Observation (CEACR) - adopted 2010, published 100th ILC session (2011)

Right to Organise and Collective Bargaining Convention, 1949 (No. 98) - Malaysia (Ratification: 1961)

The Committee notes that the Government indicates in its report and response to the comments made by the International Trade Unions Confederation (ITUC) on 24 August 2010 that the amendments to the Trade Union Act, 1959, and the Industrial Relations Act (IRA), 1967, have been approved by Parliament and came into effect on 28 February 2008, and that the Industrial Relations Regulations 2009 were subsequently enacted on 8 October 2009. According to the Government, the amendments to the IRA provide, inter alia, for a fast and efficient procedure for recognition for collective bargaining purposes. The Committee also notes the conclusions reached by the Committee on Freedom of Association in Case No. 2301 (353rd Report of the Committee on Freedom of Association, paragraphs 133–140, and the 356th Report, March 2010). The Committee therefore requests the Government to transmit a copy as soon as possible of the final version of the abovementioned legislation.

Articles 1 and 4 of the Convention. Trade union recognition for purposes of collective bargaining. Duration of proceedings for the recognition of a trade union. In its previous comments, the Committee had noted the comments by the ITUC reiterating issues previously raised by the Committee regarding long delays in the treatment of union claims to obtain recognition for collective bargaining purposes. The Committee had requested the Government to submit more precise information on the ITUC’s comments in the light of the provisions of the IRA and to indicate the average duration of proceedings for the recognition of a union, as well as the requirements for obtaining recognition. The Committee notes the Government’s indication that, under the new legislations, the average duration of proceedings for the recognition of a union is nine (9) months, provided that the parties involved do not challenge the process through judicial review in the court or raise issues that could cause delays. The Committee considers that this average duration of proceedings is excessively long and requests the Government to take measures to modify the legislation in order to reduce the length of proceedings for the recognition of trade unions.

Procedure of recognition. The Committee further notes that the Government indicates that, in order to be accorded recognition, the relevant union has to undergo a competency check (conducted by the Industrial Relations Department) to ascertain whether the majority of the class of workers of the enterprise had become members of the union seeking recognition. However, the Committee notes that the Government makes no reference to the applicable legislation. The Committee therefore requests the Government to indicate in its next report what the requirements in order to fulfil the competency check are and to indicate the relevant legislative provisions applicable.

In addition, the Committee notes that the Government indicates in its report that, in claims for recognition, once the trade union concerned has served Form A on the company, the employer shall have 21 days to either accord the recognition or to reject the claim. Should the company reject the claim for recognition, either at the end of the 21 days or anytime before that, then the union has to inform the Director General of Industrial Relations (DGIR) within 14 days after receiving such notification by the company. The DGIR will then take appropriate action. The Committee further notes that section 9(5) of the IRA states that the Minister has the final say on whether recognition is to be accorded by the employers to the unions. However, an aggrieved party may apply for a judicial review at the High Court against the decision. While recalling again the excessive length of these proceedings, the Committee requests the Government to indicate the criteria applicable to the decisions of the DGIR and/or the Minister.

Sanctions applicable for refusal to apply orders of recognition and of reinstatement. In its previous comments, the Committee had noted the Government’s statement about the comments previously made by the ITUC with regard to the inefficiency of labour courts concerning the application of the provisions of the Convention. On this matter, the Committee had noted the ITUC’s comments that the Government failed to apply any sanctions against employers who opposed the directives of the authorities granting trade union recognition or who have refused to comply with Industrial Court orders to reinstate unlawfully dismissed workers. The Committee had requested the Government to submit its observations on these matters.

The Committee notes the Government’s indication that: (i) the Industrial Court has jurisdiction for trade disputes under section 26 of the IRA and in cases of dismissals under section 20 of the IRA; (ii) under section 56(1), (3) and (4) and section 60 of the IRA, there are procedures and sanctions applicable against employers who opposed the directives of the authorities granting trade union or who have refused to comply with Industrial Court orders to reinstate unlawfully dismissed workers; and (iii) the Industrial Relations Department has set up a Legal Division to initiate legal proceedings against any errant party that contravenes the law. In these circumstances, the Committee requests the Government to provide details about the composition and functioning of the Legal Division of the Industrial Relations Department, and to provide a copy of its Rules of Procedures. The Committee also requests the Government to provide information and statistics on any sanctions against employers who opposed the directives of the authorities granting trade union recognition or who have refused to comply with Industrial Court orders to reinstate unlawfully dismissed workers in the last two years.

Migrant workers. In its previous comments, the Committee had noted that, although foreign and local workers enjoy equal rights; migrant workers can join a union but cannot be elected as trade union officers under the Trade Union Act. In this respect, the Committee had recalled that workers, including migrant workers, should enjoy the right to elect their representatives freely and it had requested the Government to communicate its observations on the exercise of trade union rights by migrant workers in law and in practice. The Committee notes the Government’s indication that: (i) to form and to be elected as trade union representatives, the foreign workers require permission from the Minister of Human Resources; (ii) there are currently trade unions who have foreign workers as members; and (iii) foreign workers have been appointed as representatives of certain trade unions. The Committee considers that the requirement for foreign workers to obtain the permission from the Minister of Human Resources in order to be elected as trade union representatives hinders the right of trade union organizations to freely choose their representatives for collective bargaining purposes. The Committee requests the Government to take measures in order to modify the legislation.

Scope of collective bargaining. The Committee had previously urged the Government to amend the legislation so as to bring section 13(3) of the IRA, which contains restrictions on collective bargaining with regard to transfer, dismissal and reinstatement (some of the matters known as “internal management prerogatives”), into full conformity with Article 4 of the Convention. The Committee notes with regret that the Government indicates in its report that there is no need to amend the said provision and reiterates that: (i) section 13(3) of the IRA is not intended to limit collective bargaining, but rather to provide for the right of employers to run their business in the most efficient way and to protect from abuse of the collective bargaining process; and (ii) these requirements are not absolute and matters relating to them may be brought to the Industrial Relations Department and, if no settlement is reached, the matter may be referred to the Industrial Court for adjudication (section 13(8) of the IRA). The Committee further notes the case law Sarawak Commercial Banks Association v. Sarawak Bank Employees’ Union, submitted by the Government. Nevertheless, the Committee considers that section 13 of the IRA restricts the scope of negotiable matters. The Committee recalls that measures taken unilaterally by the authorities to restrict the scope of negotiable issues are often incompatible with the Convention; tripartite discussions for the preparation, on a voluntary basis, of guidelines for collective bargaining are a particularly appropriate method to resolve these difficulties (see General Survey of 1994 on freedom of association and collective bargaining, paragraph 250). The Committee therefore once again requests the Government to amend section 13(3) of the IRA so as to remove these restrictions on collective bargaining matters and to initiate tripartite discussions for the preparation, on a voluntary basis, of guidelines for collective bargaining.

Compulsory arbitration. In its previous comments, the Committee had noted that section 26(2) of the IRA allows compulsory arbitration, by the Minister of Labour of his own motion even in case of failure of collective bargaining. The Committee had requested the Government to take measures to ensure that the legislation only authorizes compulsory arbitration in essential services, in the strict sense of the term, for public servants engaged in the administration of the State or in cases of acute national crisis. The Committee notes that the Government reiterates that, although the provision accords discretionary powers to the Minister to refer a trade dispute to the Industrial Court for arbitration, practically, the Minister has never exercised such power in an arbitrary manner and only makes a decision upon receipt of a notification from the Industrial Relations Department that the conciliation has failed to resolve the dispute amicably. The Committee once again recalls that the imposition of compulsory arbitration procedure if the parties do not reach agreement on a draft collective agreement raises problems in relation to the application of the Convention. Therefore, the Committee once again reiterates its previous comments and urges the Government to take measures to ensure that the legislation only authorizes compulsory arbitration in essential services, in the strict sense of the term, for public servants engaged in the administration of the State or in cases of acute national crisis.

Restrictions on collective bargaining in the public sector. The Committee has for many years requested the Government to take the necessary measures to ensure for public servants not engaged in the administration of the State the right to bargain collectively over wages and remuneration and other employment conditions. The Committee notes with regret that the Government, invoking the peculiarities of the public service, once again reiterates that it will maintain the policy of not engaging in that kind of collective bargaining with the employees of the public sector. The Government once again points out that trade unions can express their views on matters concerning conditions of work through the National Joint Council and the Departmental Joint Council. Nevertheless, the Committee, while recognizing the singularity of the public service which allows special modalities, considers that simple consultation with unions of public servants not engaged in the administration of the State do not meet the requirements of Article 4 of the Convention. Therefore, the Committee urges the Government to take the necessary measures to ensure for public servants not engaged in the administration of the State the right to bargain collectively over wages and remuneration and other employment conditions, in conformity with Article 4 of the Convention.

The Committee reminds the Government that it may avail itself of the ILO’s technical assistance so as to bring its law and practice into full conformity with the Convention if it so wishes.