Industrial Relations (Amendment) Act 2020: What Employers Should Know

The Industrial Relations (Amendment) Act 2020 (“Amendment Act”) which seeks to amend the Industrial Relations Act 1967 (“IRA”) was gazetted on 20.2.2020.  Following notification in the Gazette (PU(B) 695) on 21.12.2020, certain provisions of the said Amendment Act have come into operation on 1.1.2021.  

A summary of some salient changes to the IRA which would be relevant to employers is set out below.  

Reference of complaint on trade union- related matters to the Industrial Court

If a complaint on trade union-related matters which is referred to the Director General for Industrial Relations (“DGIR”) is not resolved, the DGIR may, if he thinks fit, refer the complaint to the Industrial Court for hearing.
See: Section 8(2) IRA

Prior to this, the DGIR had to notify the Minister of Human Resources (“Minister”) if a complaint is not resolved and the discretion was vested in the Minister to refer the complaint to the Industrial Court for hearing if he thought fit.

Recognition and scope of representation of trade unions

The power now vests in the DGIR (and no longer the Minister) to decide as to whether any workman or workmen are employed in a managerial, executive, confidential or security capacity.  
See: Section 9(1D) IRA

Representations on dismissals

Section 20(3) IRA imposes a requirement on the DGIR to take necessary steps to facilitate an expeditious settlement of a representation for unfair dismissal filed by a workman.  This is typically done by way of a meeting, commonly referred to as a reconciliation meeting.  

As a result of the recent amendments, if no settlement is reached during the reconciliation meeting, the DGIR shall refer the representation to the Industrial Court for an award.  Prior to this, the discretion was vested in the Minister (upon notification from the DGIR that there is no likelihood of the representation being settled) to make a referral to the Industrial Court for an award if he thought fit.  
See: Section 20(3) IRA

In respect of proceedings related to any representation on dismissal filed by a workman under a mental disability who does not have a guardian ad litem, the IRA now specifically stipulates that his next-of-kin may apply to the High Court for an order to appoint a guardian ad litem.  
See: Section 20(6A) IRA

Complaints for non-compliance

Complaints for non-compliance of an award for reference under Section 20(3) IRA may now be heard by the President or a Chairman sitting alone.
See: Sections 22(5) and 22(4) IRA)

Prior to this, complaints for non-compliance were to be heard by a panel of 3 comprising of the President (or a Chairman), a member from the panel of employers and a member from the panel of workmen.  

Power of the Court

Pursuant to the amendments, the Industrial Court may, in any proceedings before it, hear and determine the matter notwithstanding the fact that the date of dismissal stated in the DGIR’s reference under Section 20(3) IRA is disputed by any party in the proceedings or is incorrect.  In light of the above, it is possible that preliminary objections on grounds of discrepancies or dispute on the date of dismissal stated on references may no longer be readily upheld. 
See: Section 29(da) IRA

Proceedings after the filing of a representation for unfair dismissal under Section 20(1) IRA may now continue notwithstanding the death of the said workman after the filing of the representation.  An award of backwages or compensation in lieu of reinstatement or both may be made to the next-of-kin of the deceased workman.
See: Sections 29(EA), 30(6B) and 32(1)(e) IRA

Awards

The failure to make payment of backwages and compensation in lieu of reinstatement within 30 days of an award will now attract interest.   

Following the amendments, the Industrial Court shall now have the power to award interest at the rate of 8% per annum, or at such lesser rate as it may direct, commencing on the 31st day from the date of making the award, until the award is satisfied.  If, however, upon application by the aggrieved party within 30 days from the date of the award, the Industrial Court is satisfied that special circumstances exist, it may determine any other date from which the interest is to be calculated.
See: Section 30(1A) IRA

Appeal against an award to the High Court

Prior to 1.1.2021, any party who was aggrieved by the award handed down by the Industrial Court would have to challenge the award by way of judicial review application before the High Court.  There was also the option for an aggrieved party to make an application under the previous Section 33A IRA to refer to the High Court on a question of law – these are no longer applicable under the new amendments.

A challenge of the award shall now be by way of an appeal to the High Court within 14 days from the date of receipt of the award.
See: Section 33C IRA

Picketing

The penalty for picketing has been increased to RM5,000 (previously RM1,000).  The penalty of imprisonment for a term not exceeding 1 year has been removed.  
See: Section 40 IRA

Power to restrain strikes or lock-outs

If a strike or lock-out lasts beyond a certain time or extends beyond a certain scope, thus endangering the life, personal safety or health of the whole or part of the population, the Minister may order a strike or lock-out to stop.
See: Section 44A IRA

The penalty for illegal strikes and lock-outs has now been changed to a fine not exceeding RM5,000, and a further fine of RM50 per day that such offence continues.  The penalty of imprisonment for a term not exceeding 1 year has been removed. 
See: Section 46 IRA

The penalty for instigating or inciting others to take part in, or otherwise acting in furtherance of, an illegal strike or lock-out is now increased to a fine not exceeding RM5,000 (previously RM1,000) or imprisonment not exceeding 1 year or both.
See: Section 47 IRA

The penalty for giving financial aid in direct furtherance or support of an illegal strike or lock-out is now increased to a fine not exceeding RM5,000 (previously RM500) or imprisonment not exceeding 6 months or both.
See: Section 48 IRA

Representations for dismissals against statutory bodies

If an order for the applicability of Part VI of the IRA (which deals with representations for dismissals) to any statutory body  is made by the Minister and published in the Gazette, employees of the statutory body in question may file representations for dismissals against the said statutory body.
See: Section 52(3) IRA

Non-compliance with award or collective agreement

Any person who is found liable for non-compliance shall be liable to a fine not exceeding RM5,000 (previously RM2,000) or to imprisonment for a term not exceeding 1 year, or to both, and a further fine of not exceeding RM500 per day during which the offence continues.  The Industrial Court may also order the person to make payment due to the workman by virtue of an order made under Section 30 IRA.
See: Sections 56(3) and (3A) IRA

General penalties

Unless an express penalty is provided for under the IRA, a person who contravenes (i) any provision of the IRA and any Regulations made thereunder; or (ii) any summons, order or direction given or made under the IRA shall upon conviction be liable to imprisonment for a term not exceeding 2 years or to a fine not exceeding RM50,000 (previously RM5,000) or to both.
See: Section 60(1) IRA

Contributed by: 
R. Ravindra Kumar (Partner)
T: +603-2632 9863
E: [email protected]

Tham Li Vyen (Partner)
T: +603-2632 9875
E: [email protected]

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