Chapter Eight The Industrial Court MALAYSIAN INDUSTRIAL RELATIONS & EMPLOYMENT LAW Author: Maimunah Aminuddin Chapter Eight The Industrial Court Malaysian Industrial Relations & Employment Law

Malaysian Industrial Relations & Employment Law Preview Purpose of the Industrial Court Disputes arbitrated by the Court Claims for reinstatement Retrenchment of employees Malaysian Industrial Relations & Employment Law

Malaysian Industrial Relations & Employment Law The Industrial Court The main objective of the Industrial Court is to provide a peaceful and unbiased means of settling disputes between employers and employees. The Court arbitrates disputes when conciliation fails. Malaysian Industrial Relations & Employment Law

The Industrial Court, cont. The Court’s awards (decisions) are made by: a President, and. a number of chairmen. Malaysian Industrial Relations & Employment Law

The Industrial Court, cont. Disputes heard by the Court include: Trade disputes between trade unions and employers Claims for reinstatement by individual workers Claims of non-compliance with a CA or an award of the Court Requests for interpretation of a CA or an award Malaysian Industrial Relations & Employment Law

The Industrial Court, cont. Trade disputes arbitrated by the Court relate either to: an individual grievance where the worker is represented by his union, or a dispute relating to a collective agreement. Malaysian Industrial Relations & Employment Law

The Industrial Court, cont. Claims for Reinstatement Under Section 20 Industrial Relations Act, a dismissed employee may file a claim for reinstatement within 60 days of his dismissal. Claim is made at Department of Industrial Relations. If conciliation is successful, case closed. Malaysian Industrial Relations & Employment Law

The Industrial Court, cont. Claims for Reinstatement If conciliation unsuccessful, Minister of Human Resources is authorised by the Act to decide whether or not to refer the dispute to the Industrial Court. If dispute is referred to Court, a hearing will be held. Malaysian Industrial Relations & Employment Law

The Industrial Court, cont. Claims for Reinstatement After hearing the evidence presented by the employer and the employee, the Court will decide whether the employee was dismissed with or without just cause or excuse. If Court decides dismissal was with just cause and excuse, dismissal is upheld. Malaysian Industrial Relations & Employment Law

The Industrial Court, cont. Claims for Reinstatement If Court decides dismissal was without just cause or excuse, Court will either: order reinstatement of employee, OR order employer to pay compensation. Malaysian Industrial Relations & Employment Law

The Industrial Court, cont. Claims for Reinstatement Compensation: One month’s wages for every year employee’s service with the employer AND Backwages from date of dismissal to date of Court award, but a maximum of 24 months is imposed by law Malaysian Industrial Relations & Employment Law

Retrenchment of employees Employers have the right to terminate an employee’s contract when he is surplus to the employer’s needs, i.e. he is redundant. To be fair, a retrenchment exercise should comply with the Code of Conduct for Industrial Harmony. Malaysian Industrial Relations & Employment Law

Retrenchment of employees, cont. Employers are expected to take steps to avoid retrenching workers such as: Freezing recruitment of workers and re-deploying redundant workers into vacancies that arise Limiting or ceasing overtime/public holiday work Malaysian Industrial Relations & Employment Law

Retrenchment of employees, cont. Reducing working hours and wages (with consent of employees) Conduct a Voluntary Separation Scheme (VSS) Malaysian Industrial Relations & Employment Law

Retrenchment of employees, cont. If retrenchment cannot be avoided, employer must: Choose who to retrench based on: FOF LIFO Malaysian Industrial Relations & Employment Law

Retrenchment of employees, cont. Give proper notice to the employees concerned Pay termination benefits where required Malaysian Industrial Relations & Employment Law

Retrenchment of employees, cont. Which employees are entitled to termination/retrenchment benefit? Employees within the scope of the Employment Act Employees within the scope of a CA Employees who have a clause providing for retrenchment benefit in their contract of employment Malaysian Industrial Relations & Employment Law

Retrenchment of employees, cont. Termination/ Retrenchment benefit under the Employment Act: Employees with less than 1 year’s service: No benefit Employees with more than 1 year & less than 2 years: 10 days wages for each year of service Malaysian Industrial Relations & Employment Law

Retrenchment of employees, cont. Employees with more than 2 years and less than 5 years: 15 days wages for each year of service Employees with more than 5 years: 20 days wages for every year of service Malaysian Industrial Relations & Employment Law

Malaysian Industrial Relations & Employment Law Review Purpose of the Industrial Court Disputes arbitrated by the Court Claims for reinstatement Retrenchment of employees Malaysian Industrial Relations & Employment Law