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

2. 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

3. 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

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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

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

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

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

17. 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

18. 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

19. 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

20. 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