Arinaa Kambyan Berhad v Viknaswaran A/L M.Suppiah (BA-16-59-12/2023)

This is an appeal against the decision of the Director General of Manpower (DGM) dated 8.12.2023 allowing the Appellant his salary from March 2022 till June 2023 and 6

After careful consideration of the records of appeal and the submissions, this Court decided to dismiss this appeal. The following are the reasons for that decision. Proceedings before the ADM

The Respondent was appointed under a contract as Head of Trading at the Academy with effect from 1.2.2021. He alleged that he was not paid his salary and resigned giving 2 months notice. The Appellant released him paying the 2 notice.

The Respondent filed a claim seeking arrears salary and payment of 6 months of base fee in lieu of notice in the sum of RM247,400.00. He contended that he was an employee of the Respondent.

The Appellant raise a preliminary objection to the hearing and maintained that the Respondent was a contractor and not an employee. Therefore, the DGM had no jurisdiction to hear the claim.

The Appellant did not participate in the hearing thereafter.

The DGM was mindful that to answer the question of whether the Respondent was an employee, she would first have to determine where the employment between the parties was a contract of service or contract for service.

The former created an employer-employee relationship and any dispute regarding the payment of salary can be referred to the Department of Manpower under section 69 Employment Act 1955 (Act 265). The latter merely created a contractual relationship that did not come under the purview of the Department or Act.

She was mindful that the control test was not the sole factor to be considered in deciding whether the Respondent was an employee. She concluded that the Respondent was an employee after considering

the intention of parties;

(ii) the element of control of the manner and method in which the Respondent carried out his responsibilities;

(iii) that the Respondent was an integral part of the

(iv) the payment of salary and other benefits. Principles of law

Section 77 Employment Act 1955 (Act 265) provides that the procedure for an appeal to the High Court is the same procedure as an appeal from the Sessions Court.

The general principles of law in respect of the appellate jurisdiction of the High Court hearing appeals from the Subordinate Court is as pronounced in China Airlines Ltd v. Maltran Air Corp Sdn Bhd (formerly known as Maltran Air Services Corp Sdn Bhd and another appeal [1996] 2 MLJ 517 at 527 and UMW Motor Sdn Bhd & Anor v. Allan Chong Teck Hin [2021] 3 MLJ 107 at 117. Analysis and findings

The sole question to be decided in this appeal was whether there was a relationship of employer-employee between the Appellant and Respondent. If the answer is in the affirmative, of Manpower under section 69 Act 265.

A contract of service and a contract for service are two distinct types of work agreement that define the relationship between parties in an employment or work arrangement.

The former refers to an agreement between the employer and the employee, whereby the employee agrees to work under the control, supervision and direction of the employer for a salary. This type of contract establishes a employer-employee relationship, and carries with it certain statutory obligation on the part of the employer to make social security contributions and provide for leave. The employee enjoys protection against unfair dismissal.

The latter is an agreement between a client and an independent contractor or service provider. The contractor undertakes to perform a specific task or deliver a particular result and is in control over how the work is carried out. There is no employer-employee relationship and the contractor is responsible for his own taxes, insurance and other business expenses. (Employees Provident Fund Board v. Bata Shoe Company (Malaya) Ltd v. [1968] 1 MLJ 236, Honeywill & Stein Ltd v Larkin Bros Ltd [1934] 1 KB 191 at 169, England Vol 25 (3rd Edn) at 498 & Bank Voor Handel en Scheepvaart NV v Slatford [1953] 1 QB 248; [1952] 2 All ER 956).

The Court took note that under the terms of the contract wherein the Appellant who was an associate partner of the Respondent, was appointed head of training on 1.1.2022.

He was entrusted to direct and coordinate the internal structure of URA based on Group policies, goals and objectives as set out in their business plan and in compliance with requirements of the Civil Aviation Authority of Malaysia. He was to liaise with strategic goals.

During the tenure of the 5-year contract, the Respondent was to be paid a base fee of RM250.00 per block of 8 hours and his time sheets were to be tallied at the end of the month. Later he was paid a fixed monthly retainer of RM12,600.00. The Appellant would be paid a performance fee based on the project completion target.

The working hours were not fixed and he could take annual leave at his prerogative. The Respondent was not obliged to contribute to the Employees Provident Fund.

This Court is of the opinion that the Appellant email dated 16.11.2022 directing the Respondent and other employees to use a particular programme to update work record on a daily basis is a type of control mechanism used by employer over employees to monitor and verify work done for their performance-based reward system.

The Respondent prescribed that the Appellant should act in accordance with their policies and in compliance with the requirements of the law and meet the targets of the projects he was working on. He was part and parcel of the Respondent as he was also required to monitor the work of other employees.

For these reasons, this Court finds that the DGM was correct For the Appellant V. Amereson Messrs Amereson & Meera For the Respondent Respondent in person