CASE SPOTLIGHT: International Organizations Immune from Unfair Dismissal Claims
Despite Dicey’s rule that “no man is above the law”, Section 4 of the International Organizations (Privileges and Immunities) Act 1992 (“Act”) provides that the Government of Malaysia may confer certain international organizations and persons special privileges and immunity.  

Does this protect international organizations from unfair dismissal claims?

On 8 March 2022, in Asia-Pacific Institute for Broadcasting Development (AIBD) v Y. B Menteri Sumber Manusia dan 3 lagi (WA-25-270-09/2020), the High Court answered whether the Minister of Human Resources has the authority to refer a representation of unfair dismissal to the Industrial Court, where the employer named in the representation is an international organization.

Brief Facts

  • Under section 4 of the Act, the Asia-Pacific Institute for Broadcasting Development (“AIBD”) was granted immunity from any suit of legal process by the Government of Malaysia. 
  • AIBD’s ex-Finance Manager (“Employee”) tendered her resignation, which was accepted by AIBD.
  • A few days after the acceptance of resignation, the Employee attempted to withdraw her resignation. AIBD did not agree to her withdrawal of her resignation.
  • The Employee lodged a representation of unfair dismissal under Section 20(3) of the Industrial Relations Act 1967.
  • As there was no settlement, the Minister of Human Resources (“Minister”) referred the matter to the Industrial Court for adjudication.
  • AIBD applied to the High Court for judicial review to quash the Minister’s referral because the Minister failed to appreciate that AIBD was immune from any suit or legal process.

Court’s Findings

The High Court quashed the Minister’s referral and found that the Minister had acted in error of law and fact. The Minister’s referral contravened Parliament’s intention for enacting the Act, which provided international organizations with immunity from legal process.

At the hearing, the Minister claimed that he was not aware of the Act or AIDB’s status as an international organization. However, the affidavit evidence showed that AIDB had informed the Industrial Relations Department of its status and immunity during the conciliation meeting. The High Court held that the Minister cannot be ignorant about an Act of Parliament, and therefore the Minister’s own admission is that he failed to consider the facts about AIBD’s immunity before arriving at his decision to refer the matter to the Industrial Court. Therefore, the Minister’s decision was tainted with illegality, irrationality and/or was outside or without jurisdiction.

A side issue also arose as to whether the Employee should have been named as a party to the judicial review application. Here, as the Employee knew of the judicial review proceedings but chose not to intervene or challenge the judicial review application, the High Court held that her not being named as a party was not fatal to the judicial review application.

Key Takeaways

Under the Industrial Relations Act 1967 (“IRA”), some entities such as the government or statutory bodies are protected from unfair dismissal claims, provided certain conditions are met.  Immunity can also be afforded through the Act, which means international organizations are shielded from unfair dismissal claims.

Under Section 8A(1) of the Act, an international organization must cooperate with the appropriate authorities in Malaysia to facilitate the proper administration of justice, secure the compliance of all domestic legislation, and prevent abuse of the privileges and immunities conferred under the Act. Even with this requirement, an employee who feels that the international organization has not complied with local labour law would have no recourse for unfair dismissal under the IRA. The presumption is therefore that international organizations through Section 8A(1) would comply with local law and would not intentionally do anything that may jeopardize their privileges and immunities as an international organization.

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This article was written by Donovan Cheah (Partner) and  Tan Jing Huei (Intern). Donovan has been named as a recommended lawyer for labour and employment by the Legal 500 Asia Pacific for 2017-2022, and he has also been recognised by Chambers Asia Pacific and Asialaw Profiles for his employment law and industrial relations work.

Donovan & Ho is a law firm in Malaysia, and our employment practice group has built a reputation for providing strategic employment advice to local and global organisations.  Our team of employment lawyers provide advice on employment law and industrial relations including review of employment contracts, policies and handbooks, advising on workforce reductions, and managing dismissals of employees for poor performance or misconduct. We also represent clients in unfair dismissal claims and employment-related litigation. Have a question? Please contact us.

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