The Industrial Court found that the Employee was employed under a genuine FTC, which had expired due to effluxion of time. In doing so, the Industrial Court took into account that:

• The Employee’s previous employment with Telekom Malaysia Berhad was also under an FTC. He fully understood the difference between FTCs and permanent employment.

• The Employee has more than 20 years of experience in human resources matters.

• The Employee was responsible for the implementation of various national and GLC human capital management initiatives, including the emplacement of senior management on FTCs.

• The Employee was responsible for managing the FTCs of the Company’s senior management.

• The Employee’s subordinate transitioned from his permanent employment to an FTC during the Employee’s tenure as Chief Human Capital Officer.

• The Employee’s FTC was subject to renewal upon deliberation by the BNRC.

• The renewals of the Employee’s FTCs were never meant to be automatic, given that the Employee must undergo the Kon Ferry assessment to determine his suitability.

• The Employee cannot feign ignorance, as he was the individual spearheading the Company’s FTC initiatives that involved other members of senior management.

• The Employee received an end-of-contract payment of RM15,000.00 and his remaining leave entitlements were also forfeited upon the expiration of each FTC.

• Despite the Employee’s claim that his job scope was ongoing as part of the Company’s management, which had not ceased and taken over by his subordinate, the Employee was aware of the initiatives that placed all senior management under FTCs. As such, the Employee’s evidence on his performance is not relevant considering the circumstances of this case and the overall initiatives in which he participated.

• The Employee’s purported legitimate expectation to remain in employment until the retirement age pursuant to the Minimum Retirement Age Act 2012 is not applicable, as the Employee was at all times aware that he was employed under genuine FTCs, which were certain to come to an end by effluxion of time.

This decision affirms the validity of genuine fixed-term contracts, particularly in the context of GLCs and senior management appointments. It underscores that the nature of an employee’s role, including involvement in policy formulation and contract management, may be a pivotal factor in assessing whether an FTC is bona fide. In this case, the Employee’s seniority and responsibility over human capital matters, including the administration of FTCs for others, render his claim of wrongful non-renewal untenable.

The Company was represented by Partner, Amardeep Singh Toor, and Associate, Wong Lien Taa, of Lee Hishammuddin Allen & Gledhill.

If you have any queries, please contact Partner Amardeep Singh Toor (ast@lh-ag.com) or Associate Wong Lien Taa (wlt@lh-ag.com)