Terms

Terms are matters that was agreed by both parties, like the amount of wages. There will be a
breach of contract if parties failed to follow the terms agreed. Also, terms cannot be changed
by one party if the other party did not give his consent to it.
Conditions are matters that is solely given by the employer to the employee, and no breach of
contract will occur if failed to follow the conditions given. For instance, the employer asked
the employer to open a CIMB account for paying wages. The employee refused and wanted
to use his Maybank account. this situation will not render the contract to be breach but only
slowed his payment of wages.
Sources of terms is the documents that listed the terms and conditions of the employment
contract. If a person is sent an offer of employment, he would get an offer letter containing
the name of his post, description of his job, status of his job, wages, hours of work, days of
work, annual leave, sick leave, and termination clause. If for example, the letter did not
mention about misconduct or medical benefits he needs to find other documents available
within the employer’s organization. If there are other documents, he needs to see whether the
documents are applicable to him. These documents are the sources of terms.
Unfair term of contract. Term of contract must be fair and reasonable. A contract of service
may be legally binding contract but may contradicting with provision under the employment
act. The term may also be invalid if it is unfair, unjust and unreasonable.
In the case of Pherdzaha Maneekji Framroz v Nowroji Rustamji Mistri [1932] MLJ 96, the
plaintiff entered into a written contract with the defendant where the defendant became the
manager of the plaintiff’s business for ten years. One of the provisions in the contract was
when after the employee stop to be employed by effluxion of time or by any other reason, he
cannot do a similar business for five years. Later the defendant wanted to do similar business
like the plaintiff, he then took action of injunction restraining the defendant from doing so. It
was held that there is no need for it as there were no secrets to be trade from the plaintiff’s
business.
Acme Canning Corporation Ltd v Lee Kim Seng 1 [1977] 1 MLJ 252, Respondent, Lee was
employed by As, Acme Canning Corporation, as a supervisor in the factory. He was paid
salary according to the terms of the contract of service and the company was overpaying him
to the extent of $85 as food, housing and traveling allowance. He was not paid overtime
wages as it was not a condition of service between the Applicant and Respondent. However,
the Respondent claimed overtime wages for the period 10/10/69 to 20/11/72, and double
wages for work on rest days for the period 10/10/69 to 20/11/72. The court held that if a party
is subject to any express condition in any previous contract or service, he shall only be
entitled to the benefits of the ordinance subject to express condition of his contract of service.
The benefits of Section 7 of Employment Ordinance are also subject to section 6 of
Employment Ordinance. Any entitlement of overtime under Employment Ordinance was
subject to the conditions which respondent himself had accepted. There was well understood
and well-defined oral contract of service between the parties that respondent will not be
entitled to the overtime wages, still in view of extra benefits given to be him in the form of
allowances to the extent of $85, he cannot claim overtime wages. Having accepted these
benefits instead of overtime he cannot claim that he is entitled to receive overtime benefits.
Balan v National Electricity Board Employees Union [1975] 1 MLJ 9, applicant was engaged
by respondent, National Electricity Board Employees Union, as its executive secretary for 5
years. On 25th Sep 1972, when he was on medical leave, he gave the Respondent 6 months’
notice of resignation in accordance with the Clause 14 of the agreement. He remained on
medical leave until the expiry of the notice, and then made a claim for his salary for the
period of 6 months and 1/3 of the medical fee which he had incurred during that period.
Respondent resisted the claim on the ground that there was no term in the contract of service
for providing salary to applicant during the period of his illness. The Federal Court in this
case stated that there was an implied term that applicant would be entitled to wages during his
illness. Earlier the respondent had on 29/1/1969 given him 3 months medical leave on full
pay. There was no express or implied term in the contract that no salary was payable to
applicant during his absence from work on accordance of illness.
Reigate v Union Manufacturing Co. (Ramsbottom) Ltd. And Elton Cop Dyeing Company
Ltd. [1918] 1 KB 592, the court held that the term can only be implied if it is necessary in the
business sense to give efficacy to the contract. Test for implying a term: ‘The first thing is to
see what the parties have expressed in the contract and then an implied term is not be added
because the court thinks it would have been reasonable to have inserted it in the contract. A
term can only be implied if it is necessary in the business sense to give efficacy to the
contract; that is if it is such a term that it can confidently be said that if at the time the
contract was being negotiated someone had said to the parties, ‘ What will happen in such a
case,’ they would both have replied, “Of course, so and so will happen; we did not trouble to
say that; it is too clear’ Unless the court comes to some such conclusion as that, it ought not
to imply a term which the parties themselves have not expressed.
Gold Coin Limited v Tay Kim Wee [1987] 2 MLJ 271, the court said that the selfless activity
of one party and the ignorance of the other party does not imply consensual variation of the
contractual term to pay a quantum meruit.
Dr. Paramsithy v University of Malaya [1983] 1 MLJ 289
Pengurus Wilayah Bahagian Kenderaan MARA, Kedah v Hasnah [1970] 2 MLJ 130, the
court stated that although there is an express provision in the EA 1955 giving primacy to any
condition or term in the collective agreement or in the Act over any term or condition in the
contract of service, yet there is no express provision to give primacy to less favourable
provision in collective agreement over any term or condition in the contract of service.
Whether Payment of wages without providing job will breach the contract
In the case of Turner v Sawdon [1901] 2 KB 653 (CA), defendant employ plaintiff as their
representative salesman for 4 years. Before the expiration of that time, defendant refused to
give work to the plaintiff but will still pay wages. The court held that there was only an
implied term to pay wages. In contract of service, it needs a consideration for it to be valid. In
this case, the consideration is to pay wages on the employer’s part, and it is for the employee
to do the job.
In the case of Collier v Sunday Refree Publishing Co. [1940] 2 KB 647, the plaintiff entered
into a contract of service with the defendants whereby he was appointed chief sub-editor of
their newspaper for a certain period at a weekly salary. Later, the defendant sold their
newspaper without retaining the service of the plaintiff. The payment was still given to the
plaintiff, but the plaintiff did not go to the office and the defendant stop paying. In this case,
the defendant had destroyed their contract when he sold the newspaper thus breaching the
contract. The plaintiff was entitled to damages.
In the case of Ahmad Hariri & Ors v Lembaga Pelabuhan Kelang [1982] 2 MLJ 28, the
appellants claim that those whose shift duties, fell between 10 p.m. and 6 a.m. were entitled
to receive the dark allowance with retrospective effect from 1st January 1970,
under paragraph 84 of the Service Circular No. 1 of 1975. They also claimed housing or
rental in lieu of housing allowance. The High Court dismissed the claims and the appellants
appealed. It was held that since the appellants were not really required to be there on call all
the time, they cannot be said as holding essentials posts.
In William Hill Organisation Ltd v Tucker [1998] IRLR 313, the employer of a senior dealer
in a spread betting business requested that he go on 'garden leave' when the dealer served
notice that he was terminating his contract of employment to take up fresh employment with
a competitor of the employer. “Garden leave” describes the situation where an employer
requires an employee not to work during the period of notice of termination of employment,
subject to the continued receipt of all other contractual benefits, including salary, during that
period. The court held that, in the case of a highly skilled employee (such as Mr Tucker), in
the absence of a clause in the contract of employment, garden leave will not be possible.
Accordingly, Mr Tucker was entitled to be provided with work during the notice period.
Meanwhile, in SG & R Valuation Service v. Boudrais [2008] IRLR 770, it was held that
where the employees have breached the contract of employment or some other duty such that
they have rendered it impossible or reasonably impracticable for the employer to provide
work, the employer will be entitled to compel the employees to go on garden leave even in
the absence of a garden leave clause.
Whether there is duty to provide work
In the case of Turner v Sawdon [1901] 2 KB 653 (CA), there is a general rule that the
obligation to pay wages does not extend to an obligation to provide work, except when
employee is paid on a commission basis or employee will not get paid if the work is not
provided for them, or employee in the performing arts industry.
In the case of Langston v AEUW [1974] ICR 180, when the employee worked on night shifts
or work overtime, he was paid his basic wage plus premium payments. his employers
suspended him without pay, and thus took away his opportunity to earn the premium
payments. The court in this case held that an employer, when employing a skills man, is
bound to provide him with work, when the work is available, and the employee is ready and
willing to do it.
Whether the employee has a right to remain at the premises provided
after his termination of services
In the case of Board of Governors of Sekolah Menegah St. Gabriel v. Ranjit Singh [1970] 1
MLJ 38, a watchman was employed by Sekolah Menegah St. Gabriel. The court in this case
held that the watchman was provided with accommodation for the effective performance of
his duties. Once his services are terminated, he had no right to remain on the premises.
Therefore, the general principle is that an employee has no right to remain on the premises
provided by the employer after his service are terminated.
Stamford College v Lesle Dolores Swansan [1954] MLJ 261, the contract of employment was
silent regarding the duration of contract. However, the letter to the Immigration Department
for visa stated that the claimant was to be employed for 2 years. The court concluded that
since the circumstances of the case the contract was for 2 years. Therefore, when the contract
does not expressly provide for the duration, it is to be inferred by the court from the terms of
the contract of employment or from other related documents pertaining to the employment.
Whether the employer has a duty to provide safe and proper system of work.
In the case of Manlio Vasta v Inter Ocean Salvage and Towage Ltd [1997] 1 ILR 152, while
performing diving operation for the defendant company, plaintiff was injured. On the claim
for damages by plaintiff, the High Court stated that the defendant’s company had failed to
provide safe and proper system of work, as they did not provide a second diver at the scene,
and also, they were negligent in that through their agents they were responsible for the
unreasonable delay in bringing plaintiff to the decomposition chamber at Loyang after the
accident. The company relied on the defence of the doctrine of common employment. The
court in this case held that where the employer had not provided a safe and proper system of
work for his employee, the employer cannot rely on the doctrine of common employment as a
defence.
In the case of McDermid v Nash Dredging & Reclamation Co Ltd [1987] IRLR 334, the
plaintiff was employed as a deckhand by a contract in writing. In the first sentence of this
contract, it was expressly agreed that the employee shall safely comply with the lawful
directions of the companies’ representatives. In this case it must be noted that the defendant’s
employers will a subsidiary of a Dutch company, Stevin Baggeran BV. The function of the
defendant what's the provide and pay the British staff engage in the operation. The plaintiff
was injured due to the negligence of the defendant’s employee. He claimed for compensation
for the breach of an implied duty to provide a safe system of work. In this case the court held
that, an employer also his employee a duty to exercise reasonable care to ensure that the
system of work provided for him is a safe one.
Vicarious Liability
In the case of Chang Fah Lin v United Engineers (M) Sdn Bhd & Ors [1978] 2 MLJ 259, the
plaintiff had caught accident during his job which caused severe injuries. Plaintiff claimed for
damages caused by the negligence and breach of statutory duty as there was no safety belt
provided which caused him to become paralyze. The court allowed the claim as it is enough
that there is evidence that the plaintiff is under the supervision of one of the defendants and
the accident happened during the work asked.
Ang Toh Wah v Goh Loh & Anor [1975] 2 MLJ 186, the plaintiff was employed as a
labourer by the first defendant on a lighter. The 1st defendant had entered into a contract with
the 2nd defendant to transport the 2nd defendant’s crushed granite from Pulau Ubin to
Ponggol. The Granite had to be unloaded by means of a grab crane operated by a servant of
the 2nd defendant. The plaintiff was injured when the crane driver lowered the grab to pick
up a load of granite. The grab fell on the plaintiff and fractured the bones for right leg. The
court held that the accident was caused by the negligence of the crane driver. Since at the
time of the accident, plaintiff was not doing the work of first defendant but was doing the
work of the 2nd defendant, which held the control and direction of the unloading, thus the
2nd defendant was vicariously liable for the negligence of his employee, crane driver.
Employee wilfully ignoring safety measures
Leong Chin Kum v SELCO (Shipyard) Pte. Ltd [1982] CLJ Rep 901, the plaintiff who was a
widow of deceased, brought an action against the defendants for breach of statutory duty to
take reasonable care for the safety of worker. The court held that the employers were not in
breach of statutory duty or caused or materially contributed to the death of the deceased. The
deceased was a very experienced project supervisor. He knew that he needed clearance of the
safety promoter and that a powered blower was necessary to ventilate the tank. He wilfully
entered the tank ignoring all the safety procedures.
Gan Kim Thye v The Union Omnibus Co. Ltd [1969] 1 MLJ 186, the employee was not
required by the employer to work for more than 48 hours or to work more than 6 days in any
one week. The employee was entitled to take a day off, and it is unreasonable to say that there
was a breach of statutory duty on the part of the employer. An employer owes no duty to
prohibit a labourer if he so elects to work more than 6 days in a week or to work more than
48 hours in a week. The injury suffered by the plaintiff could not in all probabilities be said to
be cause by an accident arising out of, and in the course of plaintiff’s employment. Though
the court was satisfied the plaintiff had suffered stroke while at work, however, it was unable
to hold the injuries were caused by the breach of statutory duty on the part of defendants, nor
could it hold that the injuries arose out of plaintiff’s employment.
Johnstone v. Bloomsbury Health Authority [1991] IRLR 118, the Court of Appeal held that
the employer's implied duty to exercise reasonable care is capable of overruling the
employer's exercise of discretion based upon the express contractual powers of the employer.
Thus, the exercise of the employer's option to call on the employee to work a further 48 hours
per week was controlled and regulated by the content of the implied duty. However, one
should be clear that this is not the same as saying that the implied duty cuts down or ousts the
express term. Instead, as Lord Browne- Wilkinson stated, the scope of the employer's implied
duty requires to be carved with reference to the express terms of the contract so that they can
coexist that is to say the express term will fashion and influence the normative content of the
implied duty and the standard of care but will not supersede it.
Whether the employee has the duty to respect confidentiality
In the case of Wessex Dairies Ltd v Smith [1935] 2 KB 80, a servant who, while in the
service of his master, asks his master's client to transfer their custom to himself, though the
transfer will take place only after the service is terminated, he commits a breach of his duty
tohis master, and for that violation, he shall be liable in damages.
Faccenda Chicken Ltd v Fowler [1986] IRLR 69, Mr Fowler was employed as sales manager
of the plaintiffs, a company which breeds, rears, slaughters, prepares and sells chickens. In
1981, Mr Fowler set up his own business of selling fresh chickens from refrigerated vehicles.
The Fowler company directly competed with Faccenda, and the majority of its customers
were former customers of Faccenda. Neither Mr Fowler nor any of the former employees of
the Faccenda was subject to any express agreement restricting his or her activities after
leaving Faccenda’s employment. Faccenda asking for damages on the grounds that the
defendants, Mr Fowler, the former Faccenda employees and Mr Fowler’s company, had
broken their contracts of employment by using confidential sales information relating to the
requirements of customers and the prices they paid to the disadvantage or detriment of the
company. The court in this case held that while the employee remains in the employment of
the employer, his implied duty is not to dispose any information, whether important or not.
After their contract of service ended, the employee only has the obligation not to use or
disclose trade secret and other information which is amount to a trade secret. The obligation
does not extend, however, to cover all information which is given to or acquired by the
employee while in his employment.
Stamford College Group Sdn Bhd v Raja Abdullah bin Raja Othman [1991] 2 CLJ 1135, the
court was discussing about a lecturer who worked for Stamford College. There was a clause
in the contract whereby the lecturer cannot give any lectures anywhere without Stamford
College’s approval. The court held that this restriction was not approved of because ‘not at
all’ is unreasonable. Therefore, the argument of the course belonging to them is untrue and,
he is a lecturer, asking him not to teach would be to affect his living.
Whether the employee has a duty of care
in the case of Lister v Romford Ice & Cold Storage Co Ltd [1957] AC 555(HOL), the
principle held was that where an employer is found vicariously liable for an employee’s
actions, they are entitled to recover an indemnity from them to cover such losses. Adding on,
an employer may be civilly responsible for his employee’s breach even though it constitutes a
crime, and a skilled employee in general, owes a contractual duty of reasonable care to his
employer in the performance of his employment.
In the case of Majlis Perbandaran Pulau Pinang v Lim Soo Seng [1991] 1 MLJ 162, D, who
was employed as a bus driver was involved in an accident where it caused injury to X too. D
was driving the bus in the course of his employment at that time. In the instant case, the
finding of a learned judge on the implied term of the employment contract that the employer
will compensate the driver in the event of an accident resulting in damage or injury to a third
party resulting from the negligence of the employer's motor vehicle is illegal.