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What HR Need to Know About the Proposed Changes to the Industrial Relations Act 1967

by Danial
Feb 11, 2019 at 10:38 AM

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Malaysia’s Human Resources Ministry’s recent propose to amend the Industrial Relations Act 1957 (“IRA”) would introduce significant changes to the dispute resolution regime for employment claims in Malaysia.



A new provision in the IRA will expressively 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 discrimination has happened because of the inherent requirements of a particular job.

The proposals seek to extend the jurisdiction of the Industrial Court by introducing the option for the Director General of Industrial Relations (“DGIR”) to refer cases of employment-related discrimination.


Unfair dismissal

The proposed amendment to the unfair dismissal provisions of the IRA would remove the need for the 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. But with the new proposal, the DGIR will refer the representation directly to the Industrial Court if it cannot be settled at the conciliation stage.

This amendment is hoped to reduce delays and result in a reduction in the number of complaints against the referral decisions of the Minister.

However, there are concerns that removing the referral to the Minister may lead to complaints which leads to procedural delays and increased costs for employers.


Industrial Appeal Court

Under the current law, if a party is not satisfied with the Industrial Court’s decision the only choice is to challenge it by way of judicial review.

The new proposal seeks to introduce an Industrial Appeal Court to deal with appeal cases. Although the Minister has not yet released any details about 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 new amendments will include these changes that affect trade unions:

  • Claim for recognition under Section 9 IRA - The DGIR rather than the Minister will decide if a workman is employed in a managerial, executive, confidential or security capacity.

  • New provision in 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 through 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.


The proposed changes are currently being consulted on and have the potential to significantly affect the dispute resolution regime for employment claims in Malaysia. Keep a close eye on your employment policies, and look out for future updates.


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Source: Lexology


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