Report in which the committee requests to be kept informed of development - Report No 363, March 2012

Case No 2850 (Malaysia) - Complaint date: 08-APR-11 - Closed

Allegations: The complainant organization alleges that the Minister of Human Resources registered an in-house union in the Malayan Banking Berhad (Maybank) to represent the same category of workers represented by the National Union of Bank Employees (NUBE) and that the NUBE Vice-President and the NUBE Treasurer-General have been dismissed following a meeting with the Minister of Human Resources

1. 853. The complaint is contained in a communication from the Malaysian Trades Union Congress (MTUC) dated 8 April 2011 and 28 February 2012.
2. 854. The Government forwarded its response to the allegations in communications dated 22 June and 5 October 2011.
3. 855. Malaysia has ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), but has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87).

A. The complainants’ allegations

1. 856. In a communication dated 8 April 2011, the complainant organization indicates that the present complaint is a case of union busting and deals with the arbitrary, unfair and unacceptable decision of the Minister of Human Resources and the Director-General of Trade Unions (DGTU) to register an in-house union in the Malayan Banking Berhad (Maybank) representing the same category of workers as represented by the National Union of Bank Employees (NUBE). The complainant supports NUBE’s calls for the cancellation of the registration of the in-house union Maybank Non-Executive Employees Union (MAYNEU).
2. 857. The complainant criticizes that MAYNEU was registered despite full knowledge that NUBE was already representing the same category of workers in Maybank, and that the registration has caused great strife, animosity and industrial disharmony among workers in Maybank who have been represented by NUBE for more than 50 years and are confused by the sudden arrival of an in-house union. According to the complainant, the registration results in duplicity of trade unions representing the very same workers, although the intention of the law is clear in that there ought not to be such duplicity.
3. 858. The complainant further indicates that NUBE denounces the manner in which the registration of the in-house union was approved. There was no consultation whatsoever by the DGTU with NUBE prior to the registration of MAYNEU. The application for the registration of MAYNEU was submitted in November 2010, and the DGTU registered the in-house union within two months of receiving the application on 3 January 2011. However, the complainant states that, in the case of NUBE seeking amendments to its Constitution, the DGTU rejected the amendments after more than two years of submission, and NUBE’s appeal filed on 28 January 2011, stating the reasons for the amendments, was eventually rejected. With reference to a similar case of registration of an in-house union at another bank, the complainant denounces union-busting tactics by the DGTU.
4. 859. The complainant highlights the grounds given by the DGTU for approving the application for registration of the in-house union MAYNEU in Maybank as follows: (i) the seven individuals who applied to register the in-house union were not members of NUBE; (ii) a large population of workers in Maybank cannot join NUBE; (iii) an in-house union can better represent workers in Maybank; and (iv) the law allows another union to seek recognition for collective bargaining purposes after a period of three years. The complainant believes that the DGTU was erroneous in its decision for the following reasons: (i) out of the seven individuals who applied for the registration of the in-house union, six were members of NUBE at the time of the application. NUBE has expelled and taken legal action against three of them in December for publishing and disseminating false and defamatory statements regarding NUBE and its officials. One of the seven persons concerned continued to be a member of NUBE until January 2011; (ii) one of the seven individuals who applied for the registration of the in-house union had not joined NUBE for personal reasons, which cannot be the basis for the DGTU to register an in house union; (iii) NUBE represented, as at 31 January 2011, a total of 5,153 workers out of approximately 6,000 workers in Maybank. There was therefore no question of NUBE not representing the majority of the workers capable of being represented; and (iv) there is no evidence of any kind to show that NUBE has failed in its duties as a union in representing its members in Maybank. In the complainant’s view, the DGTU has thus taken into consideration irrelevant matters and wrong information in arriving at its decision to register the in-house union.
5. 860. The complainant believes that the provisions of the MCBA–NUBE Collective Agreement have been violated by Maybank, particularly section 6 which reads: “The union is the sole negotiation body.” Moreover, according to the complainant, the CEO of Maybank admitted in a CEOs meeting that the formation of the in-house union was with the intention of crippling NUBE’s influence in the banking industry. The complainant asserts that Maybank has granted several individuals who claimed to be MAYNEU members trade union leave, which they used to go to Maybank branches around the country to try to convince and compel NUBE members to resign from NUBE and instead join MAYNEU, and Maybank managers have also assisted to facilitate the recruitment by providing these persons with managers’ or meeting rooms to enable them to hold meetings with NUBE members during office hours.
6. 861. In addition, the complainant claims that Maybank managers were used to coerce NUBE members to resign from NUBE and sign up with MAYNEU, and that Maybank has taken a stand by not allowing NUBE officials to enter Maybank premises to meet members and hold meetings. Furthermore, Maybank, while having rejected the provision of better benefits during collective bargaining with NUBE with the excuse that it has a large workforce, is now willing to provide better benefits to the in-house union. Finally, the complainant alleges that Maybank security guards and the police were used to harass and intimidate NUBE Officials.
7. 862. The complainant also explains that it was compelled to file an Application for Judicial Review in the High Court on 12 February 2011. The complainant indicates that, prior to filing the application, it wrote to the DGTU on 27 and 28 January 2011, but to date has not received any response; and that it appealed on 28 January 2011 to the Deputy Secretary General (Operations) in accordance with section 71A of the Trade Unions Act, 1967, without receiving any response; thus having no other alternative than to file an application for judicial review, in order to avoid any technical objections with regard to filing court proceedings within a certain time of getting to know of the registration of the in-house union by the DGTU (e.g. time-barred application). According to the complainant, a meeting with the Minister of Human Resources and other Ministry officials was held on 28 February 2011. Despite assurances to revert to it within two weeks, no response has been received concerning the appeal to cancel the registration of the in-house union.
8. 863. Finally, in its communication dated 28 February 2012, the complainant indicates that the case was heard at the High Court and the Appellate Court, and that a second meeting took place on 30 January 2012 between the Ministry of Human Resources and high-level MTUC and NUBE officials without achieving any concrete results. According to the complainant, the bank management dismissed, contrary to the protection provided by law, the NUBE Vice-President Mr Abdul Jamil Jalaludeen and the NUBE Treasurer-General Mr Chen Ka Fatt, on the day following the meeting, in order to intimidate the remaining union members. The complainant further states that the Government failed to listen to the concerns raised by the MTUC in connection with the amendments to the Employment Act 1995.

B. The Government’s reply

1. 864. In its communications dated 22 June and 5 October 2011, the Government observes that the complaint criticizes the registration of an establishment-based union in Maybank, namely the MAYNEU.
2. 865. The Government indicates that the 1959 Trade Union Act: (i) provides for the existence of more than one union; (ii) guarantees workers the right to determine the union of their choice through a secret ballot vote; (iii) stipulates that the union that obtains the majority of the votes will represent the workers; and (iv) allows other unions to seek recognition after three years.
3. 866. The Government concludes that these provisions are intended to grant free formation of trade unions (freedom of association) by workers. There are many instances where national unions have sought recognition where establishment-based unions existed. In its view, the ultimate solution in these cases is the right of workers to choose the union that should represent them, which is actually in the spirit of freedom of association and not union busting.
4. 867. Furthermore, the Government states that the registration of a trade union is under the DGTU’s jurisdiction. The Trade Union Act confers on the DGTU the general supervision, direction and control on matters relating to trade unions. Under section 71A of the Trade Unions Act, any aggrieved party may appeal before the Minister of Human Resources against any decision by the DGTU to register or not to register a particular union. The aggrieved party may also make an application for judicial review or injunction before the High Court against the DGTU’s or the Minister’s decision.
5. 868. According to the Government, the decision of the DGTU to register MAYNEU was challenged in the High Court, and the High Court has decided that the registration is valid and within the power of DGTU. However, the decision of the High Court is being appealed by NUBE to the Court of Appeal. Furthermore, there is a defamation suit filed by Maybank against NUBE in the High Court. The Government indicates that it is therefore not in a position to comment further until these cases are finally disposed off.

C. The Committee’s conclusions

1. 869. The Committee notes that, in the present case, the complainant criticizes that the Minister of Human Resources registered MAYNEU, an in-house union at Maybank, to represent the same category of workers as represented by NUBE.
2. 870. The Committee notes the complainant’s allegations that: (i) the decision of the Minister and the DGTU to register MAYNEU results in duplicity of trade unions representing the same workers; (ii) contrary to the DGTU’s statement that the seven individuals who applied for the registration of the in-house union were not members of NUBE, six were NUBE members at the time of application; (iii) contrary to the DGTU’s statement that a large population of workers in the bank cannot join NUBE and an in-house union can better represent workers in the bank, NUBE represents, as at 31 January 2011, the majority of the workers capable of being represented (5,153 out of approximately 6,000 workers) and there is no evidence that NUBE had failed in its duties as a union; (iv) the registration of MAYNEU was approved without any prior consultation with NUBE within two months of receiving the application, whereas the DGTU rejected the amendments sought by NUBE to its Constitution after more than two years of submission, which, in the complainant’s view, illustrates the union-busting tactics of the DGTU; (v) the bank’s CEO admitted that the formation of the in-house union aimed at crippling NUBE’s influence in the banking industry; (vi) the bank has granted several individuals claiming to be MAYNEU members trade union leave, which they used to try to convince and compel NUBE members in several branches of the bank to resign and instead join MAYNEU; (vii) the management has facilitated the recruitment by providing managers’ or meeting rooms to enable these persons to hold meetings with NUBE members during office hours; (viii) the management was used to coerce NUBE members to resign and sign up with MAYNEU; (ix) NUBE officials were not allowed to enter the bank’s premises to meet members and hold meetings; (x) the bank, while having rejected the provision of better benefits during collective bargaining with NUBE, is now willing to provide better benefits to the in-house union; and (xi) the bank’s security guards and the police were used to harass and intimidate NUBE officials. The Committee also notes that, in the absence of a response from the DGTU and the Minister of Human Resources concerning the appeal against the registration of the in-house union, the complainant filed an application for judicial review in the High Court.
3. 871. The Committee notes that, in the Government’s view, the provisions of the Trade Union Act that allow for the existence of more than one union in an establishment, are in the spirit of freedom of association and not of union busting. The Committee notes the Government’s indication that the High Court has decided that the registration of MAYNEU is valid and within the powers of the DGTU, that this ruling is being appealed by NUBE, and that, in addition, there is a defamation suit against NUBE filed by the bank before the High Court. The Committee notes that the Government states that it is not in a position to comment in more detail until these cases are disposed of.
4. 872. As regards the registration by the DGTU of MAYNEU, which is denounced by the complainant as an act of union busting against NUBE, the Committee notes that, according to section 12 of the Trade Union Act, the DGTU may refuse to register a trade union in respect of a particular establishment, if he is satisfied that there is already in existence a union representing the workers in that establishment and if it is not in the interest of those workers that there be another union. In this regard, the Committee notes that the DGTU has considered that the registration of an in-house union would be in the interest of the workers and that the registration has been ruled valid by the High Court. Moreover, the Committee wishes to highlight that it has always held that a provision authorizing the refusal of an application for registration if another union, already registered, is sufficiently representative of the interests which the union seeking registration proposes to defend, means that, in certain cases, workers may be denied the right to join the organization of their choice, contrary to the principles of freedom of association. Consequently, the Committee has previously suggested that States should amend their legislation so as to make it clear that when a trade union already exists for the same employees as those whom a new union seeking registration is organizing or is proposing to organize, this cannot give rise to objections of sufficient substance to justify the registrar in refusing to register the new union [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, paras 326 and 328]. The Committee has already requested, in the framework of Case No. 2301, the revision of certain provisions of national legislation in this respect, including section 12. The Committee therefore considers that the registration by the DGTU of an additional trade union (the in-house union MAYNEU), despite the existence of a representative union at the bank (NUBE), does not in itself give rise to a violation of freedom of association. However, the Committee wishes generally to recall that any favourable or unfavourable treatment by the public authorities of a particular trade union as compared with others, if it is not based on objective pre-established criteria of representativeness and goes beyond certain preferential rights related to collective bargaining and consultation, would constitute an act of discrimination which might jeopardize the right of workers to establish and join organizations of their own choosing. The Committee trusts that due account is being taken of this principle. It further requests the Government to provide information as to the impact of the registration of MAYNEU on the recognition of NUBE as bargaining agent in the light of its apparent majority representation, which has not been contested by the Government, and the previously existing collective bargaining agreement, which recognizes NUBE as the bargaining partner. The Committee also requests to be kept informed of the final outcome of the ongoing judicial proceedings.
5. 873. With respect to the alleged acts of harassment and intimidation against NUBE officials by the bank’s security guards and the police, the Committee notes with regret the Government’s failure to provide any information concerning these serious allegations. The Committee wishes to recall that the rights of workers’ and employers’ organizations can only be exercised in a climate that is free from violence, pressure or threats of any kind against the leaders and members of these organizations, and it is for governments to ensure that this principle is respected [see Digest, op. cit., para. 44]. The Committee requests the Government to swiftly conduct an independent inquiry into the allegations of harassment and intimidation of NUBE officials and keep it informed of its outcome.
6. 874. The Committee further regrets that the Government has not provided its observations in relation to the other measures allegedly taken by the bank. In these circumstances, the Committee notes the seriousness of the allegations that the bank, the management of which allegedly admitted that the formation of the in-house union was aimed at crippling NUBE’s influence in the banking industry, would have coerced NUBE members to resign and sign up with MAYNEU, granted trade union leave to several MAYNEU members for the purpose of trying to convince or compel NUBE members to resign and instead join MAYNEU, and provided manager or meeting rooms in order to facilitate such recruitment of NUBE members during office hours. In this regard, the Committee reminds the Government that respect for the principles of freedom of association requires not only that the public authorities exercise great restraint in relation to intervention in the internal affairs of trade unions. It is even more important that employers exercise restraint in this regard. They should not, for example, do anything which might seem to favour one union at the expense of another. As regards allegations of anti-union tactics in the form of bribes offered to union members to encourage their withdrawal from the union and the presentation of statements of resignation to the workers, as well as the alleged efforts made to create puppet unions, the Committee has always considered such acts to be contrary to Article 2 of Convention No. 98, which provides that workers’ and employers’ organizations shall enjoy adequate protection against any acts of interference by each other or each other’s agents in their establishment, functioning or administration [see Digest, op. cit., paras 859 and 858]. In light of the above freedom of association principles and the Government’s obligation under Articles 1 and 2 of Convention No. 98, ratified by Malaysia, to ensure the adequate protection of workers’ organizations against acts of interference on the part of employers, the Committee requests the Government to institute without delay an independent investigation into the alleged acts of interference against NUBE by the bank and to keep it informed of the results.
7. 875. Concerning the allegation that NUBE officials were not allowed to enter the bank’s premises to meet members and hold meetings, the Committee reminds the Government that, for the right to organize to be meaningful, the relevant workers’ organizations should be able to further and defend the interests of their members, by enjoying such facilities as may be necessary for the proper exercise of their functions as workers’ representatives, including access to the workplace of trade union members [see Digest, op. cit., para. 1106]. The Committee requests the Government to take the necessary measures to guarantee the access of NUBE representatives to the bank’s premises and to keep it informed in this regard.
8. 876. Lastly, expressing concern at the alleged anti-union dismissal of the NUBE Vice-President Mr Abdul Jamil Jalaludeen and the NUBE Treasurer-General Mr Chen Ka Fatt on 31 January 2012, the Committee requests the Government to provide its observations concerning the allegations contained in the latest communication of the complainant, as well as to supply the relevant decisions of the High Court and the Appelate Court.

The Committee’s recommendations

1. 877. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) As regards the registration of MAYNEU, the Committee requests the Government to provide information as to the impact of the registration of MAYNEU on the recognition of NUBE as bargaining agent in the light of its apparent majority representation and the previously existing collective bargaining agreement recognizing NUBE as the bargaining partner; as well as to keep it informed of the final outcome of the ongoing judicial proceedings.
   • (b) With respect to the allegations of harassment and intimidation of NUBE officials by the bank’s security guards and by the police, the Committee requests the Government to swiftly conduct an independent inquiry into these allegations and to keep it informed of its outcome.
   • (c) In light of the Government’s obligation under Convention No. 98 to ensure the adequate protection of workers’ organizations against acts of interference on the part of employers, the Committee requests the Government to institute without delay an independent investigation into the alleged acts of interference against NUBE by the bank and to keep it informed of the results.
   • (d) The Committee requests the Government to take the necessary measures to guarantee the access of NUBE representatives to the bank’s premises and to keep it informed in this regard.
   • (e) Expressing concern at the alleged anti-union dismissal of the NUBE Vice-President Mr Abdul Jamil Jalaludeen and the NUBE Treasurer-General Mr Chen Ka Fatt on 31 January 2012, the Committee requests the Government to provide its observations concerning the allegations contained in the latest communication of the complainant, as well as to supply the relevant decisions of the High Court and the Appelate Court.