Report in which the committee requests to be kept informed of development - Report No 211, November 1981

Case No 965 (Malaysia) - Complaint date: 08-MAY-80 - Closed

1. 177. The complaint of the Malaysian Trades Union Congress (MTUC) is contained in a letter dated 8 May 1980. The Government replied in a letter dated 28 September 1981.
2. 178. Malaysia has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87); it has ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant's allegations

1. 179. The complainant alleges that amendments to the Trade Unions ordinance, 1959, and to the Industrial Relations Act, 1967, passed in May 1980 contain prohibitive and oppressive anti-union provisions which erode the basic rights of workers, restrict union activities and result in government and employer interference in the internal administration of trade unions.
2. 180. The MTUC refers in particular to the following sections of the new trade union legislation: section 27(2)(f) and (3)(aa) which provides that public officers and any person employed by a statutory authority holding any post in the managerial or professional group or engaged in a confidential or security capacity shall not join or be a member of any trade union; section 2(1) which defines a strike widely to include the word "reduction" in execution of employment and section 40(6) which provides that the Registrar, if satisfied that a strike or lockout would contravene the Trade Unions ordinance or any other law, may direct the trade union or employer not to commerce the proposed strike or lockout and, in this connection, new section 43 of the Industrial Relations Act which prohibits strikes in essential services which, according to the complainant, now include private sector industries such as barking; section 18 which allows the Minister of Labour to suspend any trade union, subject only to the agreement of the Minister responsible for internal security, for a period not exceeding six months if in his opinion the union is being used for purposes prejudicial to or incompatible with the interests of Malaysian security or public order (during suspension the certificate of registration of the union shall cease to have effect, it shall be prohibited from carrying out its normal activities and its funds shall be frozen), there is no appeal and non-compliance shall be punished by a fine not exceeding $3,000 or three years' imprisonment or both; section 52 which prohibits the use of trade union funds for promoting political objects which are broadly defined; section 28(2) which allows the Registrar at his discretion to disqualify a member of a trade union or federation executive from holding office; section 64 which empowers the Registrar to enter trade union premises and, where he has reasonable grounds for believing that an offence under the Trade Unions ordinance has been committed and after obtaining a search warrant from a magistrate, search and seize any document or article for use in prosecution proceedings; and section 76A(1)(b) which provides that no trade union shall affiliate with any consultative or similar body whether established within or outside Malaysia except with the prior permission of the Registrar.
3. 181. With regard to changes to the Industrial Relations Act, the MTUC complains of section 2A which makes the office of Director General of Industrial Relations a political appointment rather than a career civil service one; section 8A of the Act which provides that an employer may convey directly to his workmen in such manner as he may deem appropriate any information pertaining to any collective bargaining or trade dispute concerning them (according to the complainant, this would create misunderstanding between union members and officials); section 40(1) and (2) which restricts workers not directly involved in the trade dispute and elected union officers from participating directly in picketing (according to the complainant, this would remove leadership during pickets); section 52 of the Act which denies to workmen in the employ of a statutory authority the provisions of the Act relating to protection of rights of workmen and employers and their trade unions (Part II), recognition and scope of representation (Part III), collective bargaining (Part IV), conciliation (Part V) and representation on dismissal (Part VI).
4. 182. In addition, the complainant states that the draft amendments were only sent to it by the Government on 29 January 1980 for discussion in the tripartite National Joint Labour Advisory Council on 4 February. The complainant's protest to defer the meeting to a later date to enable it to study fully the proposed amendments was ignored. At the meeting, the Government granted the MTUC a month in which to study the proposals and to submit observations thereon; this the MTUC did within two weeks, but its counterproposals were not tabled or discussed during the adoption of the amendments. According to the complainant, it and its affiliates made every endeavour to persuade the Government to defer adoption of the amendments to enable further discussion between all the parties concerned and to this end a memorandum was submitted to the Prime Minister on 27 March 1980. Nevertheless, the bills were passed without taking into account the unions, objections.

B. The Government's reply

1. 183. In its letter of 28 September 1981, the Government states that workers in Malaysia enjoy the right to organise and engage in collective bargaining consistent with the provisions of Convention No. 98, ratified by Malaysia, and that the requirements of the Trade Unions Ordinance for trade unions to be structured along lines of particular or similar industries, trades or occupations do not contravene this Convention. It claims that these requirements have helped the orderly growth of trade unions and development of collective bargaining as is substantiated by statistics, e.g. in 1969 there were 337 trade unions covering 314,758 members which concluded 58 agreements that year; in 1975 there were 350 trade unions covering 455,796 members which concluded 137 agreements that year; in 1980 there were 392 trade unions covering 547,677 members which concluded 280 collective agreements that year. According to the Government, the 1980 amendments to section 27 of the ordinance merely added those engaged in a confidential or security capacity and those who hold posts in the managerial or professional groups to the police, armed forces and prisons service which are excluded from taking part in trade union activities; it states that through administrative action in June 1981, the scope of the managerial or professional category has been considerably relaxed. According to the Government, this amendment reflects the recognition that there can be a conflict of interests if certain high-level policy-making personnel in the public sector are allowed to take part in trade union activities.
2. 184. As regards the amended definition of "strike", the Government states that this does not introduce any substantial change, but provides greater clarity to the definition.
3. 185. As regards the new provision allowing suspension of trade unions, the Government stresses that it does not obliterate the existence of a union, but only places a temporary (not exceeding six months) "freeze" on its activities and that the order of suspension may, at any time, be varied or revoked by the Minister. The Government considers this provision essential for the maintenance of law and order in the light of past experience.
4. 186. Regarding amended section 52, the Government states that trade union funds can only be expended on objects specified in the ordinance and that the amendment merely clarifies what political objects are; it stresses that it does not in any way restrict a member of a trade union from taking part in politics in his individual capacity.
5. 187. As for the new powers to remove elected trade union officials from office, the Government claims that the amendment does not confer on the Registrar the power to remove from office any person who qualifies and is duly elected to the executive, but is aimed at persons who are elected despite being disqualified from holding such positions under the ordinance.
6. 188. As regards amended section 64, the Government points out that the powers of entry and search of trade union premises are subject to the existence of reasonable grounds for believing that an offence has been committed and the obtaining of a search warrant, duly issued by a magistrate.
7. 189. Concerning the prohibition on formation of or affiliation with consultative or similar bodies, the Government states that the provisions concerning affiliation to international bodies have always been in the ordinance and the amendment merely sets out in detail the procedural matters concerning such affiliation and provides the Registrar with powers to withdraw his permission in respect of such affiliation should the union concerned fail to comply with the ordinance. It points out that the Registrar's decision can be appealed to the Minister of Labour and Manpower.
8. 190. As regards the amendments to the Industrial Relations Act, 1967, the Government states that the position of Director General of Industrial Relations is a designated position within the public service and denies that it is a political appointment.
9. 191. Concerning the right of employers to provide certain information to the workmen, it claims that in recent years workers have complained of the lack of information from trade union officials, which omission or failure has led to undue protraction of collective bargaining resulting in disputes which would not otherwise have occurred. According to the Government, where employers attempted to keep their employees informed of the situation, they were accused by the union officials of engaging in unfair labour practices so the amendment now legitimises this action. It stresses that the provision is not intended to undermine trade union functions and that no employer would want to disseminate wrong information.
10. 192. The Government then states that the amendment concerning restriction of participation in picketing does not introduce any substantial change apart from rendering the provision more explicit and introducing an element of flexibility by allowing an officer or employee of the relevant union, who may not be a workman involved in the trade dispute with which the picketing is involved, to be present to maintain order and respect of the law. According to the Government, the redesignation of "public utility services" as "essential services" in section 43 was due to difficulty of interpretation and past confusion and there is no prohibition of strikes in the essential services if the relevant legal conditions are complied with. It points out that banking services" are included in this category as they are another service on which the nation's economic life is dependent.
11. 193. Lastly, the Government states that Parts II, III, IV, V and VI of the Act do not apply to government employees as their terms and conditions of employment are determined by the Government; employees of statutory bodies and local authorities have also been excluded from these parts of the Act to harmonise the conditions of the public sector as a whole and to raise the position of these employees to the level of public service employees, not in any way as a discriminatory move as is alleged by the complainant.
12. 194. The Government adds that notwithstanding the complainant's posture as regards the 1960 amendments to the labour legislation, individual unions have generally accepted the rationale behind them. It supplies a copy of the Second Reading Speech of the two amendment Acts made by the minister of Labour and Manpower, in which he states that the amendments were discussed in the National Joint Labour Advisory Council at Committee level in 11 separate meetings with workers and employers, in two full sessions of the council itself and in a meeting with the Prime Minister. The Minister stresses that there was no undue haste in amending the labour legislation and that many suggestions are reflected in the amendments.

C. The conclusions of the Committee

1. 195. The Committee notes that this case concerns amendments to the two principal pieces of labour legislation, alleged by the complainant to be serious violations of the workers' fundamental rights adopted without proper consultation, but upheld by the Government as having been widely discussed and not endangering trade union rights.
2. 196. As regards firstly the allegations relating to the Trade Onions (Amendment) Act which amends the 1959 Ordinance, concerning section 18 (minister's discretion to suspend a trade union, subject to the agreement of the minister responsible for internal security, for no longer than six months for security and public order reasons) the Committee notes the Government's reply that this was essential for the maintenance of law and order in the light of past experience. It however would recall that it has emphasised in the past the importance of the generally accepted principle that employers' and workers' organisations should not be subject to suspension or dissolution by administrative authority, and that where suspension measures are issued by administrative authority, there may be danger that they will appear to be arbitrary even though they are issued only temporarily or for a limited time.
3. 197. Concerning section 27 (public officers in the managerial or professional group denied the right to associate), the Committee notes the Government's statement that this avoids a conflict of interests situation and that recent administrative action has considerably relaxed the scope of the managerial and professional staff who are prohibited to join trade unions. Nevertheless, it would stress the fundamental importance of the right to organise and that it should be guaranteed without distinction of any kind, not only to workers in the private sector of the economy but also to civil servants and employees of public services in generally The definition of personnel which may be excluded from labour unions should be restrictive and cover only those persons who genuinely represent the interests of the State as employer. The scope of managerial staff and the like should not be defined so widely as to weaken the organisations by depriving them of a substantial portion of their present or potential membership.
4. 198. As regards section 28(2) (Registrar's right to disqualify- any member of a trade union executive or federation for the reasons set out in section 28(1), i.e. he has not been engaged for at least three years in the occupation with which the union is connected; criminal conviction for breach of trust, extortion or intimidation or any offence which the Registrar considers renders him unfit for office; or, inter alia, bankruptcy), the Committee, whilst recognising that certain of these reasons could constitute valid grounds for disqualification, would recall that the Committee of Experts on the Application of Conventions and Recommendations has expressed the view that when provisions in national legislation provide that all trade union leaders shall belong to the occupation, in respect of which the organisation carries on its activities, the rights of workers' organisations to elect their representatives in full freedom may be impaired; a greater degree of flexibility could be introduced into the provisions by exempting from the occupational requirement a reasonable proportion of the officers of the organisation. In the present case, it appears to the Committee that the Registrar is given an unduly wide discretion to disqualify executive members. It would recall, as it has in the past in this connection, that the removal from office by an administrative authority of trade union leaders is a serious infringement of the free exercise of trade union rights, and that it is desirable for the authority to refrain from any interference in the performance by trade union leaders of union functions to which they have been freely elected by the members of the trade unions. Furthermore, in the Committee's opinion, it is of paramount importance that measures for the suspension or disqualification of trade union officials should not become enforceable except on the basis of a firm sentence on the part of the competent judicial authority, or, in any case, after the period allowed for the submission of an appeal has elapsed without such an appeal having been made.
5. 199. As concerns section 40 (Registrar's right to direct a trade union not to commence a proposed strike if it would contravene the ordinance or any other written law), the Committee must point out that this section, aimed at controlling the legality of strikes and lockouts, could have the effect of severely limiting the right to strike, particularly so when read in conjunction with new section 43 of the Industrial Relations Act which prohibits strikes in essential services which are listed in the Schedule to the Act as including banking, docking, postal services, fuel production, storage and distribution, radio-communication services, transport and water services. The Committee notes the Government's statement that there is no prohibition of strikes in essential services if the relevant legal provisions are complied with and that banking services are included in this category as the nation's economic life depends on them. However, the Committee has always considered that the right to strike is one of the essential means through which workers and their organisations may promote and defend their occupational interests. It has admitted that the right to strike could be restricted or even prohibited in the civil service or in essential services in the strict sense of the term, i.e. services whose interruption would endanger the existence or well being of the whole or part of the population. On this criterion, the Committee has been of the opinion that the hospital sector is an essential service; it has also stated that, for instance, banking, petroleum production, general dock work, aircraft repairs and transport services did not appear to be strictly essential in character. In addition, where strikes are prohibited or subject to restrictions, it is important to ensure adequate guarantees to safeguard to the full the interests of the workers so deprived of this means of defending their interests by providing adequate, impartial and speedy conciliation and arbitration proceedings in which the parties concerned can take part at every stage.
6. 200. With reference to section 52 (trade union funds not to be applied for political objects, which are defined as including (a) payment of candidacy expenses in parliamentary elections, (b) holding meetings or distributing literature in support of candidates, (c) maintenance of a parliamentary member, (d) registration of electors or selection of a candidate for membership of Parliament, (e) holding of political meetings and distribution of political documents of any kind, and (f) any object which the Minister may specify in the Gazette), the Committee notes the Government's explanation that this amendment does not restrict a member of a trade union from taking part in politics in his individual capacity. It would point out generally that freedom of association implies not only the right for workers and employers to form freely associations of their own choosing, but also the right for the industrial associations themselves to pursue lawful activities up defence of their occupational interests. More specifically, if trade unions are prohibited in general terms from engaging in any political activities, this may raise difficulties by reason of the fact that the interpretation given to the relevant provisions in practice may change at any moment and considerably restrict the possibility of action of the organisations; it would therefore seem that States should be able, without prohibiting in general terms political activities of occupational organisations, to entrust to the judicial authorities the task of redressing abuses which might, in certain cases, be committed by organisations, which had lost sight of the fact that their fundamental objective should be the economic and social advancement of their members. In the present case it appears to the Committee that certain of the restrictions imposed, such as those relating to the maintenance of a member of Parliament or payment of candidacy expenses, may be considered as reasonable. However, the prohibition of the use of trade union funds for the holding of political meetings or distribution of political documents of any kind, and the Minister's discretion to specify any object as being political, appear to the Committee to be too far reaching as well as susceptible of application in a manner that would be contrary to the principles of freedom of association.
7. 201. As regards section 64 (Registrar's right to enter trade union premises, and, after obtaining a search warrant from a magistrate, search and seize union property), the Committee would recall that, while recognising that trade unions like other associations or persons cannot claim immunity from a search of their premises, it has emphasised that such a search should only be made following the issue of a warrant by the ordinary judicial authority after that authority has been satisfied that reasonable grounds exist for supposing that evidence exists on the said premises material to a prosecution for an offence under the ordinary law and provided that the search is restricted to the purposes in respect of which the warrant was issued. In the present case, the provision does require the issue of a search warrant by the ordinary judicial authority "if he is satisfied upon written information by the Registrar that there is good reason to believe that an offence under this ordinance or any regulations has been committed, and that the office, premises or place to be specified in the search warrant is kept or used for the purposes of the trade union". It would therefore appear that, in this particular instance, the legislation is in conformity with the recognised principles of freedom of association.
8. 202. With reference to section 76A (prohibition, unless the Registrar so permits, on registered trade unions against the formation of or affiliation with consultative or similar bodies, whether established within or outside Malaysia), the Committee notes the Government's statement that the amendment merely sets out in detail the procedural matters concerning such affiliation and allows the Registrar to withdraw his permission already granted. It would recall the importance of the principle that no obstacle should be placed in the way of the affiliation of workers' organisations, in full freedom, with any international organisation of workers of their own choosing. In this respect, it has stated in the past that legislation which requires the obtaining of government permission for the international affiliation of a trade union is incompatible with the principle of free and voluntary affiliation of trade unions with international organisations. Moreover, the Committee considers that this provision restricts the right of workers and their organisations to organise their activities and to formulate their programmes, given that the setting up of such bodies is normally one of a union's legitimate activities in defence of the workers' occupational interests.
9. 203. Considering secondly the amendments to the Industrial Relations Act, the Committee notes that, according to the complainant, section 2A (appointment of Director General for Industrial Relations) introduces a political appointment, but that the Government specifically denies this. As the complainant does not explain, how this violates freedom of association, the Committee considers that this aspect of the case does not fall within its competence and does not call for further examination.
10. 204. As regards section 8A (employer may provide information on collective bargaining and trade dispute to his workmen), the Committee notes the complainant's fears that this could result in the dissemination of a distorted version of the facts, especially as the workers' unions are not given the reciprocal right (direct communication with the board of directors and shareholders) and that the Government denies that this would occur. In this respect, the Committee considers that the provision in question confers on the employer an entitlement that is wholly reasonable and that it therefore is not incompatible with the principles of freedom of association Nevertheless, the Committee is of the opinion that the employer should not use this right to undermine the position of the trade unions or the workers' representatives or to interfere in the union's right to represent the workers in the collective bargaining process.
11. 205. As concerns section 40(1) (restriction of picketing on employers and workmen not directly involved in the trade dispute), the Committee notes the Government's statement that uninvolved unionists may attend pickets to maintain order and respect of the law. In this connection, it would point out as it has in the past, that pickets acting in accordance with the law should not be subject to interference by the public authorities, but that it has considered legitimate a legal provision that prohibited pickets from disturbing public order and threatening workers who continue to work. In this case, the Committee considers that the restriction on participation in pickets applying as it does to an employer as well as to workers not directly involved in the dispute does not violate the principles of freedom of association. As concerns section 40(2) (supervisory role in pickets of trade union officers), the Committee notes the complainant's view that this would remove the leadership from the rank-and-file picketers. It appears to the Committee that this provision which authorises the presence of trade union officers at pickets organised by members of their union solely for the purpose of maintaining order and discipline is unduly restrictive and runs counter to the principle according to which trade unions should be able to formulate their programmes and organise their activities without interference from the public authorities.
12. 206. As regards section 52 (exclusion of government and statutory authority employees from the rights guaranteed under the Act), the Committee notes the Government's explanation that this results in a harmonisation of treatment of employees of the public sector as a whole and is not in any way discriminatory. However, it would recall that Convention No. 98, and in particular Article 4 thereof concerning the encouragement and promotion of collective bargaining, applies both to the private sector and to nationalised undertakings and public bodies, it being possible to exclude from such application only public servants engaged in the administration of the State, The Committee of Experts on the Application of Conventions and Recommendations has pointed out that, while the concept of public servant may vary to some degree under the various national legal systems, the exclusion from the scope of the Convention of persons employed by the State or in the public sector, who do not act as agents of the public authority (even though they may be granted a status identical with that of public officials engaged in the administration of the State) is contrary to the meaning of the Convention. The distinction to be drawn, according to the Committee, would appear to be basically between civil servants employed in various capacities in government ministries or comparable bodies on the one hand, and other persons employed by the government, by public undertakings or by independent public corporations. In the present case, it would appear that the provision in question is too broad in its scope and is therefore not in conformity with the Convention.
13. 207. In view of the various principles and considerations set out in the paragraphs above concerning sections 18, 27, 28, 40(6), 52(2)(e) and (f) and 76A of the Trade Unions ordinance and sections 40(2), 43 and 52 of the Industrial Relations Act, which run counter to the principles of freedom of association, the Committee would ask the Government to give serious consideration to amending these sections to bring the trade union legislation into conformity with these principles. It also considers that the attention of the Committee of Experts on the Application of Conventions and Recommendations should be drawn to those aspects of the new legislation which are incompatible with Convention No. 98, ratified by Malaysia.
14. 208. Finally, regarding the complainant's allegation that its opposition to the changes in the legislation was ignored both by the tripartite National Joint Labour Advisory Council and by the Prime Minister, the Committee notes that, according to the Government, consultations did take place or a number of occasions and that many suggestions are reflected in the amendments. In view of the conflicting statements in this regard the Committee would limit itself to recalling the terms of the Consultation (Industrial and National Levels) Recommendation, 1960, No. 113, according to which measures appropriate to national conditions should be taken to promote effective consultation and co-operation between public authorities and employers' and workers' organisations. Such consultation and co-operation should aim at joint consideration of matters of mutual concern with a view to arriving to the fullest possible extent at agreed solutions. It should also aim at ensuring that the competent public authorities seek the views, advice and assistance of employers' and workers' organisations in an appropriate manner in respect of such matters as the preparation and implementation of laws and regulations affecting their interest

The Committee's recommendations

1. 209. In these circumstances, the Committee recommends the Governing Body to approve the following conclusions:
   • As regards the allegations concerning section 64 of the Trade Unions Ordinance and sections 2A and 8A of the Industrial Relations Act, the Committee considers that these aspects of the case do not call for further examination.
   • The Committee would draw the attention of the Government to the principles and considerations set out in the preceding paragraphs concerning sections 18, 27, 28 40(6), 52(2)(e) and (f), and 76A of the Trade Unions Ordinance, and sections 40(2), 43 and 52 of the industrial Relations Act which run counter to the principles of freedom of association. It would ask the Government to give serious consideration to amending these sections to bring the trade union legislation into conformity with these principles.
   • The Committee would also draw the attention of the Committee of Experts on the Application of Conventions and Recommendations to these aspects of the new legislation which are incompatible with Convention No. 98, ratified by Malaysia.
   • The Committee requests the Government to inform it of any measures taken or envisaged to amend the above-mentioned provisions of the trade union legislation in accordance with the principles of freedom of association set out in the preceding paragraphs.