Court of Appeal holds question of state immunity in employee dismissal case is a matter to be decided at Industrial Court

15 October 2021

Subramaniam a/l Letchimanan v The United States of America
(Appeal No. W-01(A)-66-01-2020); Menteri Sumber Manusia Malaysia v The United States of America (Appeal No. W-01(A)-59-01-2020)

In Subramaniam a/l Letchimanan v The United States of America , heard together with Menteri Sumber Manusia Malaysia v The United States of America, a Malaysian workman (“Workman”) had his employment as a security guard at the United States Embassy (“Embassy”) terminated, after having worked at the Embassy for 10 years (“Dismissal”). The Workman complained that he had been unlawfully dismissed as he was terminated without notice and with no reasons given. Upon being informed by the Director General of Industrial Relations that there was no resolution of the dispute between the Workman and the Embassy at the conciliation level, the Minister of Human Resource (“Minister”) referred the dispute to the Industrial Court (“IC”) under section 20 of the Industrial Relations Act 1967 (“Reference”).

At the High Court, the United States made a judicial review application challenging the Reference, arguing that State immunity applied and that the Minister was wrong in law to have made the Reference. The High Court ruled in favour of the United States, hence the present appeals.

In setting aside the High Court decision, the Court of Appeal held, among other things:

• The restrictive immunity doctrine, in which only acts that are primarily and peculiarly governmental or diplomatic in nature are immune from legal action, is based on a distinction between acts jure imperil (i.e. acts of a sovereign or governmental in nature) and acts jure gestionis (i.e. acts which could be performed by a private party). The issue as to whether the principle of restrictive immunity applies to the Dismissal is a matter to be decided at the IC.
• The Reference of the Minister to determine the issue of immunity cannot be said to be tainted with illegality, irrationality or procedural impropriety. The IC has the duty to embark on a fact-finding exercise to determine if the defence of State immunity applied to exclude the jurisdiction of the IC. It would be premature for a party to seek an order to prohibit the IC from hearing the Reference before it makes a determination on the jurisdictional question.