Malaysian Bar opposes proposed amendments to Labour Laws

Malaysian Bar Council
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No. 13, 15 & 17, Leboh Pasar Besar, 50050 Kuala Lumpur, Malaysia
Tel: 03-2031 3003 (Hunting Line) Fax: 03-2034 2825, 2026 1313, 2072 5818
E-mail: council@malaysianbar.org.my
Website: http://www.malaysianbar.org.my

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Press Release

Malaysian Bar opposes proposed amendments to Labour Laws

The Malaysian Bar is concerned that the amendments being proposed to various labour laws will be detrimental to workers at large, and will give employers an unbridled hand to dismiss employees with impunity. The Bar Council is surprised that it has not been consulted about these proposals despite having had numerous dialogues with the Minister for Human Resources.

The key proposals are aimed at restricting the access of certain categories of employees to redress in the Industrial Court, and will effectively further erode the safeguards against wrongful dismissal by employers. Employees who have fixed-term contracts, have less than one year of service, earn a basic salary of RM 10,000 or more, or who are past retirement age, will be prohibited from seeking relief, such as reinstatement, back wages and/or compensation, under Section 20 of the Industrial Relations Act 1967.

There is no justification for removing the current protections for such employees. By giving employers vast powers to dismiss employees at will, the proposed amendments will be open to abuse. Employers will discriminate against vulnerable workers by reclassifying their workforce to come within these exceptions, in order to escape from their duties and obligations.

We would hasten to add that a vast majority of employers are responsible and do ensure that their employees are well taken care of. The current safeguards only apply to a very small number of employers who are taken to the Industrial Court for exploiting or victimising their employees.

The proposed reforms are wholly pro-employer and are at the expense of public interest and social responsibility. They are not significant in attracting foreign investments, as most cases filed in the Industrial Court involve local companies. The proposals will deprive several hundred employees per year of any remedy in the Industrial Court, which is the only court that can order reinstatement. The sole recourse for them will be in the civil courts, which offer very limited redress according to the terms of the employment contracts, which always favour the employers because of their stronger bargaining position.

The proposals will defeat the purpose of the current social legislation, which was introduced by Parliament to prevent exploitation, and in recognition of the imbalance in the relative bargaining position between employers and employees. They will negate the rationale for the establishment of the Industrial Court, which was to provide members of the workforce with relief from the harshness of the civil courts in relation to employment terminations.

Our labour laws cannot be reformed purely by reference to the laws of developed nations, which are strong welfare-based states that have specific benefits to cater for the needs of workers who are unemployed or have been terminated. The suggested amendments are altogether misconceived, and will sanction the statutory victimisation of employees.

The Malaysian Bar is also opposed to the proposal that human resource consultants be permitted to represent parties in the Industrial Court, as such consultants will not possess the necessary qualifications to practise in a court of law. Furthermore, they are not governed by a regulatory regime, unlike lawyers, who are bound by strict rules on ethics to govern professional conduct and are subject to disciplinary proceedings if they breach these rules. Lawyers are also covered by a mandatory professional indemnity scheme set in place to protect a client’s interest in the event of a claim of negligence against a lawyer.

Employees have far less bargaining power than employers and should be given additional protection. The proposed amendments, however, will further tip the balance of power in favour of employers. We urge the Government to make security of tenure, which is a fundamental tenet of industrial relations, the paramount consideration, and to not bow to the self-serving interests of the private sector.

Note: The Bar Council intends to organise a public forum on 24 July 2010 to seek views from stakeholders and members of the public on these amendments.

Ragunath Kesavan
President
Malaysian Bar
23 June 2010