Report in which the committee requests to be kept informed of development - Report No 248, March 1987

Case No 1380 (Malaysia) - Complaint date: 15-SEP-86 - Closed

1. 363. The International Metalworkers' Federation (IMF) presented a complaint of violations of trade union rights against the Government of Malaysia in a communication dated 15 September 1986. The Government supplied its observations in a communication dated 15 January 1987.
2. 364. 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. 365. The IMF, in its communication of 15 September 1986, alleges that one of its Malaysian affiliates - the Electrical Industry Workers' Union (EIWU) - is still faced with the authorities' restrictive interpretation of the principal laws on freedom of association, and anti-union practices similar to those already examined and criticised by the Committee on Freedom of Association in Cases Nos. 879, 911 and 1022. The IMF claims that the behaviour of the Malaysian authorities in the case of two claims for recognition by the EIWU as representing employees in two factories shows that the Government has persistently refused to implement the recommendations of the Governing Body of the ILO.
2. 366. According to the complainant, in the case of the first company, Ericsson Telecommunications SDN.BHD., the EIWU had been recognised as representing employees since 1974. In 1982 the company was restructured to meet with the requirements of the national economic plan and to secure additional contracts from the Telecoms Department without, however, any change in its production activities. The IMF states that on the assurance that the terms and conditions of employment would remain the same and recognition of the EIWU would be automatic, about 100 employees - members of the EIWU - were transferred from Ericsson Telecommunications to the new company, Perwira Ericsson SDN.BHD. Subsequently, in July 1984, the EIWU's claim for recognition was disputed by the second company. In accordance with the Industrial Relations Act, continues the complainant, the dispute was referred (on 28 July 1984) to the Registrar of Trade Unions, who decided against the EIWU. An appeal to the Minister of Labour (dated 5 February 1985) was equally unsuccessful, as was an appeal to the High Court (dated 30 August 1985), the latter rejecting the appeal, however, on a legal technicality given that the EIWU should have sought a "declaration" and not a writ of "certiorari".
3. 367. The complainant attaches to its complaint a translated copy of the Minister of Labour's rejection of the EIWU's appeal against the administrative authorities' refusal to allow it to represent workers in Perwira Ericsson SDN.BHD. Dated 19 July 1985, the notice gives no reasons for the Minister's rejection of the appeal. The complainant also attaches a copy of the EIWU's appeal before the High Court of Malaya at Kuala Lumpur (dated 30 August 1985) and which includes copies of the contracts offered to Ericsson employees concerning their re-employment with the new company, Perwira Ericsson. The letters state: "we have pleasure to offer you employment with Perwira Ericsson SDN.BHD. The employment would be of the same terms and conditions as at present existing with Ericsson Telecommunications SDN.BHD. inclusive of the terms and conditions in the collective agreement of the Electrical Industry Workers' Union ..." The High Court documents also include copies of the EIWU's claim for recognition under section 9(1) of the Industrial Relations Act dated 5 July 1984, as well as the company's refusal of this claim dated 24 July 1984. The letter of refusal states: Perwira Ericsson SDN.BHD is a newly formed company having entered into their contract with the Government for the supply, installation and testing of stored programme control (SPC) public telephone exchange equipment ... When the company began its operations it recruited staff mostly from Ericsson Telecommunications SDN.BHD. This was a major part of the understanding and goodwill between the two shareholders. In fact, as can be seen from the letter of offer of employment, Perwira Ericsson SDN.BHD. has employed those staff under the same terms and conditions which they had previously enjoyed .. . In terms of manufacturing, sales and project implementation, the company's main business areas generally cover computerised electronics and telecommunications based product lines ... In essence then, Perwira Ericsson SDN.BHD is an electronics based company established to participate in the national telecommunications development of this country. The success of our role depends on mutual co-operation of the employer and employees. As a responsible employer we are bound to cater for the welfare and needs of our employees. Thus, in keeping with general industry practice we support the overall representation by a workers' union. As to the union that will most appropriately represent the workers of this company, I would respectfully wish this matter to be referred to the appropriate authorities. Thus in response to EIWU's claim for recognition, this company would like to refer the matter to the Director-General of Industrial Relations for their (sic) advice and clarification prior to our according recognition.
4. 368. The complainant also annexes a copy of the EIWU's memorandum of appeal to the Minister of Labour made in accordance with the provisions of section 71 A) of the Trade Unions Act 1959. The memorandum is dated 5 February 1985 and explains that given rule 3 of its Constitution covering membership scope (i.e. membership of the union shall be open to all employees ... involved in the manufacture and repair of dry cells, batteries and related articles; manufacture and repair of electrical appliances; manufacture and repair of radios and communication equipment; manufacture and repair of electrical industrial equipment; ... manufacture and repair of miscellaneous electrical apparatus) and the work carried out by Perwira Ericsson SDN.BHD. (namely manufacturing, insulation and maintenance of telecommunications exchange equipment and telex exchange equipment as well as mobile telephone exchange equipment and the assembly of printed circuits boards) the employees concerned can and should be members of the EIWU. The copy of the High Court's Order, dated 16 April 1986, merely dismisses the appeal.
5. 369. According to the complainant, the second case of failure to allow EIWU's unionisation efforts concerns the Amalgamated Parts Manufacturers SDN.BHD whose employees had been unionised by the EIWU in 1984. The EIWU's claim for recognition was rejected by the company in April 1984 and at the same time the company announced that it had taken the decision "to encourage the setting up of a House Union". According to the complainant this is clearly a violation of Convention No. 98, ratified by Malaysia. The appeals lodged by the EIWU to the Registrar of Trade Unions (dated 17 July 1984) and the Minister of Labour, in accordance with the relevant provisions of the Act, failed despite the fact that the activities of the company in question are, in its opinion, within the scope of the EIWU membership.
6. 370. The complainant attaches copies of the EIWU's unsuccessful appeal to the Minister of Labour to represent employees of the Amalgamated Parts Manufacturers SDN.BHD. The memorandum of appeal is dated 5 February 1985 and states that given the scope of the EIWU's rule 3 (i.e. manufacture and repair of miscellaneous electrical apparatus, and so on as quoted above) and the activities of the company (namely, the production of automobile harnesses or wiring devices) entitles the EIWU to recognition in respect of those employees. This is all the more so, according to the complainant, given that the Malaysian Industrial Classification of 1972 defines "miscellaneous electrical apparatus" as: the manufacture of other electrical apparatus, accessories and supplies not elsewhere classified such as ... other current carrying wiring devices; conduits and fittings; electrical insulators and insulation materials.
7. 371. Lastly, the complainant attaches to its complaint a copy of an announcement signed by the Managing Director of Amalgamated Parts Manufacturers SDN.BHD. in which it is stated that "at the Board of Directors's meeting held on 11 April 1984, it was decided to encourage the setting up of a House Union in our company so as to comply with the declared government look east policy". Also attached is a copy of the company's letter of 25 April 1984 addressed to the EIWU stating that in view of the membership scope of the EIWU, "it is felt that your union is not the appropriate union to represent our workers".

B. The Government's reply

1. 372. In its communication of 15 January 1987, the Government explains that trade unions in Malaysia are structured on the basis of a particular trade, occupation or industry or within similar trades, occupations or industries. It claims that this requirement of the Trade Unions Act, 1959 does not contravene Convention No. 87 which Malaysia has not ratified but notwithstanding that, it stresses that the right of workers and employers to form, join and participate in lawful activities of trade unions to protect their interests is preserved in the Malaysian Constitution and other labour laws, consistent with ILO Convention No. 98, which Malaysia has ratified. It stresses that trade unions are free to engage in collective bargaining without interference by the State save in situations affecting the security, public order and economic well-being of the nation for which the Government bears overriding responsibility in its opinion.
2. 373. As regards the specific complaint of the EIWU, the Government states that this union is not unaware of the fact that its membership coverage rule is confined specifically to a class of workmen engaged in a certain industry and that in so far as Perwira Ericsson SDN.BHD. and Amalgamated Parts Manufacturers SDN.BHD. are concerned their activities do not fall within the industry similar to those industries envisaged in the membership clause. Consequently, the EIWU is not competent to represent workmen employed by the companies concerned.
3. 374. The Government states that nevertheless, consistent with the principles of freedom of association, the workmen of the two companies have voluntarily formed their own unions respectively: the Kesatuan Pekerja-Pekerja Perwira Ericsson Semenanjung (Union of Employees of Perwira Ericsson Peninsula, Malaysia) and Kesatuan Pekerja-Pekerja Amalgamated Parts Manufacturers (Union of Employees in Amalgamated Parts Manufacturers). According to the Government these unions enjoy harmonious relations with their respective employers and are currently engaged in collective bargaining with a view to concluding collective agreements. The Government wishes to reiterate, in no uncertain terms, that Malaysia does not pursue anti-union practices and that it has always upheld and will continue to uphold the principles of freedom of association within the bounds of the Malaysian Constitution and the other relevant laws of the country. It states that it has been committed to and will continue to foster the growth of a responsible trade union movement in Malaysia and the very fact that the EIWU has taken court action in the case of Perwira Ericsson SDN.BHD. is ample testimony that Malaysia not only advocates the rule of law, but ensures that every person has recourse to it.

C. The Committee's conclusions

1. 375. The Committee notes that this complaint is similar in certain respects to three previous complaints involving the complainant organisation and its Malaysian affiliate, the EIWU, alleging restrictive interpretation by the authorities concerned of trade union recognition legislation leading to the refusal to recognise for collective bargaining purposes the EIWU's unionisation of workers in various electronics industry companies. The Committee notes that in one of the previous cases (Case No. 911) the same employer had been involved, namely Ericsson Telecommunications.
2. 376. The Committee refers to its examination of Cases Nos. 879, 911 and 1022 (see, respectively, 177th Report, paras. 88-113 approved by the Governing Body at its 205th Session, February-March 1978; 190th Report, paras. 410-429, approved by the Governing Body at its 209th Session, February-March 1979; 202nd Report, paras. 122-142 approved by the Governing Body at its 213th Session, May-June 1980; 211th Report, paras. 515-525 approved by the Governing Body at its 218th Session, November 1981; 217th Report, paras. 379-388 approved by the Governing Body at its 220th Session, May-June 1982; and 218th Report, para. 18 approved by the Governing Body at its 221st Session, November 1982). In these previous cases, the Committee had stated that it would be desirable for the Government to take steps to ensure that the provisions on the establishment of first-degree unions were interpreted in a less restrictive manner by the administrative authorities, especially in view of the fact that the right of workers to establish and join organisations of their own choosing is one of the basic tenets of freedom of association. It also insisted that the competent authorities should take appropriate conciliatory measures with a view to obtaining recognition by the employer of the most representative union in an undertaking.
3. 377. In the present case - although it is not the EIWU's "registration" that has been refused, but its "recognition" which is a legal prerequisite for collective bargaining purposes in each enterprise - it can only regret that once again the authorities do not appear to have taken into account the Committee's recommendations. In effect, they continue to construe the EIWU's membership rule as limited to the electrical industry and refuse to use the discretion available in the legislation to grant recognition to the EIWU in electronics companies. The Committee recalls that its recommendations have consistently been made taking full account of the Government's repeated statements that the workers in Malaysia enjoy the right to organise and to engage in collective bargaining. Although in the present case, as in the past cases, the EIWU has been able to appeal to the High Court to quash the decision of the Minister and the Registrar of Trade Unions concerning its establishment in certain companies, the Committee notes that the High Court has consistently rejected the Union's appeals, without any substantive reasons for the rejection being given. The Committee of Experts on the Application of Conventions and Recommendations has considered that, where systems provide for the most representative trade union to have preferential or exclusive bargaining rights, it is important that the determination of the trade union in question should be based on objective and pre-established criteria, so as to avoid any opportunity for partiality or abuse. It has also been suggested that where national legislation provides for a procedure of certifying unions as exclusive bargaining agents, certain safeguards should be attached, such as: a) the certification to be made by an independent body; b) the representative organisation to be chosen by a majority vote of the employees in the unit concerned; c) the right of an organisation which fails to secure a sufficiently large number of votes to ask for a new election after a stipulated period; d) the right of any organisation other than the certificated organisation to demand a new election after a reasonable period has elapsed (otherwise a majority of the workers concerned might belong to a union which, for an unduly long period, could be prevented from organising its administration and activities with a view to fully furthering and defending the interests of its members) (General Survey, 1983, para. 295).
4. 378. In connection with the manner in which the trade union movement is structured in Malaysia, the Committee would emphasise that the free choice of unions to which workers wish to belong should be that of the workers themselves; such free choice should not in any way be limited by an interpretation by the administrative authorities of union rules in so far as these determine the scope of their membership.
5. 379. As regards the alleged violation of Article 2 of Convention No. 98, the Committee observes that it is not clear whether the unions set up in the two companies concerned and currently engaged in collective bargaining were of the employees' own choosing. The Committee bases this conclusion on the documents supplied by the complainant concerning the companies' stated industrial relations policy and the fact that the EIWU had been representing workers in the two companies for some time prior to its unsuccessful claims for recognition with the management. It therefore would recall that the competent authorities should, in all such cases, have the power to proceed to an objective verification of any claim by a union that it represents the majority of the workers in an undertaking, provided that such a claim appears to be plausible. If the union concerned is found to be the majority union, the authorities should take appropriate conciliatory measures to obtain the employer's recognition of that union for collective bargaining purposes (see, for example, 204th Report, Case No. 922 (India), para. 217; 218th Report, Case No. 1122 (Costa Rica), para. 327). In the interests of ensuring harmonious employer-employee relations in the two companies concerned, the Committee invites the Government to instruct the appropriate authorities to undertake a verification vote and to respect, for recognition purposes, the result of that vote.

The Committee's recommendations

1. 380. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • a) The Committee requests the Government, as it has done in previous cases concerning the same recognition problem, to take steps to ensure that the provisions on the establishment and recognition of first-degree unions are not interpreted in a restrictive manner by the administrative authorities and give effect to the principle that the free choice of the unions to which workers wish to belong should be that of the workers themselves.
   • b) It draws the Government's attention to the principle that workers should have the right to establish and, subject only to the rules of the organisation concerned, to join organisations of their own choosing.
   • c) The Committee invites the Government to instruct the appropriate authorities to carry out a verification vote so as to clarify the representativity of unions in the two companies involved in the present case and to keep it informed of further developments in this matter.