Acexide Technology Sdn Bhd & Anor v Chang Heng Keong & Anor

Appellant(s):

• Acexide Technology Sdn Bhd
• Mahkamah Perusahaan Malaysia

Respondent(s): Chang Heng Keong

• YA Dato' Seri Vazeer Alam bin Mydin Meera
• YA Tan Sri Ahmad Terrirudin Bin Mohd Salleh
• YA Dato' Mohd Nazlan Bin Mohd Ghazali

• Two respondents served as directors and shareholders of the appellant company since its incorporation in 1996, holding functional titles of "Technical Director" and "Project Director" respectively. The company made EPF, SOCSO, and income tax (PCB) contributions and deductions on their behalf, and listed them in its register of employees.
• At an EGM in November 2019, the majority shareholder used his controlling stake to pass resolutions removing both respondents as directors. The EGM minutes recorded that the respondents were "discharged of all their duties" and that the company would "no longer be paying salaries" to them, effectively terminating their employment as well.
• Both respondents filed references under s.20 of the Industrial Relations Act 1967 ("IRA 1967") for unlawful dismissal. The Industrial Court and High Court dismissed their claims, finding they were not "workmen." The Court of Appeal reversed, holding they were both directors and employees, and awarded compensation and back-wages. The appellant appealed to the Federal Court on 11 certified questions of law.

• Whether the Order 53 r.3(2) statement in a judicial review application must specifically categorise errors of law under the recognised heads of judicial review (illegality, irrationality, procedural impropriety, proportionality), and whether non-compliance divests the court of jurisdiction to conduct a merits review.
• Whether an individual who is simultaneously a promoter, shareholder, and director of a private company — with no identifiable superior authority — can qualify as a "workman" under s.2 of the IRA 1967, and whether the absence of a formal written employment contract, defined job scope, and conventional indicia of control negates the existence of a contract of employment.
• Whether the Court of Appeal could make consequential orders for compensation and back-wages without remitting the matter to the Industrial Court for a fresh merits hearing, and whether deductions for post-dismissal earnings and contributory misconduct were required under the Second Schedule of the IRA 1967.

• The Federal Court held that while an Order 53 statement must identify errors of law under the recognised heads of judicial review, the respondents' statements sufficiently pleaded illegality and irrationality in substance and form. Non-compliance with Order 53 r.3(2) is not a jurisdictional defect; it is a procedural requirement, and the appellant's failure to raise this objection in the courts below further undermined the challenge.
• The Court affirmed that a director and an employee are conceptually and legally distinct roles, but an individual may simultaneously hold both. The respondents were found to be "workmen" under the IRA 1967 based on the totality of evidence — including EPF/SOCSO contributions, payroll records classifying payments as "salaries," their listing in the register of employees, and EA Forms — all of which the appellant could not rebut. The Court also clarified that executive directors report to the board as a whole, satisfying the superior-subordinate requirement, and that removal as a director under s.206(1)(a) of the Companies Act 2016 does not automatically terminate employment.
• The Court upheld the Court of Appeal's consequential orders for compensation and back-wages, finding that a merits hearing had already taken place at the Industrial Court. Since the appellant chose to defend solely on the basis that the respondents were not "workmen" and led no evidence of misconduct, remittal would unfairly grant the appellant a second opportunity to litigate. The Court confirmed the Court of Appeal's reliance on R Rama Chandran and Practice Note No. 3 of 2019 was correct, and that no deductions were warranted as the respondents remained unemployed and no contributory misconduct was proven.