High Court holds Director General of Labour may preside over complaints relating to cash payments such as retrenchment benefits and bonuses

17 December 2020

Mashyur Mutiara Sdn Bhd v Abdul Samat Ishak & Ors and another appeal [2020] 4 CLJ 643

In Mashyur Mutiara Sdn Bhd v Abdul Samat Ishak & Ors and another appeal, the appellant as an owner of the hotel entered into four collective agreements with the workers. The workers filed a complaint with the Labour Court against the appellant for its failure to pay them remuneration benefits on the basis of the fourth collective agreement. One of the main issues to be tried was whether the jurisdiction of the Labour Court is restricted to wage disputes only, as the current appeal relates to retrenchment benefits and bonuses.

The Malaysia High Court rejected that argument and held that the jurisdiction of the Labour Court is not just restricted to wage disputes between an employer and its workers under section 69(1)(a) of the Employment Act 1955 (“EA 1955”). It further held that the Labour Court is also entitled to inquire into other cash payments which are not wages. However, it would need to satisfy itself that the cash payments are due under one of the circumstances listed in sections 69(1)(a) to (c) of the EA 1955. An interpretation restricting the jurisdiction of the Labour Court to wage disputes would result in an anomaly where the worker might have to bring a claim for wages in the Labour Court and a claim for other payments in the Industrial Court.

In the present case, although the letter of offer did not state the terms of employment, it must be read in conjunction with the fourth collective agreement which contained such terms. Therefore, the workers’ claim for retrenchment benefits and bonus constitute cash payments payable under a contract of service and the Director General of Labour had the powers to inquire into such claims.