Observation (CEACR) - adopted 2016, published 106th ILC session (2017)

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

The Committee notes the observations of the International Trade Union Confederation (ITUC), received on 1 September 2016, concerning matters addressed by the Committee as well as allegations of specific violations of the Convention in practice. The Committee requests the Government to provide its comments in this respect.

Follow-up to the conclusions in the Committee on the Application of Standards (International Labour Conference, 105th Session, May–June 2016)

The Committee takes note of the discussion held in the Conference Committee on the Application of Standards (hereinafter the Conference Committee) in June 2016 on the application of the Convention by Malaysia. It notes that the Conference Committee requested the Government to: (i) provide further detailed information regarding the announced repeal of section 13(3) of the Industrial Relations Act 1967 (IRA) on the limitations with respect to the scope of collective bargaining; (ii) report in detail on the holistic review of the national labour legislation described above to the next meeting of the Committee of Experts in November 2016; (iii) ensure that public sector workers not engaged in the administration of the State may enjoy their right to collective bargaining; (iv) provide detailed information on the scope of bargaining in the public sector; (v) review section 9 of the IRA in order to guarantee that the criteria and procedure for union recognition are brought in line with the Convention; (vi) undertake legal and practical measures to ensure that remedies and penalties against acts of anti-union discrimination are effectively enforced; and (vii) ensure that migrant workers are able to engage in collective bargaining in practice. The Committee notes that the Conference Committee further called upon the Government to avail itself of the technical assistance of the Office with a view to implementing its recommendations and ensuring that its law and practice are in compliance with the Convention.

The Committee takes note of the information provided by the Government to the Conference Committee in June 2016 as to the outcome of the judicial proceedings concerning matters raised in the observations of the World Federation of Trade Unions (WFTU) and the National Union of Bank Employees (NUBE) of 2014. The Committee further notes the information provided by the Government to the Conference Committee on the observations of the ITUC and the Malaysian Trades Union Congress (MTUC) of 2015, including the Government’s indication, as to allegations of anti-union discrimination and interference, that out of eight complaints raised by the MTUC, three had been resolved and five were pending before the Industrial Court or the relevant authority, and that the Government would submit detailed comments in writing. The Committee requests the Government to provide such comments concerning these allegations.

With regard to the holistic review announced by the Government on the main labour laws (including the Employment Act, 1955, the Trade Unions Act, 1959 and the IRA), the Committee welcomes the Government’s indication that it is in the process of drafting amendments with the technical assistance of the Office to ensure conformity with the Convention. The Committee trusts that, with the technical assistance of the Office, the Government will take into account the following comments to ensure the full conformity of these Acts with the Convention and it requests the Government to provide information on any developments in this regard.

Article 1 of the Convention. Adequate protection against anti-union discrimination. The Committee notes that the Government informs that in the period from 2013 to 2015 the Department of Industrial Relations enforced the laws protecting against anti-union discrimination in 51 cases: 48 cases pertaining to section 8 of the IRA and three cases pertaining to section 59 of the IRA. In this respect, the Committee observes that two different kinds of protection against anti-union discrimination are indeed set out in the IRA. Firstly, section 5 of the IRA broadly prohibits anti-union discrimination in relation to both union membership and participation in union activities, including at the recruitment stage. Under section 8 of the IRA, such prohibition is enforced through general remedies: in case of dismissal, the general dismissal procedures provided in the law, and otherwise the intervention of the Director-General for Industrial Relations to seek a resolution and, failing that, the Labour Court, which “may make such award as may be deemed necessary and appropriate”.

Secondly, section 59 of the IRA singles out certain anti-union discrimination acts as offences (namely, the dismissal or other prejudicial treatment by reason of becoming a member or an officer of a trade union or the undertaking of certain activities by trade unionists). The commission of offences under section 59 is punished with imprisonment for a term not exceeding one year or a fine not exceeding 2,000 Malaysian ringgit (MYR) (approximately US$479) or both, as well as payment of lost wages and “where appropriate direct the employer to reinstate the workman”. From the information provided by the Government, the Committee observes that in the past years the vast majority of reported anti-union discrimination cases were addressed through the protection procedure set out in sections 5 and 8 of the IRA (neither providing for specific sanctions, nor acknowledging explicitly the possibility of reinstatement) and that in less than 6 per cent of reported cases use was made of the procedure concerning anti-union discrimination offences set out in section 59 of the IRA (explicitly providing for penal sanctions and the possibility of reinstatement). Recalling that, under the Convention, all acts of anti-union discrimination should be adequately prevented through the imposition of dissuasive sanctions and adequate compensation, the Committee requests the Government to provide further detailed information as to: (i) the sanctions and compensations effectively imposed to anti-union discrimination acts, especially in those cases where anti-union discrimination acts were dealt with through sections 5 and 8 of the IRA; and (ii) the factors explaining the limited use of section 59 of the IRA which sets specific sanctions for anti-union discrimination acts.

Articles 2 and 4. Trade union recognition for purposes of collective bargaining. 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; (ii) the competency check is undertaken through a secret ballot to ascertain the percentage of the work people or class of work people, in respect of whom recognition is being sought, who are members of the trade union making the claim; and (iii) 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 notes that the Government informed the Conference Committee that the main criterion for recognition is the majority support (50 per cent plus one) from employees through secret ballot. The Committee also takes note of the concerns raised by Worker members at the Conference Committee, and by the MTUC in its 2015 observation, that the DGIR uses the total number of workers on the date that the union requested recognition rather than those at the ballot, which given the length of the procedure may impede the recognition of a union enjoying a majority support, and that in certain instances more than 50 per cent of the workforce, being migrant, had repatriated to their home country but were considered as counting against the union for the purposes of the secret ballot. The Committee further notes the concern raised by the ITUC that the secret ballot procedure does not provide protection to prevent interference from the employer. The Committee finally notes that the Government indicates in its latest report that a holistic review of the recognition procedure will be carried out in its next legislative review exercise. The Committee observes that the recognition procedure should seek to assess the representativeness existing at the time the ballot vote takes place (this would not be the case if, for example, the quorum is set in relation to the workforce that existed at a much earlier date, after which there may have been important fluctuations in the number of employees in the bargaining unit), and that the process should provide safeguards to prevent acts of interference. Moreover, the Committee considers that, to promote the development and utilization of collective bargaining, if no union reaches the majority required to be declared the exclusive bargaining agent, minority unions should be able to group together to attain such majority or at least be given the possibility to bargain collectively on behalf of their own members. The Committee requests the Government, in consultation with the social partners and in the context of the review of the recognition process, to ensure that the process provides safeguards to prevent acts of interference, and that if no union reaches the required majority to be declared the exclusive bargaining agent, minority unions may be able to group together to attain such majority or at least be given the possibility to bargain collectively on behalf of their own members.

Duration of proceedings for the recognition of a trade union. In its previous report the Government had indicated that the average duration of the recognition process was: (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 which do not involve judicial review. The Committee had considered that the duration of proceedings could still be excessively long. In its information provided to the Conference Committee the Government noted that the length of the process varies, depends on the cooperation of the parties and may be subject to judicial review. Not having received any indication from the Government as to measures carried out or planned in this regard, the Committee again requests the Government to, in consultation with the social partners and in the context of the abovementioned review exercise, take any necessary measures to further reduce the length of proceedings for the recognition of trade unions.

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 the Government’s statement that current laws do not prohibit foreign workers from becoming trade union members and welcomes its indication that a legislative amendment will be introduced to enable non-citizens to run for election for union office if they have been legally residing in the country for at least three years. The Committee finally notes the concerns raised by the Worker members at the Conference Committee that migrant workers faced a number of practical obstacles to collective bargaining, including the typical two-year duration of their contracts, their vulnerability to anti-union discrimination and a recent judicial decision in the paper industry ruling that migrant workers under fixed-term contracts could not benefit from the conditions agreed in collective agreements. Recalling the Conference Committee’s request to ensure that migrant workers are able to engage in collective bargaining in practice, the Committee requests the Government to take any measures to ensure that the promotion of the full development and utilization of collective bargaining under the Convention is fully enjoyed by migrant workers, and to provide information on any development in this respect.

Scope of collective bargaining. The Committee had previously urged the Government to amend 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”) and to initiate tripartite discussions for the preparation, on a voluntary basis, of guidelines for collective bargaining. The Committee welcomes the Government’s indication that section 13(3) will be amended to remove its broad restrictions on the scope of collective bargaining. The Committee requests the Government to provide information on any development in this respect.

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 noted the Government’s indication in previous reports 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 that the Government indicates once again that, through the National Joint Council and the Departmental Joint Council, representatives of public employees have other platforms to hold discussions and consultations with the Government, on matters including terms and condition of service, training, remuneration, promotions and benefits. The Committee, while recognizing the singularity of the public service which allows special modalities, must again reiterate that it considers that simple consultations with unions of public servants not engaged in the administration of the State do not meet the requirements of Article 4 of the Convention. 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, and recalls that the Government may avail itself of the technical assistance of the Office.

Application of the Convention in practice. The Committee notes that the Worker members of the Conference Committee raised concerns over the low percentage of workers covered by collective agreements in the country (according to Worker members, 1 to 2 per cent despite the unionization rate of almost 10 per cent). The Committee requests the Government to provide information concerning the number of collective agreements concluded, specifying the sectors, the level of bargaining and the number of workers covered, as well as on any additional measures undertaken to promote the full development and utilization of collective bargaining under the Convention.