The Importance Of The Terms of An Employment Contract In Cross Border Employments

Employment

The above issue was recently considered by the High Court in John Brian Chesson v Baker Hughes (M) Sdn Bhd & Anor (Application for Judicial Review No. WA-25-96-04/2018).

The Claimant was employed by International Professional Resources Ltd (“IPRL”), a company incorporated in Dubai, as an internationally mobile employee. He was subsequently assigned to Baker Hughes (M) Sdn Bhd (“BHM”) as the Manager Operations Sr II. In addition to the employment contract between the Claimant and IPRL, an assignment agreement was executed between the Claimant and IPRL in relation to his assignment to BHM. In those documents, it was made clear that although a local contract may have to be entered into with BHM to facilitate the application for his employment pass, the Claimant would at all material times during the assignment be and remain as an employee of IPRL.

The Claimant’s employment was terminated by IPRL due to poor performance. Arising therefrom, his assignment to BHM was also put to an end.

The Claimant contended inter alia that the execution of the local contract with BHM and the issuance of an employment pass naming BHM as his employer had created an employer-employee relationship between him and BHM and as such, brought a claim for unfair dismissal against BHM. He also relied on the fact that his income tax returns had been filed by BJ Services (M) Sdn Bhd (“BJ Services”) (BHM’s related company which was the cost centre for his services) in support of this contention.

In its decision, the Industrial Court held that the Claimant had clearly entered into the employment contract with IPRL and agreed to the terms therein. The Industrial Court further held that the parties agreed that IPRL would remain as the Claimant’s employer during the assignment and therefore, it was not equitable for the Claimant to make a turnabout and claim that both IPRL and BHM were his joint employers in a triangular relationship.

More importantly, the Industrial Court recognised the parties’ agreement under the employment contract with IPRL to submit to the exclusive jurisdiction of the laws of Dubai International Financial Centre, Dubai, United Arab Emirates and hence, held that the employment contract was subject to those laws. The fact that the Claimant’s tax returns had been submitted by a Malaysian company, BJ Services, did not ipso facto make his employment contract subject to the laws of Malaysia.

Accordingly, the Industrial Court decided in favour of BHM and dismissed the Claimant’s claim on 10th January 2018 (John Brian Chesson v BHM (Award No. 118 of 2018)).

The Claimant applied for judicial review of the Industrial Court award. The decision of the Industrial Court was upheld by the High Court in its decision dated 12th November 2018 and consequently, the Claimant’s application was dismissed with costs.

*Baker Hughes (M) Sdn Bhd was represented by R. Ravindra Kumar (ravindrakumar@rdl.com.my) and Tham Li Vyen (livyen@rdl.com.my); partners in our Employment and Industrial Relations practice group.



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