Case Update: Is a verbal offer for a job position binding?

AZLINDA ADELI lwn. BARKATH STORES/ BARKATH MANAGEMENT SERVICE (Penang Industrial Court Case No. 18/4-1565/16) (Award No. 1988 / 2018)

Facts:

The claimant (Employee) has applied for a position as Shipping Assistant with the Company and after attending an interview, has been accepted to work while on the job training.

She was introduced to other employees at the Company and was requested to work immediately. Everything went smoothly, for 5 days, until she was suddenly laid off for no reason and notice and paid for two days.

The offer of employment letter was not submitted to her. The Claimant now claims that she is an employee of the Company even though the offer letter has not been submitted to her and that the termination of her service has been without just cause and cause.

On the contrary, the Company claimed that employee had never been its employee because she was not legally or officially appointed by the Company and that she was only present for pre-employment training, at her own request, and had no express / implied contract on offer of employment.

The crux of the reason of termination is the Claimant was offered an employment initially to replace a staff who had resigned. Then the said employee withdrew her resignation and returned to work with the company. So there is no vacancy to be offered to the Claimant.

“Question 10 : What happened on 15th April 2016?

Answer : My Staff Khatijah who was resigning withdraws her resignation and wants her position back and the company agrees. Since appointment letter is not being issued then we offer her another job in Butterworth branch which near to her house.”

Issues:

There are 3 issues arising out of court judgment:-

• whether the claimant is an employee?
• whether the termination of its services has been fair and with just cause?
• Whether exemplary damages should be awarded against the  company?

Issue 1: whether the claimant is an employee ?

A contract of service under the Act need not be in writing by virtue of the interpretation clause of Section 2 of Industrial Relations Act 1967. It can be implied. Technicalities and legal forms have no place in industrial adjudication Section 30 (5) IRA.

There is no conclusive test on whether the person is part of the organisation.  The standard of proof taken into account varies from one case to another. In determining whether a contract of employment exists or otherwise should be viewed from the perspective of an ordinary people who sees it is a contract of employment. This test is said to be a ‘common sense’ approach of a reasonable man. 

Four criteria were used in determining the existence or not of the contract of service as follows

(a) the master’s power of selection of his servant;

The evidence is supported by the COW1’s  respondent’s own witness that the claimant has been interviewed by the respondent and succeeded in the interview and has also been directed to continue working on the same day. The claimant succeeds in the interview because her qualifications met the criteria required by the respondent.

(b) the payment of wages or other remuneration;

It is agreed by both parties that the claimant has been offered a salary of RM1,700 a month.

(c) The master’s right to control the method of doing the work;

The claimant’s working hours from 9am to 5pm. Claimant was also directed to undergo training while working. Exercise given clearly demonstrates what control and what the task needs to be done by the claimant. This shows the relationship between the employer and the worker.

(d) The master’s right of suspension or dismissal.

The actions of the respondent to dismiss the claimant clearly proved that the respondent had considered the claimant to be an employee. This is also evident when the claimant rejected the offer to work at the Butterworth branch, the respondent continued to dismiss the claimant.

Issue 2: whether the termination of its services has been fair and with just cause?

From the evidence, the court was with the claimant when she claimed that the subsequent offer made to her was intended to dismiss her and the respondent had reason to dismiss her for reasons by not accepting the said offer. The respondent’s action ie offer of another post in another branch is actually a dismissal in disguise.

Issue 3: Whether exemplary damages should be awarded against the  company?

The court also considers the act of the Company not to take claimant seriously in the job offer should also be reprimanded. The Company should be more responsible in offering a job to the public.

In this claim, the claimant has left her previous employment for accepting job offers by the respondent. The actions of respondents who later reneged on its offer have been detrimental to the claimant.

The court is of the opinion that the respondent’s actions against the claimant should be an example to another company to be more responsible in their actions.

Decisions

The court gave away RM22,100 (equivalent to total of backwages plus compensation in lieu of reinstatement) as exemplary damages and compensatory award against the Company.

Takeaways

1. A contract of service under the Act need not necessarily be in writing.
2. Company may be imposed of exemplary damages by the Industrial Court.

This article was first published at BurgieLaw.