Nor Azri Bin Omar v Mrcb Engineering Sdn Bhd (WA-12BNCvC-122-09/2022)

The Session Court dismissed the Appellant’s claim for RM145,278 being the contended gratuity the Respondent owed the Appellant and damages for breach of the contract of employment. The Appellant submitted that the Session Court had erred in finding the Appellant’s employment status from 1.9.2000 to 29.2.2004 was pursuant to a genuine fixed-term contract. 05/12/2023 10:36:36 WA-12BNCvC-122-09/2022 Kand. 28

The Appellant claimed that he was entitled to the gratuity payment having consecutively served ten years of employment with the Respondent under the latter’s employment and benefit plan. The Appellant submitted he was a permanent employee of the Respondent and that the Session Court had erred as it ought to have addressed the construction of the employment appointment letters as a question of law instead of relying on his evidence in cross-examination.

The undisputed facts of the case corroborated by the documentary evidence below tabulates the Appellant’s appointment as an employee with the Respondent: Date of Letter Employment Terms Employment Period 19.9.2000 Eighteen months contract as Resident Engineer 1.9.2000 to 28.2.2002 10.1.2002 Extend the contract as Resident Engineer for a further ten months 1.3.2002 to 31.12.2002 23.12.2002 Extend the contract as Resident Engineer for a further two months 1.1.2003 to 28.2.2002 1.3.2003 Appointed as Resident Engineer for a fixed term of twelve months 1.3.2003 to 29.2.2004 1.3.2004 Long term employment as Resident Engineer From 1.3.2004

During his employment with the Respondent, the Appellant had tendered his resignation thrice – on 5.10.2005 which he later withdrew 3 and the Respondent had accepted the withdrawal of resignation on 27.10.2005. The second time on 11.1.2008 which he had again withdrawn; that was accepted by the Respondent on 11.2.2008. The final time he gave his one-month notice of resignation was on 15.4.2014, the Respondent had accepted this so his last day of employment was 14.5.2014.

The Appellant’s demand for gratuity was based on the following term on gratuity issued by the Respondent on 1.4.2002, namely the following clause: Clause 7.1.(c)(iv): “A Gratuity based on the last drawn salary will be paid to an employee or his estate who resigns after completion of at least ten

years continuous service with the company.” Clause 7.1.(f): “The Gratuity shall be a lump sum payment equivalent to one month of the employee’s last drawn basic salary for every completed year of service or proportionally for any incomplete year.” [6] What must be considered for this appeal and to determine whether the Session Court was correct in finding that he was not a permanent employee entitled to such gratuity, was the Respondent’s circular of 4/2002 dated 16.8.2002 issued to all its employees. That circular was a notification of changes to the current terms and conditions of employment and benefit plan which was effective from 1.9.2002. For gratuity, it was plainly and clearly stated as follows: “The current benefit shall remain for employees who are currently employed as permanent employees. This benefit shall cease to be extended to all new employees effective 1st September 2002.” This Court’s finding [7] Thus, the status of the Appellant vis-à-vis his employment with the Respondent at each respective time was determinative as to his entitlement to the gratuity claimed. From the undisputed documentary evidence, as of 1.4.2002 the Appellant had already completed his eighteen-month contract as the Respondent’s Resident Engineer. He was on his first contract extension by virtue of the Respondent’s letter dated 10.1.2002 which had extended his contract as Resident Engineer for ten months. So, the Appellant’s contract of employment was from 1.3.2002 to 31.12.2002. As of the time the Respondent’s term for gratuity was effective on 1.4.2002, the Appellant had only served nineteen months of continuous employment with the Respondent. [8] When the Respondent’s circular became effective on 1.9.2002 that provided gratuity to only those who were permanent employees, it did not include the Appellant. He was still serving the Respondent as the Resident Engineer contracted for employment until 31.12.2002. [9] On 1.3.2004, the Appellant’s status of employment was no longer on contract basis. After thirty months of employment with the Respondent as Resident Engineer on contract basis, vide the Respondent’s letter of

1.3.2004 the Appellant was offered appointment on permanent basis. A clause on termination of the employment was stipulated in the contract giving parties notice of one month or payment of one-month salary in lieu of notice. With the Appellant’s acceptance, he became a permanent employee of the Respondent on 1.3.2004. [10] His resignation was accepted on 21.4.2014 and his last day under the employment of the Respondent was 14.5.2014. During that period of employment as a permanent employee, the Appellant was reassigned to Dubai. For the secondment there, Al-Fattan MRCB took over his employment. His station in Dubai was from 1.11.2006 to 21.4.2008 when he was reassigned back to Malaysia, the Respondent then took over his employment from Al-Fattan MRCB. [11] Before this Court even starts calculating the period served as a permanent employee, based on the circular the benefit of gratuity was only for permanent employees which at that particular material time the Appellant was not. The benefit of gratuity was also not extended to all new employees as of 1.9.2002 of which Appellant was only appointed as permanent employee on 1.3.2004, some two calendar years later. Therefore, the Appellant did not have any claim for gratuity based on the circular. [12] This Court noted that no evidence showed the Appellant’s previous service of thirty months on contract basis was converted/backdated as permanent employee or that the thirty months of the said previous service on contract basis was added or taken into account in any calculation of benefit entitlement when he was employed as a permanent employee of the Respondent. As of 1.3.2004 the Appellant’s appointment was a fresh tenure. [13] As a new permanent employee, the Appellant had to undertake pre-employment medical examination, assigned new staff number (M01265) that replaced his old staff number (ME0053) and completed a new staff appointment form. Both the Appellant and the Respondent were bound by the terms of their contracts they had executed – there was no acknowledgment or inclusion of the Appellant’s previous service to the Respondent when he had accepted and assumed as permanent employee on 1.3.2004 – refer to the Court of Appeal’s decision in Datuk Yap Pak Leong v Sababumi (Sandakan) Sdn Bhd [1997] 1 MLJ 587. [14] As with the Session Court, this Court will not re-write any contracts between the two parties and interpret and enforce the plain meaning of the Appellant’s contract of employment on a fixed term dated 1.3.2004 and also the Respondent’s circular of 16.8.2002 – refer to the Court of Appeal’s decision in Mulpha Pacific Sdn Bhd v Paramount Corporation Bhd [2003] 4 CLJ 294. [15] Furthermore, it was not the Appellant’s pleaded case that his past tenure on contract basis with the Respondent was incorporated into the contract of permanent employee in the letter dated 1.3.2004. The Appellant was bound by his pleadings – see RHB Bank Bhd (substituting Kwong Yik Bank Bhd) v Kwan Chew Holdings Sdn Bhd [2010] 2 MLJ 188. As per the established legal principle, the Appellant’s claim must be decided on the issues pleaded that bind the parties – Court of Appeal’s decision in Kuan Pek Seng @ Alan Kuan v Robert Doran & Ors and other appeals [2013] 2 MLJ 174. [16] This Court has considered the Appellant’s contentions including where he claimed that the letter of 1.3.2004 was a letter of variation of his employment terms. Such contention is unacceptable. The Respondent’s letter dated 1.3.2004 which was accepted by the Appellant was clearly and certainly a fresh offer of employment permanently as Resident Engineer – Job Grade 14. This was undisputed by the Appellant himself during his testimony at trial. As the fact that his past tenure was not incorporated or considered into his new contract of employment dated 1.3.2004. The Appellant did not demand for any gratuity at the time of his resignation. [17] The Respondent’s letter dated 5.5.2008 to the Immigration Department of Malaysia conclusively confirmed the fact that the Appellant was employed as a permanent employee since 1.3.2004. There is no evidence of the Appellant having had any dispute on this. [18] A scrutiny of the evidence in the Appeal Records shows that the Appellant had initiated its claim on the basis that his former colleague (PW1) who had resigned a year later, had received gratuity payment from the Respondent. Though PW1 concurred that the terms of their contracts may differ, there was nothing to show that PW1 was contractually entitled to such payment. In any event, the Appellant had not shown any term of his contract of employment that would entitle him to such payment, to succeed in his case before the court. Consideration of the Appellant’s arguments [19] The Appellant submitted that the Session Court was erroneous when it did not decide his employment status on a question of law. The Appellant when he submitted that he was a permanent employee from the very beginning invited this Court to the decision by the Federal Court in Ahmad Zahri bin Mirza Abdul Hamid v AIMS Cyberjaya Sdn Bhd [2020] 5 MLJ 58. However, that case concerned a judicial review of the Industrial Court’s award under the Industrial Relations Act 1967. The issue was whether the dismissal was without just cause or excuse. The factual matrix there was different as the employee had worked for a group of companies under one enterprise so there was an issue of piercing the corporate veil – all of which did not arise here. [20] The Appellant highlighted the fact that he was in continuous employment without any intermittent breakssince 2000. Based on the evidence in this case, the Appellant’s submission cannot be equated to the conversion of his contract into that of permanent employment. As with the Session Court, this Court refuses to impose an interpretation not within the ambit of the contract into it. [21] This Court finds that the Session Court had considered everything – from the documentary evidence to the oral testimony of witnesses. There are no errors in its grounds of judgment. The reasoned decision illustrated the consideration of the Appellant’s contentions and also the appreciation of the evidence adduced. [22] The Appellant had failed to show on a balance of probabilities that he was entitled to the gratuity claimed. On the other hand, what was very clear from the evidence adduced is that he was only employed on a permanent basis with the Respondent on 1.3.2004, of which he was not entitled to the gratuity benefit by virtue of the circular. The Appellant himself testified that his contract had expired on 29.2.2004. Thus, his submission that he was a permanent employee of the Respondent from 1.9.200 is devoid of merit. [23] There was also the argument of the payment of arrears raised by the Appellant. It was contended that the payment of RM708 would not have been paid to him if the Respondent did not recognise or carry forward his past tenure on contract into the contract of employment as a permanent employee. The Appellant however had failed to show the payment was for arrears from January 2004 to February 2004. The Appellant did not adduce any evidence to show that the Respondent would not have paid if it did not recognised or carry forward his past tenure on contract. The Appellant also had not adduced evidence that the said ‘arrears’ showed that there was a continuity of service of the Appellant’s employment. [24] Additionally, this Court considered the Appellant’s reference to Press Metal Sarawak Sdn Bhd v Etiqa Tafakul Bhd [2016] 5 MLJ 417 and Open Country Dairy Limited v Able Food Sdn Bhd [2021] 6 MLRA 244 but the evidence in this case shows no such incorporation of the benefit/gratuity into the Respondent’s letter of 1.3.2004 or any other subsequent letters. [25] There will be no appellate interference as the ‘plainly wrong test’ is not satisfied – Ng Hoo Kui & Anor v Wendy Tan Lee Peng, Administrator of the Estates of Tan Ewe Kwang, Deceased & Ors [2020] 10 CLJ 1 and Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441. This Court’s order [26] This appeal is dismissed. The Session Court’s decision is affirmed. Costs of RM8,000 is awarded to the Respondent. DATED 21 JUNE 2023 ROZ MAWAR ROZAIN JUDICIAL COMMISSIONER HIGH COURT IN MALAYA KUALA LUMPUR For the Appellant: Farrandy Iskandar bin Norshahid together with Amir Feisal Ariff T/n Farrandy & Co. For the Respondent: Rutheran Sivagnanam together with The Wen