Sinmah Axis Healthcare Sdn Bhd v 1. ) Menteri Sumber Manusia (WA-25-105-04/2021)

MOHD ISMAIL BIN ABDUL HAMID (NO. K/P: 580703-10-6375) RESPONDEN-RESPONDEN JUDGMENT [1] The 3rd respondent, Mohd Ismail bin Abdul Hamid, claimed that he was appointed as the applicant company's Chief Executive Officer (“CEO”). The applicant company was known as Sinmah Amegajaya Healthcare Sdn Bhd at the material time. [2] By a letter dated 30.4.2020, the applicant terminated the 3rd respondent’s employment as the CEO. The letter inter alia states as follows: This is to notify you that the Board of Directors of the Company abovementioned, i.e. SINMAH AMEGAJAYA HEALTHCARE SDN BHD have since resolved that your position as the Chief Executive Officer of the Company is hereby terminated as at the date of this letter with immediate effect. [3] Aggrieved, the 3rd respondent made a representation to the Director General of Industrial Relations (“DGIR”) under s 20(1) of the Industrial Relations Act 1967 (“IRA”). Upon receipt of the representation, the DGIR had taken steps to explore a possible settlement between the parties. [4] Unfortunately, there was no settlement reached. [5] The DGIR then referred the matter to the Minister of Human Resources (“the Minister”) under s 20(3) of the IRA. On 27.1.2021, the Minister, the 1st respondent, in exercising his discretion, referred the 3rd respondent’s representations to the Industrial Court for an award (“the impugned decision”). [6] Dissatisfied, the applicant commenced an application for judicial review for an order of certiorari to quash the impugned decision. The Judicial Review [7] This application for judicial review is supported by the affidavit (“AIS”) of Kalai Chelvan a/l Muniandy (“Kalai”). Encik Kalai is the director of the applicant company in charge of the human resources division. [8] The grounds of the application for judicial review can be summarised as follows. According to the applicant, the Minister, in arriving at the impugned decision, had failed to consider that:

The 3rd respondent was, at the material time, over the retirement age.

The 3rd respondent was never in the employment of the applicant.

The relation between the applicant and the 3rd respondent, if at all, is limited to a business relationship and not that of between an employer and employee. [9] Learned counsel for the applicant highlighted that at the time of the purported termination, the 3rd respondent was 62 years old. Since the 3rd respondent is above retirement age, a possible reinstatement is no longer an issue. In short, there is no longer any room for reinstatement. Therefore, the Industrial Court ceases to have jurisdiction to hear the matter; Unilever (M) Holdings Sdn Bhd v So Lai @ Soo Boon Lai & Anor [2015] 4 MLJ 326 FC. [10] Learned counsel for the applicant further contended that there was no employer-employee relationship between the applicant and the 3rd respondent. Since there was no contract of employment to prove that the 3rd respondent was employed by the applicant, learned counsel submitted that, even if the matter is referred to the Industrial Court, it is impossible for the Industrial Court to determine the quantum of compensation. This is so, according to learned counsel, since the Industrial Court cannot determine the quantum of compensation in the absence of the contract of employment between the parties. [11] In any event, in a letter dated 15.7.2020, the applicant indicated to the Director of Industrial Department, Selangor, that the applicant made no SOCSO contributions for the benefit of the 3rd respondent: Salinan penyata caruman PERKESO bagi bulan 08/2017, 09/2017, 08/2018, 09/2018, 08/2019, 09/2019, 04/2020, 05/2020 yang jelas menunjukkan tiada sebarang caruman dilakukan oleh syarikat bermaksud beliau bukan pekerja Syarikat Sinmah Amegaya Healthcare Sdn Bhd. [12] It is also the contention of learned counsel for the applicant that there was no direct relationship between the 3rd respondent and the applicant. If at all, the relationship was between one Amegaya Medical Planner Sdn Bhd (“Amegaya”). The 3rd respondent is one of the directors of Amegaya. It is the applicant’s case that the applicant had entered into an oral agreement whereby Amegaya would provide consultancy services in relation to setting up and managing hospitals for the applicant. I hasten to add at this stage, as to how could a limited company make an oral agreement with another limited company? [13] In exchange for the services rendered to the applicant, the applicant company would pay certain fees to either the 3rd respondent or Amegaya. [14] In the circumstances, whatever payment made to the 3rd respondent was pursuant to this business arrangement between the applicant company and Amegaya. [15] Subsequently, there was a dispute between the applicant and Amegaya. The dispute is now a subject matter of a legal proceeding at the Shah Alam High Court, which case is still pending. The 3rd respondent was also named as one of the defendants in the said suit in Shah Alam. [16] For the aforesaid reasons, learned counsel submitted that the impugned decision made by the Minister is tainted with irrationality and procedure impropriety which is therefore amenable to judicial review. The Minister’s response [17] In response to the AIS, the Minister filed an affidavit in reply in Encl 16 (“AIR-16”). [18] In explaining the grounds of his decision to refer the dispute to the Industrial Court, the Minister inter alia affirmed as follows:

He took cognisance of the assertion made by the applicant that the 3rd respondent was never in the employment of the applicant company.

However, the Minister averred that the status of the relationship between the applicant company and the 3rd respondent is unclear. The Minister then referred to the letter of dismissal dated 30.4.2020. According to the Minister, the letter raises a question of law and fact which is only suitable to be determined by the Industrial Court.

As to whether the 3rd respondent has reached the retirement age, which purportedly disqualifies him from making a claim at the Industrial Court, the Minister was of the view that this is not the only criteria he used in exercising his discretion. The status of the 3rd respondent’s employment and the possible remedies in the event of any breach of contract, if any, can only be resolved by the Industrial Court. The Analysis [19] Lest we miss the forest for the trees, the issue in this judicial review is whether the Minister’s decision to refer the dispute to the Industrial Court is tainted with illegality, irrationality and procedural impropriety. [20] The law, I believe, is that the exercise of discretion under s 20(3) of the IRA may be quashed if the Minister commits an Anisminic error or if his decision is tainted with Wednesbury unreasonableness. The Court of Appeal in Hong Leong Equipment Sdn Bhd v Liew Fook Chuan & Anor Appeal [1996] 1 MLJ 481 CA, held that in exercising his discretion, the Minister ought to ask himself two questions:

Whether the way in which he proposes to exercise his discretion will have the effect of preventing or settling the particular dispute - for that is what the IRA is primarily aimed at.

Whether, objectively speaking, the representations made under s 20(1) are frivolous or vexatious. If they are, then he may well be justified in refusing a reference. [21] Applying the law to the facts of the case, on the first question, it is quite apparent that there were attempts to resolve the dispute amicably. Two meetings were held on 10.7.2020 and 28.7.2020, but as I indicated earlier, no settlement was reached. [22] In para 8 of his AIR-16, the Minister affirmed as follows: Oleh itu, setelah menjalankan kuasa mengikut budi bicara yang diberikan di bawah seksyen 20(3) Akta 177, saya pada 27.1.2021 telah berpuashati bahawa representasi pembuangan kerja Responden Ketiga wajar dirujuk kepada Responden Kedua. It is therefore clear that since the parties reached no settlement, the only way to settle the dispute is by referring it to the Industrial Court. [23] Learned counsel for the applicant highlighted the issues of the age of the 3rd respondent and the nature of the relationship between the parties. According to learned counsel, since there was no contract of employment, there should not be any reference made under s 20(3). With respect, these are factual and legal issues that ought not to be determined by the Minister. [24] In his AIR-16, the Minister has explained in detail the issues raised in the dispute during the negotiations arranged by the Director General. He has directed his mind to the factual matrix available before him; Exxon Chemical (Malaysia) Sdn Bhd v Menteri Sumber Manusia, Malaysia & Ors [2007] 2 CLJ 97 FC. [25] In fact, the Minister was under a duty to refer the matter to the Industrial Court for resolution. In delivering the judgment of the Court of Appeal in Subramaniam a/l Letchimanan v The United States of America & Anor Appeal [2021] 5 MLJ 612 CA, Lee Swee Seng JCA remarked as follows: We agree with the learned SFC that provided that the representation relates to the allegation of dismissal without just cause or excuse and that the serious issue of fact and law has relevance to the dispute, the Minister is under a duty to refer the matter to the Industrial Court for resolution. [26] Now, the issue of whether there was a contract of employment or otherwise, the nature of the relationship between the applicant company and the 3rd respondent, whether the arrangement was purely business between the applicant company and Amegajaya or whether the 3rd respondent is eligible to claim despite his age can only be resolved by the Industrial Court. [27] In Subramaniam, the appellant workman, a Malaysian, had been working as a security guard for the United States of America (USA) Embassy in Kuala Lumpur. Ten years later, the workman was terminated without being informed of the reasons. [28] Unbeknown to the workman, the USA Embassy had, on 22.3.2019, sent a representation to the Director General arguing that sovereign immunity applied and that the matter should not be referred at all to the Industrial Court. The Minister was subsequently informed by the DGIR that there was no resolution of the dispute between the workman and the embassy. After considering the representations of the parties, the minister decided to refer the matter to the Industrial Court. Aggrieved, the USA made an application for judicial review to the High Court, arguing that state immunity applied and that the Minister was wrong in law to have referred the dispute to the Industrial Court. The High Court held, inter alia, that the doctrine of sovereign immunity was applicable. [29] On appeal, the Court of Appeal held that the Industrial Court should not be sidestepped from deciding on the assertion of State immunity based on a judicial review application. The question concerning the nature of his role as a security guard could only be determined at the fact-finding stage at the Industrial Court. [30] The Court of Appeal further held that: Whatever it is, the evidence could only be more properly adduced at the Industrial Court where the matter would be heard and parties may cross-examine each other on the exact nature of the workman’s employment and the act of dismissal. [31] In any event, the issue of whether the 3rd respondent is of retirement age or otherwise can be taken up as a preliminary issue before the Industrial Court. [32] As to the second question, I do not respectfully think that the representation made by the 3rd respondent under s 20(1) of the IRA is frivolous or vexatious. In the letter of dismissal dated 30.4.2020, the applicant recognised that the 3rd respondent was employed as the CEO of the applicant company. If the 3rd respondent was never in the employment of the applicant company in the first place, as learned counsel urged me to conclude, then why is the necessity to terminate his employment? I am not in any way trying to pre-empt the issue, but these are questions that the Industrial Court is designed to resolve. [33] The representation made under s 20(1) of the IRA is not frivolous or vexatious and I so hold. Finding [34] The Minister had addressed the two questions required in Hong Leong Equipment in arriving at his decision. [35] For the aforesaid reasons, the impugned decision is not tainted with Anisminic error or Wednesbury unreasonable to make it amenable to judicial review. [36] This application for judicial review is dismissed with costs of RM3,000 each to the 1st and 3rd respondents subject to allocatur. There shall be no order as to costs against the Industrial Court. Tarikh: 5th September 2022. (WAN AHMAD FARID BIN WAN SALLEH) Hakim Mahkamah Tinggi Kuala Lumpur.