EMPLOYER AND

EMPLOYEE RELATIONSHIP
 INTRODUCTION
 Labour law deals with the main legal aspects of
the employer and employee relationship from
both common law and statutory viewpoint.
 Including contracts of service and contract for
services.
 The duties and liabilities arising therefrom,
contracts for work and labour, trade unions, labour
relations and the statutory regulations of the same
with specific reference to the Employment Act
1955 (Act 265) and the Industrial Relations Act
1967.
 Definition of Employee

 Sec 2 of the Employment Act 1955

 Included in any category in the first schedule
to the extent specified therein; or
 In respect of whom the Minister makes an
order under subsection (3) or Section 2A.
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 First schedule, Employment Act 1955

 Who earn less than RM1,500.00, irrespective of his
occupation, entered into contract of service with an
employer.
 Milan Auto Sdn. Bhd v Wong Sen yen [1994] 2 MLJ 31
The High Court ruled that a mechanic who is paid
RM600.00 is an employee according to paragraph (i0, First
Schedule, Employment Act 1955.
Continue….
 Any person who, irrespective of the amount of wages,
has entered into a contract of service with an employer:
 Manual labour including such labour as an artisan or
apprentice
 Operation or maintenance of any mechanically propelled
vehicle operated for the transport of passengers or goods or
for reward or for commercial purpose.
 Supervise or oversees other employee in manual labour
employed by the same employer.
 Engaged in any capacity in any vessel registered in
Malaysia.
 Domestic servant
Continue….
 Chang Kim Chiang v Mariadas [1978] 1 MLJ
138
◦ Domestic staff is a person who employed in
connection with the work of a private
dwelling-house and not in connection with any
trade, business or profession.
Continue….
 Definition of employee according to
Section 2 Industrial Relations Act 1967
◦ “Workman” means:
 any person, including an apprentice, employed by
an employer under a contract of employment to
work for hire or reward and for the purposes of any
proceedings in relation to a trade dispute
 any such person who has been dismissed,
discharged or retrenched in connection with or as a
consequence of that dispute or whose dismissal,
discharge or retrenchment has led to the dispute.
Continue…
 Dr A Dutt v Assunta Hospital [1981] 1 MLJ 304
 Inchape (M) Holdings Bhd v R B Gray [1985] 2
MLJ 297
 Hoh Kiang Ngan v Mahkamah Perusahaan
Malaysia & Anor [1995] 3 MLJ 369
 Chong Kim Sang v Metatrade Sdn Bhd [2004] 3
MLJ 1
 Definition of Employer
Section 2 of Employment Act 1955
 Any person who has entered into a
contract of service to employ any other
person as an employee and includes the
agent, manager or factor of such
mentioned person.
 Contract of Service or
Contract of Employment

A contract of employment may be either

oral or in writing.
What is Contract of Services?
 Under Section 2 of Employment Act
1955,
◦ a contract of service is defined as any
agreement,
◦ whether oral or in writing and whether
express or implied,
◦ whereby one person agrees to employ another
as an employee and
◦ that other agrees to serve his employer as an
employee and includes an apprenticeship
contract.
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 Whether contract of service must be in
writing?
◦ Under Section 10 of Employment Act 1955
◦ A contract of service for a specific period of
time exceeding one month or for the
performance of a specified piece of work
exceeds or may exceed one month shall be in
writing.
Continue….
 What is apprenticeship contract?
◦ Section 2 of Employment Act 1955
◦ A written contract
◦ By a person with an employer who undertakes
to employ the person and train or have him
trained systematically for a trade for a
specified period
◦ Shall not be less than two years in the course
of which the apprentice is bound to work in
the employer’s service.
What is contract of employment?
 Under Industrial Relations Act 1967,
contract of employment is defined as
any agreement, whether oral or in writing
and whether express or implied, whereby
one person agrees to employ another as a
workman and that other agrees to serve
his employer as a workman.
What is Contract for Service?
 A distinction is made between an
employee and an independent contractor.
 To determine the legal consequences of
the relationship between the parties to a
contract.
Continue….
 Chye Hin Co. (Perak) Ltd v Public Prosecutor [1960]
MLJ 137
 Norafizal bin Japperi v Asian Supply Base Sdn Bhd
[2010] 3 MLJ 403
 Mary Colete John v South East Asia Insurance Bhd
[2004] 6 MLJ 483 (High Court)
 Mary Colete John v South East Asia Insurance Bhd
[2010] 2 MLJ 222 (Appeal Court)
 Mary Colete John v South East Asia Insurance Bhd
[2010] 6 MLJ 733 (Federal Court)
 Determination test for
Contract of service
 The Court elaborated through cases
advanced, circumstances of the case
before determining the matter.
 The four test are as follows:
◦ Control Test
◦ Multiple Test
◦ Organisation Test
Control Test
 How much of “control” one have, the
employers control towards its employee.
◦ Chye Hin Co. (Perak) Ltd v Public Prosecutor
[1960] MLJ 137
◦ Hoh Kiang Ngan v Mahkamah Perusahaan
Malaysia & Anor [1995] 3 MLJ 369
Organisation or Integral Test
 An integral part of business, first mentioned
by Lord Denning.
◦ Cassidy v Ministry of Health [1951] 2 KB 343
 According to Lord Denning, under the contract of
employment, a person is employed as part of business
and the work is done as integral part of business.
Whereas in the contract of employment, the work done
for business not only complements but is also an
accessory to the business.

◦ Lembaga Kumpulan Wang Simpana Employee v

M.S. Ally & Co. Ltd [1975] 2 MLJ 89
Organization test (cont..)
 Independent contractor has the right to
exercise his/her discretion on how, when
etc. the work is done.
 The organization test is necessary but not
necessarily sufficient to determine the
status of the relationship
Multiple Control Test
• Totality of circumstances, including comparing certain
situations with one another, such as all situations and
factors in connection with employment must be
exercised.
• First established in the case of Ready Mixed Concrete
(South East) Ltd v MPNI [1968] 2 QB 497
• * Degree of control
* Hours of work
* Mode of remuneration
* Right to delegate
* Provision of equipment
* Entitlement to annual leave
* Method of paying tax
* Parties belief as to their working arraignment
Multiple test
 In Short v Henderson [1946] 62 TLR 427
 In Morren v Swinton and Pedlebury
Borough Council [1965] 1 WLR 576
 Lim Kim Hai Electric (M) Sdn Bhd v
Mokhtaruddin bin Mohamed [1985]