Observation (CEACR) - adopted 2008, published 98th ILC session (2009)

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

The Committee notes the comments submitted by the International Trade Union Confederation (ITUC) on 29 August 2008, according to which the Government in the National Labour Advisory Council (tripartite body) did not consult with the labour movement with regard to the tabling of the Industrial Relations (Amendment) Bill 2007 which restricts union rights in the process of recognition by the employer (i.e. the secret ballot of workers to be undertaken allows the employer to manipulate the size of the bargaining unit for the purpose of the election, etc.). The Committee notes that the Government refers to tripartite consultation concerning the Bill; thus, it requests the Government to submit detailed observations to permit it to examine the Bill’s conformity with the Convention and to provide a copy of the Bill once adopted.

The Committee notes the comments by the ITUC reiterating issues previously raised by the Committee regarding long delays in the treatment of union claims to obtain recognition for collective bargaining purposes. The Committee notes that, according to the 2006 Government report, the cause of the delay is mainly due to the time taken by legal proceedings lodged either by trade unions or an employer against the decision of the Director-General of Trade Unions (DGTU) on issues of competency or membership verifications. The Committee notes that, according to the Government, the Bill is shortening the timeframe for recognition of trade unions. The Committee requests the Government to submit more precise information on the ITUC’s comments in the light of the provisions of the Bill and to indicate the average duration of proceedings for the recognition of a union, as well as the requirements for obtaining recognition.

The Committee notes the Government’s statement about the comments previously made by the ITUC with regard to the inefficiency of labour courts concerning the application of the provisions of the Convention. The Government indicated that: (1) efforts are made to further increase the number of Industrial Court chairmen who will be assigned to deal with cases in designated areas; (2) recently implemented and computerized case management in the Court will help the Court President to monitor more closely cases in the courts; and (3) this process is supposed to expedite the issuance of awards. On this matter, the Committee notes the ITUC’s comments that the Government failed to apply any sanctions against employers who opposed the directives of the authorities granting trade union recognition or who have refused to comply with Industrial Court orders to reinstate unlawfully dismissed workers. The Committee requests the Government to submit its observations on these matters.

Restrictions on collective bargaining for certain categories of worker. The Committee had urged the Government to repeal section 15 of the Industrial Relations Act (IRA), which limited the scope of collective agreements for companies granted “pioneer status”, for instance with respect to election campaigns. The Committee notes with satisfaction the deletion of section 15 of the IRA due to the amendment of the aforementioned legislation.

The Committee notes that, according to the ITUC, 2.6 million migrant workers in Malaysia are prevented by law from organizing or applying to register a trade union and are barred from serving as officers of a trade union. The ITUC adds that the system for registering migrant workers discourages them from asserting their rights because it grants total discretion to employers to terminate workers for virtually any reason. The Committee notes that, according to the Government, foreign and local workers enjoy equal rights; migrant workers can join a union but cannot be elected as trade union officers. Recalling that workers, including migrant workers, should enjoy the right to elect their representatives freely, the Committee requests the Government to communicate its observations on the exercise of trade union rights by migrant workers in law and in practice.

Scope of collective bargaining. The Committee had previously urged the Government 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 Bill amends section 13 by inserting three subject matters in a proposal for a collective agreement (training to enhance skills and knowledge of the workmen; annual review of the wage system; and a performance-based remuneration system). The Committee notes that according to the Government: (1) section 13(3) of the IRA is not intended to limit collective bargaining, but rather to provide for the right of employers to run their business in the most efficient way and to protect from abuse of the collective bargaining process; (2) these requirements are not absolute and matters relating to them may be brought to the Industrial Relations Department and, if no settlement is reached, the matter may be referred to the Industrial Court for adjudication; and (3) in matters concerning transfers, parties are allowed to discuss the procedures for promotion of a general character. The Committee underlines that section 13 of the IRA restricts the scope of negotiable matters. The Committee reiterates therefore that measures taken unilaterally by the authorities to restrict the scope of negotiable issues are often incompatible with the Convention (see General Survey of 1994 on freedom of association and collective bargaining, paragraph 250) and once again requests the Government to amend section 13(3) of the IRA so as to remove these restrictions on collective bargaining matters. Furthermore, the Committee requests the Government to indicate whether there are any judicial decisions by the Industrial Court on this point and, if so, to transmit copies of the same in its next report.

Compulsory arbitration. The Committee notes that section 26(2) of the IRA allows compulsory arbitration, by the Minister of Labour of his own motion even in case of failure of collective bargaining. The Committee recalls that arbitration imposed by the authorities at the request of one party is generally contrary to the principle of the voluntary negotiation of collective agreements established in the Convention, and thus the autonomy of bargaining partners (see General Survey, op. cit., paragraph 257). Therefore, the Committee requests 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 had previously requested the Government to provide information on the possibility of collective bargaining under the auspices of the National Joint Council and the Departmental Joint Council.

The Committee notes that the Government states that: (1) it has its own forum, i.e. the National Joint Council and the Department Joint Council, to discuss grievances in the public sector and to consider any suggestions to improve terms and conditions of employment of public servants; (2) the outcomes of consultations pertaining to salaries and remuneration are subject to the decision of the Cabinet Committee on Establishment and Salaries of Employees in the Public Sector, and are to be tabled and legislated in Parliament; and (3) it maintains its position of not recognizing the right to collective bargaining of public servant unions not engaged in the administration of the State.

The Committee recalls that, while the principle of autonomy of the parties to collective bargaining is valid as regards public servants covered by the Convention, the special characteristics of the public service require some flexibility in its application. Thus, legislative provisions allowing Parliament or the competent budgetary authority to set upper and lower limits for wage negotiations, or to establish an overall “budgetary package”, within which the parties may negotiate monetary or standard-setting clauses (i.e. reduction of working hours, varying wage increases according to levels of remuneration), are compatible with the Convention, provided they leave a significant role to collective bargaining (see General Survey, op. cit., paragraphs 261–264). The Committee 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. The Committee requests 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.