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23/04/2010 23:30:16
Re: Contract of service and Company Handbook

I have a few questions on contract of service and company handbook.

1. What is the different between a contract of service and a company
handbook ?

2. In the event of a trade dispute, which document should one refer to ?
What has the labour law says on this ?

3. What is said in the company handbook is not said in the contract of service.
The company handbook says retirement is on attaining 55th birthday. The
contract of service, however, do not say about retirement. So, by labour law,
which is binding to the parties concerned ?

Kindly advise on the above.

Thank you.
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KL Siew
24/04/2010 14:09:13
1. A contract of service/appointment letters normally contain basis terms and conditions of service whereas a company handbook contains other rules and regulations, company policies and other benefits which are not mentioned in the contract of service. Normally, the contract of service has a clause making reference to the handbook and some companies even attach a copy of the company handbook.

2. It is true initially, the company did not have a company handbook. When they decided to have one, the terms and conditions in the handbook might turn out to be different or less favourable the those in the contract of service. As you said, in the contract of service, there was no mention of retirement age and suddenly there was one in the handbook. A retirement age may put the employee at a disadvantage because he or she is not entitled to termination and layoff benefits when retired as mentioned in Regulation 4 of the Employment(Termination and Layoff Benefits) Regulations. So, employees must be alert. They should read carefully what were stated in the handbook. They should bring the matter up when they find somethings not in their interests. For example retirement age. While they are still young, they may not be bothered about retirement age of 55 in the new handbook. But when they reached the retirement age and asked to retired, then began to realise and ask "which document should one refer to".

3. So, it is quite difficult to say which one one should refer to when handbook was not mentioned in the contract of service. If the handbook had been there for years and no one ever protested. That could be interpreted as consent. However, the final decision on this lies with the authority based on facts. You can always consult the Industrial Relations Department for an official opinion.
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25/04/2010 00:39:16
Thank you very much for your valuable and informative inputs.

1. You mean both the contract of service and the handbook go hand in hand if either one has made reference to it. What if the contract of service makes no reference to the handbook but the handbook says it shall supersede all terms and conditions before the coming into force of the handbook Could a handbook render invalid any terms or conditions of service which is more favourable of a lawfully entered contract of service between employer and employee ?

Section 7 of the Act states;
Subject to section 7A, any term or condition of a contract of service or of an agreement, whether such contract or agreement was entered into before or after the coming into force of this Act, which provides a term or condition of service which is less favourable to an employee than a term or condition of service prescribed by this Act or any regulations, order or other subsidiary legislation whatsoever made thereunder shall be void and of no effect to that extent and the more favourable provisions of this Act or any regulation, order or other subsidiary legislation whatsoever made thereunder shall be substituted therefor.

Can you help to interpret this section ? Is there any relationhip on the above question ?

2. This is the predicament that I am now in. The handbook says retirement age is 55 but none in the contract of service. Is there any possible recourse to take to overcome this ?

3. Before this I was not aware of the law. Now I have to visit the Labour Department to seek assistance.
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KL Siew
25/04/2010 09:46:40
My interpretation may not be much different from yours. Everyone can have his own interpretation. The Labour Department or IR Department may have different interpretation. What we need is authority. I think if I were you, I would do some research on past Industrial Court or High Court decisions on such a case like yours. Catch hold of some Malaysian Industrial Law Journals and do some research on it.

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27/04/2010 16:25:58
As suggested, I have done some research and found 2 cases which I feel there are some similarities in essence.

The two cases were:
(a) Ng Chee Wan v. Ranhill Bersekutu Sdn Bhd (2009)
Constructive dismissal - Whether claimant had been bound by the terms in the Employee Handbook - No reference to employee handbook in claimant’s letters of appointment - Effect of - Whether the claimant had enjoyed any benefits under the terms of the handbook - Whether the doctrine of approbation and reprobation had applied in this case - Effect of - Whether dismissal without just cause or excuse - Industrial Relations Act 1967, s. 20(3)

Finding of the court :
…. There was no provision in any of the letters of appointment of the claimant by the company (RBSB) that he would be bound by the terms of employment which was provided in the Employees Handbook.

(b) Malakoff Bhd v. Kuppusamy & Ors (1991)

Finding of the court :

…. The agreement was silent on the age for retirement and therefore the 19 respondents were entitled to their claim for termination benefits payment.

However, I am very concerned on Section 20 subsection (1A) which states:-

The Director General shall not entertain any representations under subsection (1) unless such representations are filed within sixty days of the dismissal:
Provided that where a workman is dismissed with notice he may file a representation at any time during the period of such notice but not later than sixty days from the expiry thereof.

My case happened in 2009 and after that I was re-engaged under contract employment. As of now, it is well over a year thing.

Will I be time-barred if I file for representations now under this section of the Act ? If , what other recourse is open to me ?
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