Labour Court or Industrial Court? The Employment Act 1955 Dilemma
Employees facing workplace disputes in Malaysia often rely on two primary legal pathways: the Employment Act 1955 and the Industrial Relations Act 1967. While these frameworks are designed to provide protection, a growing legal conflict between them is creating confusion and in some cases, delaying justice.
Two Legal Paths, One Problem
Typically, disputes over unpaid wages are handled by the Labour Court, offering a faster resolution. On the other hand, cases involving unfair dismissal are first brought before the Industrial Relations Department (IRD) and may proceed to the Industrial Court if unresolved.
However, complications arise when employees attempt to pursue both claims simultaneously such as seeking unpaid wages while also challenging a dismissal.
Section 69A: The Legal Roadblock
At the center of this issue lies Section 69A of the Employment Act 1955. This provision prevents the Director General of Labour from handling any dispute already being addressed under the Industrial Relations Act.
While intended to avoid overlapping cases, Section 69A has instead created a rigid barrier that limits employees’ access to timely remedies.
A More Flexible Past Approach
In earlier rulings, courts adopted a more employee-friendly interpretation. For example, in a notable High Court case, an employee successfully pursued both unpaid wages and constructive dismissal claims separately.
The court recognized that:
- Wage claims relate to work already performed
- Dismissal claims address post termination remedies
This distinction allowed both cases to proceed without conflict, ensuring fair access to justice.
A Shift Toward Strict Interpretation
Recent decisions, however, signal a shift toward a stricter approach. In a 2026 Court of Appeal case, the court ruled that once an unfair dismissal claim is filed, the Labour Court loses jurisdiction over related wage claims.
This interpretation positions the Industrial Court as a “comprehensive forum” for all employment disputes effectively blocking parallel proceedings.
The Real World Impact on Employees
This rigid interpretation comes at a cost:
- Delayed wage recovery: Labour Courts are known for speed, while Industrial Court proceedings can take significantly longer
- Financial hardship: Employees may be left without income during lengthy legal battles
- System overload: Industrial Courts may become burdened with technical wage claims better suited for Labour Courts
In many cases, this delay directly affects workers’ ability to meet daily needs highlighting the principle that justice delayed is justice denied.
Legal Contradictions and Concerns
Adding to the complexity, the Employment Act itself limits unpaid suspension periods to two weeks. Yet, in some cases, employees have gone unpaid for months raising questions about enforcement and consistency.
Moreover, historical parliamentary records suggest that Section 69A was never intended to be applied so broadly. Originally, it was meant to address specific termination-related claims, not to block wage disputes entirely.
Why Reform Is Needed
The current interpretation of Section 69A risks undermining the very protections employment laws were designed to provide. By forcing all disputes into a single legal channel, employees may lose access to faster and more effective remedies.
A legislative review is essential to:
- Restore clarity between jurisdictions
- Ensure timely justice for employees
- Align the law with its original intent
