Interim Report - Report No 380, October 2016

Case No 3126 (Malaysia) - Complaint date: 06-MAY-15 - Closed

Allegations: The complainant organization alleges the violation of the collective agreement in force by the employer, Hong Leong Bank, dismissal of union members and a series of other anti-union acts including the restriction of the right to industrial action by compulsory arbitration and an attempt to deregister the union following the declaration of a trade dispute by the complainant

1. 697. The complaint is contained in a communication dated 6 May 2015 from the National Union of Bank Employees (NUBE).
2. 698. The Government provided its reply in a communication dated 28 October 2016.
3. 699. 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 complainant’s allegations

1. 700. In a communication dated 6 May 2015, NUBE asserts that the Government is neglecting its duties to protect the job security of 27 NUBE members. The workers were subjected to extreme victimization over a period of two months by Hong Leong Bank (hereinafter “the company), and eventually dismissed for not being able to relocate from their rural workplaces to new workplaces in the cities. The company argued failure to comply with a relocation directive, while in NUBE’s view, this directive would have inevitably resulted in the 27 workers being separated from their families, suffer undue hardship and increased cost of living without adequate and fixed compensation.
2. 701. Furthermore, NUBE indicates that the company is the fifth largest commercial bank in Malaysia and is a member of the Malayan Commercial Banks Association (MCBA), an employers’ organization. The company is also party to the MCBA/NUBE Collective Agreement (copy provided). NUBE refers to the hubbing and relocation process whereby the company’s Hire Purchase/Housing Loan Collection Department job functions are centralized from the various states to three cities in Peninsular Malaysia. The company actually carried out Phase I of this hubbing and relocation process in the fourth quarter of 2012, and the relocation was within the same state/city. Workers were not badly affected by the move.
3. 702. According to NUBE, the company continued with Phase II of the hubbing and relocation process which, however, affected a larger population of workers. A total of 49 workers were forced to leave their homes, families and relocate. Workers subjected to relocation under Phase II were from the rural states in Peninsular Malaysia. They were forced to leave their homes and families behind and move to either one of the cities. This move would have a serious impact on the workers’ livelihoods.
4. 703. NUBE asserts that it was engaged in discussions with the company since March 2013 over this matter. However, the company failed to justify the real need to carry out the hubbing and relocation process which would have an adverse impact on the lives and livelihood of the workers. While NUBE appealed to the Chairman and the CEO, the company remained adamant with its decision. The unresolved complaints evolved into a trade dispute between NUBE and the company. The dispute was reported to the Industrial Relations Department of the Ministry of Human Resources on 28 October 2013. NUBE officials met with the Department on 31 October 2013, but there was no follow-up action from the Department. On 10 November 2013, NUBE announced mass picket action against the company to be held on 16 November 2013. The Department met with the company on 14 November 2013, and called NUBE immediately for a conciliation meeting on 15 November 2013, but without the presence of the company. During the meeting, NUBE urged the Director-General of Industrial Relations (DGIR) to exercise his vast powers vested under Section 2A(3) of the Industrial Relations Act 1967 to direct the company to stop all forced relocation with a view to finding an amicable solution. However, the Department did not intervene and instead called for a subsequent tripartite reconciliation meeting on 19 November 2013. Consequently, NUBE proceeded with its picket action on 16 November 2013.
5. 704. According to NUBE, at the reconciliation meeting held on 19 November 2013, the following decisions were reached: (i) the company agreed to review its hubbing and relocation process and revert back by 4 December 2013; (ii) the company agreed to maintain status quo until they reverted back on 4 December 2013; and (iii) NUBE agreed to stop all industrial action.
6. 705. NUBE denounces the fact that the company did not comply with its commitments and took the following actions against the workers: (i) locked out workers, preventing them from entering the premises and signing their attendance; (ii) denied access to washrooms/toilets; (iii) denied access to prayer rooms to fulfil their religious obligations; (iv) denied their annual leave; (v) denied bonus payments that were supposed to be paid by 15 December 2013 as per Article 20 of the MCBA/NUBE Collective Agreement; and (vi) denied salaries for the days the workers were not able to report to the new workplace. They were present at the old workplace but were locked out.
7. 706. In addition, NUBE indicates that on 27 November 2013, the company notified the Industrial Relations Department of the Ministry of Human Resources that it was not willing to review the hubbing and relocation process and would proceed with it. The company had also urged the Department to refer the trade dispute to the Industrial Court for adjudication immediately to deny NUBE the right to picket. On the same day, the company issued a letter to the workers stating that their inability to report to the new workstation would be treated as unpaid leave for being absent without leave. The company deemed it absence without leave and deducted their salaries without consent, although the workers reported to their old workstations, and despite the workers repeatedly writing appeal letters against the arbitrary hubbing and relocation process.
8. 707. NUBE reported to the Industrial Relations Department urging it to take steps to prevent the firing of the workers. The only action taken by the Department was merely appealing to the company to maintain the status quo. At the conciliation meeting on 4 December 2013, NUBE made a one-hour presentation regarding the effect of the hubbing and relocation process on the lives of the workers and the various provisions of the Collective Agreement, Malaysian law and policies and International Labour Standards that were breached by the company. NUBE requested the Industrial Relations Department to make a stand in the best interest of the workers. However, the Department remained evasive and the company adamant.
9. 708. On 6 December 2013, the Ministry of Human Resources referred the trade dispute to the Industrial Court ignoring the plight of the workers and denying NUBE’s right to picket. According to the complainant, this was an unprecedented and most expedient submission to the Industrial Court ever by the Industrial Relations Department. However, more than a year after the submission of the complaint, the trade dispute remains pending at the Industrial Court. In addition, to date, the Minister has not responded to Parliamentarians’ questioning about the trade dispute.
10. 709. According to the complainant, after the trade dispute on the hubbing and relocation process was referred to the Industrial Court, the company continued the said process, subjecting the affected workers to various abuses such as disciplinary action, non-payment of wages and contractual bonus, denial of annual leave and the final blow of dismissal in stages from 18 to 22 December 2013. The complainant denounces the fact that the Industrial Relations Department of the Ministry of Human Resources remained passive, although it was warned about the dismissal as early as October 2013, ignoring claims that the whole transfer exercise was a guise to reduce the workforce, and that where the workers resisted, the employer would eventually dismiss them.
11. 710. This situation gave rise to yet another series of violations of human rights and union busting. NUBE declared a trade dispute and commenced picketing action on the disruption to family lives, neglect of children, non-payment of wages, bonuses and denied annual leaves, denied access to sanity facilities and prayer rooms. In a move to deny NUBE its right to picket, the company filed an ex-parte application for an injunction against NUBE carrying out the picket and an Application for Mandamus for the Director-General of Trade Unions to deregister NUBE. The hearing of this injunction and mandamus was heard on 1 April 2015. The decision is presently pending.
12. 711. In view of this interference by the employer, the victimization and violation of fundamental rights of workers and trade union rights, and the Government’s inaction, NUBE requests an urgent decision from the Committee on Freedom of Association and action from the ILO to address the non-compliance of Conventions Nos 87 and 98 by the Government.

B. The Government’s reply

1. 712. In a communication dated 28 October 2016, the Government indicated that the matters raised by the complainant were dealt with in two pending cases before the courts. First, NUBE disputed the interpretation of Articles 4 and 15 of the Collective Agreement in a case (trade dispute case) before the Industrial Court. On 13 April 2016, the Court handed down an award which acknowledged that: (i) the Collective agreement recognizes the right of the company to transfer its employees to another town or city; (ii) the company had given sympathetic consideration to the 27 employees who had failed to report for duty at their new centres by giving them a five months’ notice instead of the limit of three provided by the collective agreement, therefore the failure to obey the transfer order cannot be justified; and (iii) the hardship and grievances of the 27 employees have not been identified in any document by them or by NUBE or in court. As a result, the Industrial Court dismissed the case (Award No. 435 of 2016, on Case No. 22 (5)/3 1449/13). NUBE filed for a judicial review of the case in the High Court, for which mention is scheduled on 21 November 2016.
2. 713. The Government further indicates that NUBE also filed cases involving the 27 employees dismissed pursuant to their refusal to be transferred (Case No.13/4-545/14). While the proceedings were ongoing, the claimants walked out of the Court, however the Industrial Court handed down an award on 7 September 2016. NUBE took the case to the High Court which decided in its favour on a legal point. Now, the company is appealing the decision to the Court of Appeal. The date of the hearing is yet to be scheduled.

The Committee’s conclusions

1. 714. The Committee notes that, in the present case, the National Union of Bank Employees (NUBE) alleges the violation by the company of a collective agreement to which it is party, the dismissal of union members and anti-union acts including the restriction of the right for industrial action by compulsory arbitration and an attempt to deregister the union following the declaration of a trade dispute.
2. 715. The Committee notes from the information provided by NUBE that the company is a member of the Malayan Commercial Banks Association (MCBA), an employers’ organization, and is party to the MCBA/NUBE Collective Agreement. The Committee also notes that a trade dispute arose in 2013 between the complainant and the company concerning the implementation of a relocation of jobs exercise (hubbing and relocation process whereby a number of job functions are centralized from the various states to three cities in Peninsular Malaysia). According to NUBE, Phase I of the relocation exercise, which took place in the fourth quarter of 2012, was within the same state/city and workers were not badly affected by the move. However, Phase II of the exercise affected a larger population of workers from the rural states who were forced to leave their homes and families behind and relocate. NUBE was engaged in discussions with the company since March 2013 over the second phase of the relocation exercise which, according to the trade union, would have an adverse impact on the lives and livelihood of the workers. Despite NUBE’s appeal, the company remained adamant with its decision. The unresolved complaints evolved into a trade dispute between NUBE and the company.
3. 716. The Committee notes that the dispute was reported to the Industrial Relations Department of the Ministry of Human Resources on 28 October 2013 and that, after NUBE announced on 10 November 2013 mass picket action against the company to be held on 16 November, the said Department started holding conciliation meetings with both parties. After NUBE proceeded with its picket action on 16 November 2013, and following a reconciliation meeting held on 19 November 2013, the parties reached the following decisions: (i) the company agreed to review its hubbing and relocation process and revert back by 4 December 2013; (ii) the company agreed to maintain the status quo until they reverted back on 4 December 2013; and (iii) NUBE agreed to stop all industrial action.
4. 717. However, according to NUBE, on 27 November 2013, the company notified the Industrial Relations Department of the Ministry of Human Resources that it had no intention to review the hubbing and relocation process and would proceed with it. The company also urged the Industrial Relations Department to refer the trade dispute to the Industrial Court for adjudication immediately to deny NUBE the right to picket. On the same day, the company issued a letter to the workers refusing to comply with the transfer directive stating that their inability to report to the new workstation would be treated as unpaid leave for being absent without notice. Furthermore, the Committee notes the complainant’s allegations that the company took the following actions against these workers: (i) prevented them from entering the work premises and signing their attendance; (ii) denied them access to washrooms/toilets; (iii) denied them access to prayer rooms to fulfil their religious obligations; (iv) denied their annual leave; (v) denied bonus payments that were supposed to be paid by 15 December 2013 as per Article 20 of the MCBA/NUBE Collective Agreement; and (vi) denied salaries for the days they were not able to report to the new workplace, although the workers were present at the old workplace but were locked out.
5. 718. The Committee notes that NUBE urged the Industrial Relations Department to take steps to prevent the firing of the workers. However, according to the complainant, the said Department only appealed to the company to maintain status quo and held a conciliation meeting on 4 December 2013, whereby despite NUBE’s in depth presentation on the effect of the hubbing and relocation process on the lives of the workers and the various provisions of the Collective Agreement, Malaysian law and policies and International Labour Standard that were breached, the company remained adamant. On 6 December 2013, the Ministry of Human Resources referred the trade dispute to the Industrial Court denying NUBE’s right to picket. On the date of the submission of the complaint before the Committee, the trade dispute was still pending before the Industrial Court of Kuala Lumpur.
6. 719. Firstly, while certain substantive aspects of the complaint, such as the jobs relocation process put in place by the company are outside the mandate of the Committee, it will pursue its examination of this case as it relates to the trade dispute arising from this process, including as regards the breach of the collective agreement.
7. 720. In this regard, the Committee notes from the Government’s reply that the Industrial Court of Kuala Lumpur issued its award in this case on 13 April 2016. The Committee observes from the award that the case was subject to hearings in January, August, October and November 2015, and that the company and NUBE submitted written submissions in January and February 2016. The Committee notes that, in its findings, the Industrial Court acknowledged that the collective agreement between the company and NUBE accords the Bank the right to transfer its employees within the same city or town, and where necessary to another city or town without the consent of the employees; such a transfer will not be carried out without the Bank giving sympathetic consideration to cases where undue hardship will be caused. Where the Bank is satisfied that undue hardship will be caused, then the transfer will not be carried out without the employee being given a reasonable period of time to organize his/her affairs. The period of time allowed in such cases shall not exceed three months from the date of the first notification of transfer. The Court found – among other considerations – that the evidence provided showed that: (i) the company had engaged with the trade union on the matter and considered the hardship caused; (ii) the company complied with its obligation under the collective agreement having given the workers five months’ notice to report to their new work station and provided outstation employees with a financial package; (iii) the trade union did not adduce evidence to support its contention that the company had acted mala fide and in breach of natural justice; and (iv) the union failed to identify to the company or to the Court the hardship and grievances of the 27 employees who were dismissed by the company pursuant to their refusal to be transferred. Consequently, the Industrial Court rejected the complainant’s claims on the merits of the case. Noting the indication that NUBE filed for judicial review of the case before the High Court, which mention is scheduled on 21 November 2016, the Committee urges the Government to keep it informed of the outcome of the High Court review and of any follow-up to its decision.
8. 721. The Committee further notes the Government’s indication that on 7 September 2016 the Industrial Court handed down an award concerning the 27 employees dismissed pursuant to their refusal to be transferred. The Committee notes that the case was taken by NUBE to the High Court which decided in its favour on a legal point and that the company appealed the decision to the Court of Appeal. The Committee urges the Government to keep it informed of the ruling of the Court of Appeal and of any follow-up to the decision.
9. 722. Furthermore, referring to the complainant’s allegation that the Ministry of Human Resources referred the trade dispute to the Industrial Court denying NUBE’s right to picket, the Committee wishes to recall that compulsory arbitration to end a collective labour dispute and a strike is acceptable if it is at the request of both parties involved in a dispute, or if the strike in question may be restricted, even banned, that is in the case of disputes in the public service involving public servants exercising authority in the name of the State or in essential services in the strict sense of the term, namely those services whose interruption would endanger the life, personal safety or health of the whole or part of the population [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 564]. The Committee expects the Government to ensure full respect of these principles and to provide without delay its observations in this regard.
10. 723. Finally, with regard to NUBE’s allegation that the company filed an Application for Mandamus for the Director-General of Trade Unions to deregister NUBE which was heard on 1 April 2015, the Committee urges the Government to provide without delay information on the outcome of this application and any other information relevant to this serious allegation.

The Committee’s recommendations

1. 724. In light of its foregoing interim conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee urges the Government to keep it informed of the outcome of the judicial review by the High Court on the trade dispute case as well as of the ruling of the Court of Appeal concerning the case involving 27 dismissed employees, and of any follow-up to these court decisions.
   • (b) Recalling its principles on compulsory arbitration to end a collective labour dispute, the Committee expects the Government to ensure their full respect and to provide without delay its observations in relation to the case.
   • (c) With regard to the allegation that the company filed an Application for Mandamus for the Director-General of Trades Union to deregister NUBE which was heard on 1 April 2015, the Committee urges the Government to provide without delay information on the outcome of such application and any other information relevant to this serious allegation.