RAJAMANSINGH MUKESH SINGH v BGB BINA WORKS SDN BHD

Case Significance

Illustrates that a work permit taken out in a company's name does not by itself create an employment relationship under the Employment Act 1955: where the claimant never actually worked, he is not an employee within section 2(1) and the First Schedule, and a wages claim before the Director General of Labour cannot succeed.

This High Court decision at Shah Alam is an appeal under the Employment Act 1955 against a decision of the Director General of Labour dismissing a claim for arrears of salary, and it turns on whether an employment relationship existed at all. The appellant, a foreign national, claimed RM42,000 in arrears, contending that he was the respondent's employee because the respondent, a construction company, had taken out a work permit in its name naming him. He admitted, however, that he had never actually worked and had paid RM11,000 to secure the work permit. The respondent's director gave evidence that the company was a small construction firm, since closed, and that he had merely helped the appellant obtain a work permit for a fee, as a favour connected to a mutual acquaintance; the permit was issued in the company's name only because foreign nationals of the appellant's nationality were permitted to work in construction, and the company was in the midst of arranging a further permit when the appellant lodged a police report about his passport. An administrative staff member confirmed that the appellant had never worked for the company. The Director General of Labour had dismissed the claim on the ground that the appellant was not an employee within section 2(1) and the First Schedule of the Employment Act 1955, and correspondingly that the company was not an employer. On appeal, the appellant argued that selection and control — evidenced by the work permit and the withholding of his passport — made him an employee, relying on authorities such as Employees Provident Fund v MS Ally & Co. The court considered the appellate principles and the exercise of the Director General's discretion, including a refusal to adjourn for the appellant to appoint counsel, and was satisfied that the decision was properly made. The court dismissed the appeal.