Case Update: Is a clause in an employee handbook effective if an employee claims not to have read it?

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

Identifying the terms and conditions that apply to an employment relationship is often not as straightforward as reading through an employment contract.

It is the norm, particularly in large employer organisations which span multiple jurisdictions, for these terms and conditions to be set out in several documents. As a minimum, many employers would have an offer letter, the main employment contract, and an employee handbook. These are then supplemented by further individual policies, such as those in relation to personal data, BYOD, IT, benefits, discipline, workplace conduct, grievance procedures — the list is close to endless. The difficulty in determining which terms apply is further complicated when these documents (or parts of some of these documents) are amended or updated over the years.

Problems arise when an employer seeks to apply or enforce some of the terms set out in one of those documents, and the employee claims to not be aware of it — or contends that the document does not apply. The Industrial Court recently considered one such case in Ho Seng Fatt v. Strateq System Sdn Bhd (Award No. 279 of 2018).

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Case Update: Factors considered by the Industrial Court in determining the identity of the employer in a multi-jurisdictional employment relationship

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

In this era of the multinational corporation, it is common for employees to be carrying out most (or even all) of their work in one jurisdiction, while technically being employed by an employer entity in another jurisdiction. This could either be because the employer does not have a local entity, or because the employee was initially employed by an entity in one jurisdiction but was subsequently assigned to a post in another jurisdiction, or for a host of other commercial reasons.

We therefore see increasingly complicated employment relationships — the core employment contract being supplemented by assignments, secondments, or some other similar arrangements both formal or otherwise — which in time can lead to confusion over who the actual employer entity is, and more importantly, which jurisdiction the employer is in. Some of these arrangements can get even more convoluted with the introduction of other structures such as third party employment or payroll service providers or local host entities.

Identifying the correct employer entity becomes important when an employee seeks recourse at the Industrial Court. It is not as straightforward as determining which entity pays the employee’s salary, or owns the office the employee spends most of his time in. Once it is determined that the employer entity is in another jurisdiction, can the Industrial Court hear the matter?

The relevant factors were recently considered by the Industrial Court in two cases — Lars Kruse Thomsen v. Hot-Can Sdn Bhd (Award No. 1629 of 2017), and John Brian Chesson v. Baker Hughes (Malaysia) Sdn Bhd (Award No. 119 of 2018).

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