Knm Exotic Equipment Sdn Bhd v Foo Ooi Beng (BA-16-43-09/2024)

This is the Appellant’s appeal against part of the Director General of Manpower (DGM)’s decision dated 21.8.2024 allowing the Respondent’s claim for salary in lieu of notice in the sum of RM5,953.16.

After careful consideration of the cause papers and the submission of parties, this Court dismissed the appeal. The following are the grounds for that decision. Background facts

The Appellant appointed the Respondent as an IT Business Analyst with a basic monthly salary of RM5,800.00 on 24.5.2016. His last drawn salary was RM5,984.00. The letter of appointment contained the following provision for termination – “… the notice period for termination of employment will be two

months by either party or two (2) months salary in lieu of such notice subject to approval and agreement by the Management for the early release of the employee. …”

The Appellant faced financial problems and had to undergo restructuring exercise which involved terminating their workforce.

On 29.4.2024, the Respondent was terminated and paid RM14,350.00 which included arrears salaries for April and May 2024, a-month’s salary in lieu of notice and a portion of the outstanding staff claim leaving a balance of RM1,853.00. The Respondent signed a document agreeing that one-months salary was the full and final payment due to him.

The Respondent then instituted a claim before the DGM to claim termination benefits under section 69 Employment Act 2955 (Act 265) and it was allowed.

Briefly, the Appellant contended that the DGM erred in fact and law in allowing the Respondent’s claim because –

the Respondent was not a person engaged in manual labour;

(ii) he failed to consider that the Respondent signed a document agreeing to the termination and the last payment by the Appellant; and

(iii) the Respondent was not entitled to lay off benefits because he was an employee as opposed to a daily paid worker and the Appellant’s business closed down. Principles of law

Section 77 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, UMW Motor Sdn Bhd & Anor v. Allan Chong Teck

The Respondent is clearly an employee as defined in Act 265 as he is a person who has entered a contract of service with the Appellant. Therefore he is entitled to the protection under the legislation.

A perusal of the letter of termination dated 29.4.2024 shows –

the Appellant was not closing business. They were trying to “restructure the workforce and streamline the operations to ensure the financial stability of the company in the long run.”; and

(ii) the Respondent did not accept their payment as final payment because he made a note that termination benefits of two months were not paid. The Respondent had not waiver his right to make other statutory claims against the Appellant.