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Case Update: Industrial court is the proper forum to decide on sovereign immunity

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EMPLOYMENT LAW
Sovereign Immunity – Employment – Private Acts – Commercial Transactions – Industrial Court – Dismissal – Embassy of the United States of America

The United States of America v Menteri Sumber Manusia & Ors
Civil Appeal No: 01(f)-18-10/2021(W)| Federal Court
- see the grounds of judgment here

Facts The United States of America (the ‘Appellant’) is a sovereign state which has established a diplomatic mission, the Embassy of the United States of America in Kuala Lumpur. Subramaniam a/l Letchimanan (the ‘2nd Respondent’), a Malaysian, was employed as a security guard at the Embassy by the Appellant. The dispute in the present case arose when he was dismissed from his employment by the Appellant via a phone call from an official of the Embassy with no reasons given. Feeling aggrieved, the 2nd Respondent filed a representation under section 20(1) of the Industrial Relations Act 1967 (“IRA 1967”) claiming his dismissal by the Embassy was without just cause and excuse and seeking for reinstatement to his position as a security guard at the Embassy. At the material time, the 2nd Respondent as a dismissed employee has no direct access to the Industrial Court. Access was available only upon a reference by the Minister of Human Resources (the ‘1st Respondent’). A conciliation meeting was held between the Embassy and the 2nd Respondent but no settlement was reached. Subsequently, the Embassy was informed that the Human Resource Minister had decided to refer the 2nd Respondent’s representation to the Industrial Court for adjudication. Before the 2nd Respondent could proceed to file his claim at the Industrial Court, the Appellant filed an ex parte application to the High Court for leave to commence judicial review application seeking amongst others that a declaration be made that the Appellant and the Embassy were immune from the jurisdiction of the Industrial Court. The High Court held that the Industrial Court had no jurisdiction to hear the 2nd Respondent’s claim and was of the view that the Appellant was immune from the jurisdiction of the Industrial Court. An appeal was filed and the Court of Appeal allowed and set aside the High Court’s decision. Hence, this appeal before the Federal Court.

Issue Whether the Court of Appeal had erred when it set aside the High Court’s decision and ordered that the Industrial Court should decide whether the Appellant and the Embassy were immune from the jurisdiction of the Industrial Court?

Held In dismissing the appeal, YA Azahar Bin Mohamed in his judgement, held that the 1st Respondent has a wide and unfettered discretion under Section 20(3) of the IRA to refer representation to the Industrial Court, provided that he has acted bona fide and has not taken into account extraneous or irrelevant matters. The applicability of restrictive doctrine of sovereign immunity depends on the finding of facts of the precise nature, duties as well as job scope of the 2nd Respondent. Hence, the Federal Court held that the proper forum to decide on the issue of nature of job and dismissal should be the Industrial Court, after complete consideration of both oral and documentary evidence. Further, the Federal Court was of the view that precedent cases in other jurisdictions involving Employment Tribunals showed that, the Industrial Court has the duty of fact-finding to determine the applicability of the restrictive doctrine of sovereign immunity. In conclusion, the Federal Court held that the appropriate and only forum to determine whether the Appellant and the Embassy were immune from jurisdiction was the Industrial Court. Hence, the appeal was dismissed.

Zul Rafique & Partners
{30 June 2022}

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