged evidence that since her dismissal from employment with the Company, she had been unemployed from the date of her dismissal until the period of May 2019 and thereafter she was only working as a part-time host in Astro Go Shop and had since August 2019 secured a contract of employment earning RM800.00 per episode/programme which could vary from 8 to 12 episode a month. This Court will take into account this income of the Claimant when scaling down the back wages awarded to the Claimant.
[51] Having considered all the facts of case on the appropriate sum to be awarded and after taking into account the Claimant's post dismissal earnings, this Court now orders that the Claimant be paid 1-month salary of the last drawn salary of RM7,000.00 for every year of service completed totalling 4 years taken from January 2014 and back wages of the last drawn salary of RM7,000.00 for 15 months. This will amount to:-
(i) Backwages ordered:
RM7,000.00 x 15 months = RM105,000.00
(ii) Compensation in lieu of Reinstatement:
RM7,000.00 x 4 months = RM28,000.00
Total amount ordered by this Court: RM133,000.00
Final Order Of This Court
[52] It is this Court's order that the Company pays the Claimant through the Claimant's solicitor, a sum of Ringgit Malaysia One Hundred Thirty Three Thousand (RM133,000.00) only less statutory deduction (if any) within 30 days from the date of this Award.