The Industrial Relations (Amendment) Act 2020 (“Amendment Act”) was gazetted on 20th February 2020, and came into partial effect on 1 January 2021. Some provisions relating to essential services and sole bargaining rights of trade unions are not in force yet.
These are some of the key amendments that are now in effect:
Representation at conciliation meetings
Pursuant to the Amendment Act, an employer or employee may now be represented by any person of their choice (except lawyers) during a conciliation process at the Industrial Relations Department subject to the permission of the Director General.
Automatic referral to the Industrial Court
Previously, the Minister of Human Resources had the discretion to refer unfair dismissal complaints to the Industrial Court. For example, the Minister could refuse to refer an unfair dismissal complaint if he was of the view that it was frivolous or vexatious. However, under the Amendment Act, the Minister no longer has this power – the referral is done by the Director General of Industrial Relations who is required to automatically refer the unfair dismissal complaint to the Industrial Court if there is no settlement at the Industrial Relations Department stage.
Continuation of Proceedings Upon Claimant’s Death
Post-amendment, the Industrial Court is empowered to carry on with a hearing of unfair dismissal even after a claimant’s death. Previously, an unfair dismissal claim was considered a personal action and would be struck out upon the Claimant’s death.
Extension of Scope of Entitled Persons
Before the Amendment Act came into force, employees of the government and statutory bodies did not have a right to file a complaint of unfair dismissal. The scope of protection is extended to include employees of statutory bodies in certain situations.
Appointment of Guardian ad litem
A next-of-kin of a mentally disabled employee may apply to the High Court and obtain an order to appoint a guardian ad litem (court appointed guardian) for the employee.
Power of the Industrial Court
Imposition of Interest
The Amendment Act confers powers to the Industrial Court to impose an interest of up to 8% per annum to an award (including an interim award), commencing from the 31st day of the award.
Compensation to Next-of-kin
In making an award in respect of a deceased workman, the Amendment Act provides that the Court is empowered to award backwages or compensation in lieu of reinstatement (or both) to the next-of kin of a deceased workman.
No question of law to High Court
Section 33A in IRA has been deleted post-amendment, where the Industrial Court is no longer empowered to refer any questions of law to the High Court.
Increase of penalty for non-compliance with award
The penalty for non-compliance with an Industrial Court Award has been increased to a fine not exceeding RM50,000.
Appeals from the Industrial Court
Prior to the Amendment Act, parties had the option to challenge the decisions of the Industrial Court via judicial review. Presently under the new Section 33C IRA, the Amendment Act enables aggrieved parties to directly appeal an Industrial Court award to the High Court, insofar as the appeal is made within 14 days of the grant of the award.
This provision does not expressly abolish judicial review as an alternative to challenge a decision handed down by the Industrial Court, although the likelihood of the High Court dismissing an application for judicial review is foreseeably higher, as a speedier remedy exists and applicants may be required to show that they have exhausted all other measures/avenues available before seeking judicial review.
Under the Amendment Act, the appeals process adopts similar process laid out in the Rules of Court 2012 as the appeal will be treated as if it were an appeal from a decision of the Sessions Court.
Punishment for Illegal Picketing, Strikes and Lock-outs
Although the amended section 40(3) IRA has abolished imprisonment as a consequence of illegal picketing, strikes and lock-outs, the fine has been raised from one thousand ringgit (RM1,000) to five thousand ringgit (RM5,000).
Power of Trade Unions
Trade unions are now empowered under the Amendment Act to raise questions of a general character relating to the transfer, recruitment, termination of services due to redundancy, dismissal and reinstatement as well as distribution of tasks.
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Industrial relations and employment litigation practice in Malaysia will undoubtedly be changed now that the Amendment Act is in force (partially). Under the Amendment Act:
- unfair dismissal representations made, and
- all proceedings commenced or awards made before the Industrial Court in relation to unfair dismissal,
before the coming into operation of the Amendment Act shall proceed and have effect as if there were no amendments.
Given the savings provision of the Amendment Act, it is now crucial for employers and employees to be aware when an unfair dismissal representation was first made, as it will have a significant bearing on the proceedings down the line.
Previously, the exact date of lodgment of a representation would have been mostly relevant in respect of the 60 day limitation period. Now, the difference in rights, liabilities and procedure between a representation lodged on 31 December 2020 and 2 January 2021 could be substantial.
This article was written by Donovan Cheah with assistance from Tiffany Chin (Intern). Donovan has been named as a Recommended Lawyer for Labour and Employment by the Legal 500 Asia Pacific 2017, 2018, 2019 and 2020, 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. Our practice areas include employment law, dispute resolution, tax advisory and corporate advisory. Have a question? Please contact us.