Report in which the committee requests to be kept informed of development - Report No 397, March 2022

Case No 3401 (Malaysia) - Complaint date: 30-DEC-20 - Follow-up

Allegations: The complainant organization alleges the failure of the Government to provide protection in law and practice against repeated anti-union acts against its members by the employer, including harassment, victimization and anti-union dismissals of trade union leaders and members, as well as non-compliance with a concluded agreement and deliberate delays in negotiations of a collective bargaining agreement

1. 480. The complaint is contained in a communication dated 30 December 2020 from the National Union of Bank Employees (NUBE).
2. 481. The Government provides its observations in communications dated 10 April and 30 September 2021 and 28 January 2022.
3. 482. Malaysia has ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), but not the Freedom of Association and Protection of the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87).

A. The complainant’s allegations

1. 483. In its communication dated 30 December 2020, the complainant alleges failure of the Government to provide protection in law and practice against repeated anti-union acts by the Hong Kong and Shanghai Banking Corporation (HSBC) Bank Malaysia Berhad (the bank) against NUBE and its members, including harassment, victimization and anti-union discrimination of trade union leaders and members, as well as non-compliance with a concluded agreement and deliberate delays in negotiations of a collective bargaining agreement.
2. 484. In particular, the complainant alleges that during the negotiations of a collective bargaining agreement for the period from 2016 to 2019, the bank deliberately delayed negotiations, which reached a deadlock when the bank refused to agree with four major articles even though those issues had been agreed to in a national collective agreement applicable to 21 banks. The complainant argues that the Government failed to provide an effective mechanism to facilitate the negotiations and the union therefore declared a trade dispute against the bank and resorted to industrial action (picketing and union campaign with the use of social media) in September 2018. The collective agreement was finally signed in July 2019.
3. 485. The complainant further alleges the bank’s non-compliance with an agreement concluded with the union in 2010. This agreement stipulates an obligation on the employer to consult with the union prior to structural changes and outsourcing of jobs of permanent employees. However, in 2015 and 2017, on grounds of excessive numbers of workers due to automation and outsourcing, the bank initiated a voluntary separation scheme (VSS) and in 2019, proceeded to further imposition of the VSS without any prior agreement with the NUBE. Although the union attempted on many occasions to make the employer honour the agreement, the bank claims that it is not binding and that no consultation is necessary prior to implementing structural changes. In its October 2019 ruling, the Industrial Court stated that the agreement had not been recognized by the Court and was therefore invalid but the complainant argues that even if the agreement had not been filed to the Industrial Court as a collective bargaining agreement, it is a subsidiary agreement, arising out of a dispute and showing consensus reached between the parties. The complainant is in the process of appealing to the High Court to challenge the October 2019 decision. In its view, the bank is taking advantage of the uncertain situation created by the COVID-19 pandemic and continues to disregard the 2010 agreement, showing a lack of labour inspection from the Ministry.
4. 486. On matters of collective bargaining, the complainant also alleges that current labour laws constitute an impediment to fostering the right to collective bargaining and dispute resolution. In particular, it claims that the scope of collective bargaining does not permit matters relating to termination, promotion, employment and transfers to be negotiated, resulting in disciplinary procedures being employer-biased. In addition, due to the lack of effective conciliation and mediation provisions, disputes referred to the Ministry for conciliation are eventually submitted to the Industrial Court for resolution without any conciliation or mediation process, and the unions are refrained from taking any industrial action when a dispute has been referred to the Ministry or the Industrial Court.
5. 487. The complainant further alleges a pattern of repeated anti-union acts against its members. It first points to victimization of workers for joining the union, including through the issuance of warning letters and artificial promotion to managerial positions so as to reduce union membership, since workers in management cannot be union members. It then alleges that during the September 2018 industrial actions, NUBE members were harassed and threatened by the police for exercising the right to peaceful assembly and picketing. After the industrial actions, two union representatives and members of the Industrial Relations Committee, Ms Sarimah Binti Awang Senik and Mr T. Sethupathy (also a union official) were suspended and then terminated and one representative, Mr Arshad Bin Amran, was suspended but later reinstated. Although bank employees nationwide participated in the same trade dispute and activities, the bank deliberately acted against NUBE members in Kuala Lumpur and these three unionists, with the aim of disrupting them from engaging in legitimate trade union work and demoralizing other members. The show cause letters they received alleged that the conduct of engaging in union actions showed failure to act in the interest of the bank and therefore constituted a breach of duties. Mr Sethupathy and Ms Sarimah appealed against the decision to the bank, which was refused. They also filed a case to the Industrial Court but no progress has been made until now. The complainant alleges that 19 other members were also reprimanded and issued with show cause letters and warnings against their participation in industrial actions in the future and the bank took disciplinary action against other trade unionists who had participated in the industrial actions. The union claims that these acts are contrary to sections 4, 5(d), 39(a) and 59(d) of the Industrial Relations Act (IRA), for which it filed complaints to the Ministry of Human Resources in April 2019. It states that the Department of Industrial Relations is still interviewing the aggrieved unionists and that they were denied trade union representation during the interviews, contrary to conciliation and mediation practices. The cases concerning the termination of the two unionists are now pending at the Industrial Court and will probably take a long time to address the issue.
6. 488. Moreover, the complainant considers that the imposition of the VSS on NUBE members, in violation of the 2010 agreement, as reported above, also constitutes anti-union acts. It alleges that many NUBE members were coerced to opt for retrenchment – 97 of its members were forced to accept the VSS in 2015, 120 members in 2017 and overall, around 500 NUBE members had been indirectly threatened or intimidated to opt for the VSS under the threat of disciplinary sanctions, including dismissal. The complainant brought this issue to the attention of the Ministry of Human Resources, including in November 2020, but the Ministry failed to address these concerns. The complainant also alleges that the bank obstructs trade union officials from having access to the workplace to meet with union members. As an example, it points to a November 2019 branch-level grievance meeting in the Petaling Jaya Branch. On that occasion, the branch manager informed that Ms Sarimah could not attend the meeting since she had been terminated and asked her to leave the premises. Although union members insisted to continue the meeting with the NUBE Branch Secretary, the manager threatened to call the security, which he did, and the union officials were forced to leave the premises. In the complainant’s view, the above actions against NUBE members constitute harassment, retaliation, forced retirement and anti-union discrimination for carrying out legitimate union activities.
7. 489. The complainant further alleges the bank’s non-cooperative attitude with regard to the above disputes and indicates that it has made several attempts to engage in genuine discussions with the bank to resolve the outstanding issues but that the bank uses the COVID-19 pandemic as an excuse to refuse to meet with the union. The bank is a member of the Malaysian Commercial Banks’ Association (MCBA) with which the NUBE had created a Standing Committee, which is a part of the mandatory dispute settlement process under the applicable collective agreement between the MCBA and the NUBE, to which the bank is also a party. Nevertheless, when the unresolved dispute was referred to the MCBA/NUBE Standing Committee for mediation, the bank refused to attend its meeting stating that it preferred to refer the dispute to the court.
8. 490. The complainant also considers that the Ministry of Human Resources was ineffective in protecting workers against the increasing attacks on trade union rights and failed to do so for all aspects of the present case. It argues, in particular that the Ministry failed to intervene in relation to the enforcement of the 2010 agreement, to facilitate negotiations of the new collective bargaining agreement, to provide protection to carry out legitimate industrial actions and to protect workers against discrimination, even where the union filed two complaints to the Industrial Relations Officers under section 39(a) and 59(1)(d) of the IRA. According to the complainant, the Ministry failed to engage and cooperate with the NUBE in a joint labour inspection it had requested concerning the various alleged violations of freedom of association and collective bargaining and even when an inspection took place in December 2020, the Labour Department failed to address the union’s concerns about the vindictive acts against workers. Finally, the complainant contends that the bank’s actions and the Government’s ineffective measures lead to a decline in union security, promote union victimization and weaken trade union rights. The complainant therefore considers that the Ministry should take appropriate measures to ensure that: the dispute is resolved and all workers who had been dismissed are reinstated with adequate compensation; the bank withdraws its VSS programme and enters into negotiations with the union on this matter; and the bank, the Ministry and the Industrial Court recognize the 2010 agreement as a legally binding document.

B. The Government’s reply

1. 491. In its communications dated 10 April and 30 September 2021 and 28 January 2022, the Government indicates, with regard to the alleged failure to facilitate negotiations between the union and the bank, that following the union’s complaint on the deadlock in negotiations, the Department of Industrial Relations initiated four conciliation meetings between the parties from August to November 2018. As they did not reach an amicable settlement, the case was referred to the Industrial Court in December 2018. The matter was settled out of court and both parties jointly deposited the concluded collective agreement to the Industrial Court for cognizance, which was accorded in 2019. The fourth collective agreement was considered valid from July 2016 to June 2019 and the issue was deemed as resolved.
2. 492. Concerning the alleged non-compliance by the bank with the 2010 agreement on outsourcing and restructuring, the Government states that in October 2019, the Industrial Court decided that the agreement had no legal effect. The NUBE filed for judicial review to the High Court of Malaysia, which dismissed the application in December 2021.
3. 493. As to the allegations of inadequate protection of the right to collective bargaining and dispute resolution in the current labour laws, the Government indicates that it took note of the concerns raised but considers that the aim of section 13(3) of the IRA regarding management prerogatives is to preserve industrial harmony and expedite collective bargaining processes. The restrictions on the scope of bargaining contained in the provision are not mandatory and if both parties come to an agreement, they may negotiate on matters relating to promotion, transfers, employment, termination, dismissal, reinstatement and assignment or allocation of duties. The Government also indicates that the recent amendment of section 13(3) of the IRA allows trade unions to raise questions of a general character relating to these matters in the course of any discussion, including in the course of any collective bargaining.
4. 494. Regarding the alleged victimization of workers due to their union activities, the Government indicates that no complaint has been lodged to the Department of Industrial Relations under section 8 of the IRA but that complaints received under sections 39(a) and 59(d) are currently under investigation. To address the complainant’s concern that union representatives were not allowed to assist the concerned unionists in the interviews, it emphasizes that the concerned unionists are directly examined by the investigation officer but no other person, including a union representative, is allowed to participate in the investigation, since it is not a conciliation or mediation process. With regard to the trade dispute on the termination of two NUBE members, the Government indicates, that the dates for the hearings in the case concerning Ms Sarimah were scheduled between April and October 2020 and in the case of Mr Sethupathy, between December 2020 and January 2021 but did not take place due to the COVID-19 pandemic and were rescheduled in both cases to January and April 2022. The Government adds that, contrary to what the complainant alleges, the law does not restrict the rights of workers in managerial, executive, confidential or security positions to form a trade union and exercise collective bargaining rights but stipulates that such a union may not represent workers who are outside of these categories, so as to avoid conflict of interest.
5. 495. The Government concludes by indicating that the Department of Labour assisted and facilitated the resolution of the dispute by calling both parties for discussion on multiple occasions and conducting inspections on the premises. It also highlighted the issue of retrenchments of workers and requested the employer to notify the Department of Labour 30 days before such retrenchments. The Government thus strived to facilitate the resolution of the dispute in compliance with domestic legislation, while adhering to international labour standards, and remains committed to upholding social justice and industrial harmony, regularly engaging and consulting the relevant stakeholders.

C. The Committee’s conclusions

1. 496. The Committee observes that the present case concerns allegations of the failure of the Government to provide protection in law and in practice against repeated anti-union acts against the NUBE and its members by the employer, including harassment, victimization and anti-union dismissals of trade union leaders and members, as well as non-compliance with a concluded agreement and deliberate delays in the negotiations of a collective bargaining agreement.
2. 497. The Committee notes that the complainant alleges several violations of the right to bargain collectively in practice. Firstly, it alleges that contrary to a 2010 agreement, which stipulates an obligation on the employer to consult with the union prior to structural changes at the enterprise, the bank has been regularly imposing a voluntary separation scheme on NUBE members (addressed in more detail below) without any prior agreement with the union, claiming that the agreement is not binding and that no consultation is necessary prior to implementing structural changes. The Committee notes that while the complainant considers this agreement as a legally binding tool showing consensus reached between the parties during a labour dispute and alleges the bank’s non-compliance with the agreement, the Government does not elaborate in detail on this allegation but refers to the decision of the Industrial Court which ruled in October 2019 that the agreement had not been registered with the Court and was thus not valid. While noting that it does not have at its disposal a copy of the agreement or further details as to its legal nature, the Committee wishes to underline that mutual respect for the commitment undertaken in collective agreements is an important element of the right to bargain collectively and should be upheld in order to establish labour relations on stable and firm ground. Agreements should be binding on the parties. The Committee has emphasized that it is important that governments consult with trade union organizations to discuss the consequences of restructuring programmes on the employment and working conditions of employees [see Compilation of decisions of the Committee on Freedom of Association, sixth edition, 2018, paras 1336, 1334 and 1555]. Accordingly, where a lawful agreement is concluded between the parties, they should endeavour, in good faith, to respect its provisions.
3. 498. Secondly, the Committee notes that the complainant alleges deliberate delays by the bank in the negotiations of a collective bargaining agreement for the period 2016-2019 and its non-cooperative attitude in solving the outstanding issues, demonstrated by the bank’s refusal to attend the meetings of the MCBA/NUBE Standing Committee – a mandatory dispute settlement mechanism under the applicable collective agreement – and its refusal to meet with the union under the pretext of the COVID-19 pandemic. The complainant also alleges the failure by the Government to provide effective mechanisms to facilitate the negotiations, as a result of which the dispute had to be solved at the Industrial Court, delaying the signature of the collective bargaining agreement until July 2019. The Committee notes that the Government does not contest the alleged delays in negotiations or the bank’s non-cooperative attitude but refutes the allegation on its own inaction, asserting that it had called the parties for discussion on multiple occasions and initiated conciliation meetings but that due to a lack of agreement between the parties, the matter was settled at the Industrial Court. The Committee wishes to recall from the outset that it is important that both employers and trade unions bargain in good faith and make every effort to reach an agreement; moreover genuine and constructive negotiations are a necessary component to establish and maintain a relationship of confidence between the parties. The principle that both employers and trade unions should negotiate in good faith and make efforts to reach an agreement means that any unjustified delay in the holding of negotiations should be avoided [see Compilation, paras 1328 and 1330]. The Committee further recalls that if the negotiations are not successful because of disagreement, the Government should consider with the parties ways of overcoming such an obstacle through a conciliation or mediation mechanism, or, if the disagreements persist, through arbitration by an independent body trusted by the parties [see Compilation, para. 1322]. The Committee notes in this regard that despite a number of conciliation meetings initiated by the Government and the referral of the dispute to the Industrial Court, the collective bargaining agreement was only signed a few months before the end of the period for which it was supposed to be valid, thus reducing much of its purpose. The Committee trusts that any future negotiations between the parties will be conducted in good faith, with the aim of avoiding excessive delays and keeping in mind the benefits of constructive dialogue for the establishment and maintenance of harmonious labour relations. The Committee expects the Government to continue to take any necessary measures to facilitate such negotiations between the parties.
4. 499. The Committee observes, with regard to the alleged legislative shortcomings on collective bargaining, that both the complainant and the Government agree that section 13(3) of the IRA sets certain restrictions on collective bargaining, but they have differing opinions on the actual effect of these restrictions on the scope of negotiations. While the complainant alleges that the law limits the scope of collective bargaining in that it excludes matters relating to termination, promotion, employment and transfers from negotiations, resulting in disciplinary procedures being employer-biased, the Government puts forward that the restrictions contained in section 13(3) of the IRA are not mandatory, allowing parties to agree to negotiate these matters, and that the recent amendment of the provision also allows trade unions to raise questions of a general character relating to these matters in the course of any discussion, including in the course of any collective bargaining. The Committee observes in this regard that section 13(3) of the IRA does indeed stipulate that a union may not include in its proposal for collective bargaining a number of matters, some of which are essentially questions relating to conditions of employment, which should be regarded as falling within the scope of collective bargaining, but at the same time allows a union to raise questions of a general character in relation to these matters, including in the course of collective bargaining. Observing the lack of clarity on the practical application of the provision, as amended, and its effect on the scope of negotiable issues, the Committee wishes to recall that measures should be taken 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 the regulation of terms and conditions of employment by means of collective agreements. The right to bargain freely with employers with respect to conditions of work constitutes an essential element in freedom of association, and trade unions should have the right, through collective bargaining or other lawful means, to seek to improve the living and working conditions of those whom the trade unions represent. The public authorities should refrain from any interference which would restrict this right or impede the lawful exercise thereof. Any such interference would appear to infringe the principle that workers’ and employers’ organizations should have the right to organize their activities and to formulate their programmes [see Compilation, paras 1231 and 1232]. The Committee also observes in this regard that the Committee of Experts on the Application of Conventions and Recommendations (Committee of Experts) had previously requested the Government to amend section 13(3) of the IRA to remove its broad restrictions on the scope of collective bargaining. In its latest observations, it welcomed the amendment allowing unions to raise questions of a general character in relation to these matters and requested the Government to indicate its practical implications on the scope of collective bargaining, so as to clarify how the possibility to raise questions of a general character on matters that are within the scope of legislative restrictions on collective bargaining would be articulated in practice. In line with the above, the Committee requests the Government to provide to the Committee of Experts further information on the practical application of section 13(3) of the IRA, as amended, in particular on the interaction between the legislative restrictions on negotiable issues and the possibility to raise questions of a general character in this regard, and refers this legislative aspect of the case to the Committee of Experts.
5. 500. The Committee further notes that the complainant alleges repeated anti-union acts against its leaders and members, both for joining the trade union and for participating in union activities. In particular, it points to victimization of workers, issuance of warning letters and promotion to managerial positions to restrict union membership, as well as harassment during the September 2018 industrial actions and their aftermath, both by the police and by the bank, including suspension and dismissal of two union representatives and the issuance of reprimands and other disciplinary actions against several unionists. Furthermore, the complainant alleges restrictions on union officials’ access to the workplace, as well as the imposition of a voluntary separation scheme on workers under the threat of disciplinary action and dismissal, touching around 500 NUBE members. While the complainant considers these acts as a deliberate attack on trade union rights, including in the context of economic restructuring, and denounces the Government’s failure to provide adequate protection against these violations, the Government contends that it took the necessary measures to address the concerns raised, in particular through labour inspections, discussions with both parties, interviews of the concerned unionists and a request to the bank to notify the Department of Industrial Relations of retrenchments under the VSS. It adds that any complaints received were investigated and that the cases concerning the dismissal of Ms Sarimah and Mr Sethupathy are currently pending before the Industrial Court, with hearings rescheduled to January and April 2022 due to the COVID-19 pandemic.
6. 501. While taking due note of the Government’s initiatives, the Committee observes the complainant’s concerns that the various actions undertaken by the bank, including on the pretext of economic necessity, result in a pattern of harassment and anti-union acts with serious consequences on its members. The Committee recalls that no person should be prejudiced in employment by reason of legitimate trade union activities and cases of anti-union discrimination should be dealt with promptly and effectively by the competent institutions. The dismissal of workers on grounds of membership of an organization or trade union activities violates the principles of freedom of association [see Compilation, paras 1077 and 1104]. The Committee also wishes to underline that not only dismissal, but also compulsory retirement, when imposed as a result of legitimate trade union activities, would be contrary to the principle that no person should be prejudiced in his or her employment by reason of trade union membership or activities. A corporate restructuring should not directly or indirectly threaten unionized workers and their organizations [see Compilation, paras 1109 and1113]. In view of the above and given the Government’s commitment to address the concerns raised, the Committee requests the Government to continue to engage with the parties with a view to solving any outstanding issues concerning the allegations of anti-union termination or suspension of NUBE members and to ensure that, where appropriate, adequate remedies are provided to the concerned workers, allowing for reinstatement and compensation. It also requests the Government to provide information on the outcome of the judicial proceedings in the two cases concerning allegations of anti-union dismissals of NUBE representatives. The Committee trusts that the Government will remain vigilant as to any future dismissals or other measures targeting the complainant’s members, so as to ensure that they are not motivated by anti-union reasons and that the NUBE is allowed to conduct its activities in a climate that is free from harassment, threats or efforts to discredit the union or its leaders. Observing that certain allegations, albeit without any details, concerned the police, the Committee trusts that the police and other State authorities are regularly sensitized to trade union rights, so as to avoid harassment or intimidation of unionists by public authorities.

The Committee’s recommendations

1. 502. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee trusts that any future negotiations between the parties will be conducted in good faith, with the aim of avoiding excessive delays and keeping in mind the benefits of constructive dialogue for the establishment and maintenance of harmonious labour relations. The Committee expects the Government to continue to take any necessary measures to facilitate such negotiations between the parties.
   • (b) The Committee requests the Government to provide to the Committee of Experts further information on the practical application of section 13(3) of the IRA, as amended, in particular on the interaction between the legislative restrictions on negotiable issues and the possibility to raise questions of a general character in this regard, and refers this legislative aspect of the case to the Committee of Experts.
   • (c) Given the Government’s commitment to address the concerns raised in this case, the Committee requests the Government to continue to engage with the parties with a view to solving any outstanding issues concerning the allegations of anti-union termination or suspension of NUBE members and to ensure that, where appropriate, adequate remedies are provided to the concerned workers, allowing for reinstatement and compensation. It also requests the Government to provide information on the outcome of the judicial proceedings in the two cases concerning allegations of anti-union dismissals of NUBE representatives.
   • (d) The Committee trusts that the Government will remain vigilant as to any future dismissals or other measures targeting the complainant’s members, so as to ensure that they are not motivated by anti-union reasons and that the NUBE is allowed to conduct its activities in a climate that is free from harassment, threats or efforts to discredit the union or its leaders. It also trusts that the police and other State authorities are regularly sensitized to trade union rights, so as to avoid harassment or intimidation of unionists by public authorities.