Observation (CEACR) - adopted 2018, published 108th ILC session (2019)

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 2018, including allegations of anti-union discrimination. The Committee notes with concern that, despite its requests, the Government has not provided any comments on past ITUC observations, nor on the additional information it had declared to the Committee on the Application of Standards of the International Labour Conference (the Conference Committee) in June 2016 it would provide on the Malaysian Trades Union Congress (MTUC) allegations of 2015 concerning anti-union discrimination and interference. The Committee urges the Government to provide its comments on the 2016, 2017 and 2018 ITUC observations concerning violations of the Convention in practice, as well as on the allegations of anti-union discrimination and interference raised in 2015 by the MTUC.

With regard to the holistic review previously announced by the Government on the main labour laws (including the Employment Act, 1955, the Trade Unions Act, 1959 and the Industrial Relations Act, 1967 (IRA)), the Committee notes that the Government indicates that the holistic review continues with the assistance of the Office and several tripartite engagement sessions have been conducted; and that the amended version of the IRA is expected to be tabled before Parliament by the second quarter of 2019. The Committee firmly hopes that, with the technical assistance of the Office, the Government will take into account the following comments it reiterates to ensure the full conformity of these Acts with the Convention and that it will be in a position to note progress in the near future. 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. In its previous observation, the Committee had noted 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). The Committee requested the Government to provide further detailed information as to: (i) the sanctions and compensations relating to acts of anti-union discrimination, especially in those cases where anti-union discrimination was 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. The Committee notes that the Government indicates that the aggrieved parties prefer the easier and flexible process (through conciliation) provided for under section 8 of the IRA – as opposed to section 59 which requires an investigation and process before a criminal court, since the complaint is quasi-criminal in nature, and where the standard of proof is high (beyond reasonable doubt). Noting that the Government only answered to its request for information on the factors explaining the limited use of section 59, the Committee recalls the need to ensure that all procedures set out to address anti-union discrimination afford adequate protection – including adequate compensation and sufficiently dissuasive sanctions. While recognizing that criminal procedures provide for strict standards of proof, the Committee recalls the importance of avoiding obstacles to bringing an action and obtaining an appropriate remedy for anti-union discrimination (see General Survey on the fundamental Conventions, 2012, paragraph 192). In this regard, the Committee notes that reversing the burden of proof by placing the burden on the employer once a prima facie case has been made is one of the preventive mechanisms used by a number of States to afford protection against anti-union discrimination while many other States have, in such cases, lowered the burden of proof applicable to workers. The Committee considers that placing on workers the burden of proving beyond reasonable doubt that the act in question occurred as a result of anti-union discrimination in order to access adequate protection would constitute a dissuasive obstacle to bringing an action and obtaining an appropriate remedy. The Committee requests the Government to: (i) provide detailed information on the general remedies effectively imposed to acts of anti-union discrimination dealt with through sections 5 and 8 of the IRA, as well as the sanctions and measures of compensation in relation to anti-union discrimination acts under section 59 of the IRA; and (ii) in light of this information take any necessary measures, in consultation with the social partners and with the technical assistance of the Office in the context of the review of the IRA, to ensure that the rules and procedures relating to anti-union discrimination afford adequate protection – including adequate compensation and sufficiently dissuasive sanctions, without placing on victims a burden of proof that constitutes a major obstacle to establishing liability and ensuring an appropriate remedy.

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: (i) the union has to 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 whether the union has secured the required ballot (50 per cent plus one) of the work people or class of work people, in respect of whom recognition is being sought. The Committee had also noted that the MTUC and the ITUC had raised a number of concerns on the application of this procedure (alleging 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; 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; and that the secret ballot procedure does not provide protection to prevent interference from the employer). In light of the foregoing, the Committee had: (i) recalled 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 interference; and (ii) requested the Government to ensure that the right to collective bargaining is guaranteed when no union reaches the required majority to be declared the exclusive bargaining agent.

While taking due note of the Government’s response that it does not impose any restrictions on minority trade unions to recruit members and re-submit a new claim for recognition in order to obtain majority, the Committee observes that this does not address the issue of the right to bargain collectively when no union reaches the required majority. The Committee therefore requests once again the Government to take, in consultation with the social partners and in the context of the review of the IRA, 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.

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 Department of Industrial Relations which do not involve judicial review. The Committee had considered that the duration of proceedings could still be excessively long and requested the Government to take any necessary measures to further reduce the length of proceedings for the recognition of trade unions. The Committee notes that the Government indicates that it is working towards improving the process, noting in particular that the Department of Industrial Relations is taking administrative and legal actions to expedite the process, and that the IRA is under holistic review. The Committee requests the Government to provide additional information as to the actions undertaken by the Department of Industrial Relations to expedite the process; and, 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 the Committee: (i) considered 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; (ii) welcomed the Government’s statement that current laws do not prohibit foreign workers from becoming trade union members and that a legislative amendment would 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; and (iii) noted the concerns raised by the Worker members at the 2016 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. The Committee observes that the Government: (i) on the one hand, reiterates that it does not impose any restriction on migrant workers to engage in collective bargaining – a right that is recognized in the IRA to all workers, including migrant workers, which may cast their votes in the recognition process, participate in negotiations and enjoy the benefits of collective agreements; but (ii) on the other hand, it does not provide any information on the measures it had announced or in response to the concerns that had been noted by the Committee, some of which are of a practical nature. The Committee requests the Government to inform it on the amendments made to the IRA as announced and which would address the concerns previously raised, so as to ensure the full utilization of collective bargaining by migrant workers, including as to enabling foreign workers to run for trade union office. The Committee requests the Government 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. In its previous observation the Committee had welcomed the Government’s indication that section 13(3) would be amended to remove its broad restrictions on the scope of collective bargaining. The Committee notes that the Government indicates that it is in the process of amending the IRA in accordance with the requirements of the Labour Chapter of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, in particular as to section 13(3). Firmly hoping that section 13(3) of the IRA will be amended in the near future 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. In a similar vein, the Committee observes that the Committee on Freedom of Association (CFA) referred to it the follow-up of the legislative aspects of Case No. 3126, and requested the Government to bring its legislation and practice concerning the referral of interest disputes to compulsory arbitration into conformity with the principles of freedom of association (see 383rd Report, October 2017, paragraph 454). The Committee notes that in its latest report the Government indicates that it needs more information and time before any amendment is made to change the current laws and policy on compulsory arbitration and welcomes the Government’s statement that it is working with the Office to ensure the amendments to the legislation are in compliance with international labour standards. The Committee hopes that with the technical assistance of the Office the Government will 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.

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. The Committee notes that the Government reiterates once again that, through the National Joint Council (which includes trade unions and associations in the public sector) and the Departmental Joint Council, representatives of public employees can hold discussions with and make proposals to the Government, on matters including terms and condition of service, training, remuneration, promotions and benefits. The Government adds that major trade unions, such as the Congress of Unions of Employees in the Public and Civil Services Malaysia (CUEPACS) and the National Union of the Teaching Professions Malaysia (NUTP) have been known to approach the Government directly to request for improvements in the terms and conditions of their members. The Government further asserts that while the approval of any improvements is at the Government’s discretion, Act 177 provides a dispute settlement mechanism, including the referral of a trade dispute of any governmental or statutory authority service to the Industrial Court, and that public employees may launch industrial actions such as strike and picketing (though these rights have never been exercised by public service unions, as they have never declared any deadlock in any discussion). The Government concludes that, in general, the current practice of negotiating terms and conditions of service of public employees has the rules and spirit of collective bargaining, although to a certain extent it is not in full conformity with international labour standards. In this respect, the Committee, while recognizing the singularity of the public service which allows special modalities, must recall again 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 working 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 had noted in its previous observation that the Worker members of the 2016 Conference Committee had raised concerns over the low percentage of workers covered by collective agreements in the country (according to them, 1 to 2 per cent despite the unionization rate of almost 10 per cent). Noting that the Government did not provide the statistical information requested, the Committee reiterates its request to the Government to provide 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.