Observation (CEACR) - adopted 2015, published 105th ILC session (2016)

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

The Committee notes the observations received on 1 September 2015 of the International Trade Union Confederation (ITUC) and of the Malaysian Trades Union Congress (MTUC), concerning matters addressed by the Committee as well as allegations of anti-union discrimination and interference in several sectors, including dismissals and non-recognition of unions. The Committee requests the Government to provide its comments in this respect.

The Committee further notes that, in response to the 2014 observations of the World Federation of Trade Unions (WFTU) and the National Union of Bank Employees (NUBE), the Government states that the matters raised therein are the object of two cases pending before the Industrial Court of Malaysia. The Committee requests the Government to provide information on the outcome of the judicial proceedings.

The Committee also notes the Government’s statement that Malaysia is currently conducting a holistic review of its main labour laws – the Employment Act 1955, the Trade Unions Act 1959 and the Industrial Relations Act 1967 (IRA). The Committee firmly trusts that the Government will take into account the following comments to ensure the full conformity of these Acts with the Convention and, recalling that the technical assistance of the ILO is at its disposal, it requests the Government to inform of any developments in this regard.

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 considered that the average duration of proceedings for the recognition of a union for collective bargaining purposes indicated by the Government (nine months) was excessively long, and requested the Government to take measures to modify the legislation in order to reduce the length of proceedings. The Committee notes that, in response to this request, the Government states that the average duration of the recognition process is: (i) just over three months in proceedings resolved by voluntary recognition; and (ii) four-and-a-half months for claims resolved by the Industrial Relations Department, when these do not lead to judicial review. The Government thus affirms that a number of cases were settled in less than the nine-month average previously noted, depending on whether the parties concerned cooperated and whether they resorted to judicial review. Considering that the duration of proceedings can still be excessively long, the Committee requests the Government, in consultation with the social partners, to take any necessary measures to modify the legislation in order to further reduce the length of proceedings for the recognition of trade unions.

Criteria and procedure for recognition. The Committee had noted in its previous comments that, under section 9 of the IRA, should an employer reject a union’s claim for voluntary recognition for the purpose of collective bargaining, the union has to: (i) inform the Director General of Industrial Relations (DGIR) for the latter to take appropriate action, including a competency check; and (ii) when the matter is not resolved by the DGIR, the Minister decides on the recognition, a decision that may be subject to judicial review by the High Court. The Committee had requested the Government to provide information concerning the requirements to fulfil the competency check and the criteria applicable to the decisions of the DGIR and/or the Minister. The Committee notes the Government’s indication that recognition on a mandatory basis is granted subject to the competency of the trade union concerned to represent the particular workpeople and the strength of their membership. The Government indicates that the competency check is stipulated under section 9(4A)(b), which refers to a secret ballot to ascertain the percentage of the workpeople or class of workpeople, in respect of whom recognition is being sought, who are members of the trade union making the claim. The Committee also notes that the MTUC criticizes the methodology to ascertain majority for union recognition by secret ballot, noting that the Industrial Relations Department is using the total number of workers on the date sought by the union instead of the total number of the participants in the ballot and that in certain instances more than 50 per cent of the workforce was migrant and had repatriated to their home country, yet was considered as counting against the union for the purposes of the secret ballot. The Committee requests the Government to provide further information on the criteria and procedure to assess the competency of a trade union to be recognized for the purposes of collective bargaining, including the percentage required in a secret ballot to attain recognition and the workers considered to calculate the percentage (whether those present at the ballot or the total number of workers and, in the latter case, the methodology and data used for such determination).

Refusal to apply orders of recognition and of reinstatement In its previous comments, addressing the ITUC’s observations to apply any sanctions against employers who opposed the directives of the authorities granting trade union recognition or refused to comply with Industrial Court orders to reinstate unlawfully dismissed workers, the Committee had requested the Government to provide: (i) details about the institutional operation of the Legal Division of the Industrial Relations Department; and (ii) information and statistics on any sanctions against employers opposing such directives or refusing to comply with reinstatement orders. The Committee duly notes the information provided by the Government: (i) on the composition and functioning of the Legal Division of the Industrial Relations Department; and (ii) that in the last two years no cases have been reported: (a) regarding employers opposing the directives of the authorities granting trade union recognition, except in cases where the employer obtained a stay from court due to judicial review; or (b) regarding employers refusing to comply with Industrial Court orders to reinstate unlawfully dismissed workers. The Committee also notes the observations of the ITUC and the MTUC alleging continued difficulties to ensure the recognition of trade unions, anti-union discrimination practices, and backlog of cases in the Industrial Courts in Penang and Kuala Lumpur. Taking note of the information provided by the Government, as well as of the allegations of the ITUC and the MTUC, the Committee trusts that the Government will take any necessary measures to ensure the availability and swift operation of efficient remedies to protect workers against anti-union discrimination and to ensure compliance with the decisions regarding union recognition.

Migrant workers. In its previous comments, considering 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 requested the Government to take measures in order to modify the legislation. The Committee notes that the Government simply states in its report that it has taken note of the request. Firmly hoping that it will soon be in a position to observe progress on the matter, the Committee reiterates its previous request.

Scope of collective bargaining. The Committee had previously urged the Government to take measures 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 that the Government: (i) once again indicates in its report that it intends to retain said provision to maintain industrial harmony and speed up the collective bargaining process; (ii) states that if both parties agree they may negotiate the provisions under section 13(3) during the collective bargaining process; and (iii) notes that the issue will be addressed in the holistic review of labour laws currently taking place. The Committee observes that section 13(3) of the IRA provides that the abovementioned excluded matters may not be included by a trade union in its proposals for collective bargaining. The Committee recalls again, in this regard, that measures taken unilaterally by the authorities to restrict the scope of negotiable issues are often incompatible with the Convention; and tripartite discussions for the preparation, on a voluntary basis, of guidelines for collective bargaining are a particularly appropriate method to resolve these difficulties. The Committee once again requests the Government to take measures 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 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, in practice the Minister only makes the referral when conciliation has failed to resolve the dispute amicably, and when the dispute is referred to the DGIR. The Government also indicates that the matter will be addressed in the holistic review of labour laws under way. The Committee 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. Reiterating its previous comments, the Committee 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 the right of public servants not engaged in the administration of the State to bargain collectively over wages, remuneration and other employment conditions. The Committee notes with regret that the Government, invoking the peculiarities of the public service, once again reiterates that the right to collective bargaining cannot be extended to employees of the public sector. The Government once again points out that the public service can discuss with its employer on matters concerning conditions of work through the Joint National Council and the Joint Agency 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 once again to take the necessary measures to guarantee the right of public servants not engaged in the administration of the State to bargain collectively over wages, remuneration and other employment conditions, in conformity with Article 4 of the Convention.