End of fixed-term Contract of Employment
Fixed-term contract means a contract that is stated to last for a set period of time. When a contract for a fixed-term expires, it terminates itself, it has not been "terminated" by either party.
Whether Failure to Extend A Fixed-term Contract of Employment Tantamoutg to Unfair Dismissal?
Case Summary (United Seino Transportation (M) Sdn Bhd v. Bahari Bin Bab)
The company was a transport company undertaking the transportation of goods for the entire group of companies and other companies. It is an on-going business. The claimant was working on a fixed-term contract of one year, and was extended for a further period of six months. When the claimant’s fixed-term contract expired, the same lorry was driven by another driver for the company for the transportation of goods. There had been no complaints against the claimant during his tenure with the company.
Court Award
In this case, the consideration was whether the workman’s employment was under a genuine fixed-term contract, i.e. whether an employer genuinely had a need for the service of an employee for a fixed duration and thereby employed the employee for the said term stipulated in the contract. Genuine fixed-term contracts are suitable for temporary, one-off jobs. The Court held that the claimant was an employee at the time of dismissal and his dismissal was without just cause or excuse.
Case Summary (Sime UEP Development v. Chu Ah Poi, Award No: 66 of 1996)
The claimant was employed by the company as a clerk-of-works for 4 years on a yearly contractual basis. The claimant was not employed for a particular project but involved in various projects. He was also given salary increments each time his contract was renewed. The company contended that the claimant’s contract was not renewed due to the fact that there was a slowdown in the launching of new houses by the company and the fact that the project in which the claimant was involved had to come to an end.
Court Award
In this case, the consideration was whether a workman is a permanent employee despite renewals that depend on the absolute discretion of the employer. The Court held that this was not a temporary one-off job. No other contract clerk of works besides the claimant had been terminated. The claimant was in fact and in law a permanent employee and the contract was a permanent job dressed up in the form of fixed-term contracts.
Failure to extend the workman’s contract may be tantamount to dismissal of the workman. The company has to give a genuine reason as to why the fixed-term contract was not renewed.
