Woon Kim Choy and Chang Heng Keong: The Full Analysis

In 2019, two shareholders and directors who helped build their company were ousted by a majority‑led EGM. The company maintained they were merely directors, and their removal ended any connection with the company. The two men contended they were also employees who had been dismissed without just cause. What followed was a five‑year legal battle that went through four tiers of courts.

On 24 June 2026, the Federal Court upheld the Court of Appeal’s award of about RM2 million to Woon Kim Choy and Chang Heng Keong, who were found to have been unfairly dismissed. There was no basis for appellate intervention, the apex court said, and the two men had been dismissed without just cause or excuse.

The Background

Woon Kim Choy, Chang Heng Keong, and B.H. Lim were the promoters of Acexide Technology Sdn Bhd. When the company was incorporated on 15 October 1996, they became its founding shareholders and directors. The business built its reputation around fire‑lighting systems, trenchless technology, and transportation services.

Woon served as technical director, Chang as project director. Both drew regular monthly salaries — RM19,000 and RM24,500 respectively, inclusive of allowances. EPF, SOCSO, and income tax deductions were made from their pay. They were listed in the company’s register of employees. Their EA forms classified their income under “SG” (salary). Payroll slips described their earnings as “salary,” not “director’s fees.” By any conventional measure, they were wage earners.

Lim and his son Jovin together held a 54 percent majority stake in the company. Woon held 10 percent and Chang 36 percent. On 6 November 2019, Lim exercised that majority. He convened an extraordinary general meeting to remove Woon and Chang as directors. The outcome was never in doubt: Lim and his son together commanded a simple majority. The resolutions passed, and Woon and Chang were stripped of their board seats. That same day, the company appointed Jovin Lim as a director.

The two men, now shut out of the company they had helped build, did not accept the result quietly. They commenced an action for minority oppression against Lim and his son — a statutory remedy under the Companies Act 2016 that allows shareholders to petition the court when the company’s affairs are conducted in a manner unfairly prejudicial to their interests. Separately, within the time permitted by the Industrial Relations Act 1967, they filed a complaint under Section 20 of the Act with the Director General of Industrial Relations, alleging that they had been unlawfully dismissed as employees. The company’s position was simple: they were directors, and nothing more. The law would spend the next five years deciding who was right.

The Legal Journey

Industrial Court

Woon and Chang filed their complaint under Section 20 of the Industrial Relations Act 1967, alleging they had been dismissed without just cause as employees. The company applied to strike out the claims, arguing they were directors and therefore not “workmen” within the meaning of the Act. The Industrial Court dismissed the company’s application, and it did not appeal. The matter proceeded to a full hearing, where the company called Lim and another employee as witnesses, and Woon and Chang gave evidence in support of their own claims.

The Industrial Court was not persuaded. It found that the two men did not fall within the definition of a “workman” under Section 2 of the IRA. They were, instead, the “directing mind and will” of the company — a phrase that, in the court’s view, placed them firmly outside the category of employee. The court held that “the Claimant collectively was the directing mind and brain of the Company and worked independently and with no supportive evidence that he was even answerable to the board of directors.” The same finding was made in respect of Chang. Since they were not workmen, the court concluded, there had been no dismissal to begin with, and the question of just cause or excuse did not arise. Both claims were dismissed.

High Court

Woon and Chang then applied to the High Court for judicial review. The High Court affirmed the Industrial Court’s awards and dismissed the applications. It adopted the Industrial Court’s findings of fact and added that EPF contributions, SOCSO payments, and monthly income tax deductions did not, taken together, point conclusively to an employment relationship. The company, the High Court noted, had explained that these were agreed benefits provided to all its directors. The High Court was also unpersuaded by the fact that the two men were listed in the company’s register of employees — that listing, the judge said, did not derogate from the reality that they were primarily directors.

The High Court further observed that Woon and Chang were not without remedies: they had already commenced a minority oppression action against Lim and his son. That fact, the judge suggested, was consistent with their status as shareholders and directors rather than employees. With the judicial review applications dismissed, Woon and Chang appealed to the Court of Appeal.

Court of Appeal

The Court of Appeal took a different view. In its 2024 judgment, it allowed both Woon’s and Chang’s appeals, holding that the lower courts had misapplied the legal test. The central question was not what the two men were called, but whether a genuine contract of service existed between them and the company.

To answer that question, the court first had to clear away an old and persistent doctrine. For decades, Malaysian employers had relied on the proposition that a director could never also be an employee — a rule traced to Inchcape Malaysia Holdings Bhd v RB Gray & Anor [1985] 2 MLJ 297, which treated directors as inherently the “directing mind and will” of the company and therefore outside the definition of a “workman.” The Court of Appeal expressly rejected that rule. The Inchcape position, it held, was outdated and inconsistent with the modern approach. Section 2 of the Industrial Relations Act 1967 defines a “workman” simply as any person employed under a contract of employment — whether written, oral, express, or implied. The determining factor is the existence of that contract, not the person’s title or shareholding. A director‑employee relationship can exist where the company exercises control and pays wages for services rendered.

The court drew on more recent authority to ground this shift: Gopala Krishnan v Sealand Marine [2023] 5 CLJ 917, Hoh Kiang Ngan v Mahkamah Perusahaan Malaysia & Anor [1996] 4 CLJ 68, and the foundational principle in Salomon v A Salomon & Co Ltd [1897] AC 22, which recognises that a company is a separate legal entity capable of employing its own directors.

Applying that framework, the Court of Appeal examined the totality of the documentary and factual evidence. The monthly salary and allowance statements indicated regular wage payments. EPF and SOCSO contributions had been made. The EA tax forms classified the two men under “SG” (salary) rather than “OG” (business income). Payroll slips described their pay as “salary,” not “director’s fees.” They were listed in the company’s register of employees. Taken together, these records showed that Woon and Chang were treated as wage earners, not as independent contractors or passive directors. They performed defined operational roles, received fixed remuneration, and were integrated into the company’s structure. In essence, they were employees who happened to sit on the board.

The company had also argued that because Woon and Chang had commenced a minority oppression action against Lim and his son — a shareholder remedy — they could not simultaneously claim to be employees. The Court of Appeal rejected that argument. The two roles, it held, are not mutually exclusive, and pursuing one remedy does not extinguish the other.

Having concluded that the Industrial Court had jurisdiction and that the two men were workmen, the Court of Appeal turned to the consequences. The company had chosen to rest its entire defence on the jurisdictional point; it had not adduced any evidence of misconduct before the Industrial Court, despite pleading in its Statement of Reply that the men had breached their fiduciary duties. The court declined to remit the matter back to the Industrial Court for a rehearing. To do so, it said, would unfairly give the company “a second bite at the cherry.” Drawing on the Federal Court’s decision in Rama Chandran v The Industrial Court of Malaysia [1997] 1 MLJ 145 — which empowers appellate courts to grant consequential relief when all material facts are before them — the Court of Appeal proceeded to determine the appropriate remedy itself.

It awarded both men compensation in lieu of reinstatement and back wages. For Woon, that meant RM437,000 in compensation in lieu (based on 23 years of service at a last‑drawn salary of RM14,500 plus RM4,500 monthly allowance) and RM456,000 in back wages (24 months), totalling RM893,000. For Chang, the corresponding figures were RM563,500 in compensation in lieu and RM588,000 in back wages, totalling approximately RM1.15 million. Interest was ordered at 8% per annum from 9 August 2022 until full settlement, together with costs.

The company appealed to the Federal Court. On 24 June 2026, the highest court in the land said no.

Federal Court

Justice Nazlan Ghazali, delivering the unanimous decision of the bench, was clear. The two men were “workmen” within the meaning of the Industrial Relations Act 1967. An employer‑employee relationship existed under their contracts of employment. They contributed to EPF and SOCSO. They were subject to income tax deductions. They were executive directors who reported to the entire board of directors. These facts were consistent with employee status — and they led the court to conclude, without hesitation, that the two men had been dismissed without just cause or excuse.

The company raised procedural objections, arguing that the respondents had failed to comply with Order 53 of the Rules of Court 2012 and that the Court of Appeal lacked jurisdiction to hear the judicial review applications. The Federal Court rejected both arguments. Even if the company’s arguments were accepted, the courts retained the power to examine issues of illegality and contravention of law. Citing Perbadanan Pengurusan Sunrise, the court held that procedural non‑compliance is not equivalent to a jurisdictional defect.

The court also affirmed that back wages were a proper consequential order, consistent with the principles established in the leading case of Rama Chandran v The Industrial Court of Malaysia.

The appeals were dismissed with costs of RM150,000 to the two respondents. The RM2 million award stood.

Practical Takeaways

The Woon Kim Choy case offers more than a headline sum. It clarifies a point of law that has long troubled in‑house counsel, HR professionals, and company founders: a director can also be an employee, and when the two roles are intertwined, the Industrial Relations Act does not abandon the person who does the work.

• Director and employee are not mutually exclusive. The Court of Appeal expressly rejected the old Inchcape rule. The correct test is not what a person is called, but whether a genuine contract of service exists — written, oral, or implied. A director who draws a salary, performs operational duties, and reports to the board is likely to be a “workman” with full access to the Industrial Court.
• Documentation matters — and it will be scrutinised. The court examined EPF and SOCSO contributions, EA tax forms, payroll slips, and the register of employees. If a company treats an individual as an employee for tax and statutory purposes, it cannot later deny that status when a dispute arises. Consistency across HR, payroll, and tax records is not just good administration; it is a legal shield.
• Removal as a director is not the same as dismissing an employee. A shareholder resolution can strip a person of their board seat. But if that person also has a contract of service, ending the directorship does not automatically terminate the employment. The two acts are legally distinct, and a separate, just cause is needed to end the employment relationship.
• Pursuing a shareholder remedy does not waive employment rights. The company argued that the minority oppression action was inconsistent with a claim for unfair dismissal. The Court of Appeal disagreed. The two roles — shareholder and employee — can coexist, and pursuing one remedy does not extinguish the other.
• A jurisdictional defence, if it fails, leaves no room to fall back. The company chose to fight the case on the single ground that the Industrial Court had no jurisdiction. It led to no evidence of misconduct. When that defence collapsed, the Court of Appeal refused to give the company “a second bite at the cherry.” A litigation strategy that rests entirely on a jurisdictional challenge must be weighed with care.
• Appellate courts can — and will — award compensation directly. Drawing on Rama Chandran, the Court of Appeal assessed and awarded back wages and compensation in lieu of reinstatement without remitting the matter to the Industrial Court. Where all material facts are before the court, the case can be concluded without further delay or expense.

A Closing Thought

Woon Kim Choy and Chang Heng Keong spent nearly a quarter of a century helping to build Acexide Technology. They drew salaries, contributed to EPF and SOCSO, paid income tax, and turned up to work. When the majority shareholder decided they were no longer wanted, they were told they had never really been employees at all — that their board seats were the beginning and end of their relationship with the company.

The Industrial Court agreed. The High Court agreed. It took the Court of Appeal, and then the Federal Court, to say what the payroll records had been quietly recording for decades: they were employees, and their dismissal was unjust.

For companies and their advisers, the lesson is not obscure. A directorship does not erase a contract of service. A shareholder resolution does not double as a termination letter. And when the law finally catches up with a workplace injustice, it can do so with a bill that runs into the millions.