In a significant decision that reaffirms the employee’s right to access justice under the Industrial Relations Act 1967, the Court of Appeal in ACE Holdings Bhd v Norahayu Rahmad & Anor [2023] 6 CLJ 159 held that an employee’s failure to explicitly seek reinstatement in a claim for unjust dismissal does not strip the Industrial Court of jurisdiction. This ruling addresses a frequently raised procedural objection by employers and provides clarity on how unjust dismissal claims should be adjudicated.

Background

Under Section 20(1) of the Industrial Relations Act 1967, an employee who believes they have been unjustly dismissed may file a representation with the Director General of Industrial Relations (DG) seeking reinstatement. If no amicable resolution is reached, the representation is referred to the Industrial Court.

At the Industrial Court, employees must file a statement of case outlining the facts and arguments supporting their claim. This typically includes the remedies sought—either reinstatement, compensation in lieu of reinstatement, or back wages. However, in this case, the employee sought only monetary relief and did not plead for reinstatement.

Industrial Court & High Court Decisions

ACE Holdings Bhd, the employer, raised a preliminary objection claiming that because the employee did not seek reinstatement in her statement of case, the Industrial Court had no jurisdiction to hear the matter. The Industrial Court agreed and dismissed the claim on that basis.

The employee then sought judicial review in the High Court, which quashed the Industrial Court’s decision. The High Court held that the absence of a reinstatement plea was not fatal to the claim, and that the Industrial Court was still obligated to hear the claim on its merits. The Court emphasized that it is within the adjudicator’s discretion to award reinstatement—or not—regardless of how the relief is pleaded.

Court of Appeal Decision

The Court of Appeal upheld the High Court’s decision, confirming that employees may proceed with unjust dismissal claims even if they are only seeking monetary compensation. The Court held that failure to request reinstatement does not divest the Industrial Court of its jurisdiction once the matter has been referred by the DG.

ACE Holdings had relied on the Federal Court’s decision in Unilever (M) Holdings Sdn Bhd v So Lai, arguing it was binding. However, the Court of Appeal distinguished the two cases. In Unilever, the issue was whether compensation could be granted in lieu of reinstatement where reinstatement was no longer possible (due to the employee’s retirement). The Court of Appeal clarified that in this case, the question was whether a claim can be heard at all in the absence of a reinstatement plea—an entirely separate issue.

The Court also reaffirmed its previous decision in Sanbos (Malaysia) Sdn Bhd v Gan Soon Huat [2021] 6 CLJ 700, stating that once a representation is referred to the Industrial Court, the court is duty-bound to hear the claim, even if reinstatement is not pursued. It rejected the employer’s concern that allowing monetary-only claims would flood the system, asserting that the Industrial Court is a specialized forum designed to resolve employment disputes, including claims that seek compensation in lieu of reinstatement.

Joint Hearing Approach Encouraged

Another important procedural point raised was that preliminary objections and the merits of a claim should be heard together. The Court of Appeal emphasized that deciding jurisdictional issues separately may delay proceedings unnecessarily, defeating the objectives of the Industrial Relations Act, which aims to resolve disputes quickly and economically. A joint hearing approach would be more efficient, saving legal costs and protecting employees from litigation fatigue or prejudice due to delays—such as employer insolvency.

Practical Implications of Amendments to the Act

Although the case referred to the ministerial referral process under the now-repealed Section 20(3), the decision remains relevant after the 2021 amendments to the Act. Since 1 January 2021, the referral of representations to the Industrial Court is mandatory once the Director General is satisfied that settlement is unlikely. Thus, the Court of Appeal’s decision reinforces the importance of substantive justice over procedural technicalities in both pre- and post-amendment contexts.

Conclusion

This ruling is a clear message that procedural omissions—such as failing to plead for reinstatement—do not invalidate an employee’s right to have their claim heard in the Industrial Court. It underscores the purpose of Section 20: to protect employees from unjust dismissal and to ensure access to remedies, whether reinstatement or compensation.

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