Proposed Amendment to the IRA 1967 – Part One

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The Industrial Relations landscape of Malaysia continues to evolve and change and the new Government aims to make changes by way of amendments to bring Malaysia up to the standard with the International Labour Organisations (ILO) Conventions. Part of this change is the new amendments to the Industrial Relations Act 1967(IRA). The proposed changes have since been published on the Human Resource website for public engagement and are set to be tabled in Parliament in July.

One of the major changes is its impact of the role of the Minister within the context of dismissal has been significantly altered. It removes the Minister of Human Resource discretion to refer cases to the Industrial Court. Previously, the Minister acted as the gate keeper to the Industrial Court based on the recommendations of the DGIR.
The amendments now make it clear that in the event that parties are unable to settle during reconciliation, the Director General is obligated to refer the matter to the Court. It will ensure that workmen are allowed to have their day in court, reducing the risk of injustice occurring. Yet it also increases the likelihood of more frivolous and vexatious claims coming before the Court.

In addition, another change is the introduction of S.20A for Discrimination in Employment. This is similar to the Proposed Amendments to the Employment Act. Amendments in the IRA lay down the law that “(1) An employer shall not discriminate any workman on the grounds of gender, religion, race or disability” until and unless it is an inherent requirement of the job for exclusion/preference. The amendments imply that any complaint made to the DGIR will result in investigation and the DGIR will try to resolve the issue, failure to do so would lead to the complaint being referred to the Industrial Court to decide.
The amendments also propose the increase of the penalty for non-compliance with a Court Award from RM2,000.00 to RM30,000.00. It’s a significant increase but hopefully one that will act as a sufficient deterrent to parties.

Notwithstanding the above, an exciting amendment would be the introduction of an Industrial Appeals Court. Not much is known on when or how it will come to fruition. The proposed amendments are silent, merely promising that it will be incorporated at a later date. The Appeals Court comes with the hope that it will significantly reduce the number of cases of Judicial Review to the Civil Courts. Also, that the appeals process will look at the merits of the Awards rather than just as a decision-making process as most judicial reviews does.

The amendments would bring about what likely will be a better resolution process for Dismissal cases. But the likelihood of an increase of frivolous cases due to the absence of the Minister’s filtering process is one issue that will need to be addressed.
Furthermore, employers will also need to ensure that their company practices are in line with the law. This will prevent the probability of complaints being made against them on issues of discrimination.

Beyond just the impact of the amendments to the Industrial Court and dismissal matters, the proposed amendments also touches on laws regarding Trade Unions right from recognition all the way to bargaining powers. Stay tuned to our next article which will cover the IRA and Trade Union Act amendments that affects Trade Unions in particular.