Zulkarnain Bin Hussin & Ors v Le Meridien Kuala Lumpur

Appellant(s):

• Zulkarnain Bin Hussin
• Nurul Nadia Binti Ramli
• Evelone Juin

Respondent(s): Le Meridien Kuala Lumpur Owned By Daito Asia Development (M) Sdn Bhd

• YA Datuk Supang Lian
• YA Datuk Hayatul Akmal binti Abdul Aziz
• YA Datuk Dr Shahnaz Binti Sulaiman

• A group of hotel employees filed claims at the Labour Office alleging that their hotel employer had unlawfully underpaid service charges by converting part of these charges to satisfy statutory minimum wage obligations under the Minimum Wages Order 2012.
• The Labour Court found in favour of 27 employees and ordered the hotel to pay over RM644,000 in outstanding service charges, holding that service charges are trust monies distinct from basic wages and could not be used to meet minimum wage requirements.
• On appeal, the High Court set aside the Labour Court's order, finding that the employees had consented (expressly or by conduct) to the wage restructuring and had failed to sufficiently prove their claims; the employees then appealed to the Court of Appeal.

• Whether the Federal Court's decision in Crystal Crown Hotel & Resort Sdn Bhd v Kesatuan Kebangsaan Pekerja-Pekerja Hotel, Bar & Restoran Semenanjung Malaysia, which prohibits using service charges to meet minimum wage obligations, was correctly applied or distinguished by the High Court.
• Whether the burden of proof for establishing entitlement to specific service charge points, their monetary value, and actual deductions made lay with the employees as claimants, notwithstanding the employer's record-keeping obligations.
• Whether employee consent (express or by conduct) to wage restructuring was relevant to the factual determination of contractual terms, despite the general principle that parties cannot contract out of statutory minimum wage protections.

• The Court of Appeal unanimously dismissed both appeals, holding that the High Court correctly intervened because the Labour Court's award was unsupported by adequate proof of entitlement, valuation, and actual loss.
• The Court clarified that Crystal Crown establishes the legal principle that service charges cannot be used to satisfy minimum wage obligations, but this principle does not dispense with the ordinary evidentiary burden on claimants to prove contractual entitlement, quantum, and actual deductions.
• The Court held that consent and conduct were properly considered by the High Court not to validate an unlawful wage arrangement, but as relevant factual evidence of the terms governing the employment relationship and what the employees knew and accepted over time.