Industrial Court Malaysia: How to File a Dismissal Claim

Unfair dismissal is one of the most common employment disputes in Malaysia. The Industrial Relations Act 1967 provides a statutory mechanism for employees who believe they have been dismissed without just cause or excuse to seek redress through the Industrial Court. Unlike civil court proceedings, the Industrial Court process is designed to be accessible and relatively informal, allowing employees to represent themselves if they choose. However, the procedural requirements and legal standards applied by the Industrial Court can be complex, and having experienced legal representation significantly improves the chances of a successful outcome. This guide explains how to file a dismissal claim, the timeline for doing so and the remedies available.

What Constitutes Unfair Dismissal?

Under the Industrial Relations Act, a dismissal is considered unfair if it was carried out without just cause or excuse. Examples of potentially unfair dismissal include termination without proper notice or payment in lieu of notice, dismissal for reasons that are disproportionate to the alleged misconduct, redundancy dismissals where the employer has not followed the code of conduct for retrenchment, dismissal based on discriminatory grounds such as pregnancy, union activity or disability, and constructive dismissal where the employee resigns because the employer has fundamentally breached the employment contract.

Step-by-Step Process for Filing a Claim

Step 1: File a Representation Under Section 20

An employee who has been dismissed without just cause or excuse must file a written representation to the Director General of Industrial Relations under Section 20 of the Industrial Relations Act. This representation must be filed within 60 days of the date of dismissal. The representation should set out the facts of the dismissal, the reasons why the employee believes the dismissal was unfair and the relief sought.

Step 2: Conciliation at the Industrial Relations Department

Upon receiving the representation, the Director General of Industrial Relations will attempt to resolve the dispute through conciliation. A conciliation meeting will be arranged between the employee and the employer, facilitated by an officer of the Industrial Relations Department. Many disputes are resolved at this stage through negotiated settlements. If conciliation fails, the matter is referred to the Minister of Human Resources.

Step 3: Ministerial Reference to the Industrial Court

If the Minister is satisfied that the dispute cannot be resolved through conciliation, the case will be referred to the Industrial Court for adjudication. The Industrial Court will schedule a hearing where both parties will present their evidence and arguments.

Step 4: Industrial Court Hearing

At the hearing, both the employee and the employer will have the opportunity to present witnesses and documentary evidence. The Industrial Court applies the principles of natural justice and is not bound by strict rules of evidence. The court will consider whether the employer had just cause or excuse for the dismissal and whether the correct disciplinary procedures were followed. The burden of proof is on the employer to show that the dismissal was with just cause or excuse.

Step 5: Award

The Industrial Court will issue an award after considering all the evidence. The remedies available include reinstatement to the employee's former position with full back pay, compensation in lieu of reinstatement (typically calculated based on the employee's last drawn salary and length of service) or a combination of both.

Timeline for Filing and Resolution

The 60-day time limit for filing a representation under Section 20 is strictly enforced. Late filings are generally not accepted unless exceptional circumstances can be demonstrated. The conciliation process typically takes one to three months. If the matter proceeds to the Industrial Court, the hearing and award process can take anywhere from six months to two years, depending on the complexity of the case and the court's schedule. While the process can be lengthy, the potential remedies make it worthwhile for employees who have been unfairly dismissed.

Remedies Available from the Industrial Court

The Industrial Court may award the following remedies:

• Reinstatement: The employee is restored to their former position with full back pay from the date of dismissal to the date of reinstatement.
• Compensation in lieu of reinstatement: Where reinstatement is not practical, the court may award compensation typically equivalent to one month's salary for each year of service, up to a maximum of 24 months' salary.
• Back pay: In addition to compensation in lieu of reinstatement, the court may award back pay for the period between dismissal and the award.

Constructive Dismissal Claims

Constructive dismissal occurs when an employer's conduct amounts to a fundamental breach of the employment contract, forcing the employee to resign. Examples include a significant reduction in salary or benefits, unilateral changes to job scope or reporting lines, hostile or abusive working conditions and failure to address harassment or safety concerns. Proving constructive dismissal requires demonstrating that the employer's breach was fundamental and that the employee resigned in response to the breach. The time limit for filing a Section 20 representation is 60 days from the date of resignation.

Get Legal Representation

While employees can represent themselves in the Industrial Court, having experienced legal representation is highly recommended. The employment law team at Messrs S K Song has a strong track record of representing employees in unfair dismissal claims before the Industrial Court in Johor Bahru. We also advise employers on lawful termination procedures and defend against unjustified claims. Contact our Johor Bahru office for a consultation.