The unemployment rate in Malaysia has increased to 4.8% in June 2021, with over 768,000 persons unemployed (Source: The Malay Mail). While there are various reasons behind the unemployment rate, employees who feel they have been wronged have been filing complaints of unfair dismissal, leading to a corresponding increase of cases at the Industrial Court.
We often get queries about the unfair dismissal process. This article seeks to summarize how an unfair dismissal complaint is lodged, leading to a referral to the Industrial Court.
- Filing a Complaint at the Industrial Relations Department
A complaint of unfair dismissal is also called a representation for reinstatement. An employee can file the complaint at the Industrial Relations Department (Jabatan Perhubungan Perusahaan) (“IRD”) in the state of their place of employment. For example, if the employee was working in Subang Jaya, they can file the complaint at the Selangor IRD in Shah Alam.
The complaint comprises 3 administrative forms (as at Aug 2021):
- Form P1: Representation under Sec. 20(1) of the Industrial Relations Act 1967
- Form P2 & P3: Claimant’s Details & Information
Under Sec. 20 of the Industrial Relations Act 1967, an employee has only 60 days from their last day of employment to file a complaint against their employer for unfair dismissal.
Upon lodgment of the forms, the IRD will proceed to open a file.
- Conciliation Meeting
When a complaint is lodged, the IRD will set up a conciliation meeting between the employee and the employer. The purpose of the meeting is to see if parties can resolve the dispute.
Legal representation during the conciliation meeting is not allowed.
During the meeting, an IRD officer acts as a mediator between parties to see if there is any ground for settlement.
Ultimately, there are 2 possible outcomes:
| Settlement reached | An agreement will be recorded to ensure the settlement will be adhered to. The settlement would signify the end of the complaint at the IRD and the matter will be closed. |
| No Settlement | The IR Officer will prepare a report to be sent to the head office. The matter will eventually be referred to the Industrial Court. |
The IRD does not have the power to decide on whether a case has merits. Their role is limited to that of a mediator or a facilitator of settlement. While it is common for the IR officer to comment on the strengths and weaknesses of each party’s case, this is usually from the perspective of managing the party’s expectations for settlement. The IR officer’s views are not binding and are inadmissible in court.
- Referral to Industrial Court
Before the amendments to the Industrial Relations Act 1967, the Minister of Human Resources had the discretion not to refer a frivolous complaint to the Industrial Court. However, effective 1 January 2021, the referral of a complaint is handled by the Director General of Industrial Relations, who does not have this discretion. A complaint of unfair dismissal must be referred to the Industrial Court if there is no settlement at the conciliation meeting stage.
Once the matter is referred to the Industrial Court, parties will receive a notification from the IRD and from the Industrial Court. The Industrial Court’s notice will state the case/suit number, and the first court date . At this stage, parties can elect to appoint lawyers to represent them.
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The above is an overview to help the public understand how the unfair dismissal process works. Whether a case has any merit would be up to the Industrial Court to determine through trial.
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Amirul Izzat Hasri is a Senior Associate in the dispute resolution practice group at Donovan & Ho. He has experience in a diverse area of practice, including general civil and corporate litigation, judicial reviews, land related matters, defamation, debt recovery, and shareholder and boardroom disputes. He has also appeared in Industrial Court proceedings, having represented both employers and employees in unfair dismissal claims.
Donovan & Ho is a law firm in Kuala Lumpur, Malaysia. Our practice areas include employment law, dispute resolution (litigation and arbitration), corporate and tax advisory, and real estate/conveyancing. Have a query? Contact us.
