CHAN KIEN WOH v SANJUNG CEKAP SDN BHD

Case Significance

Illustrates that a controlling director who sets his own hours and reports to no one may fall outside the definition of an employee under section 2(1) of the Employment Act 1955, and that unchallenged evidence and EPF contributions do not by themselves establish employee status.

This High Court decision at Shah Alam concerns an appeal against a decision of the Director-General of Manpower dismissing a claim for unpaid wages. The appellant had claimed unpaid salaries from the respondent company; the Director-General dismissed the claim, holding that the appellant was not an employee within the meaning of section 2(1) and the First Schedule of the Employment Act 1955. The central question on appeal was whether that finding could stand.

Before the Director-General, the appellant's own evidence was that he had been a director of the respondent since 2009, drawing a monthly income of RM40,000.00; that he had no contract of service; that he managed the whole company — contracts, procurement, site operations, meetings with developers and subcontractors and final accounts; that his working hours were flexible; and that he reported to no one, being the key person in charge. He relied on Employees Provident Fund contributions made until July 2024 as evidence of employment. The respondent had been absent from the proceedings below.

The court held that although the appellant's evidence was unchallenged, that did not compel a finding in his favour, because his own account displaced the presumption of employment under section 101C of the Act. The key indicators of employee status — control and integration — were absent: he set his own hours, reported to no one and directed the company's affairs. EPF contributions were only one of several factors and did not, by themselves, establish employee status. The court also rejected complaints that the Director-General had descended into the arena or wrongly raised section 10 of the Act, holding that she had merely referred to the statutory provisions to decide the employment question. Finding no basis for appellate intervention, the court dismissed the appeal. The judgment illustrates that a controlling director may fall outside the definition of an employee under the Employment Act 1955.