Thursday, 23 February 2017

Decoding the Law on Fixed-Term Contracts

-----This article was written by Amardeep Singh Toor, Associate with the Employment Practice Group (Lee Hishammuddin Allen & Gledhill)-----

Security of tenure

An employee in Malaysia has security of tenure. He cannot be dismissed without just cause or excuse. If he considers himself to have been so dismissed, he has a statutory right to make representations in writing to the Director General of Industrial Relations to be reinstated. The Director General will then take such steps as he may consider necessary or expedient for an expeditious settlement. Where the Director General is satisfied that there is no likelihood of the representations being settled, he will notify the Minister, who may, if he thinks fit, refer the representations to the Industrial Court for an award.1 The employer may find himself liable to substantial monetary compensation should the Industrial Court find in favour of the employee.

The principle of security of tenure guarantees an employee’s legitimate expectation to continue in his employment and to earn his livelihood unless his employer has just cause or excuse to terminate his services.2  The right to be engaged in gainful employment is a proprietary right which may not be forfeited unless there is just cause or excuse.3

The only exception to the principle of security of tenure is an employee engaged on a fixed-term contract. An employee engaged on a fixed-term contract enjoys security of tenure only for the duration stipulated in his employment contract. A fixed-term contract of service, unless a termination occurs earlier, ceases upon the expiry of the agreed term. There is a possibility of an employer evading the statutory guarantee of security of tenure by using a series of fixed-term contracts.4

An employer has the flexibility to arrange his contractual employment relationships in the best interests of his business including structuring contracts for the employment of their personnel on fixed terms where the need for an employee’s services is for a certain fixed duration. This, however, would need to be balanced against an employee’s right to security of tenure.5

The task of the Industrial Court is, therefore:

Tuesday, 21 February 2017

Singapore Budget 2017 Highlights!

Mr Heng Swee Keat presented the 2017 Budget on 20 February 2017. Overall, the main message and objective of his delivered content is to ensure Singapore remains relevant and adaptable amidst the constantly changing global business environment.

Amongst the highlights of the 2017 Budget announcement were:

Tuesday, 7 February 2017

India's 2017-2018 Budget in a flash

Arun Jaitley, India's Finance Minister, presented the country's Budget 2017 on 1 February 2017.

The Budget proposes to halve the existing personal income tax rate of 10% for taxpayers earning an annual income between INR250,000 and INR500,000. A new surcharge of 10% of tax payable is proposed on individuals whose annual taxable income is between INR5m and INR10m, while the current surcharge of 15% of tax payable is retained for those earning more than INR10m.

A simple one-page income tax return for individuals with taxable income (other than business income) of up to INR500,000 has been proposed to be introduced.

The Budget also reduces the income tax rate for smaller companies with an annual turnover of up to INR500m to 25%.

A range of proposals in the area of international tax law, including new rules on secondary transfer pricing adjustments, new interest deductibility rules to implement the recommendations contained in Action 4 of the base erosion and profit shifting project, and other changes to domestic transfer pricing provisions were also included.  

The Budget also proposes to exempt Category I and II foreign portfolio investors from indirect transfer provisions and deletes the requirement for offshore funds to maintain a minimum fund size in the year in which the fund is being wound up to benefit from the special tax regime for offshore funds.

Detailed changes were not proposed for the current indirect tax regime as there are plans for a new goods and services tax regime to replace the existing one, tentatively in July 2017.

Sunday, 5 February 2017

Sunday Fun Reads: Malaysian Corporate Law Cases

Providing you with watercooler discussion ideas

Besides catching up on your colleagues' weekend activities and Chinese New Year shenanigans, here's an alternate topic - a trip down memory lane in respect of case laws relating to the Malaysian Companies Act.


1. Malayan Banking Berhad v Chip Lam Seng Enterprise Berhad [2014] 1 LNS 1583

Can a company avoid compulsory winding up by undertaking a voluntary winding up? Also covered, can the Court appoint a provisional liquidator pending the disposal of a winding up petition?

Monday, 23 January 2017

Equal Pay for Equal Work: A Constitutional Goal Achieved

This article was written by Rudra Srivastava and Ritika Modee (Singhania and Partners), one of our key authors for our best-selling Asia Pacific Employment Law (HELP) subscription.

One of the trends in the labour market of India that has been persistent and has become a reason of worry is the practice by employers to keep large section of workforce particularly the blue collar1 as temporary workers. Recruited through an elaborate system of contractors, these workers, though they are as competent as their “regular” counterparts, are denied not only the same wages and emoluments for the same work done but also other benefits. Such workers constitute almost 50%, sometimes more, of the workforce in many organisations and even in government departments2

Constitution of India in its preamble talks about equality in terms of both status and opportunity. The Constitution does not categorically provide for “Equal pay for equal work” with reference to the permanent and temporary or contract labour. The Supreme Court of India in its landmark judgement State of Punjab and ors v Jagjit Singh and ors , on 26th October, 2016 while taking a step in furtherance of social justice has conferred the right of equal pay for equal work upon the temporary workers vis-a vis the permanent workers. On a constructive reading of Article 143 , Article 15(1)4, Article 16(1)5 and Article 39 (d)6 it may be said that the Hon’ble Supreme Court has expanded the application of equal pay for equal work so as to cover within the ambit of the principle the right of temporary labour to receive same wages/salary as their permanent counterparts provided they are engaged in same work of equal difficulty and responsibility.

The question that arose for determination before the Hon’ble Supreme Court in the aforesaid matter was:

Monday, 16 January 2017

What ‘device’?

By Aaron Bromley and Dave Ananth, Ernst & Young Tax Consultants Sdn Bhd

The GST Act 2014 will have two new sections - Sections 34A and 34B - introducing the potential application of a device to monitor sales activity. Internationally, such a device is commonly known as an ‘Electronic Fiscal Device’ (EFD). The application of such a device, for any registered person as prescribed by the Minister, comes into effect on 1 January 2017.

Section 34A of the GST Act states that a registered person may be required to provide information on supplies made and payments received by way of a prescribed device, to be installed at the taxpayer’s business premises. Presumably this will be integrated or configured with the Point of Sale (PoS) system (eg cash till).

With the installation, RMCD will have access to information on all sales made by the company and the payments received, on a "real-time" basis. The purpose would appear to be to capture transactions potentially not reported in the GST returns filed by the person (or in the case of a person not registered, but required to be so, those transactions not reported at all). Hence, RMCD is targeting undisclosed supplies and potential fraud.