Malaysian court rules on the validity of an employment contract executed by the chairman without board approval during the state assembly dissolution
A chief executive officer (CEO) serving under his second fixed-term employment contract received a third contract extending his tenure for thirty months, signed by the foundation's chairman during a caretaker period when the state assembly was dissolved.
Several months later, the foundation's board of directors determined that the third contract was invalid because it lacked proper board approval as required under the foundation's terms and conditions of service.
The worker challenged the foundation's decision to annul the contract and terminate his services, arguing the agreement was legally binding and enforceable.
The foundation maintained that the chairman exceeded his authority by executing the contract without board approval during the caretaker government period.
The worker commenced employment with the foundation in March 2021 as general manager under a fixed term contract. The first contract ran for two years from March 2021 until March 2023.
His employment was renewed upon expiry of the first contract. The worker was appointed as CEO for twelve months from March 2023 until March 2024.
The worker applied for contract extension around July 2023 during the second contract period. The foundation offered a third contract appointing him as CEO for thirty months. The third contract...
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