On September 14, 2026, the Malaysian Bar issued Circular No 335/2026, a litigation update on Malaysian Bar v Minister of Human Resources and Pembangunan Sumber Manusia Berhad. The High Court of Malaya has dismissed the Bar's judicial review of the Human Resources Development Corporation (HRD Corp) levy under the Pembangunan Sumber Manusia Berhad Act 2001 (Act 612).
Justice Alice Loke held that Act 612 does not conflict with the Legal Profession Act 1976 (Act 166) and that the HRD Corp framework complements the Bar's continuing professional development (CPD) role by allocating a dedicated training fund, a holding also reported by New Straits Times. For Peninsular law-firm employers that followed the stay-era instruction not to register or to stop paying, registration, the 1 percent levy and unpaid-levy interest are back on the live compliance list.
What did the High Court actually decide?
The Court dismissed the challenge to applying the PSMB Act 2001 levy to the legal profession. The reported ratio is a no-conflict finding: Act 612 and Act 166 can operate together because the statutory fund finances employee training and does not repeal the Bar's CPD mandate. The Bar had argued that a self-regulated profession with mandatory CPD should not also register with the Ministry of Human Resources and pay the levy. That field-occupation argument failed. Act 166, the Legal Profession (Practice and Etiquette) Rules and Bar CPD hours are unchanged; they simply do not make Act 612 inapplicable to law firms.
Who has to register and pay, and at what rate?
Every employer with 10 or more Malaysian employees in a First Schedule industry must register with Pembangunan Sumber Manusia Berhad and pay a levy of 1 percent of each employee's monthly wages (Act 612, section 14). Employers with 5 to 9 Malaysian employees may opt in at 0.5 percent. Law firms entered that perimeter on March 1, 2021 under the Pembangunan Sumber Manusia Berhad (Amendment of First Schedule) Order 2021, P.U. (A) 84/2021, which placed them in the Professional category. The Malaysian Bar recorded the expansion, the April 30, 2021 registration deadline and a three-month levy holiday in Circular No 127/2021. The holiday has expired. The High Court did not amend the Schedule or the rate.
The litigant is the Malaysian Bar, whose members are advocates and solicitors of the High Court of Malaya. Sabah Law Society and Advocates Association of Sarawak firms were not parties. Act 612 is still federal, so East Malaysian firms in the Professional category should confirm their own HRD Corp position.
What should firms that followed the stay do now?
A stay pending disposal of a judicial review falls when that review is dismissed, unless a further stay is obtained on appeal. Circular 335/2026 is a member update, not a new exemption. Until a fresh stay is granted, managing partners should treat HRD Corp duties as enforceable against firms that withheld registration or levy on the earlier instruction.
Count Malaysian employees (not total headcount, and not pupils unless they are employees). If the count is 10 or more, register with HRD Corp if the firm is not already on the register. If the firm registered and then stopped paying, expect unpaid levy plus interest at 10 percent per annum under section 18. Failure to pay levy due is an offence carrying a fine of up to RM20,000 or imprisonment of up to 2 years, or both. Ask HRD Corp in writing how it will treat the stay window and whether any interest remission is available under section 18(4). An appeal is not a substitute for knowing register status, arrears and interest today.
| Date | What it did to law-firm HRD Corp duties |
|---|---|
| March 1, 2021 | P.U. (A) 84/2021 brings law firms into the First Schedule Professional category |
| April 30, 2021 | Extended registration deadline in Circular 127/2021 (levy holiday to May 31, 2021) |
| 2023 | Court of Appeal leave plus stay: Bar told members not to register, or to stop the 1 percent levy, pending merits |
| September 14, 2026 | Circular 335/2026: High Court dismisses the review; stay-era instruction is no longer a shield |
Does Bar CPD replace the HRD Corp levy?
No. Bar CPD remains a practising-certificate and conduct requirement under Act 166. The HRD Corp levy is a payroll levy on employers, with a right to claim training grants from the Fund once contributing. A partner's CPD hours do not discharge the firm's section 14 levy, and an HRD Corp-approved course does not satisfy Bar CPD unless the Bar also recognises it. Finance and HR should budget the 1 percent as a standing cost of employing 10 or more Malaysian staff and keep Bar CPD on its existing ledger. Continuous, per-jurisdiction real-time monitoring surfaces this kind of High Court outcome and Bar circular the moment they publish.
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Verify whether the firm employs 10 or more Malaysian staff, confirm HRD Corp registration and any unpaid levy plus section 18 interest, and brief the managing partner, finance lead and HR together. Watch Circular 335/2026 for any appeal or stay. Obsidian tracks the PSMB Act 2001 file against the Legal Profession Act 1976 so Peninsular firms can act on the next circular or appellate step without waiting for a member login reminder.
