Case:

Brief Facts:

• The Appellant, Gopala Krishnan Chettiar Krishnan (“Krishnan”) joined Sealand Marine Inspection and Testing (M) Sdn Bhd (“Company”) on 3.11.2016 as an Operations Director.
  
  
• Krishnan did not have a contract of employment with the Company, but was paid a sum of RM 20,000 monthly as director’s fee which was subjected to EPF and SOCSO deductions.
  
  
• Krishnan was also given 20% shares of the Company in which he did not pay for.
  
  
• On 12.3.2018, the Company alleged that Krishnan was responsible for the resignation of several employees of the Company.
  
  
• In light of the said allegation, Krishnan was given a pre-prepared resignation letter for him to sign but he refused to do so and walked away.
  
  
• Subsequently, the Company terminated/removed and barred Krishnan’s access to Company’s email, WhatsApp groups and premises.
  
  
• Aggrieved by the events that occurred he considered himself to have been dismissed without just cause or excuse, Krishnan brought a claim under constructive dismissal.

THE DECISION OF INDUSTRIAL COURT (IC)

• One of the primary issue at the IC was whether Krishnan can be deemed a “workman” by virtue of section 2 of the Industrial Relations Act 1967 (“IRA 1967”) which would warrant him the right to sustain a claim under constructive dismissal.
  
  
• The IC held that although Krishnan was holding the position of Director and Shareholder of the Company, he was not the controlling mind of the Company as he was performing the duties of an employee as an Operation’s Director i.e. reporting to the other director, carrying out site visits etc.
  
  
• The IC ruled that Krishnan was a workman and hence could sustain the case in Court. The Court also ruled that he was dismissed unlawfully.
  
  
• The Company applied to set aside the decision of the IC at the HC.

THE DECISION OF HIGH COURT (HC)

• The HC set aside the decision of the IC and ruled that as director/shareholder of the Company, Krishnan cannot be deemed as “workman” for the purpose of IRA 1967 and would not be entitled to the statutory protection under the IRA 1967.
  
  
• Krishnan then appealed to the Court of Appeal.

THE DECISION OF COURT OF APPEAL (COA)

• The COA noted that merely being a company director does not preclude a person from carrying out functions and duties as an employee and to be remunerated as such.
  
  
• The COA held that the definition of ‘workman’ is a flexible one and that since the IRA 1967 is a manifestation of a social legislation, the term workman should be construed ‘liberally’ and not ‘restrictively’.
  
  
• In light of the above, the COA found that the IC, which examined the functions of Krishnan, was correct to find that although Krishnan was a director/shareholder, he was nevertheless carrying out functions or duties as a workman in his capacity as operations director.
  
  
• Therefore, the COA ruled in favour of Krishnan and reinstated the IC award by ordering the Company to pay Krishnan RM320,000.00 as back-wages and compensation in lieu of reinstatement.