Chang Chuen Hwa v South Island Plastics Sdn Bhd (PA-16A-2-01/2025)

This is an appeal by the Appellant/Claimant against part of the Industrial Court’s decision, whereby the Claimant was denied compensation in lieu of reinstatement on the ground that he had reached the retirement age of 60.

For the purposes of this judgment, the parties shall be referred to as “the Claimant” and “the Company” respectively. B.

The Claimant was appointed as a director of the Company in 1983 and, in 2000, was further appointed by the Board of Directors as the Managing Director. He held this position until 2021. On 10.5.2021, by way of a Company Resolution, the Claimant was removed as a director of the Board, and consequently, by a Notice of Removal of Director and Cessation as Managing Director of the same date, he ceased to hold the office of Managing Director.

Dissatisfied with his removal as a Director and the cessation of his position as Managing Director, the Claimant lodged a representation with the Industrial Relations Department. The matter was subsequently referred to the Industrial Court for adjudication. After a full trial, the Industrial Court handed down its Award, holding inter alia that the Claimant’s dismissal was without just cause or excuse and awarding him back wages in the sum of RM552,000.00. However, the Court declined to award compensation in lieu of reinstatement on the ground that the Claimant had, by the time of the Award, surpassed the retirement age of 60 years. Dissatisfied with this part of the decision, the Claimant now appeals to this Court. C.

The Claimant submits that the learned Chairman erred in holding that he was not entitled to compensation in lieu of reinstatement on the ground that he had surpassed the mandatory retirement age of 60 at the date of the Award, and in further concluding that no such compensation is awardable in the Claimant’s circumstances. It is contended that the learned Chairman failed to give due consideration to the fact that the Claimant had been in continuous employment with the Respondent for a period of 37 years, including beyond the attainment of the age of 60.

Further, the Claimant contends that the learned Chairman ought to have taken into account the evidence showing that certain staff and/or employees remained in employment with the Company and/or its subsidiaries or holding company even after attaining the retirement age. The Claimant submits that where reinstatement is not ordered, compensation in lieu of reinstatement should nonetheless be awarded.

The Claimant further submits that the provisions of the Minimum Retirement Age Act 2012 are inapplicable, as there was no agreement between the Claimant and the Company stipulating a retirement age. In any event, the said provisions were deemed waived by the Company when it continued to employ the Claimant after he had attained the minimum retirement age. In the circumstances, the applicable retirement age is that provided under the Companies Act, namely 70 years. Accordingly, the Claimant seeks compensation in lieu of reinstatement in the sum of RM2,241,120.00, calculated as RM23,000.00 plus RM2,760.00 (EPF) per month for a period of 87 months.

Thus, the Claimant submits this Honourable is not confined merely to quashing the Award of the Industrial Court, but also has the jurisdiction and duty, where appropriate, to grant fair and adequate compensation in lieu of reinstatement.

It is an undisputed fact that the Claimant could not have been reinstated at the time the Award was handed down, as he had already surpassed the retirement age of 60 years fixed by the Company. The Claimant was privy to this retirement policy, being the very person who had issued letters to other employees confirming that the Company’s retirement age was set at 60. In light of the Company’s group retirement policy stipulating retirement at 60, the Claimant, who was already 68 years of age when the Industrial Court delivered its Award, was evidently not capable of being reinstated.

As the Industrial Court has found that the Claimant is a “workman” of the Company, he is necessarily bound by the labour legislation of Malaysia, in particular the Minimum Retirement Age Act “Notwithstanding any other written law, the minimum retirement age of an employee shall be upon the employee attaining the age of sixty years.”

Accordingly, the Claimant was required to retire at the age of sixty (60), irrespective of whether his contract of employment expressly provided for a retirement age. It is further undisputed that the Claimant did not have a written contract of employment. In the circumstances, the Claimant is clearly not entitled to compensation in lieu of reinstatement, and the Industrial Court was correct in so holding.

The Company further submits that the present appeal is devoid of merit, as the Industrial Court had acted in accordance with established industrial jurisprudence in determining whether compensation in lieu of reinstatement should be awarded. The Company contends that the Industrial Court did not commit any error of law or fact amounting to a plainly wrong decision that would warrant appellate intervention in the circumstances of this case. E.

In arriving at my decision, I am guided by the well-established principle that an appellate court will only intervene where it is shown that the trial court’s decision was plainly wrong. In the case of S QUARRY SAN BHD V DESARY DEVELOPMENT CORPORATION SDN BHD [2019] 1 LNS 93, the Court of Appeal has stated as follows: “[13] Accordingly, it falls upon this Court to determine whether or not the trial court had arrived at its decision or finding correctly on the basis of the relevant law and/or the established evidence. In so doing. this Court was perfectly entitled to examine the process of evaluation of the evidence by the trial court. The requirement for the trial judge to have made a decision which was plainly wrong' before an appellate court may intervene is well settled in our appellate jurisprudence and practice. [14] A plainly wrong decision happens when it can be shown that there is insufficient judicial appreciation of evidence by the trial court. The requisite or correct standard to be applied is that no reasonable judge, on the evidence on record, could have reached the conclusion of the trial judge. The adverb 'plainly' does not refer to the degree of confidence felt by the appellate court that it would have reached the same conclusion as the trial judge. It does not matter, with whatever degree of certainty that the appellate court considered that it would have reached a different conclusion. What matters is whether the decision under appeal is one that no reasonable judge could have reached”.

The central issue for determination before me is whether the Claimant qualifies as a “workman” of the Company within the meaning of section 2 of the Industrial Relations Act 1967, as this status is pivotal in deciding whether he is entitled to reinstatement or compensation in lieu thereof, and if so, whether such entitlement extends until the age of 70.

The Federal Court in Hoh Kiang Ngan V. Mahkamah Perusahaan Malaysia & Anor [1996] 4 CLJ 687 held that [3] The definition of "workman" applies to all contracts of service but not to independent contractors who are engaged under contracts for services. 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 but may not be the sole criterion. It is a question of fact. The capacity in which one is employed or the purpose of the employment does not answer the question of the definition of a "workman". It is the function of and the duty actually discharged by the particular claimant that is important and not merely the label that is attached to the particular employment or indeed the purpose of the engagement.

Section 2 of the Industrial Relations Act 1967 (Revised 1976) Act 177 defines "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.

It is trite law that the determination of whether a person is a “workman” does not rest merely on his designation or title, but rather on the true nature and substance of the functions and duties he performs. In the present case, although the Claimant held the position of Managing Director, the evidence demonstrates that he was engaged under a contract of service with the Company and was ultimately subject to the authority and direction of the Board of Directors. Indeed, from the Claimant’s own submissions, he acknowledged that he was an employee of the Company for the following reasons: [a] He was required to report to and obtain approval from Tan Poay Seng, the Director, and the Board of Directors when making decisions regarding the Company; [b] His salary and bonuses were paid by the Company and approved by Tan Poay Seng; [c] He was issued with a “Letter of Service on Contract Basis” to be signed as an employee of the Company; and [d] He was not vested with ultimate authority to make decisions for the Company, as Tan Poay Seng, holding a greater shareholding in the Company, retained decisive control.

Having carefully considered the grounds of the Award, I find that the learned Chairman did not err in concluding that the Claimant falls within the definition of a “workman” under section 2 of the Industrial Relations Act 1967 Accordingly, the Claimant properly falls within the statutory definition of a “workman” under section 2 of the Industrial Relations Act 1967.

It is an agreed fact that the Claimant had already passed the age of 60 at the time the Award was delivered. As a workman, the Claimant is bound by the labour laws of Malaysia, in particular the Minimum Retirement Age Act 2012, which mandates retirement at the age of sixty (60). The Claimant has also failed to adduce any credible evidence to show that the Company had adopted or agreed upon a different contractual retirement age. In the absence of such evidence, the provisions of the Minimum Retirement Age Act 2012 must necessarily apply to him. In Lee Kok Kan v Foodteller Sdn Bhd & Anor [2020] MLJU 211 where the court held the following: - [34] The Court refers to s4(1) Minimum Retirement Age Act 2012 which states: 4(1) Notwithstanding any other written law, the minimum retirement age an employee shall be upon the employee attaining the age of sixty years. There was no single evidence from the 1st respondent with regards to the retirement age in the company. Since there is no retirement age in the company or set by the company, the Applicant's counsel submits that the Applicant has not attained any retirement age yet. Counsel for the Applicant also submitted that an employer can always set its retirement ago above 60 years old. The issue is whether the company has set any retirement age for the employee? [35] There was no retirement age in the 1st respondent. In the absence of any retirement age in the 1st respondent, then what is the retirement age applicable to the 1st respondent? One could not presume any numbers of retirement age applicable in the company or allowed any employee to work until death unless the Applicant can prove otherwise which is none in this case. In such circumstances, the Minimum Retirement Ago Act 2012 applies. The Act clearly provides that all employees will retire upon attaining the age of 60 years regardless whether a company has a retirement policy. The 2nd respondent did not err in law and in fact in finding that the minimum retirement age of 60 years old applies to the Applicant.

In Manokaran S Mahalingam v. Hiap Hoe Cranes & Engineering (M) Sdn Bhd [2023] 1 ILR 329, the Court states the following: - "[38] The claimant argued that since the company had continued to employ him despite him surpassing the age of 60 years, his dismissal was made without just cause and excuse. The respondent on the other hand maintained that the company holds the discretion to dismiss the claimant by virtue of s. 4(1) of the Minimum Retirement Age Act 2012. [39] Having considered the arguments presented herein, the court is of the view that the claimant's contention that he could remain in employment for as long as he intends is completely flawed. It was unreasonable for the claimant to assume that he is entitled to be employed in the company for life. [40] Drawing attention to s. 4(1) of the said Act, the court is of the opinion that even though the Act only regulates the minimum age of retirement and does not provide for a maximum age of the same, its application cannot be construed to mean that the retirement age can be extended beyond 60 years of age. It was not a sensible proposition to assume that an employee is entitled to be employed for life.

I am of the view that the Claimant’s submission—that the Minimum Retirement Age Act 2012 was deemed waived by the Company when he was employed after reaching the minimum retirement age—is unfounded and without basis. Statutory provisions on retirement age are mandatory in nature and cannot be waived by the conduct of either party. The statutory rights and obligations under employment law are matters of public policy and cannot be displaced by private agreement or assumption. It would therefore be wholly unreasonable for the Claimant to contend that he could remain in employment for as long as he personally wished. Accordingly, the Claimant had no reasonable basis for asserting that he had a legitimate expectation to retire at the age of 70.

It is hereby ordered that the Claimant’s appeal be and is hereby dismissed. Costs of RM5,000.00 are awarded to the Company, payable by the Claimant. The decision of the Industrial Court is affirmed. Bertarikh 17 September 2025 SGD (Rozana binti Ali Yusoff) Hakim Mahkamah Tinggi Pulau Pinang Kompleks Mahkamah Pulau Pinang Pulau Pinang Peguam bagi pihak Perayu : V. Amareson Tetuan V. Amareson Peguam bagi pihak Responden: