Malaysia - Ng Boon Leh v Malaysian-American Commission On Educational Exchange (MACEE) (Industrial Court Award No: 284 Of 2020).

Legal News & Analysis - Asia Pacific - Malaysia - Labour & Employment

1 April, 2020

 

Background facts

 

Ng Boon Leh relied on section 20 of the Industrial Relations Act 1967 (“the Act”) under Part VI to file a claim for reinstatement against the Malaysian-American Commission on Educational Exchange (“MACEE”). In its (amended) Statement in Reply, MACEE pleaded that the Industrial Court is excluded from hearing this matter brought against it because the MACEE is a government entity within the meaning of section 52 of the Act.

 

MACEE is a binational commission established based on a binational agreement ratified by the governments of Malaysia and the United States of America to promote educational exchange between the two countries.

 

Issues

 

Before considering the merits of the case, the preliminary issue that had to be determined by the Industrial Court was whether MACEE falls under the definition of “statutory authority” under the Act which is beyond the jurisdiction of the Industrial Court. If in the affirmative, the claim cannot be heard by the Industrial Court.

 

The law

 

Section 52 of the Act provides that “Parts II, III, IV and VI shall not apply to any Government Service or to any service of any statutory authority or any workman employed by Government or by any statutory authority”.

 

Whereas Section 2 of the Act defines “statutory authority” as “an authority or body established, appointed or constituted by any written law, and includes any local authority”.

Decision and analysis of the Industrial Court

 

MACEE submitted that it is a government entity because it is neither a commercial entity nor a charity or association registered in Malaysia. It is an entity created pursuant to an agreement entered into between the two governments.

 

The functions and operations of MACEE are managed by a board of directors which consists of members to be elected by the Minister of Higher Education of Malaysia and the Chief of Diplomatic Mission of the United States of America to Malaysia respectively. MACEE is also funded by contributions from both governments and the expenses incurred by MACEE, including salaries of the employees, are to be shared between both governments.

 

On the other hand, Ng Boon Leh contended that MACEE is not a statutory body under section 52 of the Act for the very reason that its establishment is provided by the binational agreement. Further, since MACEE is not solely the province of a single State, which is Malaysia, its employees cannot be workmen under the services of the Government of Malaysia. Ng Boon Leh also argued that she did not report to either of the governments, neither was she a government servant nor employed under the government services.

 

The Industrial Court held that because MACEE was created by a bond between the two governments, it is clear that MACEE was intended to be a government entity to be controlled by both the governments of Malaysia and the United States of America.

 

Moreover, MACEE is impliedly controlled by the governments as it is overseen by a board consisting of members to be elected by each country and two honorary co-chairmen, who are the US Ambassador to Malaysia and the Minister of Higher Education of Malaysia respectively. This reflects that MACEE was intended to be a government entity.

 

The Industrial Court further held that MACEE was deemed to be a government entity of Malaysia because its existence is dependent on the decision of Malaysia to whether continue or dissolve it. Further, the Industrial Court viewed the employees engaged by MACEE to be employed by the Malaysian Government because their salaries were borne by the Malaysian Government.

 

The Industrial Court also ruled that there is no basis to Ng Boon Leh’s argument that a binational commission cannot constitute a government entity or perform a government service. In fact, the Industrial Court ruled MACEE as an extension of services provided by the Higher Education Ministry of Malaysia.

 

Conclusion

 

The decision above reaffirms the ambit of the Act, which only extends to employees in the private sector. In other words, the Industrial Court only provides redresses to workmen in the private sector. Any claims to the Industrial Court by the Federal Government or the State Government’s servant, or any individual working with the statutory and/or government authority, including any local authority, would be struck off by the Industrial Court. As illustrated by this decision, the Industrial Court takes a purposive approach in determining whether an organisation is a governmental or private organisation. 

 

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For further information, please contact:

 
Grace Chai Huey Yann, Shearn Delamore & Co​

chai.grace@shearndelamore.com