Malaysia’s High Court rules training contract not contract for employment

MALAYSIA: Malaysia’s High Court dismissed an unusual case on Wednesday (9 Aug) involving two judicial review applications brought by a woman seeking to hold both a bank and an accounting firm liable for wrongful dismissal from employment after she was removed from a training programme set up to allow fresh graduates to gain working experience.

According to Free Malaysia Today, Yong Pui Yee had applied to quash two concurrent awards handed down by Industrial Court chairman D Paramalingam on 4 January 2021 rejecting claims that she had been dismissed from employment by both CIMB Investment Bank and PricewaterhouseCoopers (PwC) without just cause or excuse.

In a written judgment released on 2 Aug, Justice Amerjeet Singh noted that Yong had been selected to undergo training under a four-year programme organised by CIMB and PwC aimed at allowing graduates to gain work experience with both entities.

The scheme required her to sign a tripartite training agreement with both entities, pursuant to which she would be employed, first by PwC for 18 months, then CIMB for a year, and later PwC for another 18 months.

Under the arrangement, Yong was issued with two fixed-term contracts, initially by PwC in April 2012 covering the first stint, and then by CIMB covering the second, which commenced in July 2014.

She was, however, taken off the programme when her one-year contract with CIMB expired on 30 June 2016.

In the High Court, Yong challenged the Industrial Court’s rejection of her contention that the training programme itself constituted an “umbrella contract of employment”.

She claimed she had a “legitimate expectation” to be employed and trained for the entire period of four years.

Amarjeet, however, rejected that contention.

“The programme document is not even a contract, what more an umbrella contract. It is also not a contract of employment. PwC and CIMB did not guarantee anything in the programme document,” he said in his judgment.

He said the programme document issued was “merely informative in nature” setting out the collaboration between CIMB and PwC and its training measures, aimed at “producing a professional with experience in two sectors and possible employment at the end of the programme”.

“The Industrial Court was correct in finding that the tripartite training contract is a training contract that is binding on the applicant (Yong), PwC and CIMB according to the terms and conditions therein,” he said.

He said clear words in the document specifically stating it was not an employment contract.

Amerjeet went on to hold that the contracts of employment Yong entered were genuine fixed-term contracts.

“The question whether there is a dismissal or not does not arise as the end of a fixed-term contract would spell the end of the applicant’s tenure by effluxion of time,” he said.

The High Court also upheld Paramalingam’s finding that there was no need for the Industrial Court to inquire into the reasons for Yong’s removal from the training programme.

“It is not the function of the Industrial Court to interfere with the prerogative of the training organisation to remove a trainee from the programme for failing to meet the training organisation’s expectations,” said the judge.

Amarjeet also said the Industrial Court’s finding that warnings about Yong not meeting CIMB’s performance standards were not made “out of nothing”.

“The problem with the applicant began in June 2015, which is the last month before the third-year contract was to expire,” adding that the contract contained no provision for the extension of her employment.

The judge also validated the Industrial Court’s finding that Yong was not receptive to career counselling and its rejection of her excuses for taking leave at the tail-end of her contract.

“I find no error in the Industrial Court’s finding and conclusion,” he said.