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Natural Expiry of Genuine Fixed-Term Contract Saves Bursa Malaysia from Unjust Dismissal Claim

Updated: Aug 15, 2023


In the most recent judgement from the Industrial Court in the case of Azalina Binthi Adham v. Bursa Malaysia Berhad (Award No. 1087 of 2023), Bursa Malaysia Berhad successfully defended against an unjust dismissal claim by arguing that the claimant's fixed-term employment contracts were genuine and had expired naturally.


The court ruled in the company's favour, finding no dismissal had occurred when the claimant's last fixed-term contract ended on its stated expiration date.


The case underscores the importance for employers and employees to ensure that fixed-term contracts are legitimate, as the natural expiry of such contracts does not constitute dismissal.


Background Facts:
  • The claimant Azalina Adham has been employed by Bursa Malaysia Berhad (the company) since 2001. She started as a permanent employee.

  • In 2012, she accepted a new role as Head of Strategy & Transformation on a fixed-term contract from 2012-2014. This required her to convert from permanent to fixed-term employment.

  • In 2015, she accepted another fixed-term contract from 2015-2018 for the Director, Strategy & Transformation role.

  • In 2017, she accepted a 3rd fixed-term contract from 2017-2020 for the role of COO. This contract terminated her 2nd contract early.

The Claimant's Case:
  • The claimant argues that the fixed-term contracts were not genuine as her work was not temporary in nature.

  • She claims there was an attempt by new management in 2019 to remove long-serving staff, including her.

  • She argues she has a legitimate expectation to continue working until retirement age 60 under the Minimum Retirement Age Act 2012.

  • She claims she was dismissed without just cause or excuse in February 2020, when her last contract expired.

The Company's Case:
  • The company argues the fixed-term contracts were genuine as senior roles are on fixed-term contracts per company policy.

  • The claimant knew her permanent role would be terminated when she voluntarily accepted the fixed-term contracts.

  • The claimant's last contract expired naturally on its end date of 14 Feb 2020, so there was no dismissal.

  • The role of the COO ceased to exist after restructuring, so there was just cause.

Burden of Proof:
  • Since the company disputes there was a dismissal; the burden is on the claimant to prove she was dismissed.

Issues for the Court:
  • Were the fixed-term contracts genuine? If so, did the last contract expire naturally?

  • If they were not genuine fixed-term contracts, was there a dismissal and was it with just cause?

The Law on Fixed-Term Contracts:
  • The court must first decide if it is a genuine fixed-term contract. Only then does the issue of dismissal arise.

  • If a genuine fixed-term contract expires naturally, there is no dismissal.

Evaluation of Evidence and Findings:
  • The court analysed the contract documents and evidence and found the contracts were genuine based on the parties intentions.

  • The last contract expired naturally on 14 Feb 2020, so there was no dismissal.

  • The role of the COO also ceased to exist after restructuring, providing just cause.

Conclusion:
  • The court found the fixed-term contracts were genuine, and the last contract expired naturally.

  • There was no dismissal, so the issue of just cause does not arise.

  • The claimant's claim is dismissed.

The Bursa Malaysia Berhad case demonstrates that when fixed-term contracts are determined to be genuine, their natural expiry does not amount to dismissal.


As such, employers can utilise fixed-term contracts without fear of unjust dismissal claims, provided the intention for a finite term is clear and agreed upon by both parties.


At the same time, employees should pay close attention to the terms of fixed-term contracts and not assume renewal, as they legitimately end on their expiry date. Both parties would be prudent to communicate expectations around contract renewal to prevent potential disputes.


The critical points for employers and employees are:

  • Employers must ensure fixed-term contracts are genuine to avoid claims.

  • The expiry of a genuine fixed-term contract is not a dismissal.

Reference:

190.1 Azalina binthi Adham v. Bursa Malaysia Berhad
.pdf
Download PDF • 185KB

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