DG must refer unresolved disputes to Industrial Court, court rules

S Shankarkumar’s dispute with the Malayan Adjustment Company Sdn Bhd must be referred to the Industrial Court although he had rejected an offer of reinstatement, the Court of Appeal said.

PETALING JAYA: The director-general of industrial relations (DGIR) is obliged to refer any dispute over the dismissal of a workman to the Industrial Court if no resolution is achieved during the conciliation process, the Court of Appeal has ruled.

In a written judgment, Justice Lee Swee Seng said following amendments to the Industrial Relations Act 1967 (IRA) which came into force on Jan 1, 2021, no discretion is vested in the DGIR as to whether such a reference should be made.

This is so even in situations where an employee has rejected an employer’s offer of reinstatement with full payment of backwages.

He said a dispute is not settled unless and until both parties arrive at an agreement on the terms of settlement during the mediation process.

“The DGIR does not make an assessment as to the chances of success or otherwise of the workman’s claim or the position that his employer has taken. There may be offers and counter-offers, amended and even re-amended offers, with or without conditions.

“There may be admissions, confessions, apologies given and regrets expressed, and then retracted. The DGIR does not have to wrestle with whether a counter-offer cancels an original offer and is a new offer altogether.

“Until there is a concluded agreement as in a consensus ad idem in a settlement that is recorded and signed by both the dismissed workman and his employer, there is just no settlement,” he said in the written judgment released on April 30.

Also on the bench hearing the appeal were Justices Che Mohd Ruzima Ghazali and Lim Chong Fong.

The suit was brought by S Shankarkumar against the DGIR who had rejected representations to refer his dismissal by Malayan Adjustment Company Sdn Bhd to the Industrial Court.

The DGIR had refused to refer the case as the company had agreed to reinstate Shankarkumar to his post as senior adjuster and pay him backwages during the conciliation process after he was sacked summarily without a domestic inquiry in 2021.

The employee rejected the offer as he could not agree to the terms of reinstatement, which did not include an apology or admission of liability by the company and required him to report directly to the managing director.

Shankarkumar claimed the Company was not sincere and genuine in its offer, especially since it had initially rejected his request for reinstatement.

He then applied for a judicial review at the High Court seeking an order of certiorari to quash the DGIR ‘s decision and an order of mandamus to compel the DGIR to refer the representations to the Industrial Court.

Last year, the High Court upheld the decision. It ruled that there was no dispute to refer to the Industrial Court since Shankarkumar had refused the offer of reinstatement with backwages which would have seen him suffer no loss of benefits and privileges.

Lee said it stands to reason that matters said and reasons given for rejecting a settlement, including one involving reinstatement, are meant only for the ears of the DGIR or his representative.

“The DGIR should only be concerned with the result of the conciliation proceedings and not the reasons for or routes to a non-settlement.

“If matters said and offers and counter-offers with or without additional conditions are allowed to be adduced as evidence in the Industrial Court or any other court, no one would dare to speak at such a meeting for fear of it being quoted and used against the person,” he said.

The judge said the High Court had erred in its interpretation of the effect of the amendments to the IRA which now compels the DGIR to refer the matter to the Industrial Court if there is no likelihood of a settlement following representations made by a dismissed workman.

As a result, Lee said the decision of the DGIR in the circumstances of the case was “irrational” and “illegal”.

The court quashed the DGIR’s decision and directed that the case be sent to the Industrial Court for adjudication.

The appellant was represented by Hakem Arabi & Associates, while Senior Federal Counsel Khalijah Mohd Khalid and Federal Counsel Jeevitha Raja appeared for the respondent.