Observation (CEACR) - adopted 1997, published 86th ILC session (1998)

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

The Committee notes that the Government's report has not been received. It must therefore repeat its previous observation which read as follows:

1. Further to its previous comments, the Committee notes the Government's statement that it has formally approved the proposed repeal of section 15 of the Industrial Relations Act, which limits the scope of collective agreements for companies granted "pioneer status", and that positive measures are being taken to repeal this provision. The Committee requests the Government to send a copy of the repealing legislation as soon as it is adopted. 2. With reference to the Committee's previous comments on the scope of section 13(3) of the Industrial Relations Act, the Government once again indicates that the matters excluded by that provision from collective bargaining and known as internal management prerogatives (i.e. promotion, transfer, employment, termination, dismissal and reinstatement), are subject to negotiation, conciliation, arbitration and judicial decisions and can be raised at any time as and when they arise, as opposed to other matters covered in collective agreements that are negotiated at specific intervals. Moreover, in the Government's view, such matters cannot be predetermined in a collective agreement, as a predetermined agreement on such matters would ultimately affect the rights of management to manage. In addition, the Government emphasizes that the internal management prerogatives do not grant unfettered rights to employers, as demonstrated by numerous decisions of the Malaysian Courts as follows: (i) an employer can refuse to promote a worker only for proper cause and the trade union that represents the worker is free under the law to raise questions as to what is and what is not proper cause; (ii) the employers' prerogative of transfer is not unlimited. The Courts had ruled that there should be no unreasonableness or want of mala fide on the part of the employer; (iii) termination by way of retrenchment could not be carried out arbitrarily. The principle of "last in, first out" had to be applied; (iv) unjust dismissal could entitle the worker to reinstatement; (v) to provide that matters such as allocation of duties be covered by collective agreement, would be tantamount to asserting that it is not the management which is responsible for managing the enterprise, which is contrary to the commonly accepted practice worldwide. The Committee notes with interest that there is a degree of judicial protection as regards these internal management prerogatives which also appear to be subject to some level of bargaining in practice. The Committee therefore requests the Government to take the necessary steps to ensure that its legislation no longer excludes those management prerogatives which are not purely internal from collective bargaining, in conformity with the Convention as well as with national practice and judicial precedents. 3. In relation to the Committee's comments on certain restrictions on the right to bargain collectively for public servants other than those engaged in the administration of the State (section 52 of the Industrial Relations Act), the Government indicates that the Congress of Unions of Employees in the Public and Civil Services (CUEPACS), the officers of the Joint Councils and the Public Services Department meet on a regular basis to discuss issues affecting employees in the public service. Through these discussions, the public sector unions do contribute to the deliberations on remunerations, terms and conditions of employment and the resolution of anomalies arising therefrom. For instance, in the current claims for salary adjustments, CUEPACS has had meetings with the Prime Minister, and through these meetings, some understanding has been arrived at. The Government emphasizes that the National Joint Councils provide a sufficient avenue for discussion and negotiation on salary and terms and conditions of employment of public servants and that CUEPACS as a national centre for public servants, plays an important and responsible role in protecting the interests of public servants, including salary negotiation. The Committee takes note of this information and would request the Government to provide information on how collective bargaining is encouraged and promoted in practice between public employers and public servants other than those engaged in the administration of the State, for example, the number of collective agreements concluded, the different categories and numbers of employees covered, the number of public sector unions acting as bargaining agents, etc.

The Committee hopes that the Government will make every effort to take the necessary action in the very near future.