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Amendments to the Industrial Relations Act 1967

The Industrial Relations (Amendment) Act 2020 (“IRA 2020”) introduced several major changes to the Industrial Relations Act 1967 (“the Act”). The main changes with regard to the Act, which came into effect on 1 January 2021, may be summarized as follows.

 

Referral of Dismissal Cases To The Industrial Court (Section 20(3) of the IRA 2020)

Prior to the IRA 2020 the Minister had a discretion whether to refer representations for dismissal without just cause or excuse (“unfair dismissal claims”) to the Industrial Court.

Under the IRA 2020, the discretion of the Minister has been removed. Now, the Director General of Industrial Relations (DGI) is required to conciliate between the parties and if there is no settlement between the parties to refer the representation directly to the Industrial Court without the necessity of a “filter” mechanism.

Hence, the Industrial Court is now the sole arbiter of whether a representation for unfair dismissal has merits.

 

 

Employers or Workmen May Now Be Represented By Any Person At Conciliation Meetings at IR Department (Section 20(6) of the Act)

Following the amendment, both employers and workmen can now be represented by any other person (except an advocate and solicitor) at conciliation meetings at the Industrial Relations Department in respect of representations made under Section 20 of the Act. The representative must be authorised in writing by the employer/workman concerned and permitted by the DGI to attend the conciliation.

 

Next of Kin May Apply For An Order To Appoint A Guardian For A Workman Under Mental Disability (Section 20(6A) of the IRA 2020) 

Effective 1 January 2021, where a workman suffers from mental disability, his next of kin may apply to the High Court to appoint a guardian ad litem for the workman for the purposes of the conciliation process and/or during proceedings at the Industrial Court.

 

 

Death of A Workman (Section 29 of the IRA 2020)

Prior to the IRA 2020, a claim made by a workman at the Industrial Court would abate upon his death. (Thein Tham Sang V. The United States Army Medical Research Unit & Anor [1983] CLJ Rep 417)

Following the recent amendments in the IRA 2020, the Industrial Court may continue with proceedings brought by a workman notwithstanding his death.

Further, the Court in making an award in respect of a deceased workman, shall have the power to award backwages or compensation in lieu of reinstatement or both to his next-of-kin. (Section 30(6)(b))

That being said, there could be certain evidential difficulties in the Industrial Court in view of the personal nature of a dismissal claim which often requires the Industrial Court to make an evaluation of the subjective view point of the workman in respect of his complaint.

 

 

Court’s Discretion To Determine The Date of Termination (Section 29 (da) of the IRA 2020)

Previously, the Industrial Court was not allowed to amend nor determine the date of dismissal and that the date of dismissal would follow the date stated in the Ministerial Reference.

Following the IRA 2020, the Industrial Court is vested with the power to determine the actual date of dismissal of the workman. This will empower the Industrial Court to determine the date of dismissal by any party which is either disputed or is incorrect.

 

 

Interest Rate At 8% Per Annum on Awards (Section 30(1A) of the IRA 2020)

Under the previous scheme, Industrial Court awards did not carry any fixed interest. However, pursuant to the IRA 2020, any monetary sum awarded by the Industrial Court will now carry interest at the rate of eight percent (8%) per annum “or such lesser rate as the Court may direct, the interest to be calculated commencing on the thirty-first day from the date of the making of the award until the day the award is satisfied”.

Court Is No Longer Bound by The Second Schedule Of The Act For Dismissal that Relates to Section 4, 5 or 7 (Section 30(6a) of the Act)

The Second Schedule of the Act sets out the factors for consideration by the Industrial Court in making an award. Pursuant to Schedule 2, backwages which are awarded by the Court are limited to twenty-four months from the date of dismissal.

With the recent amendment to the Act, dismissal that relates to or as a result of the trade union activities under Section 4, 5 or 7 of the Act are no longer subject to the Second Schedule of the Act. In these instances, the Industrial Court is no longer limited to 24 months in its award for backwages.

 

 

Retrospective Date of Award (Abolition of Section 30(7) of the Act)

Previously, Section 30(7) had the effect of restricting the effective date of an Award to 6 months prior to the Minister’s reference to the Industrial Court save in limited circumstances under Sections 33 and 56(2)(c) of the Act and for reinstatement under Section 20(3) of the Act.

With the IRA 2020 and deletion of Section 30(7), the Industrial Court is given the discretion to decide the effective date of awards including the effective date of collective agreements.

 

Appeals Against Industrial Court Awards Are To Be Made To The High Court (Section 33 (C) and Abolition of Section 33A of the Act)

 

(i)        A major change under the IRA 2020 is the introduction of a specific appeal process in respect of challenges to awards made by the Industrial Court under Section 30 of the Act.

(ii)       Save for the limited right to appeal on questions of law under Section 33A arising from an award of the Industrial Court, the general practice in seeking to challenge an award of the Industrial Court under the Act has been by way of judicial review proceedings in the High Court.

(iii)     Section 33A of the Act has now been repealed and the IRA 2020 provides a specific appeal process from an Industrial Court award made under Section 30 of the Act. This appeal process is to the High Court and the procedure for such appeal would be that of an appeal from the Sessions Court to the High Court.

 

 

 

Time Limit for Filing Appeal / No Leave Required

 

(iv)      Such appeal would have to be filed within 14 days from the date of an Award and any aggrieved party should seek consultation as soon as possible to determine if an appeal should be proceeded with given the time limits under Section 33C of the IRA 2020.

(v)       Unlike the judicial review process, an aggrieved party may now seek to file an appeal in the High Court upon an award being made and there is no requirement for leave of the High Court to be obtained before such an appeal can be filed.

(vi)      This is in contrast to the judicial review process which is a two-stage process of challenging the Industrial Court award (i.e first obtaining leave of the High Court and upon leave being granted, for the substantive application to be heard).

(vii)    The amendment is intended to simplify and expedite the appeal process in the High Court which would be of benefit to all parties concerned.

 

Judicial Review As A Basis For Challenging Awards

 

(viii)   Although the IRA 2020 does not specifically exclude a party from seeking to challenge an Industrial Court award by way of judicial review, the general rule is that where a statutory right of appeal is provided, the judicial review process is not available to an aggrieved party unless “exceptional circumstances” are shown which necessitates bypassing the statutory appeal process. These “exceptional circumstances” include: –

(1) where there is a clear lack of jurisdiction; or

(2) where there is a blatant failure to perform some statutory duty; or

(3) where there is a serious breach of the principles of natural justice.

(Iskandar Coast Sdn Bhd V. Ketua Pengarah Hasil Dalam Negeri [2019] 7 CLJ 143)

 

The Test to Determine the Appeal from The Industrial Court

(ix)      Another major distinction which would arise under the new appeal process in the High Court is that in challenging an Industrial Court award, a party is not limited to show that the Industrial Court acted “without jurisdiction” in reaching its decision i.e on the grounds of illegality, irrationality, impropriety or breach of natural justice which are the accepted grounds of challenge under judicial review.

(x)       The High Court would now be able to review the decision of the Industrial Court in its entirety including all aspects of evidence which formed part of the Industrial Court proceedings.

(xi)      It is expected that the High Court in so determining an appeal from the Industrial Court would apply the tests established in civil appeals as to the basis on which the High Court will intervene to either set aside or vary an award of the Industrial Court.

(xii)    The test which has been adopted in respect of civil appeals is to show the decision appealed upon is “plainly wrong” either in law or in fact (or both). It is therefore likely that Industrial Court awards could now be subject to greater scrutiny by the courts under the new appeal process.

 

 

Further appeal from the Court of Appeal

 

(xiii)   An equally important effect of the appeal process from the Industrial Court award is that the ultimate appellate court is likely to be the Court of Appeal and that no further appeal can be made to the Federal Court from the decision of the Court of Appeal. (Section 96 of the Courts of Judicature Act 1964 (“CJA”) and the case of Sia Cheng Soon & Anor v Tengku Ismail bin Tengku Ibrahim [2008] 3 MLJ 753)

 

 

Minister’s Power To Restrain A Strike Or Lockout (Section 44A of the IRA 2020)

Following the IRA 2020, the Minister may order a strike or lock-out to stop in the event it lasts beyond a certain time or extends beyond a certain scope, thus endangering the life, personal safety or health of the whole or part of the population.

 

Employee of Statutory Body May File A Representation at the IR Court (Section 52 of the IRA 2020)

Under the Act, no representation for unlawful dismissal could be made to the Industrial Court by a workman who was employed by any statutory authority.  (Hamid Sulaiman v. Pertubuhan Peladang Kebangsaan (NAFAS) [2019] 4 ILR 542)

Under the IRA 2020, a workman employed by a statutory authority may file a representation for unfair dismissal pursuant to Section 20(1) of the Act.

However, before any representation can be filed, the Minister will first have to consult with the statutory authority concerned and by order published in the Gazette prescribe the name of the statutory authority.

 

 

Non-Compliance With Award or Collective Agreement (Section 56 IRA 2020)

Under the IRA 2020, the fine for a party who has failed to comply with an order under Section 56(2) has been increased substantially from RM 2,000 to RM 50,000.00 and a further fine not exceeding RM 500 everyday apart from an order for imprisonment for a term not exceeding one year.

Under Section 56(3)(a), additional powers are now provided to the Industrial Court to make an order in respect of any person convicted of an offence under Section 56(3) of the Act to make any payment due to a workman under Section 30 of the Act.

 

Conclusion

With these wide-ranging changes to the Act, the courts will continue to play an important and pivotal role in the field of industrial relations both at the Industrial Court and appellate levels and in particular in interpreting the new provisions under the IRA 2020.

 

This article is intended for general information of the clients of our Firm. It should not be regarded as legal professional advice. If you need advice based on specific facts, please feel free to contact us.

 

 

Romesh Abraham Partner [email protected]

Mehala Marimuthoo Partner [email protected]

Gavinesh Siva Dharma Associate [email protected]