Report in which the committee requests to be kept informed of development - Report No 333, March 2004

Case No 2301 (Malaysia) - Complaint date: 22-SEP-03 - Closed

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INTRODUCTION
A. The complainant’s allegations
B. The Government’s reply
C. The Committee’s conclusions
The Committee's recommendations
Annex 1

Allegations: The complainant organization alleges that the labour legislation, as applied by the authorities, denies workers the right to freely organize and join organizations of their own choosing, and to bargain collectively. Alleged restrictions, prohibitions and violations include: discretionary powers granted to the competent official as regards trade unions registration and scope of membership; refusal to recognize independent trade unions; establishment of employer-dominated trade unions; arbitrary denial of collective bargaining rights

565. The complaint is contained in a communication dated 22 September 2003 from the Malaysian Trade Union Congress (MTUC).
566. The Government provided its observations in a communication dated 18 December 2003.
567. Malaysia has ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98). It has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87).

A. The complainant’s allegations

568. In its communication of 22 September 2003, the complainant organization states that, under the Trade Unions Act, 1959 (the “Act”) every trade union must obtain a registration certificate, failing which it has no legal status. The Act imposes severe conditions and restrictions on the establishment and development of trade unions, through the arbitrary and far-reaching powers given to the Director-General of Trade Unions (DGTU). When trade unions seek registration, the DGTU relies on the powers vested in him by the Act to stipulate series of conditions, including limitations and restrictions on the unions’ scope of membership.
569. The Act permits workers to establish trade unions within any particular trade, occupation or industry, or within any similar trades, occupations or industries; the object of such organizations is, inter alia, the regulation of relations between workers and employers, the promotion of good industrial relations, the improvement of working conditions, the representation of the parties in trade disputes, and the organization of strikes or lock-outs. Despite the above, for the past 30 years, the DGTU has consistently refused the establishment of an industrial union for more than 100,000 workers in the electronics industry, allowing only company-based unions in that sector; with a few exceptions, these unions have remained weak, often influenced, and sometimes even dominated by employers.
570. In the past 36 months, the DGTU has arbitrarily denied organizational and collective bargaining rights to more than 8,000 workers in the manufacturing companies listed below (in these companies, unions had accepted members but, based on objections raised by the companies, the DGTU ruled that the unions were not permitted to represent the workers: as a result the unions’ right to bargain collectively was denied):
- Metal Industry Employees’ Union
(1) Ueda Plating (M) Sdn. Bhd. 60 members
(2) Hiroshige (M) Sdn. Bhd. 713 members
(3) Diamet Klang (M) Sdn. Bhd. 96 members
(4) Soritsu Technology (M) Sdn. Bhd. 135 members
(5) Kobe Precision (M) Sdn. Bhd. 160 members
(6) Kawamura (M) Sdn. Bhd. 67 members
(7) NSK Micro Precision (M) Sdn. Bhd. 294 members
- Timber Industry Employees’ Union
(8) Artwright Technology Sdn. Bhd 324 members
(9) Finewood Trading Sdn. Bhd. 30 members
(10) Koh Poh Seng Plywood Company (M) Sdn. Bhd. 23 members
- National Union of Petroleum & Chemical Industry
(11) EP Polymers (M) Sdn. Bhd. 237 members
(12) Shin-Etsu Polymer (M) Sdn. Bhd. 1 158 members
(13) Kualiti Alam Sdn. Bhd. 115 members
(14) SNC Industrial Laminates Sdn. Bhd. 268 members
(15) W.R. Grace Speciality Chemical (M) Sdn. Bhd. 51 members
(16) Ryoka (M) Sdn. Bhd. 272 members
(17) Takahata Precision (M) Sdn. Bhd. 494 members
- Non-Metallic Mineral Products Mfg Employees’ Union
(18) Premier Bleaching Earth Sdn. Bhd. 28 members
(19) UBE Electronic (M) Sdn. Bhd. 374 members
- The union in that case sought expert certification from the Standards and Industrial Research Institute of Malaysia, which confirmed that the products manufactured by UBE Electronic consists of 90% ceramic which comes within the jurisdiction Of the Non-Metallic Mineral Products Mfg Employees Union (NMEU) whereas the DGTU has ruled that NMEU cannot represent UBE Electronics employees.
- Electrical Industry Workers’ Union
(20) Mitsumi (Segamat) Sdn. Bhd. 1 079 members
(21) Matsushita Electronics Corp (M) Sdn. Bhd. 1 670 members
(22) Malaysian Appliance Components Sdn. Bhd. (General Electric) 334 members
(23) The Union of Telecoms employees in Sarawak were denied the right to represent employees of subsidiary companies of Telecoms, even though they belong to the same industry.
571. Even in situations where the DGTU had ruled in favour of unions, a number of employers used the restrictive provisions of the Act to challenge his decisions before the High Court and the Court of Appeal. These companies are: Top Thermo Manufacturers Sdn. Bhd.; Senju Metal Industries Sdn. Bhd.; Kiswire Malaysia Sdn. Bhd.; Pacific Quest (M) Sdn. Bhd.; Dipsol Chemicals Sdn. Bhd.; Great Wall Plastics Sdn. Bhd.; Syarikat Marulee (M) Sdn. Bhd.; White Horse Ceramic Industries Sdn. Bhd.; and Silverstone Sdn. Bhd. Pending a decision of the Court, more than 2,000 workers of these companies are denied the right to collective bargaining.
572. Attacks on freedom of association have become worst with the globalization process and the competition for investment and trade. By denying the right to union membership to thousands of workers, the DGTU has denied them the right to collective bargaining protected by Convention No. 98, that Malaysia has ratified.
573. The complainant organization attaches to its complaint, as further evidence of alleged individual violations and of the practical effect of the legislation on the general weakness of trade unions, a comprehensive analysis (some 110 pages) on the compatibility of Malaysian industrial law with international labour Conventions. The following excerpts of that analysis, inasmuch as they are relevant to the present complaint may be quoted.
574. The legislation gives extensive and detailed control to the DGTU over workers’ organizations and on most of the internal affairs of unions, for instance: name, scope of membership, size, composition of the executives, objects, use and investment of funds, prohibition of political activities, restrictions on affiliation to federations and consultative bodies abroad. The Act further stipulates that trade unions should adopt rules on all matters listed in the first schedule of the Act (see list in Annex 1 of the present document) and that these rules should not contravene the specific statutory provisions governing such matters. Section 38(1) of the Act provides that the DGTU shall refuse to register a trade union if he is satisfied that its objects, rules and constitution conflict with any provision of the Act or regulations and an unregistered union is considered as an unlawful body, to be dissolved.
575. The DGTU is not only given wide powers to refuse to register, or to deregister, a union if it is likely to be used for unlawful purposes, but there are no criteria in the Act allowing to determine whether a union is likely to be used for such unlawful purposes, thus also giving the DGTU wide discretionary powers to make such a decision.
576. In addition, the DGTU is given arbitrary powers by section 12(2) of the Act to prefer a new union to the existing one if “he is satisfied” that this would serve the interests of workers. If the DGTU decides to cancel the certificate of registration of a union, nothing can stop him from doing so, if he is satisfied that this is appropriate, and such decisions are subject to appeal only to the Minister. While this discretionary exercise of executive authority is subject to judicial review, courts do not normally intervene when such discretion is conferred to officials in the law by terms like “is satisfied that, ... is of the opinion that ...” etc.; as a result, when the competent authority is vested with such discretionary powers, its opinion or satisfaction is usually accepted as conclusive by the courts.
577. The weakness of the trade union movement dates back to 1948 when the existence of general confederations was ended by a legislative amendment which required the federations to be confined to trade unions regrouping workers in the same trades, occupations or industries. This restriction was kept in the law when Malaysia became independent, and the Government introduced a new definition of trade union as “any association or combination of workmen ... within any particular trade, occupation or industry or within similar trades, occupations or industries” which became section 2 of the Act and the interpretation of what should be considered as “similar” trades, etc. comes within the competence of the DGTU and, in the last resort, of the Minister of Labour (section 2(2) of the Act). These combined provisions limiting trade union membership to workers in similar trades have been responsible for small trade unions and the weak trade union movement in Malaysia; they effectively prevented the emergence of large powerful national trade unions, and indeed prevented the MTUC itself from being recognized as a confederation of trade unions under the Act (the MTUC could be registered only under the Societies Act and its long term objective to eliminate the multiplicity of unions and help unions to regroup into 14 national industrial unions could not be realized because of this “similarity” provision). For instance, the DGTU refused at different times to accept that food and drink industries, or that rail and road industries, are similar. The same restriction was applied in the electronic industry to prevent the Electrical Industry Workers’ Union from organizing workers in the electronic industry on the ground that they were not workers in similar industries. All these workers could obtain, under ILO pressure, was the right to organize into in-house unions in electronic establishments which are still reluctant to accept even that form of unionization for their workers.
578. The complainant concludes that the policy of the authorities seems to be to prevent national unions from becoming too powerful; this has been particularly the case in the electronics industry. Not only the Metal Industry Employees’ Union (MIEU), but other national unions are facing the same obstacles when trying to enlarge their membership; as a result, the workers in these companies are denied the right to join national unions of their choice and are forced to exist as small unions, subjected to company pressure and, in some cases, are forced to form in-house unions.

B. The Government’s reply

579. In its communication of 18 December 2003, the Government states that the main difficulty preventing ratification of Convention No. 87 is that it would enable the formation of general unions, which might be led by persons having nothing to do with the activities or interests of unions, and pursuing political or even subversive aims. The Government considers that the present system contributes to the orderly growth of trade unions which in turn contributes to industrial harmony in the country.
580. The requirement to obtain a registration certificate is meant to accord trade unions certain rights, immunities and liabilities as legal entities. The Trade Unions Act, 1959 (the “Act”) aims at ensuring that unions operate in a democratic and responsible way to maintain and promote harmonious industrial relations and to ensure that the interests of the country and the people at large are not sacrificed for the benefit of a few individuals who control trade unions. The powers conferred to the Director-General of Trade Unions (DGTU) enable him to ensure that workers are represented by the competent trade union, in terms of trade, occupation or industry, so that workers can join a union related to their work and that the union can represent the right workers, so that trade unions may grow orderly in a situation conducive to the promotion and maintenance of harmonious industrial relations.
581. With respect to the allegation concerning the limitations on the unions’ scope of membership, the Government considers that there are no such limitations. Workers are free to join the relevant trade union that falls within the scope of the Act. The Government adds that workers in the electronic industry, like workers in other sectors, are free to form a union of their own choosing, which includes the right to from or join enterprise unions. These in-house unions are free and independent and enjoy the same rights and protections accorded to national unions, including the right to bargain collectively and to strike. They can also affiliate to international unions.
582. As regards the allegations concerning the weakness of unions in the electronics industry, and the influence and domination of some employers over unions, the Government states that in-house unions can be strong and effective in promoting the welfare and interests of their members and of workers in general. Section 5(1) of the Industrial Relations Act contains provisions prohibiting influence and domination by employers.
583. With respect to the some 8,000 workers who were allegedly denied organizational rights, the Government states that the unions mentioned in the list submitted by the complainant served claims of recognition on their respective employers under section 9(2) of the Industrial Relations Act. The claims were processed by the Industrial Relations Department (IRD) under section 9(3) of the Act, which provides that, upon being served with a recognition claim, employers have three options: accord recognition; notify the union in writing of the grounds for denying recognition; applying to the Director-General of Industrial Relations (DGIR) to ascertain the membership of the union. In the present case, the employers challenged the DGIR’s competency to ascertain the rights of unions to represent their workers. The IRD referred the issue to the Director-General of Trade Unions, who decided upon investigation that the unions in question were not competent to represent the workers. The IRD informed the unions and deemed the matter resolved. The workers in question should be able to enjoy organizational rights, and the right to choose and join the trade union which is registered in respect of the industry in which they are employed. In the absence of such a trade union, they may form an establishment trade union. It is therefore incorrect to say that the authorities have arbitrarily denied these workers organizational or collective bargaining rights.
584. With respect to those instances where employers challenged the DGTU’s decisions in favour of unions, the Government points out that the judicial system gives aggrieved parties the absolute right to challenge decisions made by public officials. In fact, decisions made by the DGTU have been challenged by both employers and trade unions.
585. The Government adds that, although it has not ratified Convention No. 87, workers in Malaysia have the right to form or join trade unions under: article 10(1)(c) of the Federal Constitution; section 8 of the Employment Act, 1955; section 8(1) of the Trade Union Act, 1959; and section 5(1) of the Industrial Relations Act, 1967. Under the Trade Unions Act, 1959, unions are registered on the basis of establishment, trade, occupation or industry. The Government does not agree with the complainant’s contention that the DGTU acts to deny workers the right to organize and bargain collectively each and every time that, in the lawful performance of his duty, he decides that a trade union is not competent to represent any worker or class or workers concerned. In such cases, the workers may either join or be members of a competent trade union, or in the absence of such a union, form an establishment trade union in the particular enterprise where they are employed.

C. The Committee’s conclusions

586. The Committee notes that this complaint concerns various alleged violations of freedom of association in Malaysia, with particular emphasis on the restrictive legislative definition of workers’ organizations and the wide powers given by the Trade Unions Act (the “Act”) to the Director-General of Trade Unions in this respect, as well as the extensive and discretionary control the administrative authorities can exercise on the internal affairs of trade unions.
- The legislative framework (see Annexes 1 and 2)
587. In order to be legally recognized and to function, trade unions must be registered (section 8 of the Act) failing which they become “unlawful associations” (section 19 of the Act); to be registered, trade unions must be associations or combinations of workers within “similar” trades, occupations or industries (section 2(1) of the Act) and for the purposes of the definition of trade union, “similar” means similar in the opinion of the Director-General (section 2(2) of the Act); the Director-General may refuse registration to a trade union if “he is satisfied” that there exists another union representing workers in the establishment and the existence of another union is not in the workers’ interest (section 12(2) of the Act); the Director-General shall refuse to register a trade union if “he is not satisfied” that the trade union has complied with the Act and Regulations, or if “he is satisfied” that the objects, rules and constitution of the trade union conflict with “any” provision of the Act or Regulations (section 12(3) of the Act); a catch-all provision [section 15(1)(b)] provides that the Director-General may cancel the registration of a union. The Act also contains strict and detailed provisions on the eligibility of unions’ officers (section 28), on the subject matters requiring secret ballots (section 40) and on practically all aspects of the internal functioning and activities of unions’ cases. Finally, the First Schedule of the Act provides in minute detail the matters which must be included in the rules of every registered trade union.
588. In addition, section 9 of the Industrial Relations Act, 1967 (the “IR Act”) establishes an additional step in the recognition procedure and contains provisions on the scope of representation of trade unions, where the employer can intervene. In case of disagreement, the Minister ultimately makes a decision on recognition which cannot be questioned in any court (section 9(5) and (6) of the IR Act) and under section 13 of the IR Act, collective bargaining can only start where a trade union has been accorded recognition by the employer.
589. Noting that several of these provisions conflict sharply with freedom of association principles (see below) the Committee can only conclude that the combined effect of these provisions is clearly that, at all stages of trade unions’ existence and activities, including as regards subjects which should normally be internal matters to be decided by the workers and their organizations themselves, the latter are strictly controlled and permanently subject to the discretionary powers of the administrative authorities.
- Particulars
590. As regards the definition of trade unions, the Committee notes that the Government does not deny its restrictive character, but justifies it by admitting readily that amending the legislation would enable the formation of general unions, which might be led by persons having nothing to do with the activities or interests of unions, and pursuing political or even subversive aims.
591. Dealing with the second argument first, the Committee recalls that freedom of association implies the right of workers (and employers) to elect their representatives in full freedom [see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, para. 350]. The Committee has indeed accepted in the past some qualifications to this general principle, including as regards political activities [Digest, ibid., paras. 377?380] but, generally speaking, it is the prerogative of workers’ and employers’ organizations to determine the conditions for electing their leaders [Digest, ibid., para. 351]. The right of workers’ organizations to elect their own representatives freely is an indispensable condition for them to be able to act in full freedom and to promote effectively the interests of their members; for this right to be fully acknowledged, it is essential that public authorities refrain from any intervention which might impair the exercise of this right, whether it be in determining conditions of eligibility of leaders or in the conduct of the elections themselves [Digest, ibid., para. 353]. The mere possibility that some persons considered by the Government as foreign to the trade union movement might become involved in unions’ activities, cannot justify such a sweeping exclusion; the Committee has indicated in the past that some flexibility is appropriate in this respect, for example, admit as candidates persons previously employed in the occupation concerned, or exempt a reasonable proportion of the officers of an organization [Digest, ibid., paras. 370-372]. The Committee further recalls that normal control of the activities of trade unions should be effected a posteriori and by the judicial authorities; and the fact that an organization which seeks to enjoy the status of an occupational organization might in certain cases engage in activities unconnected with trade union activities would not appear to constitute a sufficient reason for subjecting trade union organizations a priori to control with respect to their composition and with respect to the composition of their management committees. The refusal to register a union because the authorities, in advance and in their own judgement, consider that this would be politically undesirable, would be tantamount to submitting the compulsory registration of trade unions to previous authorization on the part of the authorities, which is not compatible with freedom of association principles [Digest, ibid., para. 268].
592. As regards the argument that amending the legislation would enable the formation of general unions, the Committee emphasizes that it is for the workers themselves to decide whether they wish to establish general unions, if they consider that their interests would be better protected and promoted by such organizations. The authorities should refrain from intervening or imposing conditions or restrictions in this respect, since the right of workers to establish and join organizations of their own choosing is one of the cardinal tenets of freedom of association; this right cannot be said to exist unless such freedom is fully established and respected in law and in fact [Digest, ibid., para. 271]. The Committee also recalls as regards this key issue: that workers should be free to decide whether they prefer to establish, at the primary level, a works union or another form of basic organization, such as an industrial or craft union [Digest, ibid., para. 279]; that the free exercise of the right to establish and join unions implies the free determination of the structure and composition of unions [Digest, ibid., para. 275]; that provisions which require a single union for each enterprise, trade or occupation are not in accordance with freedom of association principles [Digest, ibid., para. 282]; that the above rights imply for the organizations themselves the right to establish and join federations and confederations of their own choosing [Digest, ibid., para. 606]; and that the question as to whether a need to form federations and confederations is felt or not is a matter to be determined solely by the workers and their organizations themselves [Digest, ibid., para. 610]. The Committee therefore urges the Government to introduce in the near future legislation to amend the Trade Unions Act, 1959, to ensure that all workers, without distinction whatsoever, enjoy the right to establish and join organizations of their own choosing, both at primary and other levels, and for the establishment of federations and confederations, as guaranteed by freedom of association principles.
593. Closely related to the abovementioned points is the issue of the wide-ranging and discretionary powers conferred upon the Director-General to decide on the unions’ demarcation and scope of membership and to control unions’ internal rules, a problem which cannot be examined in isolation from the restrictive criteria established in the legislation for trade union recognition. The Committee recalls that it has also already undertaken a detailed examination of these issues in connection with a series of complaints filed against Malaysia [see, inter alia, Case No. 1480, 265th Report, paras. 565-587] and concluded, as early as 1989, that these legislative requirements amounted to a system of previous authorization for the establishment of trade unions. The Committee deplores the long time that had elapsed without action being taken and recalls its previous recommendations on all these issues. The Committee therefore strongly urges the Government once again to introduce in the near future legislation to amend the Trade Unions Act, 1959, to bring it into full conformity with freedom of association principles, by removing the discretionary powers granted to the Director-General as regards the registration of trade unions and their right to adopt freely their internal rules, including the election of officials, as well as their activities and programme of action.
594. The Committee further notes that the judiciary control over administrative decisions concerning the existence or functioning of trade unions, is either prohibited by law (e.g. section 9(6) of the IR Act), or very limited in practice in view of the discretionary powers given to the competent official in making decisions which are crucial for unions (e.g. those provisions containing language such as: “if he is satisfied that”; “if he considers that”; “if he is not satisfied that”; or similar expressions). The Committee recalls that an appeal should lie to the courts against any administrative decision concerning the registration of a trade union [Digest, ibid., para. 265]. In addition, and this is particularly relevant in the present case, where a registrar has to form his own judgement as to whether the conditions for the registration of a trade union have been fulfilled, although an appeal lies against his decisions to the courts, the Committee has considered that the existence of a procedure of appeal to the courts does not appear to be a sufficient guarantee; in effect, this does not alter the nature of the powers conferred on the authorities responsible for effecting registration, and the judges hearing such an appeal would only be able to ensure that the legislation has been correctly applied. The Committee has drawn attention to the desirability of defining clearly in the legislation the precise conditions which trade unions must fulfil in order to be entitled to registration and on the basis of which the registrar may refuse or cancel registration, and of prescribing specific statutory criteria for the purpose of deciding whether such conditions are fulfilled or not [Digest, ibid., para. 266]. Judges should be able to deal with the substance of a case concerning a refusal to register so that they can determine whether the provisions on which the administrative measures in question are based constitute a violation of principles of freedom of association [Digest, ibid., para. 267]. The Committee therefore urges the Government to introduce in the near future legislation to amend the Trade Unions Act and the Industrial Relations Act, to bring it into full conformity with freedom of association principles, by ensuring that appeals lie to the courts against all decisions made by administrative authorities, and that these procedures allow a substantive examination of the issues raised.
595. The Committee sees the situation faced by some 8,000 workers in the 23 companies mentioned by the complainant organization as a concrete example of these fundamental deficiencies of the legislation which, in the end, prevent these workers from exercising their organizational and collective bargaining rights. The Committee notes that, according to the Government, the Director-General decided after investigation that the trade unions in question were not competent to represent the workers. No other information is provided on the reasons why such a decision was made, or whether the trade unions in question were given an opportunity to present their views in contradictory proceedings, etc. The Government merely states that these workers have the right to join the trade union which is registered in respect of the industry in which they are employed, or form an establishment trade union. The Committee refers to the comments made above on the workers’ right to establish and join organizations of their own choosing, and on the Director-General’s wide and discretionary powers. It further recalls that employers should recognize for collective bargaining purposes the organizations representative of the workers employed by them, and that recognition by an employer of the main unions represented in its undertaking, or the most representative of these unions, is the very basis for any procedure for collective bargaining on conditions of employment in the undertaking [Digest, ibid., paras. 821-822]. If there is no union covering more than 50 per cent of the workers in a unit, collective bargaining rights should nevertheless be granted to the unions in this unit, at least on behalf of their own members [Digest, ibid., para. 833]. The Committee therefore requests the Government to take rapidly appropriate measures (and to give appropriate instructions to the competent authority), so that the 8,000 workers concerned may effectively enjoy this right, in accordance with freedom of association principles. The Committee also requests the Government to amend the applicable legislation, so as to encourage and promote the full development and utilization of machinery for voluntary negotiation between employers or employers’ organizations and workers’ organizations, with a view to regulating terms and conditions of employment by means of collective agreements, as provided by Convention No. 98, ratified by Malaysia.
596. The complainant organization also alleged that some 2,000 workers are being denied the right to collective bargaining pending a court decision on the proceedings filed by a number of companies (Top Thermo Manufacturers Sdn. Bhd.; Senju Metal Industries Sdn. Bhd.; Kiswire Malaysia Sdn. Bhd.; Pacific Quest (M) Sdn. Bhd.; Dipsol Chemicals Sdn. Bhd.; Great Wall Plastics Sdn. Bhd.; Syarikat Marulee (M) Sdn. Bhd.; White Horse Ceramic Industries Sdn. Bhd.; and Silverstone Sdn. Bhd.) after the Director-General had ruled in favour of unions. While acknowledging the Government’s argument that all parties have the right to challenge decisions made by public officials, the Committee notes that it has been provided with very little information on these court challenges, and has not even been informed of their exact nature (e.g. are these employers challenging the exercise of the Director-General’s discretion in the recognition of unions; the representative character of the unions; their recognition for collective bargaining purposes; etc.?). The Committee thus requests the complainant on the one hand, and the Government after consultation with the employers concerned on the other hand, to keep it informed on these court challenges (e.g. exact nature, dates of filing of proceedings, present status, and any other useful information) so that it may make an informed decision in full knowledge of the facts.
597. The Committee cannot conclude its examination of the present case without expressing its concern at the industrial relations situation in Malaysia, in view of the fact that, during the last 15 years, several complaints have been filed on these very same issues, on which it consistently made unambiguous recommendations, and that no significant progress could be observed during all that period. In fact, the present case is the seventh one of its kind since 1977 (Cases Nos. 879, 911, 1022, 1380, 1480 and 1542) something that the Committee recounted in detail in Case No. 1542 [see para. 398 of its 277th Report, approved by the Governing Body at its 249th Session, February-March 1991]. In that case, the Committee had also suggested that the Government resort to ILO’s technical assistance, a suggestion that went unheeded. In view of the recurrence of the problems, and given that they are rooted in the framework and philosophy of the legislation, the Committee suggests once again that the Government avail itself of the ILO’s technical assistance, to help it bring its law and practice into full conformity with freedom of association principles.
598. The Committee requests the Government to keep it informed of developments on all the above matters.

The Committee's recommendations

599. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
- (a) The Committee expresses its concern at the fact that several complaints have been filed on these same issues during the last 15 years, on which it made unambiguous recommendations, and that no significant progress could be observed.
- (b) The Committee urges once again the Government to introduce in the near future legislation to amend the Trade Unions Act, 1959 and the Industrial Relations Act, 1967, to bring them into full conformity with freedom of association principles, by ensuring:
  - – that all workers without distinction whatsoever, enjoy the right to establish and join organizations of their own choosing, both at primary and other levels, and for the establishment of federations and confederations;
  - – that no obstacles are placed, in law or in practice, to the recognitions and registration of workers’ organizations, in particular through the granting of discretionary powers to the responsible official;
  - – that workers’ organizations have the right to adopt freely their internal rules, including the right to elect their representatives in full freedom; and
  - – that workers and their organizations enjoy appropriate judicial redress avenues over the decisions of the Minister or administrative authorities affecting them.
- (c) The Committee requests the Government to amend its legislation so as to encourage and promote the full development and utilization of machinery for voluntary negotiation between employers or employers’ organizations and workers’ organizations, with a view to regulating terms and conditions of employment by means of collective agreements.
- (d) The Committee requests the Government to take rapidly appropriate measures and give instructions to the competent administrative authority, so that the 8,000 workers denied representational and collective bargaining rights in 23 named companies may effectively enjoy these rights, in accordance with freedom of association principles.
- (e) The Committee requests the complainant and the Government to keep it informed on the court challenges filed by some employers and affecting some 2,000 workers, so that it may make an informed decision in full knowledge of the facts.
- (f) The Committee requests the Government to keep it informed of developments on all the abovementioned issues.
- (g) The Committee suggests once again that the Government avail itself of the ILO’s technical assistance, to help it bring its law and practice into full conformity with freedom of association principles.

Annex 1

Trade Unions Act, 1959 (excerpts)
Section 1: “Registered trade union” means a trade union registered under this Act;
...
“Trade union” or “union” means any association or combination of workmen or employees, ... (a) within any particular establishment trade, occupation or industry or within any similar trades, occupations or industries;
...
Section 1: (2) For the purposes of the definition of “trade union” in subsection (1) and for the purposes of sections 32, 33, 72 and 74, “similar” means similar in the opinion of the Director-General.
...
Section 12. Registration
...
(2) The Director-General may refuse to register a trade union in respect of a particular establishment, trade, occupation or industry if he is satisfied that there is in existence a trade union representing the workmen in that particular establishment trade, occupation or industry and it is not in the interest of the workmen concerned that there be another trade union in respect thereof.
(3) The Director-General shall refuse to register a trade union if –
(a) he is of the opinion that the trade union is likely to be used for unlawful purposes or for purposes contrary to or inconsistent with its objects and rules;
(b) any of the objects of the trade union is unlawful;
(c) he is not satisfied that the trade union has complied with this Act and of the regulations;
(d) he is satisfied that the objects, rules, and constitution of the trade union conflict with any of the provisions of this Act or of any regulations; or
(e) the name under which the trade union is to be registered is –
(i) identical to that of any other existing trade union, or so nearly resembles the name of such other trade union as, in the opinion of the Director-General, is likely to deceive the public or the members of either trade union; or
(ii) in the opinion of the Director-General, undesirable, unless the trade union alters its name to one acceptable to the Director-General.
...
15. Cancellation of registration
(1) A certificate of registration of a trade union may be cancelled or withdrawn by the Director-General –
...
(b) if he is satisfied –
...
(ii) that any one of the objects or rules of the trade union is unlawful;
(iii) that the constitution of the trade union or of its executive is unlawful;
(iv) that the union has been or is being or is likely to be used for any unlawful purpose or for any purpose contrary to its objects or rules;
(v) that the trade union has contravened any provision of this Act or of any regulations made thereunder, or of any of its rules, or allowed any rule to continue in force which is inconsistent with any such provision, or has rescinded any rule providing for any matter for which provision is required by section 38;
(vi) that the funds of the trade union are or have been expended in an unlawful manner or on an unlawful object or on an object not authorized by the rules of the union; or
(vii) that the trade union has ceased to exist.
(2) Where two or more registered trade unions exist in a particular establishment, trade, occupation or industry, as the case may be, the Director-General may, if he is satisfied that it is in the interest of the workmen in that establishment, trade, occupation or industry so to do –
(a) cancel the certificate of registration of the trade union or trade unions other than the trade union which has the largest number of workmen in the said establishment, trade, occupation or industry as its members; or [... amalgamation].
...
17. Suspension of a branch of a trade union
(1) The Director-General may, if he is satisfied that a branch of a trade union has contravened the provisions of this Act or the rules of the union, by order direct the suspension of such branch.
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18. Power of the Minister to suspend a trade union
(1) Notwithstanding anything in this Act, it shall be lawful for the Minister in his absolute discretion, but with the concurrence of the Minister responsible for internal security and public order, by order published in the Gazette to suspend for a period not exceeding six months any trade union, or any class or description of trade unions, which in his opinion is, or is being, used for purposes prejudicial to or incompatible with, the interests of security of, or public order in, Malaysia or any part thereof.
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19. Consequences of failure to register or of cancellation of registration
If any trade union does not apply for registration in due time, or if the registration of any trade union is refused, withdrawn or cancelled, then –
(a) the trade union shall be deemed to be an unlawful association and shall cease to enjoy any of the rights, immunities, or privileges of a registered trade union;
(b) the trade union shall not, take part in any trade dispute or promote, organise or finance any strike or lock-out;
(c) the trade union shall be dissolved and its funds disposed of in such manner as may be prescribed and, subject thereto, in accordance with the rules of the union.
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20. Disabilities of unregistered union
A trade union shall not enjoy any of the rights, immunities or privileges of a registered trade union unless it is registered.
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38. Rules
(1) The rules of every registered trade union shall make provision for all the matters specified in the First Schedule,
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40. Secret ballot
(1) A trade union shall take a secret ballot to make a decision on any of the following matters –
(a) the election of delegates to a general meeting, if the rules of the union provide for meetings of delegates, or to a federation of trade unions;
(b) the election of officers (other than trustees) by the members in accordance with the rules of the union;
(c) all matters relating to strikes or lock-outs;
(d) the imposition of a levy;
(e) dissolution of the trade union or a federation of trade unions;
(f) amendment of the rules where such amendment results in increasing the liability of the members to contribute or in decreasing the benefits to which members are entitled;
(g) amalgamation with another trade union or transfer of engagements to another trade union.
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72. Formation of federation of trade unions
Two or more registered trade unions in Malaysia whose members are employed in a similar trade, occupation or industry may form or create a federation of trade unions if the consent of the members of each of the registered trade unions wishing to form or create a federation has been obtained by a majority of votes taken at a general meeting or a meeting of delegates, as the case may be, after service on the Director-General and all members of the union, not less than fourteen days prior to such meeting, of notice of the proposed resolution to participate in the federation.
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74. Affiliation with registered federation of trade unions
(1) A registered trade union may affiliate with a registered federation of trade unions representing similar trades, occupations or industries if the consent of the members of the trade union to such affiliation has been obtained in the manner provided in section 72,
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76. Decisions by secret ballot
The provisions of this Act relating to the taking of decisions by secret ballot shall apply to a federation of trade unions.
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76A. Restriction on the formation of or affiliation with consultative or similar bodies
(1) No trade union registered under this Act shall affiliate with, or be a member of, any consultative or similar body, by whatever name called, established outside Malaysia, except with the prior permission in writing of the Director-General and subject to such conditions as he may impose:
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First Schedule
(Section 38)
Matters for which provision must be made in the rules of every registered trade union
1. The name of the trade union and the place of meeting for the business of the trade union.
2. The whole of the objects for which the trade union is to be established, the purposes for which the funds thereof shall be applicable, the conditions under which any member thereof may become entitled to any benefit assured thereby, and the fines and forfeiture to be imposed on any member thereof.
3. The manner of making, altering, amending and rescinding rules:
4.
(a) The election of members of the executive of the trade union in accordance with the rules of the union.
(b) Subject to paragraph (a), the nomination, appointment or election and removal of an officer and of trustees, secretaries, treasurers and employees of the trade union.
(c) The prohibition of the employment of all officers and employees of the trade union by any other trade union.
5. The custody and investment of the funds of the trade union, the designation of the persons responsible therefor, and the annual or periodical audit of its accounts.
6. The inspection of the books and names of members of the trade union by any person having an interest in the funds of the trade union.
7. The manner of the dissolution of the trade union and the disposal of the funds thereof available at the time of such dissolution.
8. Where applicable, the manner of establishing and dissolving any branch of the trade union and the manner in which any such branch and the accounts thereof shall be administered.
9. The taking of decisions by secret ballot on the following matters:
(a) the election of delegates to a general meeting, if the rules of the union provide for meetings of delegates, or to a federation of trade union;
(b) the election of officers (other than trustees) by the members in accordance with the rules of the union;
(c) all matters relating to strikes or lock-out;
(d) the imposition of a levy;
(e) dissolution of the trade union or federation of trade unions;
(f) amendment of the rules where such amendment results in increasing the liability of the members to contribute or in decreasing the benefits to which members are entitled;
(g) amalgamation with another trade union or transference of engagements to another trade union.
10. The procedure for holding ballots, the securing of the secrecy of secret ballots and the preservation of ballot papers for the prescribed period.
11. The manner in which disputes referred to in Part VI of the Trade Unions Act 1959, shall be decided.
12. Cessation of membership if members commence, participate or otherwise act in furtherance of any strike in contravention of section 25A(1).
Annex 2
Industrial Relations Act, 1967 (excerpts)
Recognition and scope of representation of trade unions
9. Claim for recognition
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(2) A trade union of workmen may serve on an employer ... a claim for recognition in respect of the workmen or any class of workmen employed by such employer ...
(3) An employer or a trade union of employers upon whom a claim for recognition has been served shall, within twenty-one days after the service of the claim –
(a) accord recognition; or
(b) if recognition is not accorded, notify the trade union of workmen concerned in writing the grounds for not according recognition; or
(c) apply to the Director-General to ascertain whether the workmen in respect of whom recognition is being sought are members of the trade union of workmen concerned and give a written notice of such application to such trade union of workmen.
(4) Where the trade union of workmen concerned receives a notification under subsection (3)(b), or where the employer or trade union of employers concerned fails to comply with subsection (3), the trade union of workmen may report the matter in writing to the Director?General.
(4A) The Director-General, upon receipt of ... an application under subsection (3)(c), or a report under subsection (4) may take such steps or make such enquiries as he may consider necessary or expedient to resolve the matter.
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(4C) Where the matter is not resolved under subsection (4A) the Director-General shall notify the Minister.
(5) Upon receipt of a notification under subsection (4C) the Minister shall give his decision thereon;
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(6) A decision of the Minister under subsection (5) shall be final and shall not be questioned in any court.