Observation (CEACR) - adopted 2021, published 110th ILC session (2022)

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

The Committee notes the observations of the Malaysian Trades Union Congress (MTUC), received on 30 August 2019, denouncing violations of the Convention in practice, including numerous instances of anti-union discrimination, employer interference and violations of the right to collective bargaining in a number of enterprises. The Committee further notes that specific violations of the Convention in practice were also previously denounced in the 2016, 2017 and 2018 observations of the International Trade Union Confederation (ITUC) and the 2015 MTUC observations and regrets that the Government has not yet provided its reply to these concerns. The Committee requests the Government to take the necessary measures to address all of the above allegations, in particular to ensure that allegations of anti-union discrimination and interference are rapidly investigated, that effective remedies are ordered and that sufficiently dissuasive sanctions are imposed on the perpetrators. The Committee trusts that the Government will be in a position to provide detailed information in this regard.

Ongoing legislative reform. The Committee previously noted that a holistic review of the main labour laws (including the Employment Act, 1955, the Trade Union Act, 1959 and the Industrial Relations Act, 1967 (IRA)) was ongoing in the country. The Committee welcomes the Government’s indication that it has been working closely with the Office in the labour law review and that the IRA has been amended through the Industrial Relations (Amendment) Act, 2020, with effect from January 2021. The Committee will address the amendments to the IRA in more detail below. It further notes the Government’s statement that the Employment Act and the Trade Union Act are currently undergoing the due processes to be amended and tabled at the Parliament. The Committee trusts that the Government’s continued cooperation with the Office will facilitate the review of the Employment Act and the Trade Union Act and contribute to achieving full conformity of these laws with the Convention. The Committee requests the Government to provide information on any developments in this regard.

Article 1 of the Convention. Adequate protection against anti-union discrimination. Effective remedies and sufficiently dissuasive sanctions. In its previous comment, the Committee requested the Government to provide detailed information on the general remedies effectively imposed for acts of anti-union discrimination dealt with through sections 5 and 8 of the IRA (referral of a complaint to the Director-General or to the Industrial Court and used in the vast majority of reported anti-union discrimination cases), as well as the sanctions and measures of compensation in relation to anti-union discrimination acts under section 59 of the IRA (a process before a criminal court with a higher standard of proof (beyond reasonable doubt), explicitly providing for penal sanctions and the possibility of reinstatement, but only used in less than 6 per cent of reported cases). In light of that information, the Committee requested the Government to take any necessary measures to ensure that the rules and procedures relating to anti-union discrimination afford adequate protection, without placing on victims a burden of proof that constitutes a major obstacle to establishing liability and ensuring an appropriate remedy.

The Committee notes that, with a view to expediting the procedure with respect to anti-union discrimination, the Government indicates that under section 8 as amended, the Director-General of Industrial Relations may take any steps or make enquires to resolve the matter and if not solved, may, if he/she thinks fit, refer the matter directly to the Industrial Court without having to first refer the matter to the Minister. The Committee observes however that the Director-General would appear to retain certain discretion in this regard and it is not evident on what basis the decision not to refer a case would be made. As regards effective remedies for anti-union discrimination, the Committee notes the Government’s indication that the amendments to section 30(6A) of the IRA allow the Industrial Court to have at its disposal a full range of remedies to be awarded to a worker dismissed for anti-union reasons. In this respect, the Committee further observes with interest that: (i) section 33B of the IRA, as amended, stipulates that an award of the Industrial Court for reinstatement or reemployment of a worker may not be subject to a stay of proceedings by any court; and (ii) pursuant to new section 33C, a worker dissatisfied with an award of the Industrial Court may appeal to the High Court within 14 days of receiving the award, suggesting that the Industrial Court’s decision will be subject to appeal on facts and law. While welcoming these amendments, the Committee observes that the Government does not provide information on the remedies imposed in practice for acts of anti-union discrimination dealt with through section 8 of the IRA, nor on the sanctions and measures of compensation awarded in practice for anti-union discrimination acts under section 59 of the IRA. The Committee therefore requests the Government once again to: (i) provide detailed information on the general remedies imposed in practice for acts of anti-union discrimination dealt with through sections 5, 8 and 20 of the IRA, whether by the Director-General or the Industrial Court, especially in view of the above amendments to the relevant provisions, as well as on the sanctions and measures of compensation awarded in practice in relation to anti-union discrimination acts under section 59 of the IRA; (ii) in light of this information, to take any necessary measures to ensure that workers who are victims of anti-union discrimination can lodge a complaint directly before the courts in order to access expeditiously adequate compensation and the imposition of sufficiently dissuasive sanctions and recalls its recommendation to consider reversal of the burden of proof once a prima facie case is made; and (iii) to provide information on the average duration of the proceedings under section 8 of the IRA, in view of the amendments to expedite the process, as well as on the number of cases in which the complaint was resolved by the Director-General, as opposed to instances referred to the Industrial Court.

Articles 2 and 4. Trade union recognition for purposes of collective bargaining. Criteria and procedure for recognition. Exclusive bargaining agent. The Committee recalls that under section 9 of the IRA, when an employer rejects a union’s claim for voluntary recognition for the purpose of collective bargaining, the union has to inform the Director-General who should take appropriate action, including a competency check through a secret ballot, to ascertain whether the union has secured the required ballot (50 per cent plus one) of the workers or class of workers, in respect of whom recognition is being sought. Having observed the concerns raised by the MTUC and the ITUC in this regard (the use of the total number of workers on the date of the request and not at the time of the ballot, leading to large discrepancies, as well as the lack of protection against employer interference in the secret ballot procedure), the Committee requested the Government to take the necessary steps to ensure that the recognition 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 trade unions should be able to negotiate, jointly or separately, at least on behalf of their own members.

The Committee notes the Government’s indication that: (i) the recognition process was reviewed, in consultation with the social partners, and is, in the Government’s view, adequate; (ii) concerns pertaining to the formula currently used for the secret ballot have been acknowledged and will be reviewed subject to consultations and views from stakeholders through the National Labour Advisory Council; (iii) a simple majority is a minimum requirement which will be maintained in order for a trade union to become exclusive bargaining agent and the social partners agree with it; and (iv) the Government continuously takes the necessary steps to ensure that the recognition process provides safeguards to prevent acts of interference and the parties may lodge a complaint in case of interference under section 8 and 18 of the IRA. The Committee observes in this regard that the main amendments to section 9 relate to expediting the process, addressed in more detail below, and to clarifying that, in case of refusal to grant recognition by the employer: (i) the Director-General shall ascertain the scope of membership of the trade union on the date of the claim, whether it is in accordance with the union’s constitution (instead of ascertaining the competence of the trade union to represent the workers concerned, as previously stipulated by the IRA); and (ii) by way of secret ballot, the Director-General, shall ascertain the percentage of workers, in respect of whom recognition is being sought, who indicate support for the trade union making the claim (instead of ascertaining the percentage of workers who are members of the trade union making the claim, as previously stipulated). While taking due note of the above, the Committee observes that the Government does not provide details as to the steps it indicates it is taking to ensure safeguards against employer interference during the recognition process and understands from the Government’s report that the formula used in the secret ballot by the Director-General to ascertain the percentage of workers who support the union, in case of employer’s refusal to grant recognition (denounced by the MTUC and the ITUC), needs to be further reviewed. It observes that the Committee on Freedom of Association also examined allegations of employers’ refusal to recognize trade unions as collective bargaining agents and the weaknesses of the existing secret ballot process and referred the legislative aspect of the case to this Committee (see Case No. 3334, 391st Report, October 2019, paragraphs 374 and 382 and 393rd Report, March 2021, paragraphs 28 and 31). The Committee wishes to recall in this regard that the recognition procedure should seek to assess the representativeness existing at the time the ballot vote takes place to take into consideration the actual size of the workforce in the bargaining unit and that the process should provide safeguards to prevent acts of employer interference. In line with the above, the Committee trusts that any further necessary amendments will be made to the secret ballot process, in consultation with the social partners, so as to effectively address the concerns raised by the trade unions in this respect, and to ensure that the recognition process as a whole, regarding both the initial employer response and the verification procedure with the Director-General, provides safeguards to prevent acts of employer interference. The Committee trusts that the amendments already made to the recognition process will contribute to these efforts and requests the Government to indicate their effect in practice. The Committee further requests the Government to provide additional details on the steps the Government indicates it is taking to ensure sufficient safeguards against employer interference in the recognition process.

The Committee further observes, in relation to the recognition procedure and the right to collective bargaining, that additional amendments were made to the IRA, but are not yet in force, adding new section 12A relating to exclusive bargaining rights. The Committee understands that this provision was introduced to govern situations where more than one trade union obtains recognition for the purpose of collective bargaining and provides for a procedure to determine which trade union will benefit from the exclusive bargaining rights to represent the workers (agreement among the unions or determination by the Director-General, including through a secret ballot based on the highest number of votes). Noting in this regard the Government’s general indication that simple majority is a requirement for a trade union to become an exclusive bargaining agent but observing that the law does not make reference to this threshold, the Committee requests the Government to specify the manner in which collective bargaining rights are granted and exercised when no trade union has reached the 50 per cent requirement once section 12A comes into force and to provide information on its application in practice. In this regard, the Committee also requests the Government to indicate whether in situations where no union is declared the exclusive bargaining agent, collective bargaining can be exercised, jointly or separately, by all unions in the unit, at least on behalf of their own members.

Duration of recognition proceedings. In its previous comment, the Committee requested the Government to provide additional information on the administrative and legal actions undertaken by the Department of Industrial Relations to expedite the recognition process and to take any necessary measures to further reduce the length of proceedings. The Committee notes the Government’s indication that the amendments to the IRA confer the powers to determine the matters related to the recognition of trade unions previously vested in the Minister of Human Resources to the Director-General of Industrial Relations, thus expediting the dispute resolution processes relating to claims for recognition by trade unions. Welcoming these amendments, the Committee requests the Government to indicate the effect they have on the recognition procedure, in particular to indicate the average duration of the process, both for voluntary recognition and for instances where recognition is determined by the Director-General. Further observing that section 9(6) of the IRA providing for the final nature of the decision on recognition by the Director-General has been deleted, the Committee requests the Government to indicate whether such decision may now be appealed by the concerned union or the employer.

Migrant workers. In its previous comment, the Committee welcomed the Government’s statement that current laws do not prohibit foreign workers from becoming trade union members but observed that the Government did not provide any information on the announced legislative amendment 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 or in response to a series of concerns that had been previously noted by the Committee. The Committee regrets that the Government’s report is limited to reiterating that foreign workers are eligible to becoming members of a trade union and to hold trade union office upon approval of the Minister, if it is in the interest of such union (a condition which, in the Committee’s views, hinders the right of trade union organizations to freely choose their representatives for collective bargaining purposes) and does not elaborate on any of the concerns previously raised on limitations on collective bargaining of migrant workers in practice. The amendments to the IRA also do not seem to address these issues. The Committee therefore reiterates its request to the Government to take the necessary measures to ensure the full utilization of collective bargaining by migrant workers, including as to enabling foreign workers to run for trade union office, and to provide information on any developments in this regard, whether legislative or other.

Scope of collective bargaining. In its previous comment, the Committee expressed firm hope that section 13(3) of the IRA would be amended in the near future to remove its broad restrictions on the scope of collective bargaining (restrictions with regard to transfer, dismissal and reinstatement, some of the matters known as “internal management prerogatives”). The Committee notes the Government’s indication that while section 13(3) was retained during the labour law reform, so as to maintain industrial harmony and speed up the collective bargaining process, the provision is not obligatory in that, if both parties agree, they may negotiate the subject matters stipulated therein. The Government adds that additional amendments were introduced to section 13(3) of the IRA, allowing trade unions to raise questions of a general character relating to transfers, termination of services due to redundancy, dismissal, reinstatement and assignment or allocation of work. While welcoming these amendments, the Committee considers that it remains unclear how the possibility to raise questions of a general character on matters that are within the scope of legislative restrictions on collective bargaining would be articulated in practice. The Committee therefore requests the Government to indicate the practical implications of the amendment of section 13(3) of the IRA on the scope of collective bargaining, in particular to clarify the meaning of the new wording – questions of a general character. While further noting the Government’s indication that the parties may, if they agree, negotiate the matters prohibited by section 13(3) of the IRA, the Committee invites the Government to consider lifting the broad legislative restrictions on the scope of collective bargaining, so as to promote the right to bargain freely between the parties, without any intervention by the Government.

Compulsory arbitration. In its previous comment, the Committee 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 and expressed hope that the Government would take any necessary 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 the Government’s statement that amendments have been made to section 26(2) of the IRA, enabling trade unions to engage freely and voluntarily in collective bargaining, except in certain situations, but that this provision is not yet enforced. The Committee observes, in particular, that pursuant to the new wording of section 26(2) of the IRA, the Minister may of his/her own motion refer any trade dispute to the court if satisfied that it is expedient to do so provided that where the trade dispute relates to a refusal to commence collective bargaining or a deadlock in collective bargaining, reference to the court shall not be made without the consent in writing of the parties, unless: (a) the trade dispute relates to the first collective agreement; (b) the trade dispute refers to any essential services specified in the First Schedule; (c) the trade dispute would result in acute crisis if not resolved expeditiously; or (d) the parties to the trade dispute are not acting in good faith to resolve the trade dispute expeditiously. The Committee notes with interest that the amendments made restrict compulsory arbitration to instances generally compatible with the Convention, except to the extent that the reference in section 26(2) to “any Government service” and “the service of any statutory authority”, as well as the reference to a number of Government services in point 8 of the First Schedule, may go beyond what can be considered as public servants engaged in the administration of the State, and point 10 of the First Schedule, which considers as essential services businesses and industries connected with the defence and security of the country (while the armed forces may be exempt from the provisions of the Convention, businesses and industries connected with them should be afforded the full guarantees of the Convention). In line with the above, the Committee trusts that these amendments will enter into force without delay and invites the Government to continue to engage with the social partners with a view to: (i) further delimiting the categories of Government services in section 26(2) and point 8 of the First Schedule, so as to ensure that compulsory arbitration may only be imposed on those public servants engaged in the administration of the State; and (ii) removing businesses and industries mentioned in point 10 of the First Schedule from its the scope of application.

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 working conditions and emphasized that simple consultations with unions of public servants not engaged in the administration of the State did not meet the requirements of Article 4 of the Convention. The Committee notes that the Government, on the one hand, asserts that it has taken the necessary measures to ensure that public officers are given fair opportunities to collectively bargain over wages and remuneration and other working conditions, in conformity with Article 4 of the Convention, subject to the applicable laws and regulations governing the employment of civil servants, and on the other hand, reiterates that collective bargaining is done through the National Joint Council and the Departmental Joint Council, as stipulated in Service Circular No. 6/2020 and Service Circular No. 7/2020, or through direct engagement with the Government. While taking due note of the above, the Committee observes that the Government does not provide any details as to the content of the Circulars or the measures it indicates it has taken to ensure that public officers are given fair opportunities to collectively bargain, that section 52 of the IRA explicitly excludes workers employed by the Government or any statutory authority from the collective bargaining machinery of the Act and that it, therefore, remains unclear what precise substantial changes were made to the existing regime of collective bargaining in the public sector. In line with the above, the Committee requests the Government to provide further information in this respect, in particular to: (i) indicate the concrete changes made to the existing regime of collective bargaining in the public sector; (ii) to specify the content of Service Circular No. 6/2020 and Service Circular No. 7/2020 or any other applicable legal provisions, which, according to the Government, ensure that public servants can bargain collectively in conformity with Article 4 of the Convention; and (iii) provide information on collective bargaining undertaken in the public sector and any agreements concluded.

Collective bargaining in practice. In its previous comment, the Committee requested the Government to provide statistical information in relation to collective bargaining in the country. The Committee notes that the Government refers to statistical information by the Industrial Court but observes that no such information has been provided. It further notes that the Government points to additional measures taken to promote the full development and utilization of collective bargaining under the Convention, including engagement sessions with the social partners during the process of legislative amendments and industrial visits conducted to workplaces to promote industrial harmony. The Committee notes, however, the concerns expressed by the MTUC as to the low percentage of workers covered by collective agreements (1 to 2 per cent) and the declining level of trade union density (6 per cent). The Committee encourages the Government to continue to provide statistical information on the number of collective agreements concluded and in force, the sectors concerned and the number of workers covered by these agreements, as well as on any additional measures undertaken to promote the full development and utilization of collective bargaining under the Convention.

The Committee is raising other matters in a request addressed directly to the Government.