How To File / Defend A Claim In The Labour Court In Malaysia? A Step-By-Step Guide

Introduction

While the Industrial Court deals with cases of unfair dismissal and trade union disputes, the “Labour Court” deals with disputes that generally occur while an employee is in employment – such as on unpaid wages, unpaid overtime, and other infringement of employee rights under the Employment Act 1955 (“EA”) (which only applies to peninsular Malaysia and Labuan).

Labour Court is Not A Real Court

Whenever a dispute of such occurs, parties can file a complaint at their nearest Jabatan Tenaga Kerja also known as Department of Labour where a Labour Officer appointed by the Director General of Labour, will inquire into the complaint.

The inquiry takes place in a room at the Department of Labour, that is designed just like a courtroom, with the Labour Officer in the middle, the parties to his/her left and right, and a dock for the witness. The inquiry also simulates a court trial, wherein parties can question the witnesses and submit their case to the “judge” i.e. the Labour Officer, although the process is more inquisitorial than adversarial.

This is perhaps why the place is colloquially called the ‘Labour Court’, but it is worth stating that by law, the Labour Court is not a real court, but just as above, a place to inquire into complaints.

This is unlike our civil courts which exist according to our Federal Constitution (and basic structure doctrine) or Acts of Parliament, or Industrial Court which is a specific creation of the Industrial Relations Act 1967.

This was confirmed in Austral Amalgamated Tin Bhd and Another Appeal v Abdul Wahab Bin Kopon & Ors and Another Appeal [2004] 2 MLJ 193[1], where it was held that the Labour Court is not a subordinate court.

What kind of cases does the Labour Court hear?

a) Disputes between an employee and employer in respect of wages or any other payments in cash due to such employee:

Such as maternity allowance, unpaid overtime, unpaid wages, minimum wage, salary in lieu of termination notice, and more. See Section 69(1) and Section 69(2)(iii) EA.

b) Disputes pertaining to misconduct of employee and punishment by an employer in relation thereto：

See Section 69(3) EA.

c) Disputes between a contractor for labour against a principal, contractor or sub-contractor for any sum which the contractor for labour claims to be due to him:

See Section 69(2) EA.

d) Dispute regarding discrimination in employment:

See Section 69F EA.

e) Complaints pertaining to sexual harassment:

See Section 81D EA.

f) Complaints regarding pre-mature retirement:

See Minimum Retirement Age 2012.

g) Offences under the Employment Act

Whenever the Director General has reasonable grounds for suspecting that an offence under the EA has been committed, or wishes to inquire into any matter dealt with by the EA, or whenever any person complains to the Director General of any breach of any provision of the EA, the Director General may summon any person who he has reason to believe can give information respecting such offence or the subject matter of such inquiry or complaint.

If upon inquiry as aforesaid the Director General is of the opinion that an offence has been committed, he may institute such criminal proceedings as he may deem necessary.

See Section 79 of EA.

What is the Process at the Labour Court and How to File / Defend a Claim?

Stage 1:       Lodging A Complaint to The Director General of Labour

The complainant facing any of the issues as mentioned above may lodge a complaint to the Director General of Labour (herein after shall be referred to as “Director General” and shall include reference to the Director General’s appointed officer) at their nearest Department of Labour.

The complainant shall present a written statement of his complaint along with the remedy he seeks to the Director General. Alternatively, he may make a statement on the same in person to the Director General.

The complainant should also ordinarily prepare the following documents:

• Name and mailing address of the complainant (according to complainant’s IC)
• Name and address of the company (resourced from SSM)
• Details of income and payslip (if any)
• Appointment letter and terms of service (if any)
• Termination letter (if any)
• Dispute Case Details

Stage 2:       Starting the Inquiry of The Complaint and Setting The Inquiry Date

According to the EA, the Director General shall then as soon as practicable thereafter examine the complainant on oath or affirmation and shall record the substance of the complainant’s statement in his case book.

The Director General may make such inquiry as he deems necessary to satisfy himself that the complaint discloses matters which in his opinion ought to be inquired into and may summon in the prescribed form the person complained against, or if it appears to him without any inquiry that the complaint discloses matters which ought to be inquired into he may forthwith summon the person complained against.

Thereafter, the Director General may attempt at a conciliation to help parties achieve a settlement, or will proceed with Stage 3.

Stage 3:       Issuing Summons to The Relevant Persons to Attend the Inquiry

The Director General will then issue a summons against the person complained against (ordinarily the employer–company), to attend the inquiry.

When issuing a summons against the person complained against, the Director General shall:

1. give such person notice of the nature of the complaint made against him and the name of the complainant;
2. shall inform him of the date, time, and place at which he is required to attend;
3. shall inform him that he may bring with him any witnesses he may wish to call on his behalf; and
4. that he may apply to the Director General for summonses to such persons to appear as witnesses on his behalf.

Besides, on the request of the complainant and subject to any conditions as the Director General may deem fit to impose, the Director General may also issue summonses to such witnesses to appear on behalf of the complainant.

Furthermore, when at any time before or during an inquiry the Director General has reason to believe that there are any persons whose financial interests are likely to be affected by such decision as he may give, or who he has reason to believe have knowledge of the matters in issue, he may also summon any or all of such persons.

Stage 4:       Inquiry Day

Notwithstanding the Stage 2 and 3 explained above, in reality and in practice, the Director General will generally just decide the date of the inquiry, and summons both the complainant and the complained person to attend the inquiry together to be examined on oath, and that they shall be entitled to bring their witnesses.

Then, on inquiry day, both parties will attend the inquiry session with their witnesses, as well as whoever has been summoned to attend.

The inquiry process is akin to a Court trial, and will ordinarily start with the complainant presenting his case (on oath or affirmation) first, who will then be questioned by the person complained against or its representative, as well as the Director General if the Director General when deem necessary. Witnesses should also present their evidence when giving their testimony.

Both parties can be represented by an advocate and solicitor i.e. lawyer during the inquiry.

If any person who has been summoned fails to attend the inquiry, the Director General may hear and decide the complaint in the absence of such person notwithstanding that the interests of such person may be prejudicially affected by his decision.

Step 5:         Decision by The Director General After Inquiry

Upon concluding the inquiry, the Director General will come to a decision.

The Director General may order such actions of either rectification, punishment, or determination of compound if they find the complaint to be valid, as well as ordering monetary payment that he deems just, which he has no limit in terms of the amount that he may impose and may carry an interest of 8%.

The Director General is also given the power to initiate criminal proceedings if he deems it necessary.

See Sections 69 and 79 EA.

The Director General will embody his decision in the form of an Order to the complainant pursuant to Section 70 EA and shall inform the same to the parties (“Order”). This is to allow a court to enforce the decision of the Director General, as will be explained below.

Step 6:         Appeal to the High Court

Any party who is dissatisfied with the Order by the Labour Court may appeal to the High Court within 14 days from the Labour Court Order being issued. See Section 77 EA.

Stage 7:       Enforcement

Meanwhile, if any person fails to comply with the Order, the complainant may enforce it by requesting that the Director General send a certified copy of the Order to the Registrar of a Sessions Court, or to the Court of a First Class Magistrate, and the said Registrar or Court shall cause the said copy to be recorded and thereupon the said Order shall for all purposes be enforceable as a judgment of the Sessions Court, or of the Court of the First Class Magistrate, as the case may be.

The Order then becomes effectively a Sessions Court or Magistrates Court order which the complainant can enforce accordingly through various civil enforcement procedures, such as bankruptcy proceedings, winding up proceedings, judgment debtor summons, and more.

Conclusion

The above is thus, a summary of the nature of the Labour Court, the type of cases heard in the Labour Court, and the various stages of an inquiry in the Labour Court.

Now, with the amendment to the Employment Act vide the Employment (Amendment) Act 2022, which came into force on 1.1.2023, the Employment Act’s applicability has expanded to include all employees under contracts of services, and no longer only applies to “EA Employees” (which are generally employees below the wage of RM2000) but not to “Non-EA Employees”.

Simply, the Employment Act now protects everyone (though employees above RM4000 salary may be excluded some protection such as overtime allowance and termination benefits).

That change of applicability, together with the removal of Sections 69A and Section 69B (which limits the type of cases that the Director General can inquiry into), as well as the introduction of new sections such as Section 69F (on discrimination in employment), only means that the type of cases that the Labour Court can now hear, has expanded tremendously, and much more cases can now go to the Labour Court and be resolved at the Labour Court.

There is thus a lot of potential with the Labour Court, and the Labour Court will play an increasingly important role in resolving employment disputes in the future.

If you think that you may have a claim in the Labour Court, are already going through or facing a claim in the Labour Court, and need legal representation, guidance or assistance, please do not hesitate to contact me here. If you have any other employment law problems, please feel free to contact me as well.

This article is written with the assistance of my able former intern Connie Yap.