Proposed Amendments to Industrial Relations Act 1967 – Part Two

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In this issue, I’d like to discuss further on the proposed amendments to the Industrial Relations Act 1967 (IRA) and its impact on the relationship between employers and trade unions.

Beyond just the reduction of the Minister of Human Resource’s role in unfair dismissal cases, the proposed amendments also set out to concentrate certain duties on the Director General of Industrial Relations (DGIR). One of these duties is with regards to the referral of complaints based on Section 4, 5 and 7 of the IRA to go straight from the DGIR to the Industrial Court without having to go through the Minister.

In addition, the Minister no longer has to make determinations on the capacity of workmen in the recognition with reference to their security, executive, confidential or managerial capacity. The amendments also propose that complaints to the DGIR with reference to recognition will no longer leave the decision up to the Minister but the DGIR takes full responsibilities to make a decision.

It seems that the amendments put more burden on the DGIR, and although the idea is to allow the person most competent in the matter to make decisions, nevertheless, it seems to provide the DGIR with a rather large amount of power. The only power the Minister keeps is the power to refer trade disputes to the Industrial Court under S.26(2). But this too has the proviso of requiring both the employer and union to give written consent for the referral.

The proposed amendments have also made it easier for trade unions to receive recognition. The timeline of 21 days for an employer to make a decision upon receipt of the claim of recognition under S.9(3) has been reduced to 14 days. This requires the employer to make a much quicker decision.

There is also the introduction of a new section on the application for bargaining rights. If an employer has granted recognition to more than one Union, the workmen have the right to choose their preferred union. The choice will be made by way of secret ballot and the Union with the highest number of votes shall have sole bargaining rights to represent the workmen.

One of the most controversial amendments is the removal of the restriction on bargaining. Previously, under S.13(3) Unions were not allowed to bargain in what were considered managerial prerogatives. Managerial prerogatives involved matters of transfers, promotions, employment, redundancy, dismissal and assignment or allocations of duties. Now the floodgates have been opened and Unions may bargain for any and all terms it deems fit.

In addition, the proposed amendments have removed the 6-month limit on the retrospective application of collective bargaining agreements. This increases liability on the employers’ side when there are requirements to backpay any additional benefits.
The penalty of imprisonment for illegal strikes, picketing, instigation and the giving of financial aid to illegal strikes have also been removed. The penalty is now only a fine where the amount will possibly be increased.

There is also no longer a requirement of certain services like banking, port, harbour, airport services, postal services, oil refineries, broadcasting services, transport services other than those within the Federal Territory of Wilayah, Putrajaya and Labuan or any of the capital cities of the states within Malaysia to provide advance notice for carrying out strikes against employers as they have been removed from the Schedule of essential services. The Minister though, may make a determination that a service is essential based on the duration of the strike.