With the gazettement of the Industrial Relations (Amendment) Act 2020 (the “Amendment Act”) on 20 February 2020 and its partial coming into force on 1 January 2021, we now see a change in procedures relevant to representations for unfair dismissal claims at the Industrial Court (“IC”). The savings provision in the Amendment Act states that all unfair dismissal representations and proceedings filed before the coming into force of the Amendment Act will not be affected by its changes.

What do you, as an employer / employee, need to know in relation to the changes under the Amendment Act?

We set out below KEY-TAKEAWAYS on changes to the unfair dismissal representations and procedures

• The Removal of the Minister “Filter” In The Reference of Unfair Dismissal Claims to the IC

  – Prior to this, the Minister of Human Resources had the discretion to refer unfair dismissal complaints to the IC and refuse to do so where he was of the view that the same was frivolous. However, the same no longer applies. With the Amendment Act, all unfair dismissal complaints from 1 January 2021 will be automatically referred by the Director General of Industrial Relations (“Director General”) to the IC where no settlement is reached during the conciliation process. It appears now that ALL unfair dismissal complaints are subject to be tried by the IC if a settlement is not reached. This could mean an influx of cases at the IC, whether frivolous or not.

• Claimant’s Death is NO Bar to the IC Proceedings

  – Previously, unfair dismissal claims were found to be personal actions, where the death of a Claimant employee would bring an end to his/her unfair dismissal proceedings. With the Amendment Act, the IC has the power to carry on with the hearing of the unfair dismissal claim despite the death of the Claimant. While the Amendment Act appears to now confer power on the IC to preserve a “dead man’s claim”, the main practical issue to this is the evidentiary element of having the testimony of the Claimant before the IC as the main witness in his own dismissal claim. It appears that even with the ability to continue proceedings despite the Claimant’s death, the reality of the same succeeding may see difficulty without his testimony.

• High Court Can Appoint a Guardian Ad Litem for a Mentally Disabled Employee

  – The Amendment Act now allows an application to be made by the next-of-kin of a mentally disabled employee to the High Court to appoint a guardian ad-litem for the purpose of the unfair dismissal proceedings at the IC. Where the extent of such applications being allowed by the Court has yet to be seen, it appears that this process puts a third party guardian in the driver’s seat of unfair dismissal proceedings.

• The New Appeal Procedures Against an IC Decision

  – Before the Amendment Act, any dissatisfaction towards the IC’s decision was subject to a judicial review application at the High Court. Now, for all claims from 1 January 2021 onwards, the Amendment Act provides that the same can be appealed to the High Court within 14 days from the date of grant of the award. The notable changes in this process are as follows :-

  1. Shorter time frame to lodge an appeal against the decision of the IC when under a judicial review application, an aggrieved party had 3 months do so.
  2. No leave is required to appeal to the High Court against an IC decision (unlike a judicial review application) but you may need leave to appeal to the Court of Appeal depending on the value of the claim.
  3. Parties are deprived of the opportunity to appeal to the Federal Court where much of the employment law development and landscape in Malaysia has been handed down by the apex Court over the years.
  4. With an appeal being by way of a rehearing, parties may be allowed to adduce fresh evidence (if allowed by the High Court), where the judicial review process was more stringent in its requirements.
  5. While there is no express bar to judicial review applications being filed, it is likely that the High Court may not entertain the same where there exist new appeal procedures in place, and applicants may need to show they have exhausted all other measures before resorting to a judicial review application.
• The IC Can Now Award Compensation to the Claimant’s Next-Of-Kin

  – Stemming from the ability to now proceed with unfair dismissal claims despite the Claimant’s death, the IC is now able to award back wages or compensation in lieu of, or both, to the next-of-kin of the deceased Claimant.

• Harsher Penalties Towards Employers : Imposition of Interest and Higher Fines

  - The IC will now have the power to impose interest at the rate of up to 8% per annum to an award commencing from the 31st day of the award. Further, the penalty for non-compliance with an award has now been increased to a fine of up to RM50,000.00.

• Other Key-Takeaways :-
  1. Certain Employees of Statutory Bodies Entitled to Bring Unfair Dismissal Claims to the IC – Previously, unfair dismissal claims were not extended to government and statutory body employees. Now, the Amendment Act confers an entitlement to employees of statutory bodies under certain situations to bring such claims.
  2. Abolishment of Imprisonment for Strikes, picketing and lock-outs – The punishment of imprisonment for illegal picketing and strikes have been abolished. While this may showcase a step in the Malaysian industrial relations landscape in favour of the trade unions’ rights to freedom of speech and expression, the fine for such illegal acts have been increased from RM1,000.00 to RM5,000.00 which may counter-act against such intended change.

For more information regarding the Industrial Relations (Amendment) Act 2020, you can click here.