Industrial Relations Act 1967

Industrial Relations Act 1967 · Act 177
Akta Perhubungan Perusahaan 1967
Applies to: Federal (whole of Malaysia, including Sabah and Sarawak) · Official text ↗

Key points

If you think you were dismissed without just cause or excuse, you must file a written representation with the Director General of Industrial Relations within 60 days of the dismissal (s 20).
The Industrial Relations Department first tries to settle the case. Since 1 January 2021, if it cannot be settled the Director General must refer it to the Industrial Court; the Minister no longer decides.
The Industrial Court can order reinstatement or compensation. Back wages are capped at 24 months (12 months for probationers) under the Second Schedule.
Since 2021 an Industrial Court award can be appealed to the High Court within 14 days (s 33C).
A union must be recognised by the employer before it can bargain collectively; collective agreements must run for at least 3 years and are deposited with the Industrial Court.

What this law covers

The Industrial Relations Act 1967 (Akta Perhubungan Perusahaan 1967) governs the relationship between employers, workers (called "workmen") and trade unions. Unlike the Employment Act 1955, which sets minimum terms, this Act deals with:

the rights of workers to join unions and of unions to be recognised;
collective bargaining and collective agreements (perjanjian kolektif);
conciliation (pendamaian) of trade disputes by the Industrial Relations Department (Jabatan Perhubungan Perusahaan, JPP);
unfair dismissal claims (s 20);
the Industrial Court (Mahkamah Perusahaan), its awards and appeals;
strikes, lock-outs and picketing.

It applies throughout Malaysia, including Sabah and Sarawak. Trade unions themselves are registered under a separate law, the Trade Unions Act 1959.

Trade union recognition and collective agreements

Workers have the right to form and join a trade union, and an employer may not interfere with that right or punish a worker for union activity. Before a union can bargain for workers, it must be recognised (pengiktirafan):

The union serves a claim for recognition on the employer (s 9). The employer must either grant recognition or give written reasons for refusing within the period set by the Act.
If the employer refuses or does not respond, the matter goes to the Director General of Industrial Relations, who can ascertain the union's support among the workers, including by secret ballot. Since the 2020 amendments the Director General, not the Minister, resolves recognition disputes.
Unions whose members are mainly ordinary workers cannot represent workers employed in a managerial, executive, confidential or security capacity (s 9(1)).

Once recognised, the union and employer negotiate a collective agreement. It must be in writing and signed, last for at least 3 years (s 14), and be deposited with the Industrial Court within one month for the Court to take cognizance (s 16). Any term less favourable than the minimum set by law is void and the law applies instead (s 14(3)). Once cognizance is taken, the agreement binds the employer, the union and the workers it covers (s 17).

Unfair dismissal: the section 20 claim

Any worker, whether or not a union member, who believes they were dismissed without just cause or excuse (dibuang kerja tanpa sebab atau alasan yang adil) can make a written representation (representasi) to the Director General of Industrial Relations asking to be reinstated (s 20(1)).

Time limit: 60 days from the dismissal (s 20(1A)). If you were dismissed with notice, you may file during the notice period but not later than 60 days after it ends. Late claims are not entertained, so act quickly.
File at the Industrial Relations Department office nearest to where you worked.
"Dismissal" includes constructive dismissal, where the employer's serious breach of the contract forces you to resign, and dismissal disguised as retrenchment.

You do not need a lawyer to file. A union officer or an official of a registered workers' organisation can help you.

Conciliation and referral to the Industrial Court

After a representation is filed, the department calls both sides to a conciliation meeting to try to settle, for example by reinstatement or a negotiated payment. Since the 2020 amendments parties may be represented at this stage by a person of their choice, but not by a lawyer.

If the Director General is satisfied that the case will not be settled, he must refer it to the Industrial Court (s 20(3), as amended with effect from 1 January 2021). Before 2021, the Human Resources Minister decided whether to refer, and many claims went no further.

Collective trade disputes between unions and employers (for example over pay in a new agreement) also go through conciliation and can be referred to the Court (s 26).

Industrial Court hearings and awards

The Industrial Court is a specialist court. It decides cases according to equity, good conscience and the substantial merits of the case, without regard to technicalities (s 30(5)). The employer must show that the dismissal was for just cause or excuse. The Court may make an award ordering:

reinstatement (pengembalian semula kerja) to the former job; or
compensation in lieu of reinstatement (in practice usually one month's wages per completed year of service); and
back wages (gaji tertunggak), capped under the Second Schedule at 24 months of last-drawn salary, or 12 months for a probationer, with a deduction for income earned elsewhere after dismissal and allowance for any misconduct by the worker. No compensation is given for loss of future earnings.

Since 2021 the Court can also order interest on unpaid award sums and can continue a case after the claimant dies, awarding sums to the next of kin. Failing to comply with an award is an offence.

Practical steps after a dismissal

Note the date you were dismissed (or your last day if you resigned in protest). The 60-day limit runs from then.
Ask for reasons in writing and keep the dismissal letter, your contract, payslips, appraisals, warning letters and any messages.
File the representation at the nearest Industrial Relations Department office. State that you want reinstatement; the Court can still award compensation instead.
Attend conciliation with an open mind. Many cases settle here. Get any settlement in writing before you sign.
Claim unpaid money separately: unpaid wages, overtime and notice pay can be claimed at the Labour Department under the Employment Act 1955.
Get help: your union, the Legal Aid Department or Bar legal aid centres. See Getting legal help.

Challenging an award: appeal and judicial review

An Industrial Court award is final and conclusive except as the Act allows (s 33B). Since 1 January 2021, a party unhappy with an award under s 20(3) may appeal to the High Court within 14 days of receiving the award (s 33C). The appeal follows the procedure for appeals from the Sessions Court under the Rules of Court 2012. The old route of referring questions of law to the High Court (s 33A) was removed.

The 2020 amendments did not expressly abolish judicial review (semakan kehakiman), but because a direct appeal now exists, the High Court is less likely to allow judicial review. Cases started before 2021 continue under the old law. Further appeals go to the Court of Appeal: see Appeals.

Laws cited on this page

Act 177	Industrial Relations Act 1967 · Akta Perhubungan Perusahaan 1967 (Terjemahan 1976)	Official text
Act 262	Trade Unions Act 1959 · Akta Kesatuan Sekerja 1959	Official text
Act 265	Employment Act 1955 · Akta Kerja 1955	Official text

Listed automatically from the federal Acts named on this page. All laws of Malaysia →

Key sections

Provision	What it says, in plain words
s 4	Workers' and employers' right to form, join and take part in trade unions.
s 9	Claim for recognition by a trade union, and resolution of recognition disputes by the Director General.
s 13	Collective bargaining after recognition.
s 14	Collective agreements must be in writing, signed and last at least 3 years; terms below legal minimums are void.
s 16	Collective agreements to be deposited with the Industrial Court within one month.
s 18	Reference of trade disputes to the Director General for conciliation.
s 20	Representation against dismissal without just cause or excuse, filed within 60 days; referral to the Industrial Court if not settled.
s 26	Reference of trade disputes to the Industrial Court.
s 30	Industrial Court's power to make awards, deciding by equity and good conscience; Second Schedule factors apply in dismissal cases.
s 33B	Awards are final and conclusive, subject to the Act.
s 33C	Appeal to the High Court within 14 days of receiving the award (since 2021).
Second Schedule	Back wages capped at 24 months (12 for probationers); deduction for post-dismissal earnings; no future earnings; account taken of the worker's misconduct.

Worked examples

Example 1: Dismissed after a warning letter

Facts. Siti, a sales executive in Kuching, is dismissed on 3 March for "poor attitude" without any domestic inquiry. She wants her job back.

The law. She can file a representation under s 20 with the Director General of Industrial Relations. The Act applies in Sarawak too. The deadline is 60 days from dismissal (s 20(1A)), so by early May.

Outcome. If conciliation fails, the Director General refers the case to the Industrial Court, which will ask whether the employer had just cause. Siti should file promptly and keep her letters, appraisals and messages.

Example 2: Forced to resign

Facts. Mr Tan's employer cuts his salary by 40% without his agreement and moves him to a junior post. He resigns in protest and claims he was effectively dismissed.

The law. This may be constructive dismissal: a serious breach of a fundamental term of the contract that entitles the employee to treat himself as dismissed. He can file a s 20 representation within 60 days of leaving.

Outcome. If the Industrial Court finds constructive dismissal without just cause, it may award compensation in lieu of reinstatement plus back wages up to the Second Schedule cap.

Example 3: Employer wants to challenge an award

Facts. A Penang company loses an Industrial Court case and is ordered to pay a former engineer 20 months' back wages and compensation. The award is received on 10 June.

The law. Under s 33C (in force since 2021) the company may appeal to the High Court within 14 days of receiving the award. Not complying with an award is an offence.

Outcome. The company must file its appeal by 24 June or comply with the award. The engineer can enforce an unpaid award.

Example 4: Union seeking recognition

Facts. A union with members among production workers at a Kedah factory serves a claim for recognition. The employer ignores it.

The law. Under s 9, if the employer does not grant recognition or give reasons in time, the matter can be referred to the Director General, who may hold a secret ballot to check the union's support.

Outcome. If the Director General decides in the union's favour, the employer must recognise the union and begin collective bargaining (s 13).

Examples are simplified illustrations with invented names; real cases turn on their own facts.

Questions & answers

How long do I have to file an unfair dismissal claim?

60 days from the date of dismissal (s 20(1A)). If you were given notice, you may file during the notice period, but no later than 60 days after it ends. The department cannot accept late claims, so file as soon as possible.

Do I need a lawyer?

Not to file. You can file the representation yourself at the Industrial Relations Department. At the conciliation stage lawyers are not allowed. In the Industrial Court, parties may be represented, including by lawyers with the Court's permission, but many workers use their union or appear themselves.

Will the Industrial Court give me my job back?

It can order reinstatement, but where the working relationship has broken down it usually awards compensation in lieu of reinstatement instead, plus back wages capped at 24 months (12 months for probationers).

Does this Act apply in Sabah and Sarawak?

Yes. Unlike the Employment Act 1955, the Industrial Relations Act applies throughout Malaysia.

Can a manager file an unfair dismissal claim?

Yes. Section 20 is open to any "workman", which the Act defines as any person (including an apprentice) employed under a contract of employment to work for hire or reward, so it is not limited by job grade or salary. Managers cannot, however, be represented by a union of rank-and-file workers.

Can the employer or I appeal the award?

Yes. Since 1 January 2021, either side may appeal to the High Court within 14 days of receiving the award (s 33C). Judicial review is still possible in principle but less likely to be allowed.

What is the difference between the Labour Department and the Industrial Relations Department?

The Labour Department (JTK) handles money claims and minimum-terms complaints under the Employment Act 1955. The Industrial Relations Department (JPP) handles unfair dismissal representations, union recognition and trade disputes under this Act.

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This page explains the general position in Malaysia (last reviewed October 2026). It is not legal advice — check the current law and get advice on your own facts.

Sources

Employment Act 1955 Employment law: your rights at work Tribunals and alternatives to court Appeals Courts and their powers