Amendments to the Industrial Relations Act 1967


Siva Kumar Kanagasabai outlines some of the recent amendments to the Industrial Relations Act 1967



The Industrial Relations (Amendment) Act 2007 ("the IRA Amendments") came into force on 28 February 2008.


The IRA Amendments do not affect representations and proceedings that were commenced under section 8 (complaints for breach of sections 4, 5 or 7), section 9 (claims for recognition) and section 20 (claims of dismissal without just cause or excuse) as well as awards that were made before 28 February 2008.


This article seeks to examine the impact of some of the changes brought about by the IRA Amendments on employers who could be involved in disputes with their employees or their trade unions.




Part II of the Industrial Relations Act 1967 deals with the protection of the rights of workmen, employers and trade unions.


Previously section 5 was anomalous in that although an employer could require an employee who is promoted or appointed to a managerial capacity to cease to be a member of the union, it could not do so when an employee was promoted or appointed to executive or security positions. The IRA Amendments now allows an employer to require persons who are not only in managerial positions, but those in executive or security positions to cease to be or not become a member or officer of a trade union catering for workmen.


Section 8 provides a complaints mechanism for breaches under Part II. The IRA Amendments introduce a new section 8(1A) to state that where a complaint for a breach of Part II involves the dismissal of a workman, section 20, and not sections 8(2) to 8(4), will apply. This amendment seeks to streamline claims for dismissal without just cause or excuse under the procedures provided in section 20.




Section 9 of the Industrial Relations Act 1967 deals with claims for recognition by a trade union of employees. The significant changes brought about to this section by the IRA Amendments are as follows:-


(1) The determination of union membership by way of membership verification by the Director General of Trade Unions ("DG") has been abolished. In place thereof, the DG may now determine by way of secret ballot, the percentage of workmen or class of workmen in respect of whom recognition is being sought. Section 26(3) of the Trade Unions Act 1959 which empowers the DG to conduct a membership check has been repealed at the same time that the IRA Amendments came into effect;

(2) Where the employer does not accord recognition and notifies the trade union concerned in writing of its grounds or does not respond within 21 days of receiving the claim for recognition, the onus now lies on the trade union under section 9(4) to report the matter to the DG within 14 days of receipt of the notification of non-recognition from the employer or within 14 days after 21 days have lapsed from the service of the claim for recognition. If the trade union fails to comply with this requirement within the prescribed time frame, its claim for recognition is deemed to have been withdrawn.


In addition, the following amendments have also been made which affect recognition claims by trade unions:-


(1) A new section 10A has been introduced to prevent other trade unions from making a claim for recognition for the same workmen until the prior claim for recognition has been resolved, deemed withdrawn or decided upon by the Minister;

(2) It has been clarified that section 10(2) which restricts an employer from declaring a lock-out or terminating its workmen after a claim for recognition has been served has been further curtailed and does not apply where (a) the claim for recognition is deemed to have been withdrawn; or (b) the termination is due to retirement, expiry of a fixed term contract, non-confirmation of a probationer or being medically boarded out;


(3) Section 12 has been amended so that a trade union which withdraws its claim for recognition after making a report to the DG under section 9(4) is now prohibited from making another claim for recognition within 6 months after the date of withdrawal of its claim for recognition. This prohibition does not appear to apply to a deemed withdrawal for failure to report to the DG under section 9(4).




The introduction of a new section 13(2A) permits a proposal for a collective agreement under section 13 to include provisions for (a) training to enhance skills and knowledge of the workmen; (b) annual review of the wage system; and (c) a performance-based remuneration system.


Section 15 has been deleted by the IRA Amendments. The effect of its deletion is that there are no longer any restrictions on collective agreements in respect of companies that have been granted pioneer status under the Promotion of Investments Act 1986 and any other industry in respect of which the Minister has declared the section as being applicable, from having provisions which are more favourable to workmen than those provided under Part XII of the Employment Act 1955 without the approval of the Minister.




In the case of claims against dismissal without just cause or excuse, employers should note the following amendments:-


(1) A new section 20(9) provides that any representation under section 20(1) shall be deemed to have been withdrawn if the workman concerned does not attend any of the conciliation conferences without any reasonable excuse;


(2) A new section 30(6A) requires the Industrial Court to take into account the following factors set out in a new Second Schedule where it makes an award under section 20:-

(a) any backwages to be awarded to a person who has been dismissed without just cause or excuse shall be limited to 24 months' backwages based his last-drawn salary;

(b) any backwages to be awarded to a probationer who has been dismissed without just cause or excuse, shall be limited to 12 months' backwages based on his last-drawn salary;

(c) where there is post-dismissal earnings, a percentage of such earnings, to be decided by the Court, shall be deducted from the backwages given;

(d) any relief given shall not include any compensation for loss of future earnings; and

(e) any relief given shall take into account contributory misconduct of the workman.


The new Second Schedule effectively puts an end to large awards for backwages which go beyond 24 months.




A new section 40(2A) has been introduced to prohibit a workman from picketing :-


(1) during the pendency of proceedings of a Board of Inquiry appointed by the Minister under Part VIII involving such workman and his employer and within 7 days after the conclusion of such proceedings;

(2) after a trade dispute or matter involving such workman and his employer has been referred to the Court and the parties concerned have been notified of such reference; and

(3) after the Yang di-Pertuan Agong or State Authority has withheld granting consent under section 26(2) to refer to the Court a trade dispute relating to service with any Government or any Statutory Authority and the parties concerned have been notified thereof.




The exclusion of evidence of any negotiations and conciliation proceedings in relation to trade disputes which have taken place under the Industrial Relations Act 1967 from being given as evidence before an Industrial Court has been extended to proceedings before any other court under a new section 54(4).




A new section 56(2A) expressly grants the Industrial Court the power to interpret any matter relating to a complaint made. This amendment, gives statutory effect to the Federal Court’s decision in the case of Tanjong Jara Beach Hotel Sdn. Bhd. v National Union of Hotel, Bar & Restaurant Workers, Peninsular Malaysia [2004] 4 CLJ 657 which overruled the Supreme Court's decision in Holiday Inn Kuala Lumpur v National Union of Hotel, Bar & Restaurant Workers [1988] 1 CLJ 133 where it was held that the Industrial Court cannot exercise an interpretation function in a non-compliance action.



SIVA KUMAR KANAGASABAI ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it )


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