Summary Facts:

Parties

: Britannia Brands (M) Sdn Bhd = Appellants

Low Lay Kiang = Respondent

Court

: High Court (Johor Bahru)

Date

: 4 August 2009
In Britannia Brands (M) Sdn Bhd v. Low Lay Kiang, Low Lay Kiang

(respondent) was a van driver of the Britannia Brands (appellant) starting from 16th
May 1975. No contract of employment between them were reduced into writing but a
document called Evidence Record (D1) for the respondent, which was created and
kept by the appellant, the only documentary evidence. On 14th June 2000, the
respondants employment was terminated and no termination benefits were given to
him with the excuse that he already reach the age of retirement. A complain was
lodge to the labour office and the Assistant Director of Labour (ADL), ordered the
appellants to pay the termination benefits with interest to Low Lay Kiang. However
the appellant appealed against the decision of ADL on the ground that they failed to
appreciate the age of retirement of 55 years old as an implied term and fail to take
into account S. 2 of the Employment Act 1955 (the Act) n wrongly interpreted
reg.4(1)(a) of the Employment (Termination and Lay-Off Benefits) Regulations 1980
(the Regulations). It was held that the appeal was dismissed with cost.
Analysis of Judgement:
In this case, the ADL made the conclusion pursuant to S. 69 of the Act. The
appellant was dissatisfied with it and appealed to the High Court under S. 77 of the
Act. It became the procedure under civil appeal from session court as prescribed by
O 9 r.2 of the Subordinate Court Rules 1980.
There are two important issues which the appellant submitted.
1) Whether the ADl erred in law failing to appreciate that it was an implied
term in the contract of employment that the retirement age was 55 years.
2) Whether the ADL fail to take into account s.2 of the Employment Act 1955
(the Act) and wrongly interpreted reg.4(1)(a) of Employment (Termination
and Lay-Off Benefits) Regulations 1980 (the Regulations).

First Issue : The first issue is whether the ADL in law in failing to appreciate that it
was an implied terms in the contract of employment that the retirement
age was 55 years.
Held

: The court will not infer the implied term on the retirement age as
contended by the appellant as it is not something so obvious ytaht it
ought to be provided in the contract of services and it is not the kind to
give business efficacy to the transaction of the contract of service.
Based on the first issue, the appellants counsel state that the claim that the

respondent made for termination benefits was made under reg.4(1) of the
Regulations but under that law, the respondent is not entitled to the termination
benefits. Although no letter of appointment was issued, the terms and regulations
between them were informed verbally. It was based on an oral contract.
They also claim that the respondent did not object to the letter that he receive
on 15th May 2000 and acknowledge the letter and stated that he would come to the
appellant office to receive his retirement benefits. The appellant counsel remark that
the respondent knew about the appellants practice and policy on the retirement age.
This show that at all materials time, the respondent was aware of it and the ADL
failed to take into account the fact.
However, the courts have its way to solve this issue. Based on the courts
finding, the ADL found that the terms and conditions of employment are contained in
D1 and it does not contain any provision on the retirement age. It was concluded that
there was no limit to the retirement age in D1. Although there were other employees
who retired when they reach 55 years old or earlier, they still received the
termination benefits.
Therefore, the court uses the two test which was laid down by the federal
court in the case of Sababumi (Sandakan) Sdn Bhd v. Datuk Yap Pak Leong [1998]
which described three types of implied terms. For the first type of implied term, which
is parties to the contract must have intended to include it in the contract though it has
not been expressly set out, two test must be satisfied first. The first test is where an
officious were to suggest some provision like in the case of Shirlaw v. Foundries
[1926]. The second test is that the implied term should be the kind thet will give

business efficacy to the transaction of the contract of both parties and can be
predicted as said in Luxor (Eastbourne) Ltd (in liquidation) & Ors v. Cooper [1941].

In the present case, although there was no contract of employment between

appellant and respondent, the D1 existed. D1 is not merely an employment recort,
but it contains all the terms and conditions of employment of respondent. However
no provision regarding the age of retirement were mention. It all relates back at the
time of negotiations. It was said that no evidence was shown at the time of
negotiations that provision on the age of retirement have been in the minds of both
the appellant ad respondent. It is not something that is so obvious that it ought to
have been provided in the contract. Beside, even without the implied term the
contract of service has been performed with business efficacy throughout the said
period.
Also, the so called practice cannot be implied under proviso (e) of s.92 of the
Evidence Act 1950 without a written contract of service. This is shown during the
time in 1975 when the appellant hired the respondent, no letter of appointment was
issued no other contract of services were made during the period of service of
respondent.

Second Issue

: Whether the ADL fail to take into account s.2 of the

Employment Act 1955 (the Act) and wrongly interpreted
reg.4(1)(a) of Employment (Termination and Lay-Off Benefits)
Regulations 1980 (the Regulations).

Held

: The respondent claim cannot be invoked to defeat under yhe

exception of reg.4(1)(a) even if ADL had made ruling following
the appellant.
The counsel of the appellant submitted that s.2 of the Act should be read

together with reg.4(1) of the Regulations. They learned that the respondent was not
entitled to the termination benefits if one of the implied terms in his contract of
employment includes the age of retirement. It is also due to the appellant practice n
policy. Not to mention the retirement age of 55 years have never been challenge nor
questioned by the respondent. Following the case of Malakoff Bhd v. Kuppusamy &
Ors [1991], the respondent fell within the exception of reg.4(1) of the Regulations.
The counsel of the appellant claim that ADL erred in allowing the respondebts claim
and stating that the retirement age is not possible to imply as implied terms.
Based on the claim, the court however finds that the exception in reg.4(1) can
only be applied if the contract of service contains a stipulation on the age of
retirement. The operative word, stipulation, based on Oxford Advanced Learner
Dictionary (2nd Ed) defines the word as state exactly how something must be or
must be done. The word only applies to what was express in the contract of service.
Reverting to the appellants contention, it was proven that the retirement age was not
a stipulation in the contract of service by ADL. It is not a wrong judgement made by
ADL that the retirement age was not possible to imply as implied terms.

Conclusion:
The appellant appeal was dismissed with the cost that in the first no letter of
appointment was issued by the appellant to the respondent. In D1, no terms or
conditions regarding retirement age was stated. Nevertheless, the respondent
already done his part on his services with business efficacy throughout his
employment services. The retirement age was also not so obvious that it would have
been provided in the contract. The court could not infer the implied term on the
retirement age following proviso (e) of s.92 of Evidence Act 1950 due to the absence
of a written contract. The retirement age was not an implied term in the contract of
service, the exception in para (a) could not be invoked to defeat the respondents
claim.