Shearn Delamore & Co. Represents HSBC In Federal Court Ruling On Union Immunity In Defamation-Linked Industrial Dispute

Shearn Delamore & Co. Represents HSBC in Federal Court Ruling on Union Immunity in Defamation-Linked Industrial Dispute

The leading Malaysian law firm, Shearn Delamore & Co. acted for HSBC Bank Malaysia Berhad in a significant matter before the Federal Court of Malaysia, where the Court affirmed that trade unions do not enjoy absolute immunity for defamatory statements made in the course of industrial disputes.

Introduction

The Federal Court on 5 March 2026, in the case of Permohonan Sivil No. 08(i)-406-11/2025(W) between National Union Of Bank Employees v Mahkamah Perusahaan, Malaysia & HSBC Bank Malaysia Berhad, declined to grant the National Union of Bank Employees (“NUBE”) leave to appeal on three proposed questions relating to whether it has total immunity under section 22(1) of the Trade Unions Act 1959 (“TUA”), wherein such absolute immunity would warrant the striking off of a trade dispute pending adjudication before the Industrial Court pursuant to a Ministerial Reference.

Facts of the Case

By way of background, HSBC Bank Malaysia Berhad is a member of the Malayan Commerce Banks’ Association (MCBA) and bound by the Collective Agreement between NUBE and MCBA. Article 4 of the Collective Agreement provides for a grievance procedure. NUBE circumvented the available procedures provided for in Article 4 of the Collective Agreement and section 18 of the Industrial Relations Act 1967 (“IRA”) in undertaking industrial actions against HSBC.

As a result, HSBC filed a trade dispute under section 18 of the IRA, which was subsequently referred to the Industrial Court under section 26(2) of the IRA for adjudication and registered as Industrial Court Case No. 4/3-2831/21.

Before the Industrial Court, NUBE did not deny that it had, inter alia, made “derogatory and defamatory social media postings and publications” against HSBC but applied to have the trade dispute struck off on the basis that it had absolute immunity and statutory protection against any tortious acts pursuant to section 22(1) of the TUA.

Apart from the derogatory and defamatory social media postings and publications complained of, HSBC also alleged that there were breaches of the Collective Agreement on the part of NUBE.

HSBC took the position that it is a matter for the Industrial Court to decide, based on the factual circumstances of the matter, whether statutory immunity is applicable to NUBE, after the production of evidence and at the conclusion of a trial.

The Industrial Court agreed and dismissed NUBE’s interlocutory application. Aggrieved, NUBE challenged the interim award which dismissed its striking out application. The High Court and Court of Appeal decided against NUBE and confirmed that HSBC’s trade dispute had to proceed for full trial and not be pre-determined through an interlocutory application.

In dismissing NUBE’s appeal, the Court of Appeal noted that,

Application for Leave to Appeal to the Federal Court

Before the Federal Court, HSBC Bank Malaysia Berhad highlighted that the matter before the Industrial Court was a trade dispute referred by the Minister for Human Resources. Apart from complaints of NUBE’s industrial actions, which were derogatory and defamatory in nature, HSBC had also raised NUBE’s breaches of the Collective Agreement. While HSBC maintained its contention of the defamatory nature of NUBE’s conduct, it emphasised that the trade dispute before the Industrial Court was not a defamation suit.

Further, in response to NUBE’s argument that it had blanket immunity, HSBC pointed out that industrial jurisprudence had confirmed that such immunity is not absolute, and any conduct carried out maliciously and/or in a manner which knowingly or recklessly disregards the truth would not be covered by the immunity.

To determine whether NUBE’s industrial action attracted such immunity, the Industrial Court must be allowed to make this determination upon the conclusion of a full trial, during which oral and documentary evidence would be adduced.

Decision of the Federal Court

The Federal Court agreed with the arguments advanced on behalf of HSBC and found in favour of the bank. NUBE’s application was accordingly dismissed with costs of RM50,000.

This decision emphasises that while the Trade Unions Act affords certain protections to unions, actions committed maliciously or in reckless disregard of the truth will not fall within such protection. Whether such conduct attracts statutory immunity must therefore be determined by the Industrial Court after a full trial, and unions do not enjoy blanket immunity allowing them to strike out a claim without undergoing the trial process.

HSBC Bank Malaysia Berhad was represented before the Federal Court by Vijayan Venugopal (Partner), Raymond TC Low (Partner), Reena Enbasegaram (Legal Associate), and Peter Santiago (Legal Associate) of Shearn Delamore & Co.’s Employment & Industrial Relations Practice.

Conclusion

The Federal Court’s ruling reinforces an important principle in Malaysian industrial relations law — while trade unions may enjoy statutory protections, such protections are not absolute and cannot be invoked to avoid scrutiny where allegations of malicious or defamatory conduct arise. The decision ensures that such disputes are properly examined through the Industrial Court trial process, thereby strengthening accountability within industrial relations disputes.

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