Malaysia: Proposed changes to the Industrial Relations Act 1967

Malaysia's Ministry of Human Resources has recently proposed amendments to the Industrial Relations Act 1967 ("IRA") which, if introduced, would result in, amongst others, significant changes to the dispute resolution regime for employment claims in Malaysia.

Unfair dismissal

The proposed amendment to the unfair dismissal provisions of the IRA would remove the need for the Director General of Industrial Relations ("DGIR") to refer the representation to the Minister of Human Resources. Under the current system, once the referral is made, the Minister may then refer the representation to the Industrial Court for an award. Instead under the new proposal, the DGIR will refer the representation directly to the Industrial Court if it cannot be settled at the conciliation stage.

It is hoped that this amendment will reduce delays and result in a reduction in the number of complaints against the referral decisions of the Minister. Although there are concerns that removing the referral to the Minister may lead to frivolous complaints thus leadings to procedural delays and increased costs for employers.

Discrimination

A new provision in the IRA will expressly prevent an employer from discriminating against an employee on the grounds of gender, religion, race or disability in respect of the employment or the terms and conditions of employment. The only exception to this is in situations where the discrimination has occurred due to the inherent requirements of a particular job.

The proposals seek to extend the jurisdiction of the Industrial Court by introducing the option for the DGIR to refer cases of employment related discrimination.

Industrial Appeal Court

Under the current regime, if a party is dissatisfied with the Industrial Court's decision the only option to challenge it is by way of judicial review. The new proposals seek to introduce an Industrial Appeal Court to deal with appeal cases. Although the Minister has not yet released any details regarding the Industrial Appeal Court, it will give appellants the opportunity to have the merits of the decision reviewed, rather than the just decision-making process under judicial review.

Trade unions

The amendments to the IRA introduce a number of changes that affect trade unions including:

•  Claim for recognition under Section 9 IRA – The DGIR rather than the Minister will decide whether a workman is employed in a managerial, executive, confidential or security capacity.
•  New provision regarding bargaining rights – If there is more than one trade union accredited by an employer to represent the employees, an application can be made to the DGIR and the employees will be given the right to vote by secret ballot.
•  Collective bargaining under Section 13 IRA – Removal of Section 13(3) which currently prevents trade unions including certain matters in collective agreement proposals.

Key takeaways

The proposed amendments are currently being consulted on and have the potential to significantly impact the dispute resolution regime for employment claims in Malaysia. Employers should keep a close eye on their Malaysia employment policies and watch this space for further updates.