Foreigners Can Be Hired Under Permanent Employment

Citizenship is not a factor in determining if an employee is in permanent employment or under a fixed-term contract, according to The Federal Court.

The Bench, chaired by Chief Justice Tengku Maimun Tuan Mat, stated Article 10 of the International Labour Organization’s Migrant Workers (Supplementary Provisions) Convention 143 of 1975 held that:

“All workers should be treated with fairness, dignity and equality, without distinction whether they are local or foreigners”.

“This is also in consonant with Article 8 (1) of the Federal Constitution which essentially provides that all persons are equal before the law and entitled to equal protection of the law,” said judge Mohd Zawawi Saleh.

The Federal Court’s decision arose when it approved an appeal by Ahmad Zahri Mirza, a Singaporean whose employment was terminated by his employer in 2013.

Zahri originally started working with the company in 2009 on the understanding that he would invest and build the business for the company.

An employee's citizenship is not a factor in deciding if they're under permanent employment or under a fixed-term contract.

He had a valid working pass and his yearly contract was automatically renewed without any application by him. The company was then consolidated in 2011.

His contract was again automatically renewed without any change to the terms and conditions of his employment contract.

However, in 2013, the company dismissed him on the purported basis that it had expired. Zahri refused to accept the removal of his entitlement to a performance bonus.

The Industrial Court in 2016 decided that Zahri was a permanent employee and as such the dismissal was without just cause and excuse.

The High Court in January 2017 also dismissed the employer’s judicial review but the Court of Appeal reversed the findings later that year.

Two legal questions were posed before the Federal Court: 

• whether a need for a work permit is a material consideration in determining whether an employment contract is a genuine fixed-term contract; and 

• whether a contract of employment, which is renewed successively, is, in reality, a permanent employment?

The Federal Court also discovered that there was an essential unity of group enterprise.

Zawawi said that the Industrial Court may, in special and appropriate circumstances, lift the corporate veil to expose who is the true employer in order to achieve social justice so that employees are not negatively affected.

He said the Federal Court found that the Zahari’s employment was in fact, a continuous employment before and after the consolidation of the company.

The Federal Court also held that in considering whether a contract is a genuine fixed-term one or permanent employment, the courts would have to consider:

• the intention of parties, 

• the conduct of the employer subsequently; and 

• the nature of the employer’s business and nature of work the employee is engaged to perform.

Source: FreeMalaysiaToday

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