The Industrial Relations (Amendment) Bill 2019 (“Bill”) was passed by the Dewan Rakyat (House of Representatives) and the Dewan Negara (Senate) of the Malaysian Parliament on 9 October 2019 and 19 December 2019 respectively. The Bill is presently awaiting royal assent after which it will be gazetted and come into operation on a date to be appointed by the Minister of Human Resources (“Minister”).

The major changes to be made to the Industrial Relations Act 1967 (“IRA”) under the Bill mainly involve the dispute resolution process surrounding unfair dismissal claims and union disputes.

A summary of the salient provisions of the Bill is set out below.

1. The Bill introduces a new Section 21(1)(aa) pursuant to which the position of ‘Deputy President of the Court’, to be appointed by the Yang di-Pertuan Agong, is created. According to the Hansard of the Dewan Rakyat dated 9 October 2019, the role of the Deputy President of the Industrial Court is to assume the role of the President while the President is away.

2. Significantly, the Bill removes the Minister’s discretion to refer representations of unfair dismissals to the Industrial Court and shifts the power of referrals from the Minister to the Director General of Industrial Relations (“DGIR”). Section 20(3) of the IRA will now allow the DGIR to refer representations of unfair dismissal to the Industrial Court for an award, without fetter, if he is satisfied that there is no likelihood of the representations being settled. The rationale behind this move is to expedite the process of reference of representations to the Industrial Court and to increase access to justice and the right to be heard.

3. The Bill also widens the scope of representation for conciliation, benefitting both the employer and workman. The new Section 20(6)(a)(iv) and Section 20(6)(b)(iv) of the IRA allow for the appointment of any other person, except an advocate and solicitor, to represent the employer or workman during conciliation, subject to written approval by the DGIR.

4. Under the new Section 20(6A) of the IRA, a workman with mental disability may apply to the High Court for an order to appoint a guardian to represent him/her at conciliation meetings.

5. The Bill introduces a new Section 23A(2) to the IRA to state that any qualified person within the Legal Professional Act 1976 with at least 15 years of experience in labour and industrial relations in the Ministry of Human Resources may be considered for appointment as an Industrial Court Chairman.

6. The Bill vests further powers with the DGIR as follows:

  • The Bill amends Section 8 of the IRA by providing the DGIR with the discretion to refer complaints of any contravention of Sections 4, 5 and 7 of the IRA to the Court for hearing. Under the present provisions of the IRA, the discretion is exercised by the Minister;
  • The Bill amends Section 9 of the IRA to provide the DGIR with powers to resolve disputes relating to the capacity of a workman and claims for recognition by a trade union of workmen. The DGIR will no longer have the discretion to refer disputes relating to the competence of a trade union of workmen to the Director General of Trade Unions. This change is aimed at expediting the resolution of such disputes.

7. The Bill also affects the operation of trade unions as follows:

  • The Bill prohibits trade unions of workmen from claiming for recognition under Section 9 of the IRA until and unless a present claim for recognition has been resolved, deemed to have been withdrawn by the DGIR or a decision is made by the DGIR;
  • The Bill amends Section 11 of the IRA by reducing the time period from three years to one year in which a trade union of workmen is barred from making a claim for recognition in respect of the same workmen or class of workmen in which another trade union of workmen has been accorded recognition for;
  • The Bill introduces Sections 12A and 12B in the IRA. These sections stipulate that where there is more than one trade union that can represent employees, the employees will have the right to vote by secret ballot to determine which trade union shall have the sole bargaining rights to represent them. Once a trade union of workmen has the sole bargaining rights to represent any workmen, no other trade union shall have the same rights for a period of three years or unless the trade union of workmen which obtained the sole bargaining rights ceases to exist;
  • The Bill amends Section 13 of the IRA by prohibiting employers, trade union of employers and trade union of workmen from commencing collective bargaining prior to the period of 90 days before the expiry of existing collective agreements. The amendments to Section 13 also allow trade unions of workmen to raise questions of a general character during collective bargaining;
  • The Bill amends Section 26(2)(b) of the IRA by inserting a proviso which states that trade disputes relating to a refusal to commence or a deadlock in collective bargaining can only be referred to the Industrial Court if parties have given their consent in writing, unless the trade dispute relates to the first collective agreement or any essential services in the First Schedule to the IRA or would result in acute crisis if not resolved expeditiously or parties to the trade dispute are not acting in good faith to resolve the dispute expeditiously.

8. The Bill grants additional powers to the Industrial Court as follows:

  • Section 29 of the IRA is amended to provide the Industrial Court with the authority to hear and determine a matter notwithstanding the fact that the date of dismissal stated in the DGIR’s reference under Section 20(3) of the IRA is disputed by any party or is incorrect. The Industrial Court is vested with the power to determine the date of dismissal;
  • Sections 29 and 30 of the IRA are amended to provide the Industrial Court with the power to continue conducting proceedings notwithstanding the death of a workman who makes a representation of unjust dismissal and to award backwages or compensation in lieu of reinstatement to the next of kin of a deceased workman. Any award made by the Industrial Court will also bind the next of kin of the deceased workman;
  • Section 30 of the IRA is amended to vest the Industrial Court with the power to impose interests up to the rate of 8% per annum on awards. The interest is to be calculated from the 31st day from the date of the making of the award until the day the award is satisfied. The Industrial Court has the discretion to choose any other date from which the interest is to be calculated upon receiving an application by an aggrieved party within 30 days from the date of the award;
  • The Bill increases the penalties to be imposed on parties who contravene the provisions of the IRA. Some examples of increased penalties include increased fines imposed under Sections 46, 47 and 48 for commencing, instigating and giving out financial aid for illegal strikes. The penalty for non-compliance with the provisions of the IRA, terms of a collective agreement, summons, orders, directions or an award of the Industrial Court have also been increased under Sections 56 and 60 of the IRA.

9. The Bill introduces a new Section 33C to the IRA, which stipulates that any person dissatisfied with an award of the Industrial Court can appeal to the High Court within 14 days from the date of receipt of the award. The procedure for such an appeal will be subject to the procedure prescribed in the Rules of Court 2012 and the High Court will exercise its appellate jurisdiction as if the appeal is from a decision of the Sessions Court. This is a significant change from the current procedure, where the main recourse available to a dissatisfied party is to apply for judicial review of the decision-making process that led to the Award. The introduction of an appeal process will provide the High Court with the option of reviewing the merits of the awards handed down by the Industrial Court.

10. The Bill also introduces a new Section 44A which provides additional power to the Minister to stop a strike or lockout if it extends beyond a certain time or scope.

In essence, the amendments brought about by the Bill are aimed at increasing the efficiency and expediting the dispute resolution process, particularly that in relation to trade union disputes and unfair dismissal claims. Although it is too early to assess whether these amendments will achieve the intended objective, they certainly represent a step in the right direction towards doing so.