1. ) Goh Shu Wei v Natasya Elmi Binti Mohd Nawam (WA-16A-40-03/2024)

1.1 On 18.02.2025, after duly perusing the cause papers and the parties' respective submissions on the balance of probabilities, I find no merit in the appeal. I dismissed it with costs of RM5,000.00 awarded to the respondent.

1.1 Aggrieved, only the 5th Appellant (A5) appealed, and my reasons are as follows: BACKGROUND FACTS 55 [2] On 01.04.2020 until 30.04.2021, the respondent (Natasya) was employed by Skymind Holdings Berhad (SHB), which wholly owns Skymind Education Group Sdn Bhd (SEGSB) and was its sole shareholder:

On 01.05.2021, the respondent was transferred to SEGSB (the 60 Company) and entered into an Employee Contract.

All of the Appellants are directors of the 6th Appellant during the material period of the respondent’s employment. S/N SkzKon9Qg0quME1iBM8q0g

2.1 The respondent avers that the Company, in express breach of the 65 said Employment Contract, failed, neglected and/or refused to pay her salary for April 2022 until 15.07.2022 and continues to remain unpaid until today 2.2

The Company issued a Notification of Retrenchment dated 70 09.06.2022 informing the respondent that she would be retrenched effective 08.08.2022.

The Company would pay her RM10,000.00 as compensation, which the respondent claimed was in bad faith.

2.3 The respondent therefore cited a breach of the material term of her 75 employment contract and claimed constructive dismissal.

2.4 The respondent lodged a representation at the Industrial Relations Department, under section 20 (3) of the IRA, 1967 and was referred to the Kuala Lumpur Industrial Court Case No: 21/4-365/23 for hearing. 80 2.5. On 03.08.2022, SEGSB changed its name to SEPD Sdn Bhd. SEGSB was later wound up on 24.05.2023.

2.6 On 17.10.2023, the respondent applied for leave from the winding-up Court to continue with the proceedings at the Industrial Court. Leave was granted to the respondent on 02.12.2023. 85 AT THE INDUSTRIAL COURT [3] On 16.07.2022, a reference was made to the Industrial Court, under section 20(3) of the Industrial Relations Act 1967 (IRA). 90

3.1 On 23.12.2023:

The respondent applied section 29(a) of the IRA 1967 for an order to include SHB and five (5) directors of SHB to be joined as parties in the said action.

They are:

Muhammad Asyraf bin Muhammad (Joinee A) is the sole director of the present company, SPED Sdn. Bhd. However, it was later discontinued because, according to the claimant/respondent, he became a director on 100 11.08.2022 after the respondent was allegedly constructively dismissed on 16.07.2021.

Goh Shu Wei (1st appellant - Joinee B).

Cheng Wei Wei (2nd appellant - Joinee C).

Eow Wan-Lin (3rd appellant – Joinee D).

Tan Ying Siang (4th appellant – Joinee E).

Datuk Yasmin Mahmood (5th appellant – Joinee F).

Skymind Holdings Berhad 201801041673 (1303705-V) (6th appellant – Joinee G). The legal foundation in her joinder application was that any Award of 110 the Industrial Court would be rendered ineffective and unenforceable because SEGSB had been wound up unless the Appellants were added as parties.

3.2 On 01.04.2024, the Chairman of the Industrial Court (IC) allowed the application vide Interim Award 471 of 2024. 115 3.3 Dissatisfied with the learned IC Chairman's decision, the appellants filed the present appeal against the said Interim Award in this Court. [4] On 18.02.2025, after duly perusing the cause papers and the parties' respective submissions on the balance of probabilities, I find no merit in the appeal. I dismissed it with costs of RM5,000.00 120 S/N SkzKon9Qg0quME1iBM8q0g THE GROUNDS OF THE LEARNED IC CHAIRMAN [5] The IC’s ground of judgment (Award No.472 of 2024) and the primary consideration are as follows (refer RR L.6, pg 8-30) (briefly): “1. The Company was wound up by the Kuala Lumpur High Court on 24.05.2023, and the Claimant obtained leave to continue with these 125 proceedings, which was granted by the High Court on 12.12.2023.

Therefore, any award that may be granted by this Court against the Company would not be effective and enforceable unless the above directors and company are joined as parties to these proceedings. There was sufficient legal or factual nexus between the Appellants and 130 Skymind Education.

These directors are the directing minds of the said Company at all material times. The Appellants and Skymind Holdings must be taken as collectively and jointly responsible on behalf of the wound-up [subsidiary] company to secure full compliance with the award that may be ordered 135 by this Court after hearing the substantive merits of the case 4. The company would be availed with the opportunity to challenge the claimant’s case at the substantive hearing of the case and the issue of liability can only be dealt with after the joinder and hearing on merits.

Reference was made to a Court of Appeal decision in Asnah Ahmad v 140 Mahkamah Perusahaan & Ors [2015] 4 MLJ 613, which decided that the third parties cannot resist the joinder or deny liability on the grounds that there is no privity of contract or that it is a separate legal entity so long as there is sufficient factual or legal nexus between the party to be joined and the party named in the Reference.

In allowing this application, this court has considered as paramount importance; its duty to act according to equity, good conscience and substantial merit of the application [or case] without regard to technicalities or legal form under s. 30 (5) of IRA 1967.” 150 THE PARTIES SUBMISSIONS I have considered the cause papers and parties' submissions, as follows: THE APPELLANTS’ ARGUMENTS (Briefly) 155 [6] The learned Chairman has failed to consider:

6.1 All the Appellants didn't need to be joined for the Respondent to secure full compliance with the award that the Industrial Court may order, and sufficient legal or factual nexus had not been established between Joinee B to F and SEGSB. 160

6.2 The Court of Appeal in Asnah Ahmad v Mahkamah Perusahaan Malaysia & Ors (supra) held: “(iv) …The more appropriate test to be applied in the Malaysian context was 165 propounded by Justice Gopal Sri Ram in Co-Operative Bank Ltd & Ors v Rashid Cruz Abdullah & Ors And Other Appeals [2004] 1 MLJ 626. The test is a ‘reasonable factual or legal nexus’ test, a ‘wide net’ to facilitate all maladies of third parties to answer to the Industrial Court for their involvement in the dispute and if appropriate be liable under the 170 award upon hearing the merits.”

6.3 The Respondent must satisfy the following conjunctive two-fold test:

Whether the inclusion of the Appellants will make the award effective and enforceable; and 175

(ii) Is there a reasonable factual or legal nexus between the proposed Joinees and SEGSB?

6.4 In the present case, despite the decision of Asnah Ahmad (supra), this Court must first determine whether the joinder of one or all the 180 Appellants, or just one of them, is necessary to ensure the effective and enforceable adjudication of the matter in the Industrial Court proceedings. Only upon such determination is this Court tasked with identifying if there exists a reasonable factual or legal nexus. It is not justified to conclude that the joinder of all the Appellants is required 185 for the Industrial Court’s decision to be effective and enforceable.

6.5 Joinee G wholly owns SEGSB (in liquidation) in the proceedings. There is nothing to suggest that the addition of Joinee G would be insufficient to make any award effective and enforceable in the 190 Industrial Court. The law cannot be that the respondent is entitled to cast the net so wide that it extends beyond the holding company.

6.6 The Chairman has failed to carefully evaluate that the respondent’s main argument for the Joinder Application was based on the 195 assertion that SEGSB had been wound up, which would render any S/N SkzKon9Qg0quME1iBM8q0g award by the Industrial Court academic. Therefore, it was legally incorrect for the learned Chairman to join all the proposed Joinees, as the sole joinder of Joinee G (SHB) would have been sufficient to ensure the effectiveness and enforceability of any award. 200 No Legal or Factual nexus between the Directors of Skymind

6.7 The appellants concede:

That there exists a legal and/or factual nexus between Joinee G and SHB, as it is SEGSB’s sole shareholder.

The appellant also conceded that there is a factual nexus with Joinee B as she was a director of SEGSB from 24.07.2020 to 11.08.2022. 210 However, it was argued that there exists no legal and/or factual nexus between the directors of SHB and SEGSB since Joinees C to F were never directors of SEGSB and were, at all material times, solely directors of SHB. Therefore, it was submitted that the learned chairman of the IC had erred in considering this to be an apparent 215 factual and legal nexus between the directors of SHB and SEGSB. In the circumstances, the appellant prays that this appeal be allowed. [7] THE RESPONDENT ARGUED 220 7.1 In opposing the present appeal (briefly):

The learned counsel for the Appellants has conceded that the Industrial Court correctly joined Joinee A and G as a party.

The learned Chairman of the IC correctly held at paragraph 30 of the Interim Award that: 225 S/N SkzKon9Qg0quME1iBM8q0g

The 2nd to the 5th appellants who were the directors of SHB in the absence of deposition to the contrary.

They were “the controlling minds of SEGSB”.

There is a factual nexus between the Board of Directors 230 and the management of SHB.

7.2 Section 29 of the IRA, 1967, does not limit the number of parties that can be joined to the proceedings at the Industrial Court. 235 In the circumstances, the respondent prays that this appeal be dismissed with costs and that the case be returned to the IC for full ventilation to ascertain the parties' rights appropriately. THE LAW 240 [8] It is trite law that the Industrial Court is empowered under Section 29(a) of the IRA to order joinder of the party to the proceedings: “29. Power of the Court The Court may, in any proceedings before it -

order that any party to be joined, substituted or struck off' 245 Section 29(a) IRA expressly empowers the Industrial Court to order any party to be joined in any of the proceedings before it.

8.1 Case laws indicate that it is incumbent for a party invoking the 250 Industrial Court's power under Section 29(a) of the IRA to substitute/ join parties to prove the following elements: -

There is a reasonable factual or legal nexus between the parties named and the parties to be joined (Appellant/

(ii) The substitution is necessary to make the Industrial Court proceedings effective and enforceable, or the non-joinder of the parties to the proceedings will render the proceedings in the Industrial Court ineffective and unenforceable. 260 S/N SkzKon9Qg0quME1iBM8q0g See: Harris Solid State (M) Sdn Bhd & Ors v. Bruno Gentil Pereira & Ors [1996] 1 MLRA 665; [1996] 3 MLJ 489; [1996] 4 CLJ 747; Asnah Ahmad v. Mahkamah Perusahaan Malaysia & Ors [2015] 3 MLRA 521; [2015] 4 MLJ 613; [2015] 3 CLJ 1053; [2015] 3 AMR 197 265

8.2 In Asnah Ahmad v Mahkamah Perusahaan Malaysia & Ors [2015] 4 MLJ 613, the brief facts are as follows:

The appellant was constructively dismissed by Sime, her employer, and the Industrial Court awarded her RM405,500.00 270 in compensation.

After Sime was wound up, EON Capital Bhd acquired Sime's shares and took control of the company.

EON filed for a judicial review of the award, which was dismissed by both the High Court and the Court of Appeal.

The appellant sought to join additional parties to her non-compliance proceedings in the Industrial Court, claiming they were connected to EON and involved in the judicial review.

The Industrial Court refused the joinder, and the High Court upheld this decision, stating the additional parties were not her 280 employers and there was no basis to lift the corporate veil.

The appellant argued on appeal that the merger led to an assumption of liability between the parties. They should explain their involvement in the judicial review and potential liability for the dismissal. The Court of Appeal held the following principles 285 (briefly):

The IRA 1967 is a social legislation.

Third parties could be liable to pay an award, notwithstanding that they were not the employers.

They can’t resist joinder or deny liability on the ground:

There was no privity or of being a separate legal entity.

(ii) When there was sufficient nexus between the party to be joined and the party named in the reference.

The threshold test at the joinder stage was low, whether the employee could demonstrate by prima facie evidence that the 295 party requested to be joined directly, indirectly, or otherwise had assumed liability or could be made partly or wholly liable for payment of the award.

The liability issue could only be dealt with after the joinder was done and the merits were heard.

So long as the employee’s complaint was not frivolous, vexatious, or an abuse of process by the court, joinder should be permitted if nexus was shown. FINDINGS 305 [9] Having perused the Interim IC Award of the learned Chairman, a legal determination was made that the claimant/respondent has presented prima facie evidence that there is a factual and legal nexus justifying the application. 310 [10] By and large:

10.1 Upon perusal of the Interim IC Award, I find that the IC had not made any appealable error in law and, in fact, in arriving at its decision that the appellants should be joined as parties to the proceeding before the IC. I am satisfied that the respondent fulfilled the two limbs test 315 for this specific purpose for the parties to go back to the IC now to canvass and ventilate the merits of their respective legal positions for a final determination by the IC of the respondent’s claim founded on constructive dismissal. 320 10.2 I agree with the learned IC Chairman and find no reason to interfere in his decision in allowing the respondent’s application.

The legal position:

He has correctly referred to section 29(a) IRA 1967, which expressly empowers the Industrial Court to order any party to 325 be joined in any of the proceedings before it.

There is no limit to the number of persons who can join as Joinees.

I find at pages 20-25, the learned IC Chairman had duly considered at length the law on joinder as held by the Court of 330 Appeal in the case of Asnah Ahmad v. Mahkamah Perusahaan Malaysia & Ors, and for ease of reference, is simplified as follows:

Third party, though not the employer, can be made liable.

(ii) They cannot resist the joinder on a no-privity-of-contract 335 basis or separate legal entity issues once legal nexus is established.

(iii) The IC is empowered to add parties.

(iv) The test to be applied: “reasonable factual or legal nexus”.

The threshold test to be used at the joinder stage is: 340 “whether the Claimant can demonstrate by way of prima facie evidence that the party who are requested to be joined have directly and/or indirectly and/or otherwise assumed liability or can be made liable partly or wholly for the payment of the award or for that matter p purported award in cases where an award has not been 345 delivered.”

(vi) The threshold at this juncture is low.

(vii) The joinder will be allowed if the claim is not frivolous, vexatious and/or an abuse of process.

(viii) The third parties' liability can only be dealt with by the 350 court after the joinder and hearing the case on its merits.

The factual and/or legal nexus of the proposed Joinees:

The learned IC Chairman considered at length the law on joinder, which clearly explained the nexus test as to whether 355 there exists a relationship between a party and the proposed S/N SkzKon9Qg0quME1iBM8q0g Joinees and whether the award is at risk of being ineffective or unenforceable if there was no joinder.

The respondent's affidavit highlights that:

The Joinees are members of the Board of Directors of SHB, which owns the wound-up SEGSB. It is accepted that the board controlled the company.

(ii) Joinee B, as Chief Operating Officer, executed the respondent's transfer letter.

(iii) Being a director of SEGSB from July 2020 until August 2022, a factual and legal connection exists between the management of SHB and SEGSB.

(iv) Therefore, it was appropriately determined that SHB's directors should be joined in this case.

It was further determined that SHB must explain why it should not be accountable for the liability of SEGSB (in liquidation) should there be any award in favour of the respondent. 375

Privity of contract, separate legal entity and corporate veil:

The Joinees cannot avoid liability, or the joinder based on a lack of privity of contract or SEGSB (in liquidation) being a separate entity, provided there is a sufficient factual or legal connection between Joinees and SEGSB.

The 'veil of incorporation' does not apply in party joinder applications. It was concluded that the court must ensure equity, good conscience, and the merits of the case as per s. 30(5) of IRA1967. 385

If Joinder is disallowed, would an Award be ineffective?

The employer or entity declared bankrupt or wound up cannot legally perform transactions, including complying with the IC award.

SEGSB (in liquidation) was wound up by the Kuala Lumpur High Court on 25.05.2023.

Without piercing the corporate veil, the proposed Joinees have not shown how an Award could be effective or enforceable unless this application is granted.

Guided by the Court of Appeal in Asnah Ahmad’s case, the legal technical doctrine of corporate veil and separate legal entities is unavailable. It is of no assistance to the proposed Joinees in this application:

The company's liquidity status is found to be an 400 exceptional circumstance for this court to unveil SHB's corporate identity.

(ii) This court concludes that even though the two entities are separate in form, the circumstances are such that the law regards them in substance to be a single 405 personality to attach the liability of one to the other.

The merits of the respondent’s claim have yet to be canvassed and ventilated at the IC. The parties will have the opportunity to contest the respondent's claims during the substantive 410 hearing of the case.

The learned IC Chairman correctly determined that SHB and its directors must be held collectively and jointly responsible to ensure compliance with any award the IC may grant after determining the issue of liability, if any. 415 S/N SkzKon9Qg0quME1iBM8q0g CONCLUSION [11] In light of the foregoing and on the balance of probabilities, I found no merits in this appeal and dismissed it with costs of RM5,000.00 (subject to allocator), payable within 30 days from the date of this order. I agree that the judgment of the learned IC Chairman ought 420 to be read in full and I find he has not misdirected himself in assessing the evidence before him. The stay order is also set aside. The matter is reverted to the IC for full hearing. 425 Dated 13.05.2025. HAYATUL AKMAL ABDUL AZIZ 430 JUDGE HIGH COURT OF MALAYA WILAYAH PERSEKUTUAN KUALA LUMPUR 435 Parties: 440 Ashok Kandiah Messrs Harris Ibrahim Kandiah Partnership Counsel for the Appellants 445 Edwin Rajasooria, together with Chandrasegaran Rajandran Messrs Chambers of Edwin Rajasooria Counsels for the Respondent S/N SkzKon9Qg0quME1iBM8q0g