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National Employment Law Conference 2008
Crowne Plaza Hotel, Kuala Lumpur
4th - 5th March 2008
Should the Industrial Court not be allowed to be what it was intended to be?
by
Dato’ Abdul Hamid Mohamad
Chief Justice
Federal Court, Malaysia
This is the second time that I am delivering a keynote
address since my appointment as Chief Justice, but the first in Malaysia. The
first was at New Delhi exactly three weeks ago. It looks as if India beats you
at it. But, still you get the first in Malaysia, for whatever it is worth!
Frankly, when Mr. Syed Ridhwan Alsree contacted me to invite me to deliver this
speech, I was quite reluctant to accept it. However, I made a mistake in
allowing him to come and see me. He was very persuasive. Even then, I did not
agree immediately. I told him the reason for my reluctance which I must also
tell you now because it is important. The reason is this. It is my policy to
accept an invitation to speak only when I think I have something worthwhile to
say. But, the danger is that, if I say what I would like to say here, later on,
some parties may take objection to my hearing an appeal involving an Industrial
Court award on the ground that I have expressed my opinion publicly on the
subject.
It had in fact happened to me once. I attended a Bar Council Annual Dinner soon
after Tun Mohamed Dzaiddin was appointed Chief Justice. Tun Mohamed Dzaiddin
gave a speech at the dinner. I was a mere listener. He spoke about the need to
check the spiraling awards for libel cases. At my table were the then Speaker of
the Dewan Rakyat, the late Tun Mohd. Zahir and the Dean of the Law Faculty of
the University of Malaya. While Tun Mohamed Dzaiddin was speaking I commented “I
don’t think he should say that here.” They agreed.
A few months later, I was scheduled to hear an appeal in a
libel suit. To my horror, one of the parties, I think it was the Respondent,
filed an application to disqualify the panel because we were at the dinner when
Tun Mohamad Dzaiddin delivered the speech on the ground that we would be
influenced by it. My photograph was exhibited in the affidavit, even though
there was no video clip.
However, I don’t know for what reason the application was withdrawn on the
morning of the hearing of the appeal. In spite of that, I felt very disheartened
and did not attend any Bar Council dinner for a few years after that. Now you
know why.
But, now I have decided that I am not going to be perturbed by such
applications. Otherwise, I would not be able to accept any invitation to speak
except to thank and to praise everybody.
In any event, I am not going to say more than what I have said in my judgment in
Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor
(2002) 3CLJ 314 (C.A.) and, instead of stating my view, I shall pose a question.
And the question is: “Should the Industrial Court not be allowed to be what it
was intended to be.”
Ladies and Gentlemen,
The history of the Industrial Court started very early. As early as 1940 we
already had the Industrial Court Enactment of the Federated Malay States, the
Industrial Court Enactment of Kedah and the Industrial Court Ordinance of the
Straits Settlement. But, due partly to the Second World War, these statutes were
never implemented. When the Federation of Malaya came into being in 1948, these
statutes were replaced by the Industrial Court Ordinance 1948 – See B. Lobo:
Industrial Relations Act 196: Evaluation of the Industrial Court in Industrial
Relations (1986) 1 CLJ 148. This Ordinance was replaced by the Industrial
Relations Act 1967 which is still the law today.
What does it mean? It means that even as early as 1940 when the courts of law (I
am using the term to mean the courts in the judicial system) were still not
clogged with cases and when judicial review was still unheard of, it was already
thought that the courts of law were not suitable to deal with employment
disputes. We know too well that an adversarial system used in the courts of law,
applying common law based principles and procedure are too technical, expensive
and the trials are protracted thus causing delay to the disposal of the
disputes. That is not good for the employers, workmen, the industry, the economy
and the country.
We shall now look at the Industrial Relations Act 1967. The long title states as
follows:
“An Act to provide for the regulation of the relations between employers and
workmen and their trade unions and the prevention and settlement of any
differences or disputes arising from their relationship and generally to deal
with trade disputes and matters arising therefore.”
Note that the objectives are quite general and wide. They include “the
regulation of the relations between employers and workmen and their trade
unions” and “the prevention… of any differences arising from the their
relationship.” These are matters not within the function of the courts of law.
Section 30(3) provides that the Industrial Court shall make its award without
delay and where practicable within thirty days from the date of the reference to
it of the trade dispute or of a reference to it under subsection 20(3). It shows
that speed is the essence. There is no such provision in any law governing the
courts of law, because it is simply not possible to achieve.
Section 30(4) requires the Industrial Court, in making the award, to have regard
to public interest, the financial implications and the effect of the award on
the economy of the country, and on the industry concerned, and also to the
effect in related or similar industries. Those are not the kind of
considerations a court of law will give in deciding a case. A court of law
decides according to the law as it is and, as is sometimes said, even if “heaven
may fall.”
Furthermore, section 30(5) makes it mandatory for the Industrial Court to act
according to equity, good conscience and the substantial merits of the case
without regard to technicalities and legal form. Nothing can be clearer than
that as to how the court should function.
In making the award, the court may also take into consideration an agreement or
code relating to employment practices, not the subject matter of the dispute -
section 30(5A). This is not the kind of thing a court of law may take into
consideration in deciding a case.
In making the award, the Court is not restricted to the
specific relief claimed by the parties but may include any matter or thing which
it thinks is necessary or expedient for the purpose of settling the dispute -
section 30(6). In other words, the court is given a broad choice of reliefs to
be given. This too is peculiar to the Industrial Court.
Section 29(3) (a) of the original Act provides:
“(a) Subject to this Act, an award of the court shall be final and conclusive,
and no award shall be challenged, appealed against, reviewed, quashed or called
into question in any court of law.”
So, looking at the provisions of the Act, perhaps it is not wrong to say that
the Industrial Court was intended to be a court of arbitration that was not
required to pay too much attention to legal technicalities but to settle
disputes speedily on broad principles of equity, good conscience having regard
to public interest implications and its effects on the economy of the country.
Even in making the award it was not restricted to the specific relief prayed
for. There was no appeal, no judicial review. In other words, the matter ended
there. This is reaffirmed by the Labour and Manpower Report 1983/1984 of the
Ministry of Labour and Manpower which says, inter alia:
“…the Court’s role is to bring about an expeditious settlement of all disputes
referred to it in order to contribute towards industrial peace and harmony.”
In late 60’s, judicial review reached our shores. In the early cases,
applications were made for the order of prohibition to stay proceedings in the
Industrial Court - see Kesatuan Pekerja2 Kenderaan Jaya v. Industrial Court
and Ors.(1969) 2 MLJ 27.
It is also interesting to note in one of the early cases, it was the Attorney
General who applied for an order of certiorari to quash the order of the
Industrial Court, inter alia, on the ground that the Industrial Court had no
jurisdiction to adjudicate on the dispute although referred to by the Minister.
Alternatively, the Industrial Court had acted in excess of its authority in
adjudicating on the question. Abdul Aziz J. dismissed the application. The case
is Attorney- General, Malaysia v. Chemical Workers’ Union of Malaya & Anor.(1971)
1 MLJ 38,
From then on, applications for judicial review kept coming to the High Court to
quash the awards of the Industrial Court. Even the decision of the Minister not
to refer the representation to the Industrial Court for an award under section
20(3) of the Act became the subject matter of such applications. Once a matter
reaches the High Court, though not through an appeal, it is not going to end
there. From the High Court normal appeal comes in, to the Court of Appeal and
even the Federal Court. So, what had started without even an appeal to the High
Court, had through judicial review, becomes appealable even, to the Federal
Court. Bear in mind that even a case that begins in the Sessions Court is not
appealable further than the Court of Appeal. On the other hand, an Industrial
Court award that begins in the Industrial Court which is not even appealable to
the High Court, having come to the High Court through judicial review, is
appealable right up to the Federal Court. That is really an irony. What was
intended to be settled speedily now takes longer time than a normal suit that
begins in the High Court and think of costs.
However, during that period, the High Court would only intervene on the narrow
ground of error of jurisdiction. South East Asia Fire Bricks Sdn Bhd. v.
Non-Metallic Mineral Products Manufacturers Employees Union & Ors. (1980) 2
MLJ 169 (P.C.) was the celebrated authority. In that case, the Privy Council
held, inter alia:
“Even assuming that the award contained one or more errors upon its fact, the
error or errors did not affect the jurisdiction of the Industrial Court and
section 29(3)(a) of the Industrial Relations Act, 1967, effectively ousted the
jurisdiction of the High Court to quash the decision by certiorari proceedings.”
While Fire Bricks’ case (supra) was being fought, the Industrial Relations Act
was amended. Sections 33A and 33B were added: Section 33A(7) provides:
“(7) A decision of the High Court under subsection (5) shall be final and
conclusive, and no such decision shall be challenged, appealed against,
reviewed, quashed or called in question in any other court or before any other
authority, judicial or otherwise, whatsoever.”
Section 33B(1) provides:
“33B(1) Subject to this Act and the provisions of section
33A, an award, decision or order of the Court under this Act [including the
decision of the Court whether to grant or not to grant an application under
section 33A(1)] shall be final and conclusive, and shall not be challenged,
appealed against, reviewed, quashed or called in question in any court.”
These amendments came into force on 30 May 1980. But, they were of no effect. In
1984, for example, the Federal Court, in Hotel Equatorial (M) Sdn. Bhd. v.
National Union of Hotel, Bar and Restaurant Workers & Anor. (1984) 1 CLJ
(Rep.) 155 F.C., in a judgment written by George Seah F.J., held:
“(2) Such a clause as contained in section 33B(1) of the Act does not have the
effect of ousting the inherent supervisory power of the High Court to quash the
decision of the Industrial Court by certiorari proceedings if it had acted
without or in excess of jurisdiction or had done or failed to do something which
rendered its decision a nullity.”
Please note that in making the ruling on section 33B(1), the Federal Court had
in mind only jurisdictional error and nullity as the grounds for quashing the
decisions of the Industrial Court.
One question that crossed my mind in the course of writing this speech is that
those judgments on ouster clause were decided prior to the amendment of Article
121 of the Federal Constitution which, inter alia, provides:
“… and the High Courts … shall have such jurisdiction and powers as may be
conferred by or under federal law.”
This amendment came into force on 10th June 1988.
I wonder whether in view of the amendment to Article 121 of the Federal
Constitution the earlier judgments on sections 33A and 33B can still stand. I
express no view on it.
It is interesting to note that, even in 1981, the Federal Court was still of the
view that where no appeal lies from a decision, “judicial review cannot be
resorted to as an alter modus for an appeal by way of circumventing or repairing
that omission.” The words came from no other than Abdoolcader J., delivering the
judgment of the Federal Court in Pahang South Union Omnibus Co. Bhd. V.
Minister of Labour and Manpower (1981) 2MLJ 199 .
But, even this view too could not last long. Soon, it was forgotten.
By 1985,we have started hearing voices to the effect that the Supreme Court
might prefer to adopt the view of Lord Denning in Pearlman v.Harrow School
(1979) 1 QB 56 – see Inchcape Malaysia Holdings Bhd. v. R.B. Gray & Anor.
(1985) 2 CLJ 305 per George Edward Seah SCJ. One year later, Mohd. Azmi FCJ
in Enesty Sdn. Bhd. v. Transport Workers Union & Onor. (1986) 1 MLJ 18 F,C.
said:
“Perhaps the time has time for the this Court (i.e. the Federal Court) to
consider the views expressed by Lord Diplock in the House of Lords in Re
Racal Communications Ltd. and thereby open the way for the acceptance of
Lord Denning’s suggestion in Pearlman v. Harrow School in discarding the
distinction between an error of law which affected jurisdiction and one which
did not. There is no degree of nullity and if there is an error of law on which
the Industrial Court’s award depends the remedy of certiorari should not be
excluded by section 33B(1) of the Industrial relations Act, 1967.”
In the meantime, the scope of jurisdictional error was widening. See, for
example, Malayan Banking Bhd. v. Association of Bank Officers Peninsular
Malaysia & Industrial Court (1988) 1 CLJ (rep.) 183 (S.C.) where it was held
that jurisdictional error includes a decision which is perverse and devoid of
plausible justification that no reasonable body of persons could have reached
it. What it means is that the High Court would be entitled to scrutinize the
evidence in order to decide whether the decision of the Industrial Court is
perverse or not. How else?
Then, in 1995 came the judgment of the Court of Appeal in Syarikat Kenderaan
Melayu Kelantan Bhd. V. Transport Workers Union (1995) 2 CLJ 748 C.A. The
main judgment was written by Gopal Sri Ram JCA. I read part of his judgment.
“An inferior tribunal or other decision-making authority, whether exercising a
quasi-judicial function or purely an administrative function, has no
jurisdiction to commit an error of law and it is no longer of concern whether
the error is jurisdictional or not. Such a distinction ought no longer to be
maintained. If there is an error of law upon which the award of the tribunal is
founded, such error whether of interpretation or otherwise must necessarily be
without jurisdiction or in excess of jurisdiction. It follows that the decision
of the Board in South East Asia Fire Bricks v Non-Metallic Mineral Products
Manufacturers Employees Union & Ors. [1981] A.C. 363, and all those cases
approved by it, are no longer good law. By the same token, the cases of Kannan v
Menteri Buruh dan Tenaga Rakyat [1974] 1 MLJ 90 and Lian Yit Engineering Works
Sdn Bhd v Loh Ah Fon & Ors [1974] 2 MLJ 41, though disapproved or overruled by
the Board, must now be taken to have always correctly stated the law.
Since the inferior tribunal has no jurisdiction to make an error of law, its
decision will not be immunized from judicial review by an ouster clause, however
widely drafted. The ouster clause in s. 33B(1) of the Act, therefore, does not
disable the High Court from exercising its judicial review of awards of the
Industrial Court.
It is neither feasible nor desirable to attempt an exhaustive definition of what
amounts to an error of law, for the categories of such an error are not closed.
But an error of law would be disclosed if the decision maker asks himself the
wrong question, or takes into account irrelevant considerations, or omits to
take into account relevant considerations, or if he misconstrues the term of any
relevant statutes, or misapplies or mis-state a principle of the general law”.
Two years later, came the judgment of the Supreme Court in R. Rama Chandran v
The Industrial Court of Malaysia (1997) 1 MLJ 145. The judgment of the court
was written by Edgar Joseph Jr. FCJ. In that case, it was held, inter alia:
“(10) Per Edger Joseph Jr. FCJ) A decision susceptible to Judicial review is not
only open to challenge on the ground of procedural propriety but also on the
grounds of illegality and irrationality; and, in practice, this permits the
court to scrutinize such decisions not only for process but also for substance.”
(13) (Per Edgar Joseph Jr. FCJ) Having reviewed the Award of the Industrial
Court for substance, members of this Court who comprised the majority that upon
the un-contradicted affidavit evidence of the Employee, he had been dismissed
from service without just cause or excuse. Furthermore, in lieu of
reinstatement, they were satisfied that the Award of the Industrial Court was
flawed on grounds of Wednesbury unreasonableness.”
The Court, by a majority, made a consequential order i.e. granting the employee
compensation for loss of employment. Wan Yahya FCJ dissented on this issue. Wan
Yahya FCJ was of the view:
“(26) (Per Wan Yahya FCJ) The discretion as to whether to award compensation in
lieu of reinstatement was an issue to be decided by the Industrial Court. In the
present case, the Federal Court would be performing its original and appellate
but not its supervisory jurisdiction if it were to proceed to determine the
issue on the Employee’s compensation.”
As far as I know, this was the first case in which the learned Judge, Edgar
Joseph Jr. FCJ gave “an additional judgment” (I call it a “rebuttal judgment”)
rebutting the dissenting judgment of Wan Yahya FCJ on the second issue.
Fortunately, Wan Yahya FCJ did not reply. Had he done so, there might have been
a further reply or rebuttal.
I think I need go no further. Even stopping there, we see what had happened to
the Industrial Court over the last forty years. It was conceived to be a court
of arbitration, not required to pay too much attention to legal technicalities,
to settle disputes speedily on broad principles of equity, good conscience
having regard to public interest implications and its effects on the economy of
the country and with no appeal to the court of law. True, until today there is
no appeal to the High Court from the decision of the Industrial Court. But, what
is not allowed through an appeal passes through judicial review, in spite of its
clear prohibition by statute. And, once it gets to the High Court, the normal
appeal process sets in. At first, judicial review was applied only on the ground
of jurisdictional error and the court of law would only look at the decision
making process and not the decision itself. But, the meaning of jurisdictional
error itself kept expanding. Error of law, whether or not it goes to the
jurisdiction became sufficient for the court of law to intervene, not only on
procedural impropriety but also on merit to see whether the decision falls
within Wednesbury unreasonableness. Regarding technicality, Telekom Malaysia
Kawasan Utara (supra) is a good example. The issue was whether the Industrial
Court was correct to apply the “balance of probability” test instead of the
“beyond reasonable doubt” test with regard to the theft of the company property
which the employee was alleged to have committed and for which he was dismissed.
You may proudly look at what had happened as development of Malaysian
Administrative Law. Some may even claim to be the champion. You may look at it
as getting lost in the legal jungle and forgetting your original destination. I
pass no comment, not until October, when I retire. In any event, I do not think
any lawyer would ever try to persuade the Federal Court to retreat. Academicians
will be disappointed if that were to happen: they will have to rewrite their
textbooks and lecture notes.
Short of intervention by the Legislature (again I pass no comment whether it
should or should not be done), that position is there to stay. Administrative
Law is the in-thing and no legal system would like to be left behind. It is now
the test of a respectable Judiciary. But, while the “development” of our
Administrative Law, generally, may be in tandem with the development in other
Commonwealth countries, the question that arises in my mind is, in applying the
developing principles of Administrative Law to awards of the Industrial Court,
had we paid sufficient attention to the provisions of the Industrial Relations
Act? Had we lost sight of what the Industrial Court was intended to be?
What are the side effects? Delay and expense. How do we solve these problems? I
would like to hear your views.
Thank you.
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