MDA ordered to pay Perkeso arrears for ‘contract’ workers

The High Court has ruled that the Medical Device Authority (MDA) must pay outstanding contributions for Perkeso workers, who were deemed employees under Section 14 of the Employees’ Social Security Act. The decision dismisses MDA’s appeal and orders the agency to pay RM5,000 in costs. The dispute originated from Fauzi Idris, an MDA worker who suffered an injury while commuting to work in 2015.

Perkeso initially denied Fauzi permanent disability benefits, claiming he was not an employee under Section 2(5) of the Act. However, the Social Security Appellate Board (SSAB) later ruled in Fauzi's favor in August 2018. Due to this ruling, Perkeso demanded that MDA pay arrears of contributions for other workers with similar contract terms.

MDA argued that the workers were independent contractors, not employees, and that Perkeso should not receive the arrears because it instructed MDA to stop paying contributions in a November 2017 email. However, the High Court disagreed, stating that the main question of employment status was within the SSAB's jurisdiction under Section 84 of the Employees’ Social Security Act.

The court considered several tests, including control, organization, entrepreneurship, and composite tests, and found that the workers' duties were integrated into MDA's business. The court also held that Perkeso's instruction to MDA could not prevent it from fulfilling its statutory duty to pay the arrears.