The doctrine of sovereign immunity or state immunity is a legal doctrine where one sovereign state cannot be sued before the courts of another sovereign state without its unequivocal consent. The rationale “par in parem non habet imperium” (equals have no sovereignty over each other) is based on customary international law.

On 3 February 2021, the Malaysian Court of Appeal decided that the US embassy has no immunity against an unfair dismissal claim.  The Court of Appeal reversed the High Court’s earlier findings that the US embassy was immune, and ordered the employee’s unfair dismissal claim to be remitted to the Industrial Court for determination.

The issue on whether foreign embassies may have absolute immunity in Malaysia has been a grey area of the law. Shortly before the Court of Appeal’s decision, an Industrial Court award decided on the contrary and held that a High Commission (an embassy of a Commonwealth country) is immune. In Davinder Kaur v Mauritius High Commission (Award No. 100 of 2021), the Industrial Court concluded that customary international law should be upheld and that immunity was granted to such bodies.  We examine the Industrial Court’s decision on Davinder Kaur in this article.

Brief Facts

  • The claimant was an Administrative cum Clerical Officer for the respondent, the Mauritius High Commission in Malaysia (“Commission”)
  • She deemed herself constructively dismissed after unpleasant events led to her decision to leave employment.
  • The claimant contended that since the Commission did not raise state immunity, the respondent had voluntarily submitted to the jurisdiction of the Industrial Court.
  • The preliminary issue that the court had to determine was whether the Commission was immune due to sovereign immunity.

 Court’s Findings

  • When dealing with sovereign immunity, the existence of unequivocal consent to be sued is a prerequisite for jurisdiction. Although the Commission did not raise state immunity, this omission does not equate to the Commission’s consent to being sued.  The Commission’s actions in trying to defend itself against the claim is also not to be construed as consent.
  • The rationale of sovereign immunity is to promote comity and good relations between states through the respect of another state’s sovereignty. To deny immunity for proceedings before the Industrial Court would be inimical to the good relations between states and violating international law.
  • The Industrial Court therefore held that it had no jurisdiction to hear the unfair dismissal claim of an employee of a foreign state if the employee was performing governmental and sovereign functions of that state.
  • The claimant’s claim was dismissed as the Industrial Court lacked the threshold jurisdiction to determine and adjudicate the reference.

Key Takeaways

The Industrial Court’s award in Davinder Kaur was handed down just days before the Court of Appeal’s decision in the United States of America v Menteri Sumber Manusia Malaysia & Ors.  The Industrial Court might have reached a different conclusion had it known the Court of Appeal’s decision there.

Before the Court of Appeal’s decision, sovereign immunity could hardly be said to be settled law. The Industrial Court did note another case (Chu Siew Mei @ Karen v Director General of Industrial Relations (Case No. 25-71-03/2014)) which held that immunity only applied to diplomatic agents and not the High Commission as an entity. The Industrial Court in Davinder Kaur opted not to follow the Chu Siew Mei case because the common law doctrine of restrictive sovereign immunity was not extensively discussed.

At the time of writing of this article, there are no written grounds of judgment for the Court of Appeal’s decision in the United States of America v Menteri Sumber Manusia Malaysia & Ors.  However, this decision has effectively shattered the shield of sovereign immunity that protected foreign governments from unfair dismissal claims.

As the Industrial Court is a court of equity and good conscience, judgments are often made based on justice without having special regard to the technicalities and legal form. Based on the Court of Appeal’s decision, there is no blanket immunity for embassies or High Commissions.

Foreign High Commissions and embassies should note, when hiring employees in Malaysia, compliance with Malaysian employment law is crucial. This presents a good opportunity for these entities to relook their employment policies and procedures for their employees in Malaysia. It should not be overlooked or taken for granted under the assumed protection of sovereign immunity.  Foreign High Commissions and embassies are now as vulnerable to unfair dismissal claims as any other employer in Malaysia.

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This article was written by Donovan Cheah with assistance from Tiffany Chin (Intern). Donovan has been named as a Recommended Lawyer for Labour and Employment by the Legal 500 Asia Pacific 2017, 2018, 2019, 2020 and 2021, and he has also been recognised by Chambers Asia Pacific and Asialaw Profiles for his employment law and industrial relations work.

Donovan & Ho is a law firm in Malaysia. Our practice areas include employment law, dispute resolution, tax advisory and corporate advisory.  Have a question? Please contact us.

 

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