Does The Industrial Court Have Jurisdiction Over An Employer Outside Malaysia

A case study - Industrial Court Award No. 950 of 2026

What Happened

The Claimant, a Brunei national, was employed by Schlumberger Global Resources Limited ("SGR Ltd"), a Bermuda company, as international mobile staff. His 2018 employment letter with SGR Ltd contained an express clause (Clause 13) making Bermuda law the governing law and the Bermuda courts the exclusive forum for disputes.

On the same day, SGR Ltd seconded him to work in Kuala Lumpur at Dowell Schlumberger (Malaysia) Sdn Bhd ("the Company"). The secondment letter confirmed that the SGR Ltd employment contract remained valid and unchanged. There was no separate Malaysian employment contract. The Company's role was purely administrative: applying for his employment pass and filing EA tax forms. His salary (in USD) was paid by SGR Ltd throughout.

In 2023, following an alleged assault on a colleague during a pre-assignment visit to Abu Dhabi and a separate internal audit uncovering inflated expense claims, SGR Ltd — not the Company — issued a termination letter dismissing him. The claimant then brought an unfair dismissal claim under section 20(3) of the Industrial Relations Act 1967("IRA 1967") against the Malaysian company.

What the Court Decided

After a trial of the matter, the Industrial Court in June 2026 held it had no jurisdiction to hear the claim, and dismissed it without ever reaching the question of whether the dismissal was with just cause or excuse.

Its reasoning:

One contract, one employer. The secondment letter did not exist independently of the SGR Ltd employment letter and had to be read with it. On secondment, an employee remains employed by the original employer unless that contract ends. Only the original employer (SGR Ltd) could dismiss — and did.

Administrative acts do not make you the employer. The Company's role in applying for the employment pass and filing EA Forms was done purely to satisfy local immigration and tax requirements. These administrative acts did not change who the real employer was.

No extra-territorial jurisdiction. The IRA 1967 is a Malaysian statute with only territorial jurisdiction. Because the true employer, SGR Ltd, was a foreign entity not named as a party, and the claimant had contractually submitted to Bermuda's exclusive jurisdiction, the Court could not hear the claim.

Why It Matters to Employers

1. Local admin does not equal local employer. A Malaysian subsidiary that merely handles immigration paperwork and tax filings for a seconded employee will not, by itself, be treated as the employer under the IRA 1967.
2. Governing-law clauses work. A foreign governing-law and exclusive-jurisdiction clause in the home-country employment contract can prevent the Industrial Court from hearing a subsequent dismissal dispute, provided the true foreign employer is not joined as a party.
3. Get your secondment documentation right. Well-drafted secondment letters that clearly preserve the home-country contract as controlling are an effective way to manage where employment disputes can be brought. All documents — the main contract, the assignment letter, payroll records, and immigration filings — should be internally consistent and should not inadvertently suggest the local entity is the employer.
4. Subsidiaries receiving seconded staff should keep their role limited and documented. If the host entity's involvement goes beyond pure administrative facilitation — for example, issuing a local employment contract or paying salary from its own accounts — the outcome could be very different.

This article is for general informational purposes only and does not constitute legal advice.