Malaysian Industrial Relations (Amendment) Bill 2019 seeks to expedite dispute resolution process
27 February 2020
The Industrial Relations (Amendment) Bill 2019 (“Amendment Bill”) was passed by the Dewan Negara (the Upper House of Parliament in Malaysia). It had been passed by the Dewan Rakyat (the Lower House of Parliament) on 9 October 2019 and the Dewan Negara on 19 December 2019. The Amendment Bill seeks to amend the Industrial Relations Act 1967 (“IRA”) in several ways, including creating the post of the Deputy President of the Industrial Court, empowering the Director General of Industrial Relations (“DGIR”) instead of the Minister for Human Resources (“Minister”) to refer a complaint to the Industrial Court for hearing, allowing an appeal of any decision of the Industrial Court to be made to the High Court and providing for the application of Part VI of the IRA to any statutory authority as determined by the Minister after consultation with the relevant statutory authority.
The following are the key features of the Amendment Bill:
- Complaints referred to Industrial Court
Currently, the Minister has the power and discretion to refer a complaint for dismissal to the Industrial Court for resolution. The Amendment Bill seeks to remove this power and discretion from the Minister and vest it in the DGIR. This amendment is intended to expedite the process of reference of complaints to the Industrial Court.
- Representation on dismissals
The Amendment Bill seeks to introduce new sub-paragraphs (6)(a)(iv) and 6(b)(iv) to section 20 of the IRA to allow an employer and a workman to be represented by any person except an advocate and solicitor during proceedings with the DGIR. The amendment further seeks to introduce a new section 20(6A) to enable the next-of-kin of any workman with a mental disability to apply to the High Court for an order to appoint a guardian ad-litem for such workman.
- Trade unions
Capacity of workman and claim for recognition
The Amendment Bill seeks to amend section 9 of the IRA to expedite dispute resolution processes relating to the capacity of a workman and a claim for recognition by a trade union of workmen to represent any workman or class of workmen, by replacing the power of the Minister with the power of the DGIR to resolve such disputes.
The amendment also removes the discretion of the DGIR to refer the matter to the Director General of Trade Unions for him to ascertain the competence of the trade union of workmen concerned to represent any workmen or any class of workmen.
Reference of complaints
The Amendment Bill seeks to replace the power of the Minister to refer a complaint in relation to sections 4, 5 and 7 of the IRA (which relate to protection of rights of workmen and employers and their trade unions) to the Industrial Court for hearing with that of the DGIR.
Prohibition of strikes
Under the Amendment Bill, power will be granted to the DGIR to prohibit workmen from going on strike after the DGIR has made a decision under section 9 of the IRA on recognition of a trade union. The Minister will no longer have the power to determine the recognition of a trade union.
No other claims after trade union has made a claim
The Amendment Bill seeks to amend section 10A of the IRA to prohibit any other trade unions of workmen from making a claim for recognition under section 9 of the IRA until a claim has been resolved under paragraph 9(3)(a) or deemed to have been withdrawn under section 9(4), or a decision has been made by the DGIR in respect of a claim for recognition by a trade union in respect of any workmen or a class of workmen under the same section. Previously, the decision was made by the Minister.
Time bar from making any claim for recognition
The time period in which a trade union of workmen is barred from making any claim for recognition in respect of the same workmen or class of workmen in which another trade union of workmen has been accorded recognition will be reduced from three years to one year, unless the trade union of workmen which has obtained the sole bargaining rights ceases to exist.
Introduction of “sole bargaining rights”
The Amendment Bill seeks to introduce a new section 12A to address issues involving more than one trade union of workmen by providing procedures for a trade union of workmen to be selected as the trade union with the sole bargaining rights to represent the same workmen or class of workmen. There will also be a new section 12B which provides that where a trade union of workmen has obtained sole bargaining rights to represent any workmen or class of workmen, no other trade unions will have the same rights for a period of three years or unless the trade union of workmen which has obtained the sole bargaining rights has ceased to exist.
Section 62 of the IRA will also be amended to empower the Minister to make regulations to provide for the procedures relating to the process of determining sole bargaining rights.
Collective bargaining
Section 13 of the IRA will be amended to add two procedures in determining recognition to be accorded to a trade union of workmen, by the trade unions of workmen or the DGIR pursuant to the new section 12A. Employers, trade unions of employers and trade unions of workmen will be barred from extending an invitation to commence collective bargaining until three months before the expiry of the existing collective agreement. This amendment also seeks to enable the trade union of workmen to raise matters of a general character stated in paragraphs 13(3) (a) to (f) of the IRA in the course of any discussion with an employer or trade union of employers.
Reference of trade disputes to the Court
A new proviso under section 26(2) of the IRA will be introduced to provide that any reference to the Industrial Court without the consent of the parties in respect of a refusal to commence collective bargaining or a deadlock in collective bargaining can only be made subject to certain conditions.
- Industrial Court
Constitution and divisions of the Court
Sections 22(5) and 23(4) of the IRA will be amended to allow the President of the Industrial Court and the Chairman of the Industrial Court to sit alone when dealing with any complaint of non-compliance of an award for a reference made under section 20(3) of the IRA. This amendment is made in order to expedite the process.
Under the Amendment Bill, officers from the ministry charged with the responsibility for human resources with at least 15 years of experience in labour and industrial relations and who is a qualified person as defined in the Legal Profession Act 1976 may be considered for appointment as Chairman under section 23(2) of the IRA.
The Amendment Bill will also introduce a new section 25(3) into the IRA to restrict the appointment of the Registrar, Deputy Registrars and Assistant Registrars to any person from the Industrial Relations Officers Scheme of Service.
Power of the Court
Section 29 of the IRA will be amended to empower the Industrial Court to hear and determine the matter before it notwithstanding a dispute by the parties as to the date of dismissal as stated in the DGIR’s reference or is incorrect. The Amendment Bill also seeks to allow the Industrial Court to continue with the hearing of a case notwithstanding the death of the workman who made the representations.
Appeal to the High Court
The Amendment Bill will introduce an appeal mechanism allowing a party aggrieved by an award from the Industrial Court to appeal to the High Court against such award. At present, an aggrieved party may only file a judicial review against an Industrial Court award and the scope of the review is limited to only the decision-making process in the Industrial Court instead of a full review on the substantive merits of the case. The new appeal process will allow a party to challenge the findings of the Industrial Court on the substantive merits of an award.
- Strikes and lock-outs
Prohibition of strikes and lock-outs
A new section 44A will be introduced into the IRA to enable the Minister to stop a strike or lock-out if it endangers the life, personal safety or health of whole or part of the population.
Penalty for illegal picketing, strikes and lock-outs
The Amendment Bill will remove the punishment of imprisonment for illegal picketing, strikes, and lock-outs. The financial penalty for illegal picketing, strikes, and lock-outs, instigation and giving financial aid to illegal strikes and lock-outs will increase from MYR1,000 to MYR5,000.
- Compliance with award or collective agreement
Interest
The Industrial Court will have the power to impose interest for awards relating to the payment of money as a deterrent measure against delay in compliance with awards. A new section 30(6B) will be introduced to allow the Industrial Court to award back wages or compensation in lieu of reinstatement or both to the next-of-kin of the deceased workman.
Next-of-kin
A new paragraph 32(1)(e) will be added to the IRA to provide that any award made by the Industrial Court will be binding on the next-of-kin of the deceased workman in relation to a reference under section 20(3) of the IRA.
Increase of penalty for non-compliance with award, collective agreement, or the IRA
There will be an increase from MYR2,000 to MYR50,000 as a fine for non-compliance with an award or a collective agreement.
The penalty for non-compliance with provisions of the IRA and its regulations will increase from MYR5,000 to MYR50,000.
Reference materials
The Amendment Bill is available on the website of the Malaysian Parliament www.parlimen.gov.my or by clicking here.