MALAYSIAN INDUSTRIAL RELATIONS
& EMPLOYMENT LAW
Author: Maimunah Aminuddin
Chapter Eight
The Industrial Court
Malaysian Industrial Relations &
Employment Law
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Preview

Purpose of the Industrial Court

Disputes arbitrated by the Court

Claims for reinstatement

Retrenchment of employees
Malaysian Industrial Relations &
Employment Law
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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
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The Industrial Court, cont.
The Court’s awards (decisions) are
made by:

a President, and.

a number of chairmen.
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Employment Law
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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
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Employment Law
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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.
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Employment Law
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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.
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Employment Law
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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.
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Employment Law
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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.
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Employment Law
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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.
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Employment Law
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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
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Employment Law
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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.
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Employment Law
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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
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Employment Law
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Retrenchment of employees,
cont.

Reducing working hours and wages (with
consent of employees)

Conduct a Voluntary Separation Scheme
(VSS)
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Employment Law
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Retrenchment of employees,
cont.
If retrenchment cannot be avoided,
employer must:
1.
Choose who to retrench based on:

FOF

LIFO
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Employment Law
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Retrenchment of employees,
cont.
2.
Give proper notice to the employees
concerned
3.
Pay termination benefits where
required
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Employment Law
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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
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Employment Law
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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
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Employment Law
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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
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Employment Law
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Review

Purpose of the Industrial Court

Disputes arbitrated by the Court

Claims for reinstatement

Retrenchment of employees
Malaysian Industrial Relations &
Employment Law
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