Industrial Relations Act 1967 amended to expedite dispute resolution processes

25 February 2021

The Malaysian Industrial Relations (Amendment) Act 2020 (“Amendment Act”) was gazetted on 20 February 2020 and came into force on 1 January 2021, save for section 4, subsections 5(c), (d), (e), (f) and 8(b), section 10, subsections 11(a), (b) and (c), and sections 18, 33 and 34. The Amendment Act amends the Industrial Relations Act 1967 (“IRA”) and aims to expedite the dispute resolution process of industrial relations related matters.

Key features of the Amendment Act are set out below.

Referral of complaints to Industrial Court

Prior to the Amendment Act, the power and discretion to refer a complaint for dismissal to the Industrial Court for resolution was vested in the Minister for Human Resources (“Minister”). The Amendment Act removes the power and discretion from the Minister and instead, vests the power and discretion with the Director General of Industrial Relations (“DGIR”). This amendment is intended to expedite the process to refer complaints to the Industrial Court. 

Representation on dismissals

The Amendment Act introduces 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. Additionally, the Amendment Act provides for the next-of-kin of any workman with a mental disability to apply to the High Court for an order to appoint a guardian to act for such workman.

Trade Unions

  • Capacity of workman and claim for recognition: The amendment to section 9 of the IRA expedites the dispute resolution process 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.
  • Reference of complaints: The Amendment Act replaces the power of the Minister to refer a complaint in relation to sections 4, 5 and 7 of the IRA (which relate to the 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: The Amendment Act also grants power 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 thus no longer has the power to determine the recognition of a trade union.
  • No other claim for recognition after trade union makes a claim: The Amendment Act also amends 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.
  • Collective bargaining: Section 13 of the IRA is amended 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.

Industrial Court

  • Constitution and divisions of the Court: Section 22(5) and 23(4) of the IRA is 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.

With the introduction of the Amendment Act, 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 Act also introduces 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 Industrial Court: Section 29 of the IRA is 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 Act also allows the Industrial Court to continue with the hearing of a case notwithstanding the death of the workman who made the representations.
  • Appeal to High Court: The Amendment Act introduces an appeal mechanism allowing a party aggrieved by an award from the Industrial Court to appeal to the High Court against such award. Before the Amendment Act took effect, an aggrieved party could only file a judicial review against an Industrial Court award and the scope of the review was 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 allows 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 is 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 Act removes 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 is increased from RM1,000 to RM5,000. 

Compliance with award or collective agreement 

  • Interest: The Industrial Court now has 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) is 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) is added to the IRA to provide that any award made by the Industrial Court is 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 is an increase from RM2,000 to RM50,000 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 increased from RM5,000 to RM50,000.