High Court rules payroll agent not liable in wrongful dismissal claim

The Kuala Lumpur High Court last Friday dismissed a woman’s claim of wrongful termination against a local recruitment agency, affirming an earlier Industrial Court decision.

In her judgment, Justice Alice Loke ruled that Great Pyramid Sdn Bhd, the recruitment firm, was not Chin Siang Tean’s employer and therefore had no authority over her dismissal.

The judge said Chin’s actual employer was GenScript Biotech Pte Ltd, a Singapore-based company.

Loke, who now sits in the Court of Appeal, found no grounds to overturn the Industrial Court’s ruling. She ordered Chin to pay Great Pyramid RM5,000 in costs.

The Industrial Court had in 2024 ruled that although an employment contract was signed with Great Pyramid, all operational control, direction and termination decisions came from GenScript.

“The company merely acted as a local payroll agent and had no supervisory or disciplinary authority.

“The court found that there was no employer-employee relationship between the claimant and Great Pyramid,” court chairman Amrik Singh said in his award.

In her suit, Chin said she had received a first offer letter from GenScript and a second from Great Pyramid, and had accepted both.

She also signed an employment contract only with Great Pyramid but worked directly under GenScript. The termination letter was issued by Great Pyramid.

Chin said there was no clause in her contract stating that Great Pyramid was only a payroll vendor.

Great Pyramid however took the position that GenScript was the real employer while they were merely a payroll service provider.

It also said work scope, benefits and termination decisions were all under GenScript’s control, adding that the decision to terminate Chin’s employment was based on the latter’s instructions.

Chin has a month, calculated from the decision date, to file a notice of appeal to the Court of Appeal.

Bhavanash Sharma appeared for Great Pyramid while Yeo Jie Hu represented Chin.

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