High Court judge says EPF should be vigilant with companies that come up with ‘creative labels’ in refusing to contribute to employee’s retirement fund.
KUALA LUMPUR: A lorry driver driver won his appeal today at the High Court here against his former employer for not making contributions to his EPF account based on travel “reimbursements” due to him.
Justice S Nantha Balan allowed driver Maniam Subramaniam’s appeal to get a backdated payment of RM12,791 from his former employer Cold Chain Network Sdn Bhd based on trips he made while working in the company from July 2010 to August 2013.
In his oral judgment, Justice Nantha said that the payment paid to Maniam for traveling is not a “reimbursement” or “travel allowance”.
“In his case, he travelled using his company’s lorry and he was even given a petrol card and Touch N Go card by his company, and he was paid based on how far he travelled.
“In my view the so called trips are incentives, instead of reimbursement as claimed by his employer,” he said, adding that such incentives are part of income that warrants contribution to EPF under the EPF Act.
Justice Nantha added that EPF, should be vigilant with companies that come up with “creative labels” in refusing to pay their employees for their pension contribution.
The court also awarded cost of RM3,000 to Maniam.
Speaking to reporters after the decision, Maniam’s lawyer New Sin Yew said the decision is important to workers in the country.
“Many of us depend a lot on our EPF money after our retirement. This decision also tells EPF as a custodian to workers’ funds to defend the contributors’ rights,” he said.
The 58-year-old filed a suit at the Sessions Court last year to seek a court declaration that the RM12,791 falls under the definition of wages as stated under the EPF Act 1991 and that Cold Chain Network has a duty to pay him the amount as part of EPF contributions due to him.
On Dec 9 last year, the Sessions Court dismissed Maniam’s lawsuit on the grounds that the EPF had investigated his claims and the courts had no reason to interfere in the findings.
Maniam had lodged complaints with the EPF, asking the fund to probe his claim against the company on the non-contribution.
However, the EPF did not take action after accepting the company’s explanation in a letter dated Sep 2, 2014, that the travel reimbursements were not part of wages that should be contributed under Section 2 of the EPF Act.