When does a company director qualify for employee protection? Malaysian court decides
The Industrial Court of Malaysia recently dealt with a case involving the dismissal of a company director who claimed to be an employee entitled to unfair dismissal protection.
The director argued that he should be considered a "workman" under the Industrial Relations Act 1967 due to his executive functions and employment-like arrangements.
The director's case centred on several key arguments: he had been receiving monthly salary payments with Employees Provident Fund (EPF) and Social Security Organisation (SOCSO) contributions, he continued performing duties for the company even after being stripped of his executive title, and his removal from the board constituted unlawful dismissal rather than standard corporate governance.
The company, however, maintained that as a shareholder-director, he was never truly an employee and that his removal was simply a matter of shareholders choosing not to re-elect him.
The director had been with the company since its establishment in 2017, which he claimed was founded through his efforts alongside financial contributions from other shareholders.
He started as sales and marketing director while another shareholder served as account and operations managing director. The director was also a legal and beneficial owner of 500,000 ordinary shares in the company's paid-up capital.
Despite having no written employment...
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