Case No: 26(1)(21)/4-272/07 Between Encik David Vanniasingham Ramanathan And Subang Jaya Medical Centre Sdn Bhd 4h1fm

INDUSTRIAL COURT OF MALAYSIA CASE NO: 26(1)(21)/4-272/07 BETWEEN ENCIK DAVID VANNIASINGHAM RAMANATHAN AND SUBANG JAYA MEDICAL CENTRE SDN BHD AWARD NO : 179 OF 2013 Before

:

AHMAD TERRIRUDIN BIN MOHD SALLEH CHAIRMAN (Sitting Alone)

Venue

:

Industrial Court Malaysia, Kuala Lumpur

Date of Reference

:

28.08.2006

Dates of Mention

:

16.02.2007, 01.10.2007, 09.10.2008, 22.06.2009, 05.11.2009,

27.04.2007, 04.01.2008, 30.01.2009, 30.07.2009, 01.12.2009,

Dates of Hearing

:

02.08.2010, 26.08.2010, 01.03.2011, 11.07.2011, 03.02.2012,

03.08.2010, 24.08.2010, 25.08.2010, 16.11.2010, 09.12.2010, 22.02.2011, 02.03.2011, 21.03.2011, 11.04.2011, 13.07.2011, 30.11.2011, 06.01.2012, 27.02.2012 & 22.03.2012

Date of Hearing of Application

:

09.02.2011

Representation

:

Mr. Su Tiang Joo, Mr. Teh Eng Lay & Mr. Abdullah Khubayb From Messrs. Cheah Teh & Su Counsel for the Claimant

15.06.2007,29.06.2007, 28.03.2008, 27.06.2008, 10.03.2009, 29.04.2009, 04.09.2009, 09.10.2009, 13.01.2010 &03.03.2010

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Y. Bhg Dato' M. Pathmanathan From Messrs. M. Pathmanathan & Co. Counsel for the Respondent/Company Mr. Rutheran Sivagnanam From Messrs. The Chambers of R. Sivagnanam & Associates, Solicitor for the Respondent / Company's Counsel Ms. Janice Anne Leo with Ms. Kathlyn Lee Sue Im From Messrs. Shook Lin & Bok Counsel for the Application for Summons (Form 'O') against Ms. Cheong Pek Yim to be set aside Reference: The reference of the Honourable Minister of Human Resources, Malaysia is regarding the alleged dismissal of Encik David Vanniasingham Ramanathan (“the claimant”) by Subang Jaya Medical Centre Sdn. Bhd (“the company”) on 31 July 2005. AWARD (NO : 179 OF 2013) The parties to the dispute are David Vanniasingham Ramanathan (“the claimant”) and Subang Jaya Medical Centre Sdn Bhd (“the SJMC”). The dispute between the claimant and the company arose out of the alleged dismissal of the claimant by the SJMC. Brief Background Facts The claimant is a doctor by profession and has been in medical practice since 1963. The claimant has been with the SJMC for the last 20 years until the alleged dismissal. The claimant then received a Notice of Non-Renewal dated 1

2

June 2005 (page 135 of CLB1) stating that his services with the SJMC will not be renewed. For ease of reference the said notice is reproduced below :

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The claimant contends that the Notice of Non-Renewal is an unjust dismissal without any cause. It is the contention of SJMC that the claimant’s medical practice was regulated through various agreements and at all material time the claimant was not under the employment of SJMC. SJMC further contends that the claimant was not dismissed but they decided to exercise their option stipulated in the agreement not to renew the claimant’s service agreement. Witnesses The following witnesses for the SJMC testified at the hearing of the case : (1)

Y. Bhg Dato’ Dr. Jacob Thomas, the then Chief Executive Officer (CEO) of SJMC and currently the Group Medical advisor and member of the Board of Directors of the SJMC (COW1);

(2)

Y.Bhg Dato’ Setia Dr. Annuar Marzuki is the Consultant Cardiologist (COW2); and

(3)

Chin Lee Ping is the Assistant Financial Controller of SJMC (COW3).

The following witnesses for the claimant testified at the hearing of the case: (1)

Cheong Pek Yim is the current Chief Executive Officer of SJMC who was at the material time the Chief Financial Officer of the company as well as the officer primarily in charge of Medical Staff Services Sdn Bhd (“MSS”) (CLW1);

(2)

Dr. Ngun Kok Wah who was a member of the Medical Advisory Board (MAB) of SJMC at the material time (CLW2); 4

(3)

Dr. Arlene s Fung Ngan was the Chairperson of MAB for the term immediately following the claimant's dismissal (CLW3);

(4)

Dr. John Tan Hong Guan was a member of MAB for the term immediately following the claimant's dismissal (CLW4);

(5)

Dr. Fong Chee Kin a consultant who left Assunta Hospital together with the claimant to the company in 1985 (CLW5); and

(6)

The claimant (CLW6).

Issues In this case the court reiterates that the claimant contends that the termination of his services under his contract of service is a dismissal without just cause or excuse and seeks reinstatement. However, the SJMC contends that the claimant was not dismissed since he was not under the employment of SJMC. Therefore, the so called “dismissal of the claimant” is actually nonrenewal of his service contract. In view of the above, court feels that the critical issues for the determination of the court are as follows: (a)

What is the status of the claimant: is he a workman as envisaged by the definition of “workman" under section 2 of the Industrial Relations Act 1967 (“the Act”) or is it a contract for services?;

(b)

If the claimant’s is a contract for services then the claimant is not a workman within the meaning of the Act and the question of an unjust dismissal will not arise;

5

(c)

However, if the court finds that the claimant’s contract is a contract of service, as it is commonly referred to in case law then the claimant is considered as a workman under the Act and the next question to be addressed is whether he had been dismissed without just cause or excuse.

The Law As for the first issue, the court opines that it is mundane for the court to determine the meaning of workman within the meaning of section 2 and by extension section 20 of the (the Act). In the same breath, the court further opines that it is also germane as a starting point for this case to refer to the decision of Gopal Sri Ram JCA (as he then was), sitting in the Federal Court in the case of Hoh Kiang Ngan v. Mahkamah Perusahaan Malaysia & Anor [1996] 4 CLJ 687 where his Lordship espoused as follows: “In our judgment, the correct test to be applied in determining whether a claimant is a workman under the Act is that enunciated by Chang Min Tat FJ in Dr. A. Dutt v. Assunta Hospital [1981] 1 LNS 5; [1981] 1 MLJ 304 at p. 311. We accordingly hold that a workman under the Act is one who is engaged under a contract of service. An independent contractor who is engaged under a contract for services is not a workman under the Act. We take this view because it provides, as earlier observed, for a flexible approach to the determination of the question. It is fairly plain to see why flexibility is achieved by having resorted to this test. In all cases where it becomes necessary to determine whether a contract is one of service or for services, the degree of control which an employer exercises over a claimant is an important factor, although it may not be the sole criterion. The of the contract between the parties must, therefore, first be ascertained. Where this is in writing, the task is to interpret its in order to determine the nature of the latter's duties 6

and functions. Where it is not then its must be established and construed. But in the vast majority of cases there are facts which go to show the nature, degree and extent of control. These include, but are not confined to, the conduct of the parties at all relevant times. Their determination is a question of fact. When all the features of the engagement have been identified, it becomes necessary to determine whether the contract falls into one category or the other, that is to say, whether it is a contract of service or a contract for services. There is not a single satisfactory test that is available for the determination of the issue.”.

(See also : Kuala Lumpur Mutual Fund Bhd v. J. Bastian Leo & Anor [1988] 2 CLJ 175 and Transportable Camps Sdn Bhd v. Liew Chong Juk [1991] 2 ILR 891A). On the issue of control, the court understands and is well aware that the nature of modern employment requirements and practices, specialization skills, responsibility levels and varied work locations are such that the application of the control test as sole criteria to determine the existence of a contract of service has become blunt. And on this the court refers to the Halsbury's Law of Malaysia Vol. 7, 2000 Edn reads at page 8 as follows : “The test that used to be considered sufficient, that is to say the control test, can no longer be considered sufficient, specially in the case of highly skilled individuals, and it is now only one of the particular factors which may assist a court or tribunal in deciding the point.”.

(See also : Mat Jusoh Daud v. Syarikat Jaya Seberang Takir Sdn. Bhd. [1982] 2 MLJ 71).

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The Privy Council in the case of Lee Ting Sang v. Chung Chi-Keung & Anor [1990] 2 AC 382 had to determine what is the standard to apply to answer the question whether the workman was working as an employee or as an independent contractor. Their Lordships agreed with the Court of Appeal when they said that the matter had never been better put than by Cooke J in Market Investigations Ltd. v. Minister of Social Security [1969] 2 QB 173, pp. 184-185: “The fundamental test to be applied is this: 'Is the person who has engaged himself to perform these services performing them as a person in business on his own ?' If the answer to that question is 'yes', then the contract is a contract for services. If the answer is 'no', then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors which may be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task.”.

It might also be useful to refer to the case of Ready Mixed Concrete (South East) Ltd v. Minister of Pensions [1968] 1 WLR 439, at p. 440 MacKenna J set out three conditions to be fulfilled before a contract of service exists, namely:

8

(i)

The servant agrees that in consideration of a wage or other remuneration he will provide his own work and skill in the performance of some service for his master.

(ii)

He agrees, expressly or impliedly, that in the performance of that service he will be subjected to the other's control in a sufficient degree to make that other master.

(iii)

The other provisions of the contract are consistent with it being a contract of service.

The court also notes that the modern test if one is under a contract of service seems to be dependent on whether the person is part an parcel of an organization (see : Bank Voor Handel En. Scheerpvaart N.V. v. Straford And Another [1953] 1 QB 248) at page 295). In Syarikat Kilang Japan Pesaka Terengganu Bhd v. Terengganu Timber Employees Union [1987] 2 ILR 32. The court held as follows : “The court is mindful that the dividing line between a contract of service and a contract with an independent contractor is very fine nd must depend on the facts of each case.”.

Section 2 of the Act defines “workman” and “contract of employment” as follows : “workman” means any person, including an apprentice, employed by an employer under a contract of employment to work for hire or reward and for the purpose of any proceedings in relation to a trade dispute includes any such person who has been dismissed, discharged or retrenched in connection with or as a consequence of

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that dispute or whose dismissal, discharge or retrenchment has led to that dispute; and “contract of employment" means any agreement, whether oral or in writing and whether express or implied whereby one person agrees to employ another as a workman and that other agrees to serve his employer as a workman. In view of the above decided cases and definitions, the court discovers as follows : (i)

there is no clear cut test to determine whether the claimant is a workman (see : Australian Mutual Provident Society v. Allen [1997] 16 SASR 237);

(ii)

any single test is insufficient; and

(iii)

the facts of each case must be examined throughly.

Thus, the court will now proceed to deal with merits of the case. Evidence Tendered By The Parties SJMC’s Case To start the case for SJMC, COW1 in his witness statement (COWS1), stated that the claimant was a General Surgeon at SJMC and started practising on 1 July 1987. Regarding the working status of the claimant, COW1 contends that the relationship between the claimant and SJMC was governed by Agreement Active Status dated 1 August 1987 (“Agreement dated 1 August 1987”) which was for a period between 1 August 1987 to 1 October 1995 (pages 17 to 39 of COB1). The second Agreement Active Status was executed on 1 October 1995 10

covering the period from 1 October 1995 to 31 July 2005 (“Agreement dated 1 October 1995”) (pages 55 to 66 of COB7). COW1 pointed out that clause 7 (a) of the Agreement dated 1 October 1995 clearly states as follows: “At the end of the first three year renewal the contract will automatically further renewed for subsequent three year periods until the consultant reaches 60 years of age unless either party gives written notice of at least sixty (60) days prior to the term ending to the other party of its intention not to renew the agreement.”.

Therefore, COW1 said based on the above clause, it is the SJMC's contention that both parties had a right of non-renewal which could be exercised in the event either party wished to bring the Agreement to an end. To further clarify the status of the claimant, COW1 also highlighted that clause 13 of the Agreement dated 1 October 1995 which provides that the claimant shall be an independent contractor and not the agent of servant of SJMC. For ease of reference, clause 13 states as follows: “Independent Contractor For the purposes of this Agreement and all the obligations undertaken and the services to be provided hereunder the Consultant shall be an independent contractor and not the agent or servant of SJMC. The Consultant

shall

have

no

authority

to

make

any

statements

representations of commitments of any kind or to take any actions which shall be binding on SJMC unless with the prior written consent of SJMC.”.

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COW1 in his written evidence, further explained the status of the claimant with the following contentions: (a)

The claimant never ask to be made the employee of SJMC;

(b)

The claimant did not ask his tax, EPF to deducted from his salary;

(c)

The claimant did not earn a salary but he received professional fees from patients less agreed deductions for facilities which he purchased from the SJMC for which SJMC was the collection agent;

(d)

All employee remunerations are paid directly to the employees concerned and in claimant’s case the fees payable to him was remitted to a private company nominated by the claimant namely Colram (M) Sdn Bhd;

(e)

The claimant was not subjected to deductions for EPF and income tax;

(f)

The claimant’s and conditions of service were not istered by the Human Resource Department of SJMC;

(g)

The claimant was not subjected to the and conditions stipulated in the various handbooks issued by SJMC;

(h)

If the claimant was absent or decided to take leave then he would not be entitled to any remuneration in that time and he is free to make his own decision on how to assign patients;

(i)

The claimant was not subjected to scrutiny of any annual appraisal. He also did not receive any increments or bonuses nor was he subject to the retirement age provision that apply to a normal employee;

(j)

The hospital determines regular business hours but the exact times and frequency for clinic session is determined by the doctors themselves; 12

(k)

As for the nurse, COW1 contends that it is the standard feature in a clinic and agreed by both parties;

(l)

The claimant had to paid for the use of medical facilities such as medical instruments, tool and staff;

(m)

The claimant was allowed to treat his own patients subjected to the payment for the use of the hospital facilities and in doing so and compliance with the ission process;

(n)

The hospital did require a detailed record of the care and the claimants’ patients for the establishment of a system; and

(o)

On the issue that the claimant was restricted from residing and practising outside the Klang Valley, it is the contention of SJMC that being a Klang Valley hospital services are time sensitive because it dictates response times.

On the agreement dated 1 October 1995, COW1 alleged that the said agreement was only finalised and executed after extensive negotiations between the doctors’ representatives and the representatives of SJMC. COW1 further stated that during the negotiations the doctors were able to seek legal advice and in fact the claimant was one of those who represented the doctors and had agreed to these . To this contention, COW1 exhibited various minutes of the meetings (pages 3 to 16, 40 to 44 and 47 to 52 of COB1). According to COW1, unlike the claimant, doctors employed by SJMC have an employment contract (page 1 of COB2). COW1 contends that although the claimant was offered the opportunity to purchase any new houses (page 131 of CLB1) by Sime Darby Group that does not make the claimant an employee of SJMC. This is because the benefits including purchase of houses offered by Sime Darby Group were also made available to many of its business s and other professional including lawyers and ants. Regarding the 13

Medical Staff Services Sdn Bhd (MSS), COW1 said that MSS was set up to provide various services. COW1 further stated that the scheme provided by MSS did allow the doctors who elected to subscribe the shares of MSS to enjoy revenues generated by the MSS. However, COW1 explained that the subscription of shares in MSS does not make the claimant an employee of SJMC since the Agreement Active Status did not mention about it. COW2 in his witness statement (COWS2) confirmed the evidence of COW1 that both Agreements Active Status were formulated after extensive discussions between the doctors’ representatives and SJMC. COW2 said he did have personal knowledge of what was discussed and transpired in those meetings because he chaired it with the exception of the meeting on 13 May 1994. He further confirmed that the claimant was involved in those meetings. To his contention, COW2 exhibited Minutes of the Meeting (pages 2 to 10, 12 to 14, 16 to 21 of COB4 and pages 1 to 4 of COB4). COW2 said he had written a letter to the claimant expressing his gratitude for the claimant’s involvement (page 34 of COB4). COW2 further stated that by virtue of clause 13 of the Agreement Active Status they are not employees of the hospital but are independent medical practitioners who practice at the hospital as independent contractors. COW2 explained that basically they are in a partnership with the company whereby the company provides medical facilities and equipment and the doctors provide the professional skills. COW2 deny any suggestion that doctors are monitored or supervised by nurses who are assigned by the SJMC since the nurses come as part of the clinic and their costs are part of the rental which the doctors pay. In term of clinic sessions, COW2 said that they are not under control in the sense that somebody telling them when and how many sessions to hold or how many patients they must treat. However, COW2 did not deny that they rely on SJMC to ister their decisions in of ensuring that there is a clinic and sufficient in of the related facilities. As for the by-laws, policies, rules, regulations 14

and procedures (pages 80 to 85, 86 to 95 and pages 346 and 347 of COB1), COW2 informed that these were drawn up tly with the company and in conjunction with Medical Advisory Board (MAB) with input from doctors from the relevant area of specialties. He further said that by laws and rules established for them to work together. As such, COW2 did not agree that the doctors work under the control of the hospital and in his view they are working in a kind of partnership. Regarding the use of equipment of the hospital, COW2 said it is not a question of being compelled but this arrangement allows the doctors to focus on their work while the Sime Darby Group takes on the costs and the risk of capital and equipment. However, if a doctor refused to agree on this arrangement he will not himself with the hospital (pages 348 to 355 of COB1). As for leave, COW2 said that there is no necessity to obtain approval from the hospital as an employee would all that need to be done is to notify them. On the issue of MSS, COW2 said MSS is a long term investment scheme for participating medical consultants and not open for employees of SJMC. COW2 said that a doctor does not become an employee of the hospital by participating in MSS. The last witness for SJMC is COW3. In her witness statement (COWS3), COW3 confirmed that the claimant nominated a company known as Colram (M) Sdn Bhd (“Colram”) to receive his revenue. She further confirmed that based on the summary of payments remitted to the claimant from year 2002 to 2005 (attachment 1 of COWS3), the claimant did give specific instruction to SJMC to remit all revenues due to him to be paid to Colram. According to COW3, based on the documents in Colram the claimant is a director and shareholder (pages 114 to 120 of COB1). Based on Attachment 1 of COWS3, COW3 stated that there was no deduction for income tax.

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Claimant’s Case CLW1 in her oral testimony during examination in chief, denied that she was aware that one Robert M. Manson (“Robert”) did assure the claimant that he can continue with the SJMC as long as he is healthy. With regards to the MSS, COW1 itted that she was involved in the formation of MSS and was entrusted by the doctors to work with Messrs. Lee Hishamuddin and Price Water House to come up with a program for them. CLW1 agreed that the purpose of MSS contained in the claimant’s Redeemable Preference Shares (RPS)- and Conditions of Issue (page 1 of Tab 3 of CLB2). CLW1 itted that MSS did contribute EPF to its employees including the claimant and doctors because they are employees of MSS. CLW1 itted that the claimant was given allotment of RPS. For the MSS scheme, CLW1 testified that the doctors who invested are given RPS which can be redeemed after certain period of time based on a formula agreed and set by the doctors in the M&A. On the issue of payments made to SJMC, CLW1 said the doctors did pay rental at the end of the month. The second witness for the claimant testified that he first knew about the claimant’s termination when there was an ad-hoc meeting called in the early morning of 1 June 2005 by the Chairman of MAB one Dr. R. Pathmanaban at the request of COW1 and in that meeting the of the meeting were told by COW1 that the meeting had been called to discuss the management’s decision not to renew the claimant’s contract. It is the contention of CLW2 that claimant should have been given a warning instead of having his contract terminated. This is because CLW2 said that when imposing a heavy sentence with such has a far reaching consequences that may affect someone for the rest of his professional life and to him the claimant should always be given a second chance to amend his ways. In fact he said, MAB was aware of the dispute between Dr. Ng Soo Chin (“Dr.Ng”) and the claimant and had advised Dr. Ng to resolve the matter amicably. CLW2 said that he was supposed to draft a letter on behalf of the MAB to the claimant to advise him 16

to settle. However, they were informed by COW1 that the management had decided to handle the issue themselves and MAB was stopped from issuing the letter. CLW2’s opinion was shared by Dr. Sanjay Woodhull and Dr. A. Vimalanathan. It is the contention of CLW2 that according to COW1 the basis for the non-renewal of the claimant’s contract was because of his actions in EGM and QMS meetings together with Dr. Ng’s letter of complaint against the claimant. CLW2 further contends that COW1 said that there were several issues involving the claimant including his attempt to remove the PEC and CDM sub-committee of Dr. Ng and Dr. Pathamanathan, his opposition against the recredentialing programme and his stand against the purchase of Megah Medical Specialist Centre (“Megah Specialist”) that had undermined the organization of the hospital and were detrimental to the hospital, all of which led to the termination of his contract. As to the MAB’s stand with regards to the claimant’s termination, CLW2 stated that the meeting ended without any common stand or statement from MAB. CLW2 alleged that COW1 informed that no warnings had been given to the claimant but COW1 said that the claimant could appeal for his so called non-renewal. CLW3 has given a written testimony during examination-in-chief (CLWS3), stating that when he was elected as the Chairperson of MAB there were lot of questions by the doctors in relation to MSS. According to CLW3, MSS was like a pension fund to encourage the doctors to work at SJMC in the long run. CLW3 further stated that for MSS scheme the doctors paid 10 cent and the hospital would pay the balance of 90 cent per share. As to the entitlement of shares the doctors were entitled to it would depend on their categories with the hospital and upon their retirement or after certain number of years in service with the hospital, the doctors would be able to cash it on the shares. Regarding the duration of MSS, CLW3 informed the court that MSS was supposed to be open-ended but on his request, CLW1 told him that MSS was terminated by the Sime Darby management because the objective of the scheme to retain the doctors and their loyalty was not met. The fourth witness for the company is Dr. John Tang 17

Hong Guan. CLW4 did prepare a witness statement (CLWS4). CLW4 explained that the events leading to the dismissal of the claimant by firstly stating that there were series of meetings regarding the issue of new CDM. CLW4 pointed out that during the meeting on 25 February 2005 the doctors were unhappy that their recommendations on the proposed new CDM were not taken into and they were kept in the dark over the whole negotiations and there was also the feeling that the negotiations for the new CDM was too hurried and rushed. As for the claimant, CLW4 said that the claimant was very vocal during the meeting but he said it is not only him because a lot of the doctors also aired their disappointments. As for MSS, CLW4 confirmed that he only paid part of the price shares while SJMC paid the rest. CLW5 is the second last witness for the claimant’s case. CLW5 has a written testimony (CLWS5). CLW5 stated that the claimant and him were both colleagues at Assunta Hospital and ed SJMC at the same time. CLW5 further stated that after he resigned from Assunta Hospital he ed SJMC sometime in 1985 and there was no contract. As such, he said the matter was brought up several times regarding to what kind of tenure the doctors are going to have at SJMC as they were still young and had a long career in front of them so Robert assured them in one of the meetings which the claimant was present that they would have a long tenure and as long as they are healthy they were allowed to work there. CLW5 said finally he was given a contract in 1987 and as far as he is concerned based on the assurances given by Robert his services will be continued without intervals. CLW5 explained that the most significant difference between 1987 and 1995 contracts is that the roll over clause inserted that consultants over the age of 60 would have their contracts renewed on a yearly basis and this was done in case the doctors became infirm and could no longer carry on the practice of the medicine. As to the issue whether they are independent contractors, CLW5 said that he is not really independent because they have to obey some rules regarding how they investigate. He said for example if he wants to operate on somebody he has to do some investigations on the patient first by using facility 18

in the hospital, to treat them using equipment provided by the hospital and he cannot tell them what machine or instrument to buy. However, compared with independent contractor they can buy machine or instrument they want. Regarding leave, CLW5 said he had to apply leave just like employees be it vacation leave, study leave or conference leave. For on call, CLW5 confirmed he is also subjected to the roster drawn up by the istration of the hospital. CLW5 did not deny that SJMC did provide staff to run the clinic but they cannot remove them. In respect of items charged and bills, CLW5 said SJMC issued bills to the patients and if any decision to write off the fees it will the decision of SJMC while he is only allowed to waive his consultant fees but not the hospital’s fees. Further, he said they are not allowed to collect fees. CLW5 also described a situation whereby if a patient refuses to pay the bill, the hospital is the one who decides whether to write off or pursue the patient and not him. Apart from that they have to follow by-laws and to him independent contractor would mean free to collect own fees, send their patients to buy medicine at pharmaceuticals where they choose. As for remuneration, CLW5 confirmed that he received his remuneration on a monthly basis by cheque and was made in the company’s name for tax benefits. Regarding other benefits, CLW5 said he also enjoyed discount on houses, cars, foodstuff and others offered by SJMC. Finally, on MSS CLW5 denied the suggestion that this scheme was suggested by doctors and in fact he said this was the idea mooted by Mack Banner when they faced the impending opening of Sunway Hospital so Mack Banner developed a pension scheme, a sort of EPF for the doctors to stop them from being enticed to Sunway and to attract new doctors. In his understanding, MSS was managed by SJMC and was like a pension scheme with the doctors paying for some redeemable preference shares with the understanding that the hospital would pay for the 90% of the price of the shares while the doctors put in the remaining 10%. CLW5 confirmed that he was aware that he was an employee of MSS and MSS did pay their salary and EPF. On the events leading up to the 19

dismissal of the claimant, CLW5 ed the evidence of CLW4 on CDM and the claimant’s involvement. The claimant vide his witness statement (CLWS6) gave evidence as the final witness. In his written evidence, the claimant mentioned that he ed SJMC since its inception in 1985 and was one of the pioneers. Prior to ing the hospital, the claimant was approached by Robert to SJMC. The claimant explained that there was no written agreement between SJMC and him when he ed in June 1985 because the doctors including him were more interested in making the hospital a success. According to the claimant, the proposed agreement (pages 3 to 51 of CLB1) was only given subsequent to him commencing employment with SJMC. It is the claimant’s contention that the arrangement at that material time between SJMC and him was the claimant to be allowed to practice medicine without management interference into the clinical aspect of his practice and was also told that so long he is healthy he can continue practising at SJMC. The claimant itted that for this arrangement there was no written agreement. The claimant agreed that subsequently he entered into two Active Agreement Status dated 1 August 1987 (pages 52 to 74 of CLB1) and Agreement Active Status 1995 (pages 75 to 86 of CLB1) with SJMC. With regards to the issue whether at the material time he was an independent contractor by virtue of clause 13 of both agreements, the claimant claimed that he was never an independent contractor and clause 13 was a mere label from day one. The claimant said that the clause 13 was inserted by the corporation to arm itself against medical negligence actions. The claimant claimed that he was referred to as a medical staff and was treated as an employee. The claimant reiterates that he was told that he can stay as long as he is healthy and he trusted SJMC on this all this while and committed himself exclusively to SJMC and he had no clinic and had not provided services elsewhere. The claimant further contends that from the time he ed SJMC until end of July 2005 he never practised outside SJMC and he has been a Consultant Surgeon with category A. Thus, under category A and based on the “Bylaws of the Medical Staff of SJMC” (“By 20

laws”) (pages 87 to 107 and 108 to 118 of CLB1) the claimant was not allowed to practice elsewhere. As to the By laws, the claimant said it was made by the Chief Executive Officer (“CEO”) of SJMC acting tly with MAB and any amendments to the Bylaws would then have to have the concurrence of the CEO. In relation to other restrictions, the claimant also contends as follows: (a)

To comply with the By laws, Rules, Regulations, policies and procedures of the SJMC (clause 2(a) and (b) of the agreements (pages 53, 54, 76 and 77 of CLB1));

(b)

Being the category A, the claimant was obligated to conduct clinic sessions during office hours as may be determined by SJMC and shall be on call rotation at such time and for such period as SJMC may decide (clause 2(g) and (j), clause 2(g) of page 77 and clause 2(i) and (I) of pages 54 and 55 of CLB1);

(c)

Was allocated a clinic in SJMC but not allowed to have own nurse, not allowed to put up signage like an outside clinic;

(d)

Name card , business card and letterhead provided by SJMC (pages 124, 125 and 126 of CLB1);

(e)

Obligated to exclusively use the investigate, therapeutic, surgical, pharmaceutical and other services available at the hospital (clause 2 (j) and clause 2 (h) of pages 55 of 77 of CLB1);

(f)

SJMC provided all the medical instruments, equipment and tools and staff and was not allowed to use any other medical instruments, equipment and not even the freedom to purchase his own medical instruments;

(g)

The staff including istrative staff and nurses were SJMC’s employees and were not only assist his work but also to monitor him and to comply with SJMC’s stringent procedures; 21

(h)

Not allowed to dispense drugs and medicine directly to the patients and must prescribe them from dispensary run by SJMC;

(i)

Not allowed to refer patient to any alternative hospital with lower charges and must recommend to the patients the services, treatments and the use of the facilities at SJMC and give the quote of charges;

(j)

SJMC stipulated the location of his personal residence that is the claimant was required to reside and practise within Klang Valley (clause 2 (g) and clause 2 (f) of pages 54 and 77 of CLB1);

(k)

Required to put in a form if the claimant needed to go on leave (page 127 of CLB1);

(l)

SJMC control appointment, ission of patients and the reference or assignments of patients to his care;

(m)

In respect of medication, SJMC provided and sold medication to the patients through its dispensary and the claimant could only prescribed. The patients pay SJMC and SJMC issues receipt of payments to the patients;

(n)

Surgery and the use of operation theatre was also controlled by SJMC;

(o)

There was also detailed procedure in relation to recording the care and treatment of patient. SJMC can take disciplinary action against the claimant if he failed to follow procedure; and

(p)

Could not practise outside Klang Valley;

The claimant also claimed that being a category A medical staff he is required to provide medical services at SJMC clinics outside Klang Valley that is Kerteh, Terengganu (pages 128 and 129 of CLB1). On control over treatment and care, 22

the claimant itted that for clinical judgment, the SJMC did not directly exercise control but SJMC after consulting the MAB sitting as the Disciplinary Committee could take disciplinary action if his clinical judgment was below professional standards. There are the Rules and Regulations of the Medical of the Medical Staff of SJMC (Tab 6 and 7 of CLB1). Regarding the other benefits, the claimant said that SJMC is part of Sime Darby Group of companies and through his relationship, the doctors including him were given certain benefits for examples housing loans, hire purchase loans at a lower interest rates and discounted price when purchasing BMW’s car (page 131 of CLB1), discount for purchase of merchandise such house hold items, toiletries and groceries from Sime Darby staff shop (Memorandum (dated February 28) page 132) and medical benefits of free inpatient treatment on an unlimited basis and outpatient treatment (page 133 of CLB1). On the issue of MSS, the claimant said that it was a pension fund established for the benefit of the medical staff at SJMC. From 1995 to 2004, SJMC and the claimant paid respective shares of contribution. According to the claimant, this fund was to dissuade medical officers from leaving SJMC to Sunway Medical Center. The claimant said in 1994 SJMC also started paying his EPF under the guise of MSS. The claimant explained that MSS operated as follows: (a)

MSS was to operate in the form of redeemable preference shares to be issued by MSS to the medical staff of SJMC by virtue of their services at SJMC and the medical staff would be listed as employees of MSS. The medical staff would be entitled to redeem the preference shares with the premised upon the number of years served with SJMC.

(b)

As part of the scheme, it was envisaged that the holders were only required to pay 10% of the issue price of the said shares

23

whereas the claimant believes that remaining 90% of the said shares would be paid by SJMC. The claimant said that he does not have any record of employment with MSS but he is subjected to EPF deductions (Tab 2 and Tab 5 of CLB2). The claimant denied that SJMC was only entrusted to manage the MSS because he said SJMC was the one who initiated the MSS and had full control of MSS. With regards to clause 7 for both agreements (pages 58 and 80 of CLB1), the claimant alleged that this clause was put by SJMC for its own benefits whereby SJMC could get rid of doctors when the needs arose. To his understanding, clause 7 is understood to have intended to regulate a situation where a consultant reaches an age when he is physically or mentally infirm as to impair the discharge of his duties as a medical professional. The claimant said he is fit and capable medically to continue his work and to discharge his duties as a medical professional and in SJMC there are at 20 consultants who are over 60 years of age with 2 of them over 70 years of age. As for his non-renewal, the claimant said that there was no proper consultation with the MAB. The claimant contends that his termination was because he has been active in pursuing the interest of the doctors practising at SJMC to the dislike of SJMC and COW1 mentioned to him that he had been disruptive. The claimant then narrated the events leading to his termination as follows: (a)

On 25 February 2005, during the Quarterly Meeting of the Medical Staff, the claimant along with several other doctors questioned the purpose of SJMC’s proposal for having a Recredentialing Programme for doctors which he opposed it;

(b)

During that meeting the claimant also requested that the Code Data Management or CDM which is the fees’ schedule to be revised upwards; 24

(c)

On 8 March 2005, the claimant chaired a Surgeons and Anaesthetists Meeting to discuss the CDM proposal. Following that meeting, an EGM was called.

(d)

Unknown to the claimant, COW1 requested the Chairman of MAB, Dr. Pathmanathan to recount the events occurring in the meeting on 25 February 2005. Dr.Pathmanathan then wrote a letter dated 14 March 2003 (pages 160 to 162 of CLB1). The claimant believes that the said letter has brought about a DI against Dr. Ng. Therefore, the claimant and other doctors protested against the treatment meted out against Dr.Ng (page 163 of CLB1). The claimant then requested another EGM on 11 May 2005 and during that meeting the claimant protested against what had happened to Dr. Ng. However, the claimant was surprised when SJMC responded by dismissing him through the Notice of Non-Renewal dated 1 June 2005. The claimant again believes that this was done to stop him from participating in pursuing the interests of the doctors practising at SJMC.

Evidence, Evaluation and Findings Based on the evidence tendered in this case, the court reiterates that before determining the issue whether the claimant was dismissed by the SJMC without just cause and excuse, it is vital and fundamental for the court to decide firstly, whether the claimant was working under the employment of SJMC or on his or independently and not employed as an employee of the SJMC. Thus, after having considered the produced evidence as a whole on this question and with due regard to the extensive submissions filed by both learned counsels together with the authorities in of their contentions, 25

the inescapable conclusion would be that there was never an intention on the part of SJMC to create legal relations with the claimant on the basis of a relationship of employer and employee. In other words, the claimant cannot be considered as a workman for the purpose of the Act. This is because firstly, the court finds that there was no written contract of employment at the material time between the claimant and SJMC and the claimant did not deny this fact. The court is of the opinion that if SJMC ever wanted to include the claimant as part of its workforce definitely a letter of employment would have been issued to him rather keeping quiet without any proper documentation for the last 20 years. The court also does not think that SJMC intended to employ the claimant because COW1 gave evidence that SJMC have their own medical officers appointed with proper formal appointment letters (a sample of the appointment letter (pages 1 and 2 of COB2)). Further, the claimant during cross-examination did not dispute the existance of these medical officers as employees of SJMC. Thus, in court's view if the claimant did ever regard himself as the employee of the SJMC he should been asking SJMC why he has not been issued a letter of employment like the other medical officers? The court its that though contract of employment is not the sole criteria in determining the issue whether the claimant at the material time was employed as an employee of SJMC but by having a documented written contract of employment would definitely assist the court in ascertaining the actual status of the claimant's employment. To this finding, the court looks at the case of Klinik Bukit Jambul v. Balavendrian Anthony [2002] 3 ILR 638 at page 643 where Industrial Court held as follows : “This court agrees with the company's submission that the best convincing evidence that the claimant was a permanent employee would be the contract of employment. Failing to produce the contract of

26

employment, the claimant would need to produce at least the mandatory deduction of EPF, but none of there are available.”.

Still on the same point, the court is also aware that “a contract of service under the Act need not be in writing. It can be implied” (see : Kilang Gula Perlis Sdn Bhd v. Aman Shah bin Khalid [1998] 5 MLJ Supp 700). In the absence of a written contract of employment, the court left with no option but has to look at the conduct of both parties and other relevant evidence or documents to determine whether and the material time there was a binding contract between the claimant and the SJMC since the claimant alleged that SJMC had employed him under a of service (see: Lau Sieng Nguong v. Hap Shing Company Ltd [1969] 1 LNS 80). Therefore premised on the above and basing on the tendered evidence, the court discovers that for nearly 20 years the relationship between the claimant and SJMC was only governed by Agreement Active Status dated 1 August 1987 (from 1 August 1987 to 1 October 1995) (pages 17 to 39 of COB1) and Agreement Active Status (from 1 October 1995 to 31 July 2005) (pages 55 to 66 of COB1) (“the Agreements”). It is the understanding of this court that these Agreements set out the parameters for doctors having status like the claimant to practice in SJMC. It is to be noted that both parties did not dispute the existence of these agreements. As such, it is important to interpret the contained in the said Agreements in order to determine the nature of the claimant's duties and functions. Upon scrutinizing thoroughly both Agreements, the court finds that it is abundantly clear that the nature of relationship between the parties at the material time was more of a contract for services. In coming to this finding, the court had perused at clause 13 of the Agreements which clearly spelt out 27

the actual status of the claimant during his tenure at the SJMC was an independent contractor. For ease of reference the court again reproduced below the said clause 13 : “Independent Contractor For the purposes of this Agreement and all the obligations undertaken and the services to be provided hereunder the Consultant shall be an independent contractor and not the agent or servant of SJMC. The Consultant

shall

have

no

authority

to

make

any

statements

representations of commitments of any kind or to take any actions which shall be binding on SJMC unless with the prior written consent of SJMC.”. (emphasis added)

It is apparently clear from the above clause, the court gets the impression that it is not the intention of the parties to create a master and servant relationship (see : Chan Whye Sc Sons Contractors v. Sarawak Shell Berhad [2002] 1 LNS 192). In this aspect also the court refer to the case of SP Fast Trading (SP) Sdn Bhd v. Esso Malaysia Bhd [2009] I LNS 1620 where the High Court held as follows : “[10] Fiduciary Relationship The plaintiff claims that its relationship with the defendant is a fiduciary one and by entering into the agreement the plaintiff has by its heavy investment put itself in a vulnerable position such that the defendant's conduct in selling directly to its dealers would ruin it financially. It claims to be entitled to the protection of equity despite the clear of Clause 21.1.1 of the agreement that states :-

28

“Stockist is an independent contractor of the Company. This Agreement does not create any agency t venture, partnership, fiduciary or employment relationship between Company and Stockist or between any of Company and Stockist.”. In Frame v. Smith [1987] 42 DLR (4th) 81 referred to with approval by Gopal Sri Ram JCA (as he then was in Tengku Abdullah Ibni Sultan Abu Bakar v. Mohd Latiff Shah Mohd [1997] 2 CLJ 607 Wilson J said that fiduciary obligations are seldom present in dealings of experienced businessmen of similar bargaining strength acting at arm's length and the law takes the position that such individuals are perfectly capable of agreeing as to the scope of the discretion or power to be exercised, ie, any Vulnerability' could have been prevented through the more prudent exercise of their bargaining power and the remedies for the wrongful exercise or abuse of that discretion of power, namely damages, are adequate in such as case. The finding of fiduciary relationship in this case would fly in the face of clear provision the the contrary and would be unjustified on the facts. [11] In the Seven Seas case (above), the second respondent (a shareholder of the first respondent company) sub-contracted to the appellant the assembly of leaders which formed integral components of compact disc based equipment. In 1993 the appellant commenced operations but only formalised their relationship in 1996 with the execution of a sub-contractor contract. In 1998 the first respondent served notice of its intention to terminate the contract. Among the issues the plaintiff raised were first, whether there was a fiduciary relationship between the parties; and secondly if so, whether there is implied in the contract an obligation of good faith between the parties was that of trust and confidence and their unequal bargaining power was evidence of the existence of a fiduciary relationship. The Court of 29

Appeal held after examining the of the delivery, payment and calculation of fees payable. Although there was a close relationship between the parties owing to the nature of the contract, there was no element of trust and confidence an no party was put in a vulnerable position under the contract. Thus, the relationship was no more than that of principal-contractor. [12] I find the Seven Seas case is on all fours with the instant case. As the plaintiff did in this case, the appellant in that case expanded its operations from one assembly plant to two and then replaced both plants with a third one. Nevertheless this did not convince the Court of Appeal that this placed it in a position of vulnerability such as to render the relationship a fiduciary one. The of the agreement in this case are no different from other contracts of services and the relationship is no more than a principal-contractor relationship (and expressly stated to be so), not a fiduciary one with elements of trust and confidence. [13] For the reasons stated, the application was dismissed with costs.”. (emphasis added)

The above finding is further fortified by the claimant’s own ission during cross-examination that based on clause 13 of the said Agreements he confirmed that he is an independent contractor and did not make any request to change his status from an independent contractor to employee. In other words, the claimant did not dispute that clause 13 did confirm his status as independent contractor for nearly 20 years. Further, the court notes that COW2 when affirmed in court testified that by virtue of the said Agreements they are not employees of the SJMC. He further affirmed that they are independent medical practitioners who practice at the SJMC as independent

30

contractor and are in a partnership with the company. The court agrees with the “partnership” label given by COW2 because from the opening words of the preamble of the Agreements it is clearly stated that the “consultant is desirous of using the facilities of the hospital”. Further, clause 5 of the Agreements subsequently provides as follows: “Covenant By SJMC (a)

SJMC hereby undertakes to use all reasonable endeavours to operate the hospital either by itself or through any appointed agent so as to ensure that the medical facilities and services provided by the hospital are of reasonable quality, meet all governmental licensing requirements and generally accepted accreditation program guidelines for its services.

(b)

SJMC undertakes to provide the Consultant with a program of benefits as may be stipulated by SJMC in its Standard Operating Policies from time to time.”.

From the above, it appears to the court that SJMC is not obliged to employ or engage the service of the claimant and the claimant too on the other hand is not obliged to provide for his services if he does not want it. However, both parties agreed to form a business t venture whereby two parties on a collective basis have agreed to conduct their affair on a particular dealing. “Dealing” here refers to the SJMC providing the place, medical facilities and equipments and in return the doctors provides the necessary skills to operate a specialist medical centre. If the claimant alleged that he is an employee of SJMC, the remaining question is why there is a need to have a written document stating explicitly not only the agreement reached but also the dichotomy of relationship between the parties? As such, the court did not agree with the claimant's contention that the term “Independent Contractor” 31

used in the Agreements is merely a label from the day he ed SJMC. The court is further of the view that if SJMC intended to employ the claimant as its employee a simple letter of employment would be sufficient rather than going through the process of spelling out the boundaries of each parties rights in writing. In fact according to COW1 and COW2, various meetings took place between the doctors and SJMC to obtain views of the doctors on the agreements and finally it was accepted by the doctors including the claimant (page 54 of COB1). As such, it can be safely concluded that the claimant participated in this arrangement willingly. The court further finds that in the instant case it is not a situation where an employer acted unilaterally to have the agreement signed. The court also opines that if SJMC is the employer of the claimant why there is a need to discuss or negotiate with claimant on of the Agreements. This is because being

the employer there is no

need for SJMC to discuss on the of employment since they are the paymaster who is paying the claimant’s monthly salary. In light of the above findings in particular the fact that the said Agreements were agreed by both parties after extensive negotiations, the court also rejects the following contentions raised by the claimant : (a)

That as a Category “A” Doctor he worked exclusively for SJMC and could not worked elsewhere;

(b)

That he was directed to work at the satellite clinics operated by SJMC;

(c)

That he was not allowed to dispense drugs directly to the patient and must prescribe from dispensary run by SJMC;

(d)

He was restricted from staying outside Klang valley; and

(e)

That he was not allowed to refer patient to alternative hospital.

32

In addition, it is to be noted also that (a) (b), (c), (d) and (e) of the above are actually clauses (f), (h), (I) and (m) of the Agreements which was agreed by the parties. Thus, the court again has to reject the nation that SJMC did impose the above restrictions on the claimant unilaterally. The other obvious aspect of the Agreements which attract the attention of the court is period of the agreement. Clause 7 of the Agreements (page 60 of COB1) clearly provides that both parties had a right of non-renewal which could be exercised in the event either party wished to end the agreement. It is to be noted that the claimant during cross-examination affirmed the existence of the said clause 7 of the Agreements and agreed that there is no requirement to give reason in the event either party decided not to renew the agreement. In the instant case, the court notes that SJMC decided not to renew the claimant’s contract and in compliance of clause 7, a Notice of Non-Renewal (page 53 of COB1) was issued to the claimant. In court’s view, if the intention to include the claimant as an employee of SJMC there is no necessity to have the said clause 7 of the Agreements. This is because the said clause 7 has made it crystal clear that the claimant’s employment shall not be renewed automatically but subjects to the right of the parties to give a notice of nonrenewal. It is to be further noted that if the claimant is an employee of SJMC he should be enjoying a continuous employment for an indefinite period without any interval clause in his letter of employment. The court agrees with the claimant’s argument that for nearly 20 years he has been enjoying uninterrupted medical practice in SJMC but that does not mean that the agreement reached by both parties on the non-renewal clause has been superseded. It is the opinion of this court that the right not to renew has been there all this while but SJMC did not exercise it because they needed the services of the claimant and the claimant also agreed to provide his services for nearly 20 years. Therefore, when the SJMC finally decided not to continue with the services of the claimant he cannot termed himself as being dismissed 33

since SJMC has fully complied with requirements of Agreements. In court's view the said clause 7 is clear and unambiguous so the court must not rewrite the contract or audit the bargain reached between the parties (see : Wong Pa Hock v. American International Assurance Co Ltd (2002) 2 CLJ 267). The court is further of the view that the same rule is applicable if the claimant on his part decided not to renew his t venture with the SJMC. In this matter, again it must be borne in mind that these Agreements were formulated and agreed after extensive discussions between doctors' representatives and the SJMC. On the same point, it is pertinent to note that “procedural safeguard such as right to consultation and right to be heard afforded in terminating a contract of service not in applicable to the present case” (see : Chan Whye Sc Sons Contractors v. Sarawak Shell Berhad (supra)). Having considered all aspects of facts and law, the court further finds that the relationship between the parties also did not fulfill the basic characteristics to conclude that the claimant was an employee of SJMC. Firstly, the court notes that the claimant did paid a monthly rental for the use of the clinic facilities and it was deducted from his monthly earnings. Further, CLW1 in her oral evidence confirmed that at times the doctors will have to pay rental separately vide by g a cheque if the amount that is fees collected from the patients is insufficient. Thus, in court’s view this has created a situation something like a tenant and landlord relationship. To this finding the court refers pages 330 to 338 of COB1 which are correspondences between the claimant and SJMC on the clinic session rental charges. In term of salary, it seems to the court that the said Agreements did not mention at all on the salary to be paid to the claimant for the services rendered. Secondly, the claimant itted that he was not paid fixed salary and it differs from month to month. In the case of Syarikat Pengangkutan

34

Pekan Baru v. Mohan A/L Darasamy [1996] 1 ILR 229, the Industrial Court states as follows : “The claimant did not receive payment of fixed remuneration, sickness pay or holiday pay. The claimant received 25% on the number of trips when he drove the various lorries. his income fluctuated from month to month. Whether the claimant was a workman employed by the company to drive lorry or whether he was a contractor for service is a question of fact. In the light of the facts so found it is the finding of this Court the employment contract is a contract for service.”.

The claimant also itted that the salary he was referring too was actually the professional fees that he charged his patients for consultations. Thirdly, based on the evidence, the court notes that the claimant will charge his patients for seeking treatment from him and this is in accordance with Fee Schedule (Schedule B of the Agreements). However, the payments made by the patients will not go directly to the claimant but SJMC will be acting as a collecting agent and at the end of each month to be exact on 25 working day of the calendar month SJMC will remit the fees due to the claimant but only after deducting the mandatory payments which has been agreed by the parties in the Agreements such as rental for clinic and for the used of medical facilities (clauses 3 and 4 of the Agreements). The court is of the view that if the claimant is an employee of SJMC he should not be made to pay to use the said medical facilities and working space. On the contrary, it is the duty casts upon the SJMC to provide these facilities to its employees. Further, the fees charged by the claimant for the consultation is based on the agreement agreed by both parties and not SJMC alone. So, if SJMC is the employer of the claimant why there is a need for them to get the consent or agreement on the fees to be charged to the patients?. Lastly, the court also finds that the claimant was not subjected to any salary increment. 35

In light of the above, the court finds that SJMC did not have control over the claimant. From the evidence tendered also, the court finds that the said fees was not paid directly to the claimant but remitted to a private company nominated by the claimant namely Colram (M) Sdn Bhd (“Colram”) and this arrangement was made based on the claimant’s instruction to SJMC (letter from the claimant to the company dated 21 January 1991 (page 103 of COB1) and Documents Relating to Colram (M) Sdn Bhd (pages 114 to 328 of COB1)). This finding is further strengtened when the claimant during cross-examination confirmed as follows : (a)

that he was not paid through the SJMC payroll system;

(b)

he did not deny that he was the Director of Colram;

(c)

Colram employed him to provide medical services to SJMC; and

(d)

for his services to SJMC he was given a salary by Colram.

Therefore, based on this payment arrangement it is without doubt that the claimant cannot be treated as an employee of SJMC and in fact it has been proven that the claimant was under the employment of another company. Although, it is the argument of the claimant that Colram was set up purely to deal with his tax but Colram’s Financial Statements ended 30 June 2003 (page 171 of COB1) did not this contention. The Colram’s Financial Statements clearly states the business of the company as follows: “Principal Activities The Company is primarily engaged in the provision of specialized medical services.” 36

Clearly, Colram was not set-up to deal with Claimant's income tax. Further, the above finding is further corroborated when the claimant in his crossexamination confirmed (the claimant also signed a Statutory Declaration to confirm this (page 177 of COB1)) that “specialized medical services” here refers to his services to SJMC. On the issue of income tax and Employee Provident Fund (EPF), the court notes that the claimant was not subjected to these deductions. This is clearly stated from remission of payments made from SJMC to Colram which does not show that any of these deductions have been made (pages 103 to 104 and 114 to 120 of COB1). Further, the court accepts and believes that the evidence of COW3 when he testified that SJMC did not do the necessary deductions because the claimant was not an employee by virtue of the of agreement. In court's view, contribution of EPF is always regarded as one of the determining factors that a person is an employee (see : Chong Kim Gong v. Metatrade Sdn Bhd [2004] 2 ILJ 439). The claimant also in his crossexamination itted that he paid income tax as an employee of Colram. Therefore, the court is of the opinion that it is inappropriate at this stage to contend this issue. In court’s view this is an afterthought on the part of the claimant. In Massey v. Crown Life Insurance [1978] 2 ALL Er 576 CA, Lord Denning M.R. held as follows: “In the present case there is a perfectly genuine agreement entered into at the instance of Mr. Massey on the footing that he is selfemployed. He gets the benefits of it by avoiding tax deductions and getting his pensions contributions returned. I do not see that he can come along afterwards and say it is something else in order to claim that he has been unfairly dismissed. Having made his bed as being selfemployed he must lie on it.”.

37

In attempting to convince the court, the claimant's counsel have also touched on the issue that the law puts the obligation on the employer that is the company to make the necessary deductions for tax and EPF and not on the claimant. As such, the claimant cannot be faulted for not making these deductions. However, the court finds that this argument is untenable because the claimant in the first place is not the employee of SJMC therefore there is no necessity on the part of SJMC to make the said deductions. Secondly, if the claimant alleged that he is an employee of SJMC the remaining question is why he allowed for nearly 20 years payment of tax to be made by his nominated company in respect of his services to SJMC and did nothing to remedy the situation?. In court's view, the claimant being a Medical Consultant it is highly improbable for him to ignore or neglect to attend to this important fact. The court is also perplexed is to why he channeled his salary to a private limited company and allowed his tax to be deducted from that company and not at source?. In this matter, the court reiterates that the claimant during his crossexamination itted that he paid income tax as an employee of Colram. The court is further of the view, the claimant's income tax should be paid by the company which employed him and not through a third party for services rendered by the first party. On the issue of bonus, it has been firmly established by SJMC that the claimant was not given any bonus and all his income were generated through his fees that he charged his clients. Regarding leave, the court finds that there is no evidence to show that the claimant must get approval from his superior before he goes on leave. It is to be noted that after perusing the documented evidence (pages 356 to 363 of COB1) and based on the evidence of COW1 and COW2, the court tends to agree that the claimant was only required to inform or to give notice to SJMC that he will be going on leave on certain dates and there is no necessity for the 38

claimant to obtain the approval from SJMC. Based on these documents also, the court further discovers that before going on leave the claimant has to made the arrangement for his clinic to be covered by other doctors. It is the opinion of the court that if the claimant is an employee of SJMC there is no necessity on the part of the claimant to make the arrangement for his replacement. The court wishes to stress that the so called leave form did not show that it has to be approved by SJMC and the claimant during crossexamination did not challenge this fact. Further, the claimant confirmed that there is no fix amount for his annual leave entitlement. In addition, the claimant also confirmed that if he goes on leave he will not make money. Therefore, it can be concluded that the claimant can independently determine his working schedule (see : STP Distributor (M) Sdn Bhd v. Chen Woei Hong (Award No 396 of 1996)). On the issue of By-Laws, Policies and Procedure, the court notes that it is the contention of the claimant’s counsel that throughout the services of the claimant he was subjected to the By-Laws, rules and regulations of the medical staff of SJMC (pages 67 to 79, 80 to 85, 86 to 90 and 91 to 95 of COB1). It is further contended that the claimant only maintained his clinical independence but still subjected to disciplinary action and all policies and procedures stipulated by SJMC. The court its that at the material time there were By-Laws, policies and procedures enforced by SJMC but the court does not find that it was done without consultations with the doctors including the claimant (as testified by COW2). This is because according to COW1 and COW2, these By-laws, policies and procedures were drawn up collectively between company and Medical Advisory Board (MAB) who represented the doctors including the claimant. The court believes this statement because although the claimant worked independently but since he has agreed to station his medical practice in a specialist medical centre owned by another party surely a mechanism must be established or promulgated to map out the 39

standard and parameters so that there would be not problem in servicing the customers who are coming to SJMC for treatments. Further, the court notes that it was not challenged when COW1 said that SJMC did not have By-Laws for its employees because they receive instructions from their superiors. On this issue also, it is mundane to note that the claimant did not have any superior to report to and he managed his own clinic. Further, it has been firmly established by SJMC that the claimant was not subjected to any scrutiny of an annual appraisal by the hospital. Premised on the above findings, the court confirms claimant as an independent contractor who is not bound generally to obey such orders as his employer may from time to time give but and he is free to act as he thinks fit within the of his contract (Halsbury's Law of England (3rd Edn. Vol. 28 at age 22)). In contending that claimant was employed as an employee of SJMC the claimant’s counsel contends that the claimant was obligated to take up clinic at the SJMC and he could not share with any doctors or consultants not d with the outside doctors. After looking at the evidence, the court cannot agree with claimant’s counsel because the court again stressed that the relationship between the parties in this case is based on mutual agreement or understanding and in ensuring the success of this t venture, both parties have to establish a working arrangement. Therefore, if the claimant wants to bring non-d doctors he must seek the consent of SJMC. Further, SJMC is the owner of the specialist medical centre. Secondly, the court totally agrees with COW2 when he testified as follows: “We with the hospital because it allows us to focus on our works while Sime Darby Group takes on the costs and the risks of capital and equipment.”. 40

On the holding of clinic session, the counsel for the claimant argued that the claimant was obligated to conduct clinic sessions during such office hours as may be determined from time to time by SJMC and shall be on call rotation at such time and for such period as decided by SJMC. As such, the claimant is part of the SJMC work force. In replying to this issue, the court agrees with the testimony of COW1 when he did not deny that SJMC determines the regular business hours but the exact times and frequency for clinic session is determined by the doctors themselves. The court is also of the view that being a specialist medical centre it is important to have a standard working hours for all the clinics operated by the doctors so that the patients know the regular business hours for all the clinics. The court is further of the view that, should the reasoning advanced by the claimant be accepted then it would defeat the purpose of having a specialist medical centre with various medical specialties under one roof. Further, the court notes that SJMC only decides on the business hours but not how many sessions to hold or how many patients to treat. COW2 in his evidence testified as follows : “Q21 :

What sort of control is placed upon doctors in regard to the holding of clinic sessions?

A21 : We are not under control in the sense of somebody telling us when and how many sessions to hold or how many patients we must treat. That is something that we must decide. However we rely on the Company to ister our decision in of ensuring that there is a clinic and sufficient in of the related facilities. For example, I am a consultant cardiologist. So, if I want a particular clinic session, I would need the hospital to make available the relevant facilities for me to do my work. This is where we have an agreed system on how to set our clinic session and how to change them.”. 41

Clearly, from the above, the claimant has bona fide control over the business aspects of delivery of his services. To buttress this finding, the court refers to the case of Chye Hin Co. (Perak) Ltd v. Public Prosecutor [1960] I LNS 21 where the High Court held as follows : “Looking at the facts of this case as a whole I cannot agree that the prosecution has proved that a contract of service exists between the Company and each of the sawyers. To distinguish between an independent contractor and a servant one of the tests is whether or not the employer retains the power not only of directing what work is to be done, but also of controlling the manner of doing the work. I cannot find in this particular case any evidence that the person doing the work could be overlooked and directed in regard to the manner of his doing the work. The Manager appears to have criticised the work when completed but never to have interfered while the work was being done.”. (emphasis added)

In Letchumanan Gopal v. Pacific Orient & Co. Sdn Bhd [2011] 5 CLJ 866 Court of Appeal held as follows : “An independent Contractor is always under control of his employer as to what he must do. But the employer cannot control the actual manner in he does the work. He is free to decide as to the work. He is free to decide as to the method of doing the work. In short, the independent contractor are said to work under of service.”. (emphasis added)

(See also : Federal Court's case of Employers Provident Fund Board v. MS Ally & Co. Ltd (Federal Court, Kuala Lumpur 28.03.1975 Civil Appeal No. of 1974).

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Regarding the status of the claimant as an independent contractor the court also would like to point out the case of Tan Eng Siew & Anor v. Dr. Jagjit Singh Sidhu v. Anor [2006] 5 ILJ 175. Although the court its that case is on vicarious liability but it is interesting the observe that the learned High Court touched on the status of medical consultant being an independent contractor. The learned High Court Judge held as follows (at page 187) : “The first defendant was, at the material time a consultant with clients of his own. Though he was attached to the second defendant it was only an arrangement to use the second defendants facilities such as running his clinic there, and using its operating facilities. For this the first defendant had to pay and the form of payment was a percentage of the first defendant's charges to his clients. These clients were exclusively that of the first defendant who had a full control in the form of treatment, management, and care to be istered upon them as well as the amount of fees to be charged. Though there is no denial that when the second plaintiff was first itted to the second defendant's hospital for treatment, and the second defendant had proposed the first defendant, but this does not mean that the second defendant had control over the first defendant. To me, this exercise was only a recommendation by the second defendant to the second plaintiff to take on the services of the first defendant. The second plaintiff could reject or refuse this recommendation of the second defendant. And similarly, the same option was opened to the first defendant. And when both the second plaintiff and the first defendant agreed to accept each other they entered into an independent contract with each other, The second defendant had absolutely no control over the and conditions of this contract relating to either the type of services to be provided or regarding the of payment for it.

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Though the second plaintiff has stressed that the first defendant is or was at all material time a shareholder of the second defendant but he was not in the management of the second defendant. The first defendant was not in control over the affairs of the second defendant. He only practiced medicine by using the premises of the second defendant for which, as stated, he paid for it. At best, being just a shareholder, the first defendant is or was merely an investor. To me, the first defendant was an independent contractor.”. (emphasis added)

The court notes that the claimant also enjoys certain benefits accorded to the employees of SJMC such as discount on houses build by Sime Darby Group, discount to purchase a car etc. However, after perusing through the evidence of COW1, it was revealed that these benefits not only made available to the employees of SJMC but also extended to its business s who had dealing with them such as lawyers and ants. Therefore, in court’s view these benefits cannot be termed as exclusively applicable to the employees of SJMC. In relation to the issue of equipment, it is not challenged that claimant has to pay to SJMC through monthly deductions for the use of these medical facilities. Secondly, the court reiterates that if the claimant alleged that he is an employee of SJMC the remaining question is why he has to pay for using these facilities? Looking back at the evidence, the court again stressed that the mutual understanding between the disputed parties are SJMC is the provider of the capital, equipment and services and the doctors will provide the medical skills. The court feels that the doctors agreed with this arrangement because they want

a peace of mind and to focus on their

medical practice and not to be disturbed with logistic problems such finding a place to practice, buying of equipment, employing of staff, finding patients

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etc. Therefore, the claimant cannot be considered as part and parcel of SJMC work force. In relation to the status of the nurses, based on the testimonies from COW1 and COW2, the court finds that the nurses are part of the clinic and the claimant was charged for it which is part on the rental for the clinic. In any event, the court finds that this is one of the items agreed by the parties in the Agreements. Pertaining to the contention that SJMC controlled the ission of patients, reference or assignment of patients and medical records, the court agrees with testimony of COW2 when he said as follows: “Q27 :

Why do you have procedures to regulate the appointments and ission of patients as well as the reference of assignments of patients under the Claimant's care?

A27

:

At any given time you will have more Doctors than equipment. This required careful istration in of appointments scheduling and issions of patients as well as the scheduled usage of hospital facilities such as operation theatres. We need to ensure smooth operations at the hospital. As the owner we need to have a system to track the use of equipment and facilities otherwise there will be chaos. As the owner it was agreed that this is our rule and contribution for which we the Company are paid. This again discussed with MAB.

Q31

:

Why did the hospital require a detailed record of the care and treatment of the Claimant's patients?

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A31

:

A patient is entitled to a proper record of his treatment. Therefore whatever the working arrangement with the Doctor the same process of record keeping would have to follow. In the context of our relationship as between Owner-Doctor, hospital would establish a system of record keeping which is updated by Doctors and retained at the hospital.”.

On the issue of MSS, the court notes that it is the contention of the claimant that he was given a pension benefit by SJMC via subscription of RPS in MSS. The claimant further contends that he was named as employee of MSS because claimant’s employment is intrinsically linked his service with the company. To his contention, the court was referred to Article 15 of the Articles of Association of MSS (pages 107 to 158 of CLB3). As for this contention, it is to be noted that both parties did not dispute that at the material time MSS did exist. The court has carefully scrutinized this issue and from the evidence finds as follows: (a)

MSS was incorporated to allow the participating doctors to subscribe the shares of MSS;

(b)

The participating doctors participated voluntarily

(c)

MSS provides medical services to SJMC; and

(d)

SJMC is the only client for MSS;

(e)

The participating doctors will enjoy revenue through services provided by MSS to SJMC;

(f)

The said revenue comes from the holding of shares in MSS.

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Despite the above findings, the crux of the matter remains whether the claimant can consider himself to be the employee of SJMC through holding of shares in MSS. Based on the evidence, the court is clear that MSS only provides medical services to SJMC but this does not in anyway allows the participating doctors to declare that they are the employees of SJMC. This is because based on the evidence of CLW1, MSS was set up through a mutual agreement between the doctors and SJMC and SJMC through CLW1 was entrusted to manage the MSS. Therefore, the SJMC did not initiate the set-up of MSS but it is a company form for the doctors “to allow” the doctors the generate income. Although, it is contended that the claimant is the employee of MSS and MSS did pay his EPF but the court did not find any nexus to link MSS and SJMC. In court’s view the mechanism is simple that is MSS was set up to provide medical services to SJMC and in return SJMC will pay for the said services. Therefore, MSS cannot be construed as part and parcel of SJMC's organization but more of an outsider company. The court also agrees with the SJMC’s counsel contention that had the claimant been the employee of SJMC he would not be able to contribute to the scheme. On the issue of the alleged contribution of SJMC for the RPS, the court finds it has no bearing in this case. This is because apart from the said alleged contribution there is no evidence to connect it with the claimant's employment. As for the court is concerned the employment of the claimant at the material time rests with MSS. To counter the claimant’s contention, the court also finds that if it is true that by virtue of claimant’s employment with MSS he is deemed to be an employee of SJMC, the remaining question is why the Agreement Active Status 1995 did not mention about the status of MSS employees since MSS was launched in December 1994?. The court also finds it is highly improbable for the parties to ignore the issue of MSS during the deliberations for the Agreement Active Status 1995 since it has serious legal effect on clause 13 of the agreement which spelt out clearly the status of the claimant at the material time. As 47

such, the court believes the version rendered by COW1 when he testified as follows: “Q39 :

Does the subscription of shares in Medical Staff Services Sdn Bhd deemed the Claimant an employee of the Company?

A39

:

No it does not. The agreement Active Status with the Company was created in 1984 even before the scheme had even come into being. Further even when the Agreement Active Status was revised in 1995 no mention was made anywhere in it about employment in MSS or the scheme. The Claimant is well aware of this fact as he was involved in the deliberations between the MAB and the Company which led to the variations of the Agreement Active Status in 1995. See Additional Company's Bundle of Documents. There was therefore no difference in the status of the Agreement Active Status in the period preceding and post creation of the scheme and MSS. This again shows that the two are completely distinct and separate.”.

Finally, the court is of the opinion that if the claimant wants to be termed as employee of SJMC he must strictly applied all the characteristics of a “workman”. In other words the claimant is not at liberty to ignore the characteristics which are deemed to be not in his favour. Conclusion And Decision In summary therefore, on the evidence, facts, equality, good conscience and law, the court is more inclined to think that the claimant at the material time was under a contract for services. Therefore, court holds that the claimant is 48

not a workman who is employed on a contract of service and automatically falls outside the scope of the Act. It therefore follows that the issue whether the claimant has been dismissed for just cause and excuse does not arise. Accordingly, the claimant's claim is hereby dismissed. HANDED DOWN AND DATED THIS 21ST JANUARY 2013 -signedAHMAD TERRIRUDIN BIN MOHD SALLEH CHAIRMAN MALAYSIA INDUSTRIAL COURT KUALA LUMPUR

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