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Proposed amendments to the Industrial Relations Act 1967

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Introduction The Industrial Relations (Amendment) Bill (“the Bill”) was tabled in the Malaysian Parliament for first reading on 7 October 2019 and was passed by the Dewan Rakyat on 9 October 2019.

In this article, we will highlight the key amendments proposed under the Bill.

Removal of Minister’s discretion The proposed amendments to the Industrial Relations Act 1967 (“IRA”) confers many powers previously vested in the Minister of Human Resources (“the Minister”) to the Director General of Industrial Relations (“DGIR”).

This is reflected under section 20(3) of the Bill whereby the discretion of the Minister to refer representations on dismissals is removed and carried out by the DGIR instead.

Similarly under Section 9(1D) of the Bill, the DGIR will have the power to determine whether a workman is employed in a managerial, executive, confidential or security capacity, a power previously accorded to the Minister.

Unfair dismissal claims
Referral of unfair dismissal claims to Industrial Court
Currently, under section 20 of the IRA, when parties are unable to reach a settlement in cases of unfair dismissals, the Minister has the discretion to refer representations to the Industrial Court as he deems fit. However under the Bill, such discretion is removed and instead, when parties are unable to settle during conciliation meetings, the DGIR will automatically refer such cases to the Industrial Court for an award.

This essentially means that the decision to refer an unfair dismissal complaint to the Industrial Court will no longer be subject to judicial review by the civil courts. As such, there are concerns that the removal of such discretion will increase the likelihood of frivolous and vexatious claims.

Representation during conciliation meetings
Amendments to Section 20 6(a) and 6(b) provides an additional option for representation during conciliation meetings whereby parties may be represented by any person except an advocate and solicitor, provided there is authorisation in writing and permission of the DGIR.

The Bill also includes a new Section 20(6A) which allows the next-of-kin of a workman under a mental disability to apply to the High Court to appoint a guardian ad litem.

Sole Bargaining Rights New provisions have been included in relation to sole bargaining rights. Section 12A provides that when more than one trade union have received recognition by the employer to represent a class of employees, the employees are given the flexibility to decide amongst themselves which trade union shall have the sole bargaining rights.

In the instance there is no agreement, an application in writing may be made to the DGIR who will, by way of secret ballot, ascertain the preference of which trade union should have sole bargaining rights by the highest number of votes received.

Further, Section 12B provides that when a trade union has obtained the sole bargaining rights, no other trade unions shall have the same rights until a period of three years has elapsed or if the trade union ceases to exist.

Collective Bargaining Under the current Section 13(3) on collective bargaining, trade unions are limited to only raising in the course of discussion the general character with regard to procedures of promotion of workmen.

With the new amendment, Section 13(3) now allows a trade union to raise in the course of discussion all the question of general character with regard to matters on,

a)      promotion of any employee from a lower to a higher grade or category
b)      transfer of an employee within the organisation, provided such transfer 
does not entail a change to the detriment of the employee’s terms of employment
c)      employment of an employee in the event of vacancies in the establishment
d)      termination of an employee by reason of redundancy or re-organisation of
the establishment
e)      dismissal and reinstatement of an employee
f)       assignment or allocation to an employee that are consistent or compatible with
the terms of employment

Further, amendments to Section 26(2) provides that where a trade dispute relates to a refusal to commence collective bargaining or a deadlock in collective bargaining, reference to the Industrial Court cannot be made without the consent in writing of the parties, unless (a) the trade dispute refers to the first collective agreement; (b) refers to any essential services specified in the First Schedule (c) results in acute crisis if not resolved expeditiously; or (d) if parties are not acting in good faith to resolve the trade dispute.

Appeal Process Under Section 33B(1) of the IRA, an award, decision or order of the Industrial Court shall be final and conclusive, and shall not be challenged, appealed against, reviewed, quashed or called in question in any court. The only redress available is to file an application for judicial review at the High Court.

Under the new Section 33C, it provides for a person who is dissatisfied with the Industrial Court award to appeal to the High Court within 14 days from the date of receipt of the award. Procedure for the appeal shall follow the Rules of Court 2012 and treated as an appeal from a Sessions Court with the relevant required modifications.

Restrain strikes or lock-outs New Section 44A under the Bill confers the Minister additional powers to restrain strikes or lock-outs if it lasts beyond a certain time or beyond a certain scope, thus endangering the life, personal safety or health of the whole or part of the population.

Penalties The amendments under the Bill has increased a number of penalties in cases of contravention of the Act.
 
a)      Section 40 – Picketing
The punishment of imprisonment has been removed and the fine has been increased to MYR5,000 instead of MYR1,000
 
b)      Section 46 – Penalty for illegal strikes and lock-outs
The punishment of imprisonment has been removed and the fine is increased to MYR5,000 instead of MYR1,000
 
c)       Section 47 – Penalty for instigation of illegal strikes and lock-outs
The punishment of imprisonment has been increased to five years from one year and the fine has been increased to MYR5,000 instead of MYR1,000
 
d)      Section 48 – Penalty for giving financial aid to illegal strikes and lock-outs
Fine has been increased to MYR5,000 from MYR500
 
e)      Section 56 – Non-compliance with award or collective agreement
Fine has been increased to MYR50,000 from MYR2,000
 
f)      Section 60 – General penalties
Fine has been increased to MYR50,000 from MYR5,000

Comments Whether the amendments to the IRA will strengthen industrial harmony can only be seen once the amendments are implemented.

One example would be the amendment to the Industrial Courts where cases will now automatically be referred to the Industrial Court by the DGIR if reconciliation fails. This would likely result in an increase of industrial cases and open the floodgate of litigation as the “filtering process” has been removed.

In view of the above amendments to the IRA, it seems that the rights of both the employers and employees will be affected. However, what matters the most is that no party will be prejudiced in any way.

Any queries on the above amendments may be directed to our Partners in the Employment & Industrial Relations Practice Group:

P. Jayasingam 
Wong Keat Ching
Thavaselvi Pararajasingam