HR Guide: The Industrial Relations Act 1967

In this article, we will explain about the Industrial Relations Act 1967 ("The IRA"), its purposes, and how it affects the workplace, employers, and workmen. We also include the latest amendments to the Act which is very important for HR practitioners to remember. 

What is the Industrial Relations Act 1967?

Came into effect on 7 August 1967, the Industrial Relations act is one of the major laws governing employment relationships in Malaysia which contains, among others, the provision on representation on unfair dismissal, claim for recognition by a trade union, and collective bargaining. 

The Act aims to promote and maintain industrial harmony and provide the regulation of the relations between employers and workmen and their trade unions. It also provides the prevention and settlement of any difference or disputes arising from their relationship and generally to deal with trade disputes and matters related to it. 

What are the purposes of the Industrial Relations Act 1967?

1. To maintain a good relationship and fair dealing between employers, workmen, and trade union

The IRA provides for mechanism related to the recognition of a trade union. It manages collective bargaining and collective agreements between the trade union of the employers and workmen.

The IRA also provides for conciliation procedures in trade disputes and the settlement of any such differences or disputes through the Industrial Court.

Trade disputes may be developed into other forms such as strikes, lock-outs, picketing, and intimidation, all of which are described under the IRA together with the regulated measures to handle such cases.

The IRA ensures a good relationship between employees and the employer.

2. To provide specific remedies that are not available in common law or the Employment Act 1955

A distinct example of such specific remedy is the remedy of job 'reinstatement' which makes up most of the claims in Industrial Court.  For example, under section 20(1) of the IRA, an employer cannot dismiss an employee without 'just cause or excuse', be it directly or indirectly. 

3. To provide for private-sector employees

Under section 52 of the Act, the provisions in the IRA '... shall not apply to any Government service or any service of any statutory authority or any workman employed by Government or by any statutory authority.'

This means that any claims to the Industrial Court under the IRA by the Federal Government or the State Government's servant; or any individual working with the statutory authority, being an authority or body established, appointed or constituted by any written law, and includes any local authority, are bound to be struck by the Industrial Courts as seen in many precedents.

Key changes to the IRA in 2019

On 19 December 2019, the Industrial Relations (Amendment) Bill 2019 has been passed by Dewan Negara. Here are some of the amendments: 

1. For unfair dismissal claims, the employer and employee can appoint representatives.

The amendments allow a workman who is under a mental disability to apply to the High Court for an order to appoint a “guardian ad litem” for the workman, as a representative for the workman at the conciliation meeting.

Representation at the conciliation meeting is also extended. The employer and employee can appoint “any other person except an advocate and solicitor” to represent them in the conciliation meeting, so long as such authorisation is in writing and approved by the Director-General of Industrial Relations (“DGIR”).

2. DGIR will now handle the referral of unfair dismissal claims to court. 

The duty to refer unfair dismissal complaints to the Industrial Court in the event that parties could not reach a settlement will now be managed by the DGIR rather than the Human Resources Minister.

Recent amendments to the IRA have given additional powers to the Industrial Court.

3. Additional powers are given to the Industrial Court

The Industrial Court can now continue to conduct the proceedings despite the death of the workman who made the representations under subsection 20(1). The Industrial Court can also award back wages or compensation in lieu of reinstatement or both in relation to a reference under subsection 20(3) in respect of a deceased workman, to their next-of-kin. 

4. Appeal against an award to the High Court

The amendments allow any party who is unsatisfied with an award of the Court to appeal to the High Court, but they must do so within 14 days from the date of receipt of the award. The procedure for the appeal will follow the Rules of Court 2012 (rules applicable to civil courts) and will be treated as if it is an appeal from a Sessions Court to High Court (with such changes as the circumstances may require).

5. The HR minister can order a strike or lock-out to stop. 

More power is given to the Human Resources Minister to order a strike or lock-out to stop in the case that the strike or lock-out extends beyond a certain time or scope, thus risking the life, personal safety or health of the whole or part of the population.

In essence, the amendments are aimed to increase the efficiency and expediting the dispute resolution process, especially in relation to trade union disputes and unfair dismissal claims. 

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References: ILO, Chia, Lee & Associates,  Donovan & Ho

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