MALAYSIAN INDUSTRIAL RELATIONS

& EMPLOYMENT LAW

Author: Maimunah Aminuddin

Chapter Eight
The Industrial Court

Malaysian Industrial Relations &

Employment Law 1
Preview

 Purpose of the Industrial Court

 Disputes arbitrated by the Court

 Claims for reinstatement

 Retrenchment of employees

Malaysian Industrial Relations &

Employment Law 2
The Industrial Court

 The main objective of the Industrial Court

is to provide a peaceful and unbiased
means of settling disputes between
employers and employees.

 The Court arbitrates disputes when

conciliation fails.

Malaysian Industrial Relations &

Employment Law 3
The Industrial Court, cont.

The Court’s awards (decisions) are

made by:

 a President, and.

 a number of chairmen.

 Nowadays the court have 20 chairmen

Malaysian Industrial Relations &

Employment Law 4
continue

 Chairmen – at least 7 yrs. experience as

a lawyer or members of judicial service
 For cases with union – president or
chairmen and 3 members panel (rep. of
employer, rep. of employee and an
independent.
 For cases of unfair dismissal – president
or chairman sit alone.
Malaysian Industrial Relations &
Employment Law 5
The Industrial Court, cont.
Disputes heard by the Court include:
 Trade disputes between trade unions and
employers
 Claims for reinstatement by individual
workers
 Claims of non-compliance with a CA or an
award of the Court
 Requests for interpretation of a CA or an
award

Malaysian Industrial Relations &

Employment Law 6
The Industrial Court, cont.

Trade disputes arbitrated by the Court

relate either to:

 an individual grievance where the worker

is represented by his union, or

 a dispute relating to a collective

agreement.

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Employment Law 7
continue

 Party in dispute submitted document (

summary of argument) called “pleadings”
in advance. During the hearing each
party is given opportunity to present their
case, introducing witness, documents
and cross examines.

Malaysian Industrial Relations &

Employment Law 8
The Industrial Court, cont.
Claims for Reinstatement
 Under Section 20 Industrial Relations Act,
a dismissed employee may file a claim for
reinstatement within 60 days of his
dismissal.
 Claim is made at Department of Industrial
Relations.
 If conciliation is successful, case closed.
Malaysian Industrial Relations &
Employment Law 9
 Claims for reinstatement must not more
than 60 days. Case: Fung Keong Rubber
Manufacturing S.B. Vs Lee Eng Kiat.
Judge: Raja Azlan Shah.
 80% of the case of the trade dispute
settle by conciliation.

Malaysian Industrial Relations &

Employment Law 10
The Industrial Court, cont.

Claims for Reinstatement

 If conciliation unsuccessful, Minister of
Human Resources is authorised by the Act
to decide whether or not to refer the
dispute to the Industrial Court.
 If dispute is referred to Court, a hearing
will be held.

Malaysian Industrial Relations &

Employment Law 11
The Industrial Court, cont.

Claims for Reinstatement

 After hearing the evidence presented by
the employer and the employee, the Court
will decide whether the employee was
dismissed with or without just cause or
excuse.
 If Court decides dismissal was with just
cause and excuse, dismissal is upheld.
Malaysian Industrial Relations &
Employment Law 12
The Industrial Court, cont.

Claims for Reinstatement

 If Court decides dismissal was without just

cause or excuse, Court will either:

 order reinstatement of employee, OR

 order employer to pay compensation.

Malaysian Industrial Relations &

Employment Law 13
The Industrial Court, cont.
Claims for Reinstatement
Compensation:
One month’s wages for every year
employee’s service with the employer
AND
Backwages from date of dismissal to date of
Court award, but a maximum of 24 months
is imposed by law

Malaysian Industrial Relations &

Employment Law 14
 Cause of delay from dismissal to present
in court:
 Worker are more educated and know
their right
 Longer process of conciliation
 Lawyer postpone cases
 Court with insufficient staff

Malaysian Industrial Relations &

Employment Law 15
Retrenchment of employees

 Employers have the right to terminate an

employee’s contract when he is surplus to
the employer’s needs, i.e. he is redundant.

 To be fair, a retrenchment exercise should

comply with the Code of Conduct for
Industrial Harmony.

Malaysian Industrial Relations &

Employment Law 16
Retrenchment of employees,
cont.
Employers are expected to take steps to
avoid retrenching workers such as:
 Freezing recruitment of workers and
re-deploying redundant workers into
vacancies that arise
 Limiting or ceasing overtime/public
holiday work

Malaysian Industrial Relations &

Employment Law 17
Retrenchment of employees,
cont.
 Reducing working hours and wages (with
consent of employees)
 Conduct a Voluntary Separation Scheme
(VSS)

Malaysian Industrial Relations &

Employment Law 18
Retrenchment of employees,
cont.
If retrenchment cannot be avoided,

employer must:

1. Choose who to retrench based on:

 FOF

 LIFO

Malaysian Industrial Relations &

Employment Law 19
Retrenchment of employees,
cont.
2. Give proper notice to the employees
concerned

3. Pay termination benefits where

required

Malaysian Industrial Relations &

Employment Law 20
Retrenchment of employees,
cont.
Which employees are entitled to
termination/retrenchment benefit?
 Employees within the scope of the
Employment Act
 Employees within the scope of a CA
 Employees who have a clause providing
for retrenchment benefit in their contract
of employment

Malaysian Industrial Relations &

Employment Law 21
Retrenchment of employees,
cont.
Termination/ Retrenchment benefit
under the Employment Act:
 Employees with less than 1 year’s service:
No benefit
 Employees with more than 1 year & less
than 2 years: 10 days wages for each year
of service

Malaysian Industrial Relations &

Employment Law 22
Retrenchment of employees,
cont.
 Employees with more than 2 years and
less than 5 years: 15 days wages for each
year of service
 Employees with more than 5 years:
20 days wages for every year of service

Malaysian Industrial Relations &

Employment Law 23
continue

 Bonus – contractual (Fixed in CA), non

contractual ( discretion of the mgmt.)
 Management Prerogatives – promotion,
transfer, employment, termination,
dismissal and reinstatement, assignment
of duty.

Malaysian Industrial Relations &

Employment Law 24
Review

 Purpose of the Industrial Court

 Disputes arbitrated by the Court

 Claims for reinstatement

 Retrenchment of employees

Malaysian Industrial Relations &

Employment Law 25