Man can’t get RM29,000 in unpaid salary as he wasn’t an employee, court rules

 

The Court of Appeal dismissed S Gunasegaran’s appeal with costs. (EPA Images pic)

PUTRAJAYA: 

The Court of Appeal has dismissed a man’s appeal to be paid RM29,000 in salary arrears owed by a cleaning service company.

A three-member bench chaired by Ahmad Zaidi Ibrahim said S Gunasegaran, 61, was not an employee of FM Multi Service Sdn Bhd as he was under a contract for service.

“The decision of the High Court is affirmed. The appellant’s appeal has no merit and is dismissed with costs,” said Zaidi who sat with Justices Nazlan Ghazali and Zaini Mazlan.

The bench ordered Gunasegaran to pay RM5,000 in costs to the company owned by Bangladeshi Harun Sirajul Islam, who is also its managing director.

Zaidi said Gunasegaran was demanding RM5,000 a month although he was being paid less than that over nine months in 2020.

“We find it puzzling that he did not complain to the authorities about his contract when his wages were not paid,” he said.

Zaidi said Gunasegaran could not be an employee as the company did not make payments to EPF and the Social Security Organisation on his behalf.

The bench also ruled that a contract for service entered between the company and Gunasegaran is valid although Harun’s daughter, then a minor, had imitated her father’s signature and signed the document.

“The father knew about the contract that was signed by the daughter,” Zaidi said, adding that Section 11 of the Contracts Act 1950 was not applicable.

Lawyer Aishah Choo, who represented FM Multi Service, said the contract entered between the daughter, then 17, and Gunasegaran was void ab initio (from the beginning) but the bench did not buy the argument.

Section 11 of the Contracts Act 1950 states that every person who is of the age of majority and is of sound mind is competent to enter into a contract.

The age of majority in Malaysia is 18.

Zaidi said that in this case, the daughter was not a party to the contract but merely represented the company – and her father was aware of it.

The facts of the case revealed that the labour court had ordered the company to pay Gunasegaran RM29,038 as salary arrears from February 2020 to September 2020, plus 8% interest on the judgment sum.

The company claimed that Gunasegaran was not appointed as an operation manager at a monthly salary of RM5,000.

Instead, his role was to assist Harun and the company after Harun suffered a stroke.

According to FM Multi Service, Gunasegaran was to be paid according to the income derived by the company.

The High Court found the contract was invalid as the underaged daughter was incapable of entering into an agreement.

It was also held that Gunasegaran was an independent contractor as Harun had no control over him.

Lawyers Hariraman Palaya and Suresh Ayangar appeared for Gunasegaran while Zulaikha Afendi assisted Aisyah. - FMT