Case Spotlight: Mandatory Referral of Unfair Dismissal Claims to the Industrial Court
Effective 1.1.2021, the Industrial Relations Act 1967 (IRA 1967) was amended to remove the Minister of Human Resources’ role to refer the representation of unfair dismissal to the Industrial Court. Instead, the Director General of Industrial Relations (DGIR) is now empowered to directly refer such representations to the Industrial Court.
Does the DGIR retain residual discretion not to refer representations? Or is the DGIR obliged to refer all representations to the Industrial Court once there is no settlement?
This article discusses the recent case of Shankarkumar Sanpathkumar v Ketua Pengarah Jabatan Perhubungan Perusahaan [2024] CLJU 818, where the Court of Appeal provided a conclusive answer as to the role of the DGIR under the new IRA 1967 regime.
Brief Facts
- The appellant was a Senior Adjuster who was dismissed by the company for alleged misconduct.
- The appellant made his representation under section 20 of the IRA 1967 to the DGIR.
- During the conciliation stage, although the company offered the appellant reinstatement without any admission of liability, the appellant refused such offer.
- The DGIR took the view that since the representation was for “reinstatement to his former employment”, and since the company was prepared to have the appellant reinstated to his former employment with the same pay and with arrears of salary being paid, the representation which could have been resolved and settled was unreasonably rejected.
- As such, the DGIR terminated the conciliation proceedings and informed the appellant that the file has been closed (“DGIR’s Decision”).
- Dissatisfied with the DGIR’s Decision, the appellant filed an application for judicial review against the same.
- The High Court dismissed the application on the basis that since the appellant had refused the offer of reinstatement, there was no loss of benefits and privileges and as such there was nothing to refer to the Industrial Court.
- The appellant appealed to the Court of Appeal.
Court of Appeal’s Findings
In allowing the appeal, the Court of Appeal examined section 20(2) and (3) of the IRA 1967:
“(2) Upon receipt of the representations the Director General shall take such steps as he may consider necessary or expedient so that an expeditious settlement thereof is arrived at.
(3) Where the Director General is satisfied that there is no likelihood of the representations being settled under subsection (2), the Director General shall refer the representations to the Court for an award.”
In interpreting the above provisions, the Court of Appeal held that it is mandatory for the DGIR to refer the representation to the Industrial Court as soon as no settlement is reached. The DGIR does not have any discretion to decide whether a representation ought to be referred to the Industrial Court or not.
The DGIR’s main role is to try and get the workman and his employer to settle the dispute. In doing so, the DGIR does not have to consider the reasonableness of parties in the acceptance or rejection of any offer for reinstatement. If the DGIR does not refer to the Industrial Court in the absence of a settlement, then the DGIR’s decision may be quashed by the High Court and a mandamus may be issued to compel the DGIR to refer the dispute to the Industrial Court.
The exception where the workman fails to attend any of the conciliation meetings without any reasonable excuse. In such scenarios, the workman’s representation shall be deemed to have been withdrawn pursuant to section 20(9) of the IRA 1967.
Key Takeaways
The Court of Appeal’s decision provides clarity to the DGIR’s role in the new regime under the amended IRA 1967. While it is common for the presiding industrial relations officer to express their views on the “merits” of a representation, the objective of this is merely to manage each party’s settlement expectations. In Minister of Labour & Manpower & Anor v Wix Corporation South East Asia Sdn Bhd [1980] 2 MLJ 248, it was held:
“[the Act] does not impose any duty on the Director General or his representative to decide or determine questions of any kind and to ascertain the law and the facts. He is merely required to deal with the situation in the way he thinks best to get the employer and employee to settle the dispute.”
The IRA does not empower the officers to make any decision on the merits, and the Court of Appeal’s decision confirms the elimination of discretion in the referral of representations to the Industrial Court.
Therefore, parties should feel free to discuss their settlement proposals at the conciliation stage, without fear of having it used against them or affecting the referral of the representation. Section 54 of the IRA 1967 also provides that no evidence shall be given of any conciliation proceedings other than a written statement that is agreed to and signed by both parties.
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This article was written by Leow Ho Eng (Associate) from Donovan & Ho’s employment law practice. Donovan & Ho is a law firm in Malaysia, and our employment practice group has built a reputation for providing strategic employment advice to local and global organisations. Our team of employment lawyers provide advice on employment law and industrial relations including review of employment contracts, policies and handbooks, advising on workforce reductions, and managing dismissals of employees for poor performance or misconduct. We also represent clients in unfair dismissal claims and employment-related litigation.
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