Case:

Brief Facts:

• The appellants, Woon Kim Choy (“Woon”) and Chang Heng Keong (“Chang”) were the promoters of Acexide Technology Sdn Bhd (“the Company”) together with Mr Lim BH (“Lim”).
  
  
• The Company was incorporated under the Companies Act 2016, thus, Woon and Chang together with Lim became shareholders as well as Directors of the Company.
  
  
• Lim and his son (“Jovi”) are currently the majority shareholders of the Company holding 54% shares of the Company whilst Woon owns 10% and Chang owns 36%.
  
  
• An Extraordinary General Meeting (“EGM”) was held to remove the Woon and Chang as Directors of the Company in which Lim and Jovi held a simple majority of the Company’s shares.
  
  
• As such, the resolution was carried out and on the same day, the Company appointed Jovi as Director.
  
  
• Woon and Chang commenced an action for minority oppression against Lim and Jovi and they also filed a complaint under Section 20 of the IRA which provides that where a workman has been dismissed without just cause or reason, he may make a representation to the Industrial Relations Department [IRD] to be reinstated.
  
  
• The complaint to the IRD was referred to the Industrial Court for resolution.

THE DECISION OF THE INDUSTRIAL COURT (IC)

• The IC found that Woon and Chang do not fall within the ambit of “workman” under Section 2 of IRA as they were Directors of the Company.
  
  
• Woon and Chang then challenged the IC’s decision at the High Court.

THE DECISION OF THE HIGH COURT (HC)

• The HC dismissed Woon and Chang’s challenge to the High Court.
  
  
• The HC pointed out that just because their name was in the “Register of the Employees”, does not make them an employee as they were enjoying the benefit that is exclusively for Directors.
  
  
• Woon and Chang then appealed against the HC decision to the Court of Appeal.

THE DECISION OF THE COURT OF APPEAL (COA) – APPEAL ALLOWED

• Firstly, even though Woon and Chang had carried out their duties as Directors of the Company, this does not mean that they cannot at the same time be under a contract of employment.
  
  
• Documentary evidence of the Company consistently referred to Woon and Chang as employees.
  
  
• The COA also took into account the fact that there were EPF contributions which were based on the percentage of the salaries for the employer and the employee.
  
  
• Further there was a monthly deduction for income tax which could be seen in the EA forms submitted to LHDN. Such would not be the case for Director’s who were not under a contract of employment.
  
  
• Therefore, the COA is of the view that Woon and Chang may wear “two hats” hence they were both assuming the roles of Directors of the Company as well as discharging their duties as employees of the Company.
  
  
• With that, the fact that they are also Directors of the Company does not disqualify them from being an employee hence Woon and Chang are considered as a “workman” within the meaning of IRA.
  
  
• As such, the COA held that their dismissal was without just cause or excuse and had awarded compensation to Woon and Chang.