Industrial Court Award, The Final Frontier?

At the end of an employment dispute, an Industrial Court will render an Award in favor of either the employee or the employer. What happens after the Industrial Court award? Is there an avenue to challenge or appeal against the Award?

Section 33B of the Industrial Relations Act 1967 provides that an Industrial Court Award is final and shall not be challenged, appealed against, reviewed, quashed or called into question by any court.

However, the Federal Court in the case of R Rama Chandran v The Industrial Court Of Malaysia & Anor [1997] 1 MLJ 145 has held that even when the Act has described an Award is final, the High Court can still intervene to quash an Industrial Court Award in appropriate cases. This can be done by way of a Judicial Review application.

The Judicial Review Process

The jurisdiction of the High Court in a normal Judicial Review application is purely supervisory in nature. In other words, the High Court is confined to supervise and/or review the decision-making process of a public body and/or inferior tribunals, not the decision itself.

In a Judicial Review application, the High Court can grant public law reliefs such as mandamus, prohibition quo warranto and certiorari, or for any others, for the enforcement of any of the rights conferred by the Federal Constitution against the decision that is under review.

The necessary requirements and procedures for a Judicial Review application are provided in Order 53 of the Rules of Court 2012, the Schedule of the Courts of Judicature Act 1964 and Part 2 of the and Specific Relief Act 1950.

For a Judicial Review application to review an Industrial Court Award, the unsatisfied parties (applicant) would usually seek to quash the Award by way of certiorari. The applicant can also seek a mandamus to compel the other party to do something or even to seek damages.

The party seeking Judicial Review must prove that the decision-making process adopted by the Industrial Court is tainted by any of the following:

a. Illegality is when the decision or conduct of the industrial court is ultra vires or beyond the limits of the Industrial Relations Act 1967 and/or the law;

b. Irrationality is when the Industrial Court decision is so outrageous that no sensible person who has applied his mind to the question to be decided could have arrived at the same decision. This is called the principle of Wednesbury unreasonableness which is derived from the English case of Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] 2 All ER 680. 

c. Procedural impropriety is when the Industrial Court, in reaching its decision, fails to observe the mandatory procedures and/or the principles of natural justice.

Reviewing / “Appealing” the Industrial Court Award

As mentioned above, the general rule is that the High Court is confined to review only the decision-making process and not the decision itself during a Judicial Review. The merits or correctness of the decision are forbidden territory and the courts are not empowered to substitute their decision in place of that which is sought to be challenged.

However, the Federal Court in R Rama Chandran has now provided an exception to this rule and allowed an applicant to challenge the merits of the decision of the Industrial Court, by way of Judicial Review.

Opening New Doors (The Decision R. Rama Chandran’s Case)

In R. Rama Chandran’s case, the appellant (the “Employee”) was dismissed by the respondent, the Malaysian Co-operative Consumer Society (the “Employer”) after two years of employment. The Employee contended that he was unlawfully dismissed by the Employer and claimed for reinstatement in the Industrial Court. Subsequently, the Industrial Court dismissed the Employee’s claim and held that the dismissal was with just cause or excuse.

The Employee applied to the High Court for Judicial Review on various grounds, but his application was dismissed. The Employee then appealed to the Federal Court against the decision of the High Court and posed the following questions of law:

1. Whether the Industrial Court Award should be quashed; and
2. Whether in the particular circumstances of this case, the Federal Court has the power not merely to quash the Industrial Court and remit the case to the Industrial Court but to go further and decide that the Employee had been dismissed without just cause or excuse and to award a fair compensation.

In a majority decision the Federal Court held, among others, that in a Judicial Review process, the Court has the power to review the decision of the Industrial Court on its merits, quash it by certiorari, substitute the decision of the Industrial Court with a different decision and also determine a just relief for the applicant.

To put it simply, in a Judicial Review proceeding, the High Court has the following powers in reviewing an Industrial Court case:

1. To review the decision of the Industrial Court on the merits;
2. To substitute a different decision in place of the Industrial Court Award without remitting the case to the Industrial Court for re-adjudication; and
3. To order consequential relief.

The exception to the Rama Chandran’s case

However, it must be noted that the exception is not applicable in every case. It ultimately depends on the factual matrix and a matter of judicial discretion on the part of the High Court as can be seen in the Federal Court case of Petroliam Nasional Bhd V Nik Ramli Nik Hassan [2004] 2 MLJ 288.

The Petroliam Nasional Bhd case further states that although a reviewing judge might not have come to the same conclusion from the established facts, the judge should exercise restraint and should not disturb such finding unless it could be shown that the finding was based on grounds of illegality or plain irrationality.

Moreover, in another Federal Court case of Ranjit Kaur a/p S Gopal Singh v Hotel Excelsior (M) Sdn Bhd [2010] 6 MLJ 1 it was held that the principle of the findings of facts of the Industrial Court based on the credibility of witnesses ought not to be disturbed by the reviewing judge unless they were grounded on the illegality or plain irrationality.

Reliefs Available for Judicial Review Against Industrial Court Awards

Re-Adjudication in the Industrial Court

In Vadiveloo Munisamy v General Type Retreaders Sdn Bhd [1999] 7 CLJ 596, the High Court quashed the Industrial Court Award and decided that the dismissal was unjust. The High Court further was remitted the matter back to the Industrial Court to determine the appropriate remedy (reinstatement or payment of compensation) including the determination of its quantum.

In Swedish Motor Assemblies Sdn Bhd v Haji Mohd Ison bin Baba [1998] 2 MLJ 372, the Court of Appeal found that the Industrial Court decision was tainted by Wednesbury unreasonableness. The Court of Appeal set aside the Industrial Court decision and substituted its own decision that the dismissal was unjust and remitted the case back to the Industrial Court to determine the appropriate remedy to be awarded.

Consequential relief (Rare Cases)

The R. Rama Chandran’s case referred to the case of Navinchandra Shakerchand Shah v Ahmedabad Co-operative Department Stores Ltd [1979] 1 LLJ 60 in explaining the meaning of consequential relief. In a situation where the main relief to quash an order is insufficient to improve the claimant’s position, the court may provide an ancillary relief or a consequential order to complete the main relief.

Similarly, the Employee in R. Rama Chandran’s case was 51 years old and was unemployed for the last seven years. To remit back to the Industrial Court would certainly prolong the litigation and do great harm and injustice to the Employee instead. Thus, the Federal Court, by a majority chose not to remit the case to the Industrial Court for a retrial. Instead, it proceeded with the computation of the monetary compensation in lieu of reinstatement that was payable by the society to the Employee.

In Thilagavathy a/p Alagan Muthiah v Meng Sing Glass Sdn Bhd [1997] 3 MLJ 735, the High Court, in exercising the extended powers of judicial review, considered the decision of the Industrial Court on its merits, substituted its own decision, determined the just relief and calculated its quantum. Briefly, the High Court reviewed the merits of the case and ordered full back wages from the day of the employee's dismissal to the day of the Award.

With R. Ramachandran’s case, the Courts in Malaysia has certainly expanded jurisdiction and powers in relation to decisions of the Industrial Courts. A dissatisfied party now has an avenue to challenge the merits of an Industrial Court award by way of Judicial Review.

In light of recent events which will lead to unprecedented employment disputes and concerns, it is apt to highlight the implications of R. Ramachandran’s case. 

The High Court must be allowed to look into not only the procedures but also the merits of an Industrial Court Award to ensure the rights of employees and employers are protected. Whilst there is not much positive news to come out of this pandemic,  it is clear that an Industrial Court Award is not the final frontier.