Individual Case (CAS) - Discussion: 2016, Publication: 105th ILC session (2016)

Right to Organise and Collective Bargaining Convention, 1949 (No. 98) - Malaysia (Ratification: 1961)



A Government representative wished to share the various efforts and measures that had been taken by the Government, both internationally and domestically, with a view to minimizing the issues related to the right to organize and collective bargaining, thereby enhancing Malaysia’s credibility and integrity. Regarding the observations made in 2015 by the International Trade Union Confederation (ITUC) and the Malaysian Trades Union Congress (MTUC), he said that the Government was currently amending the Industrial Relations Act 1967 (IRA) and the Trade Unions Act 1959, taking into consideration the comments of the Committee of Experts. Malaysia, as a signatory to the Trans-Pacific Partnership Agreement (TPPA), was embarking on labour law reforms. Out of a total of eight complaints raised by the MTUC, three had been resolved and five were pending before the Industrial Court or the relevant authority. Detailed comments by the Government would be forwarded in writing. The observations made in 2014 by the World Federation of Trade Unions (WFTU) and the National Union of Bank Employees (NUBE) concerned two cases: NUBE v. Hong Leong Bank Bhd and Nur Hasmila Hafni Binti Hashim & 26 others v. Hong Leong Bank Bhd. In both cases, the Industrial Court had dismissed the documents’ claims on the substance. The Court had not yet received any notice for judicial review from the aggrieved parties.

With respect to the holistic review of labour laws, he said that the Government was currently drafting the amendments and had requested ILO technical assistance so as to facilitate the drafting of the amendments and to ensure that they were in line with the requirements of the Convention and the principles of the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87). The length of the process of trade union recognition varied from case to case and depended on the cooperation of the parties. Furthermore, the recognition process could be subject to judicial review. Until the case was finally decided by the courts, the status of recognition could not be finalized. As to the criteria and procedure for recognition, section 9(4B)(b) of the IRA provided that during the recognition process the Director General of Industrial Relations (DGIR) could refer to the Director General of Trade Unions (DGTU) to ascertain the union’s competence. The main criteria for recognition of trade unions were competence and majority support from employees (50 per cent plus one person), to be determined through secret ballot. Details on the formula were provided in Regulation 11 of the Industrial Relations Regulations 2009. Part IXA of the IRA, as amended, granted the power of investigation and prosecution to the DGIR to determine the competency of a union to represent employees in a particular establishment, trade, industry or occupation. The investigation process would only commence after the DGIR had received a recognition claim from a trade union. The DGIR would carry out an investigation to examine the business activities carried out by the company. Among the criteria to determine eligibility were the final product: the raw materials used; the validation by the Companies Commission of Malaysia; the licence issued by the Ministry of International Trade and Industry; the relevant industrial sector; previous cases resolved; and legal court cases. The decision taken by the DGIR in light of the findings and information obtained through the investigation was forwarded to the DGTU for further action.

With respect to migrant workers, he reiterated the commitment of his country as an ILO member State and a State party to the TPPA to adhere to the principles of Convention No. 87. Non-citizens would be able to run for election for union office if they had been legally working in the country for at least three years. That amendment would enable trade unions to elect their representatives freely, especially with regard to representatives of migrant workers. As to the scope of collective bargaining, the Government had agreed, under the Labour Consistency Plan which formed part of the TPPA, to repeal during the upcoming amendment exercise section 13(3) of the IRA, which contained restrictions on collective bargaining with regard to transfer, dismissal and reinstatement. The Government would also look into and discuss the matter of compulsory arbitration, as it had been included in the Labour Consistency Plan. Concerning the restrictions on collective bargaining in the public sector, he said that the process in the public sector was different from the private sector. It was based on meetings or dialogues between workers’ representatives and the management team, the outcomes of which could be used at various levels and brought to the attention of the Prime Minister. The benefits and welfare of public sector workers were far better compared to previous years. In conclusion, he reiterated that the labour law reforms would transform the landscape of industrial relations and labour practices in the country and would hopefully improve national labour laws so as to meet international labour standards, including the Convention.

The Worker members recalled that the application of the Convention by Malaysia had previously been examined by the Committee in 1999. Yet, certain issues of concern raised by the Committee of Experts dated back to 1989 and were still topical. They therefore considered that the discussion of this case by the Committee was timely and critical. The Government had failed to address the major shortcomings in its laws and practices, as well as in its institutional framework, to give effect to the Convention. Regrettably, the deficiencies concerned key issues, including trade union recognition, compulsory arbitration, the scope of collective bargaining, collective bargaining in the public sector, anti-union discrimination and the right of migrant workers to collective bargaining. They noted from the report of the Committee of Experts that the procedure for union recognition took at least three months and that, according to the Government, judicial reviews were conducted within a timespan of at least nine months. However, certain cases had been pending before the Industrial Court for more than three years including the case of a multinational producing copper wire in the metal sector. These time frames were excessive, and were particularly problematic in light of the criteria and procedure under section 9 of the IRA. A union could submit a claim with the DGIR, if an employer rejected its request for voluntary recognition. Unions representing over 50 per cent of the workforce were entitled to participate in collective bargaining. However, the DGIR did not use the total number of participants in the ballot, but instead the total number of workers on the date that union requested recognition. If in this period (of up to three years) the number of workers in the factory had been substantially reduced, the union might lose the recognition, even if it got an overwhelming majority of the votes. The criteria and procedure were therefore open to abuse by certain employers, who sought to delay and prevent good faith collective bargaining. The Government had also repeatedly refused to comply with the request by the Committee of Experts to amend section 26(2) of the IRA, which provided that the Minister of Labour could refer a dispute to the Industrial Court for arbitration, even without the consent of the bargaining parties, in clear violation of Article 4. The Committee of Experts had also made repeated requests for the repeal of legislative texts imposing restrictions on the scope of collective bargaining, and specifically section 13(3) of the IRA, which contained restrictions on collective bargaining with regard to transfer, dismissal and reinstatement, which were essential terms and conditions of employment. Workers in the public sector were excluded from the right to collective bargaining, with consultations about working conditions taking place in the National Joint Council and the Joint Agency Council. The Committee of Experts had repeatedly urged the Government to allow public servants to bargain collectively over wages, remuneration and other working conditions.

The Worker members also expressed serious concerns over various discriminatory tactics used by certain employers against workers engaged in union activities, and the lack of remedies and dissuasive sanctions. Examples were numerous. Union officials in the railway industry had been subject to disciplinary actions for conducting a picket; ten workers in the rubber production industry had been dismissed for participating in a picket; a union leader employed in a waste collection company had been dismissed for sending out circulars to union members, and the Industrial Court had not ordered his reinstatement, despite the recognition by the court that he had acted as a union official in accordance with the law and the president of a union that sought recognition for collective bargaining purposes in a cement company had been transferred to another branch and then dismissed for allegedly making slanderous comments about management. The Committee of Experts had also raised concerns that migrant workers could only be elected as trade union representatives with the permission of the Minister of Human Resources pursuant to section 28(1)(a) and section 29(2) of the Trade Union Act. They observed that the practical obstacles to collective bargaining faced by migrants went much further. Migrant workers were likely to be subject to dismissal and non-renewal of residence permits if they joined a union or engaged in union activities, as had already happened in the electronics sector. In a case in the paper industry, the Industrial Court had ruled that migrant workers working under a fixed-term contract could not benefit from the conditions agreed in collective agreements. The Worker members wished to draw to the attention of the Committee the fact that the MTUC could not engage in collective bargaining, which meant that there was no collective bargaining at national level. According to the principle of free and voluntary collective bargaining embodied in Article 4, the determination of the bargaining level was essentially a matter to be left to the discretion of the parties. They welcomed the Government’s statement that it was currently undertaking a holistic review of its principal labour laws and emphasized the importance of social dialogue in the context of this review. They hoped that the Government would take into account the comments provided by the MTUC, which contained a detailed review of the legislation, taking into account the comments provided by the ILO supervisory mechanisms.

The Employer members noted that the case had been examined by the Committee in 1994 and 1999. Since then, the Committee of Experts had made nine observations on it, mostly dealing with Article 4 of the Convention. As the Government was conducting a holistic review of its labour laws, they considered that the observation of the Committee of Experts was a “laundry list” of issues with the current legislation in the hope that any new legislation would conform to such views. They therefore considered that it was not the right time to examine the case of Malaysia and would have preferred to do so after the long list of revisions had been made by the Government, which had welcomed the ILO’s assistance. As the situation stood, five main issues were at stake.

First, regarding recognition, the law provided for a secret ballot if an employer did not voluntarily recognize a trade union. Prior observations of the Committee of Experts concerning the duration of the recognition process mentioned that it took nine months on average, but the Government had stated that the duration was only three to four-and-a-half months. While the Committee of Experts believed it was still too long, the Employer members considered that this was shorter and that Article 4 said nothing about the duration of the recognition process. In addition, regarding the ballot, a majority of 50 per cent of workers on the date that the union sought recognition was required, whereas the Committee of Experts considered that it should be 50 per cent of actual voters. Again, Article 4 did not provide any details on the ballot process. Such matters were inappropriate for a binding Convention. Second, the law potentially restricted migrant workers from holding union office, although it did not establish a blanket ban on migrant workers, but only required permission from the Minister of Human Resources. In the view of the Employer members, Article 4 did not deal with the question, which moreover appeared to be a sovereign right consistent with the term used in Article 4 “measures appropriate to national conditions”. The Government had stated that it planned to amend the national legislation in this regard, and the Employer members welcomed that initiative. The third issue concerned management rights, including promotion, transfer, employment, termination, dismissal and reinstatement. In the past, there had been discussions in the Conference Committee on the matters that could be subject to collective bargaining. Determining matters that could be the subject of collective bargaining should be the right of a member State. The Convention did not enumerate matters that were not subject to collective bargaining. Any such detail should be part of a non-binding recommendation, not a Convention. Detailing matters in that way contradicted the voluntary character of collective bargaining and was not appropriate for an observation. While noting the Government’s intention to change the law, the Employer members considered that the existing provision was not contrary to Article 4 of the Convention. The fourth issue concerned restrictions on the right to collective bargaining for public servants other than those engaged in the administration of the State. The Government had noted that committees existed to discuss working conditions with the State. It would however be useful to receive precise information on the bargaining that had taken place, the number of those committees and the nature and number of the collective agreements that had been concluded. Finally, regarding compulsory arbitration if collective bargaining failed, the law allowed either social partner to request such arbitration and the Minister of Labour to refer the parties to arbitration. They raised the question as to why the Committee of Experts had only taken issue with the latter. In conclusion, the Employer members did not consider that the case was about the failure of collective bargaining, but mostly about the Committee of Experts expressing detailed views on a broadly worded provision.

The Worker member of Malaysia said that, while the enactment of the IRA upon ratification of the Convention had been laudable, collective bargaining was subject to statutory restrictions which ran counter to the Convention. When workers succeeded in establishing and registering a union, they still had to go through the rigid, agonizing and costly legal process of recognition under section 9. Related to this was the competency check of trade unions by a third party, as well as the secret ballot to determine whether a union represented the majority of workers. A union’s locus standi to represent the workers could also be challenged by judicial process, which was time consuming and extremely costly for trade unions. Even if trade unions succeeded in the recognition process, they could not determine the scope of negotiable issues due to the restrictive provisions in the Act. Union security clauses were prohibited from being included in collective agreements, and the highest court in Malaysia had held that the check-off provisions contained in collective agreements were no longer enforceable against employers because they were not a trade dispute, as defined in the Act. He welcomed the Government’s assurance that section 13(3) of the IRA would be amended at the next sitting of Parliament. For over 40 years, the trade union movement had raised this issue, which prevented proposals for collective agreements to include provisions that were purported to be management prerogatives.

Malaysian workers also faced other impediments such as: (i) Industrial Court presidents and judges who refused to acknowledge international labour standards; (ii) the lengthy adjudication process; (iii) the equity and good conscience of the Industrial Court’s being subject to legal technicalities; (iv) no order of reinstatement for workers wrongfully dismissed, including trade union leaders, despite the remedy provided for in the Act; (v) compensation in lieu of reinstatement restricted to 24 months and reduced by the court; (vi) unlawfulness of pickets when disputes were referred to the Industrial Court; and (vii) no real right to strike in practice, although it was provided for by law. Although the Employment Act and the IRA granted migrant workers the right to collective bargaining, they were excluded from joining a trade union and faced threats of dismissal and deportation. There were no sanctions, penalties or measures applied to errant employers. That allowed for widespread and extensive victimization of workers, including the dismissal of union members and leaders for upholding their rights, as well as attacks on unions, such as applying to the courts to de-register unions or suing them for defamation. In a recent award, the Industrial Court had concluded that the company had violated the protection accorded to trade union leaders and members, but had not imposed a penalty. Another example was the victimization and dismissal of 27 clerical workers of a bank who had appealed against their transfer, followed by the bank’s injunction to stop the union from picketing and its application to de-register the union and, after one year, the court’s dismissal of the application, which was currently being challenged. Since 2014, relations between the social partners in the country had improved under the leadership of the Secretary-General of the Ministry of Human Resources and workers’ issues would hopefully be addressed soon for the benefit of all stakeholders. He acknowledged the Government’s decision to take a holistic review of the labour laws further to the TPPA Labour Chapter, but emphasized that the labour legislation should comply with international labour standards. Finally, he urged the Government to immediately engage with the ILO High-level Mission to address the backlog of cases, so as to clear all pending issues, and to work on the holistic review of the labour and other legislation contravening ILO Conventions. The provisions for trade union recognition should be simplified and it should be mandatory for employers to give due recognition. Government organs should give effect to ILO Conventions and employers acting contrary to the Convention and to the principles of bargaining should be penalized. He hoped that the Employer member of Malaysia would be a responsible social partner and promote meaningful collective bargaining so as to enable the Government to comply with the Convention.

The Employer member of Malaysia said that, with regard to allegations of anti-union discrimination and interference in several sectors, including dismissals and non-recognition of unions, raised by the ITUC and the MTUC, disciplinary action had been taken by employers after due inquiry arising from employment misconduct committed by employees and could not be categorized as anti-union discrimination. On the issue of recognition claims filed by unions, the fact remained that the union needed to go through the process of claiming recognition before it could be recognized by the employer. In the event that the union failed to fulfil the criteria required for recognition, the employer was given discretion to recognize the union or not to do so. Furthermore, the issues raised by the WFTU and the NUBE on two cases pending before the Industrial Court were premature and should not be entertained as the matters raised were currently pending before the Industrial Court. The claims filed in the two cases had since then been dismissed and the aggrieved parties had decided to file applications for judicial review to the High Court. Referring to the issue of the holistic review of labour laws, he confirmed that the Government had actively carried out consultations with the stakeholders to review existing labour legislation. The labour law review should be carried out after getting the views and inputs from the relevant stakeholders, which required time. He considered that labour legislation should facilitate rather than hinder the growth of businesses. With regard to the observations that the duration of proceedings for claiming recognition were still excessively long, he said that the length of time taken to handle trade union recognition depended on the complexity of each case. The recognition claim could also be subjected to judicial review up to the highest level of the judicial system, which would delay the process further. The case would still be pending until a final decision by the highest court, it would not therefore be possible for the Government to impose a fixed period of time for recognition claims to be resolved. With reference to the criteria and procedures for assessing the competency of a trade union for the purposes of recognition, he was of the view that it was appropriate to consider those in employment at the date when the claim for recognition was submitted to the company, and not a future percentage of union membership, which would be unfair. Regarding the scope of collective bargaining, the restrictions under section 13(3) of the IRA were not absolute and were not a hindrance to effective collective bargaining, as many collective agreements covered the matters set out in section 13(3), such as transfer, retrenchment and promotion. He was surprised by the position taken by the Committee of Experts on the issue of compulsory arbitration and noted that the existing system in Malaysia ensured harmonious industrial relations, considering that where both parties could not resolve the dispute it was only appropriate that the matter be subject to arbitration. Referring to collective bargaining in the public sector, he emphasized that, despite the comments made by the Committee of Experts, wages and terms and conditions in service of the public sector were generally better when compared with those in the private sector, and he believed that content was more important than form.

The Government member of Cambodia, speaking on behalf of the member States of the Association of Southeast Asian Nations (ASEAN), as well as Bahrain, Bangladesh and China, acknowledged the observations made by the Committee of Experts and welcomed the commitment and efforts of the Government of Malaysia to ensure that its labour legislation was in line with the requirements of the Convention. Further noting that the country was conducting a major holistic review of its main labour laws – the Employment Act 1955, the Trade Union Act 1959 and the Industrial Relations Act 1967, he urged the Committee to grant ample time to Malaysia to conduct such a substantial exercise.

The Government member of Qatar welcomed the Government’s efforts as part of the holistic review of its main labour laws and emphasized that the Office should provide technical assistance to support those efforts.

The Worker member of Italy considered that in Malaysia there was an unacceptable situation of discrimination and exploitation towards migrant workers. Although it was possible for a migrant worker to join an existing union, section 28(a) of the Trade Union Act required that union officers be citizens of Malaysia, thus disqualifying migrant workers from serving as union leaders. The Committee of Experts had already in the past observed that such a requirement hindered the right of trade unions to choose their representatives for collective bargaining freely, and she raised the question of what concrete action had been taken by the Government in this regard. In addition, the conditions set out by the Ministry of Home Affairs (MHA) for issuing work permits to migrant workers included an absolute prohibition on these workers from joining any sort of association. Employers had interpreted this to mean that migrant workers were forbidden to join trade unions, and the MHA had declined repeated appeals by the MTUC to take a stand on this interpretation by employers. In addition, employers had included these restrictions in the contracts of migrant workers, in contradiction with the legal guarantees of freedom of association, notably section 8 of the Employment Act of 1955, and the MHA had taken no steps to prevent this. Violation of the terms of a contract was an offence that could be punished with termination, which in turn led to the revocation of the migrant’s work permit and the initiation of deportation proceedings. Employers also held the passports of migrant workers, making them vulnerable to detention by the police immediately until their identities could be verified with their employers. This situation represented a real obstacle to the implementation of the Convention in Malaysia, since the country had the fourth largest number of migrants in East Asia and the Pacific. She therefore called on the Government to act urgently in order to ensure that discriminatory rules and practices were removed and the legislation brought into line with ILO Conventions.

The Worker member of Canada, also speaking on behalf of the Worker member of the United States, indicated that national labour law remained non-compliant in almost every aspect of the Convention. The Committee of Experts had noted non-compliance concerning compulsory arbitration, dismissal, non-recognition of unions and unfair labour practices. The right to organize and collective bargaining were regularly violated and collective bargaining was restricted in companies and the public sector. Section 13(3) of the IRA provided for unfair restrictions against the freedom to bargain collectively and should be repealed with immediate effect, as it excluded from the negotiable issues that could be discussed at the bargaining table, the promotion, transfer, dismissal and reinstatement of workers, as well as assignment of duties and termination by reason of redundancy or reorganization. While recognizing the efforts made by the Government to conduct a holistic review of its main labour laws, she acknowledged that the driver of the reform was membership of the TPPA, the 12-country free trade agreement that included Canada and the United States. Despite the characterization of the TPPA as a “gold standard” by those who promoted it, its Labour Chapter and the Malaysia consistency plan proposed by the Government of the United States offered watered-down and partial measures that invoked the spirit of ILO Conventions, rather than their full content. The TPPA could have provided an impetus and some ideas for Malaysia to pursue badly needed reforms to comply with the Convention, but meeting goals set by the TPPA would not produce compliance. She concluded by expressing concern that the existence of trade agreements such as the TPPA which referred to the 1998 Declaration on Fundamental Principles and Rights at Work, but did not require compliance with fundamental Conventions, had opened the door to countries looking to be associated with the spirit of ILO Conventions, but not with their full content.

The Worker member of Japan recalled that various violations of the Convention by the Government had been continuously examined by the Committee on Freedom of Association and the Committee of Experts since the early 1970s and late 1980s, respectively. Malaysia had achieved rapid economic growth in the past decades, and the country should now take a high road towards improving its labour and employment policies. Recalling that Japan was a signatory to the TPPA, he indicated that, in the course of a parliamentary hearing in Japan related to the Labour Chapter of the TPPA, non-recognition and anti-union discrimination in Malaysia had been considered as the most serious cases where the principles of the 1998 Declaration on Fundamental Principles and Rights at Work were not respected. He emphasized that, if the Government of Malaysia was looking for further expansion of its trade and investment into the country, it should review the main labour laws that had been barriers to adequate protection of trade union rights.

The Worker member of France referred to two archetypal cases concerning violations of the right to collective bargaining. The first concerned the Hong Leong Bank and the NUBE union. In 2013, the bank had decided to centralize part of its activities, thereby imposing forced mobility on 49 workers who were members of the union, which had made their family life difficult. The workers affected by this measure had immediately protested, expressing their disagreement by means of pickets and subsequently calling for conciliation at the ministerial level, but the management of the bank had refused to reach a compromise, and the 27 workers refusing transfer had been dismissed. The bank had then initiated legal proceedings with the Supreme Court in order to obtain an injunction against the union to stop it picketing the bank’s premises and to have the trade union removed from the register, which was contrary to Articles 1 and 2 of the Convention. The second case had been running for 26 years and involved Sabah Forest Industries (SFI) and the Sabah Timber Industry Employees Union (STIEU). Attempts to register the union in 2003 and 2010 had failed. Nonetheless, in 2010, the results of a secret ballot held following a request for recognition had revealed that 85.9 per cent of staff at SFI supported the STIEU. The need for a union presence had sadly been felt after the death of a worker in the wood and pulp factory because of inadequate safety measures. At the end of 2015, the STIEU had still not been recognized. Disputes of this sort were on the increase and affected all sectors. Time and again, the same methods cropped up: lack of consultation with the trade unions; unilateral decision-making; anti-union harassment and discrimination; recourse to the highest courts; dismissed trade unionists who were simply seeking to exercise their rights peacefully; and delays in registration, which showed how difficult it was to ensure that the principles of collective bargaining were applied in Malaysia.

An observer representing the World Federation of Trade Unions (WFTU) said that, of the 24 cases selected this year, five related to Convention No. 98, or 20.8 per cent, which gave a clear idea of the situation of freedom of association and collective bargaining in a number of countries. What was happening in Malaysia and Tunisia and in other countries reflected the attitude of governments in penalizing trade union movements, discriminating against them and preventing them from enjoying their right to collective bargaining. In Tunisia, for example, the Government refused to recognize certain trade union organizations that operated outside the unionist majority in both the public and private sectors. It was important for the ILO to impose compliance with the fundamental Conventions in order to promote social justice.

The Worker member of Indonesia regretted that the Government still did not have a concrete proposal to guarantee the right to collective bargaining of public servants so as to comply with the Convention. The Government had referred to the specific characteristics of the public administration to justify the exclusion of public servants from collective bargaining. However, it was precisely the absence of the right to collective bargaining in a country that had ratified the Convention which rendered “peculiar” the situation of public servants in Malaysia. He requested the Government to respect the commitments made when ratifying the Convention and to give effect to the recommendations of the supervisory bodies of the ILO. Being part of an organization such as the ILO and pledging to abide by its rules was an act of responsibility, significance and commitment. He called on the Government of Malaysia to live up to the values and honour the commitments it had freely chosen to assume.

The Government member of India thanked the Government of Malaysia for the comprehensive reply that it had provided on all matters, including the allegations made by the ITUC and the MTUC. He recognized that three out of eight MTUC complaints had already been settled and the detailed updates on the remaining cases were expected. The IRA and the Trade Unions Act were being amended in the context of a holistic review of labour laws. Under the Labour Consistency Plan, the Government had agreed to: repeal section 13(3) of the IRA, which contained restrictions on collective bargaining with regard to transfer, dismissal and reinstatement; eventually allow migrant workers to run for election to trade union office; and address the issues of compulsory arbitration and the scope of collective bargaining. The Government had requested ILO assistance to ensure that these legislative amendments were in line with Conventions Nos 87 and 98, thereby demonstrating its commitment to international labour standards. India supported Malaysia in its efforts to reform labour legislation and requested the Committee to fully take into account the detailed information provided by the Government and its continued commitment to strengthening the compliance of its labour laws with the Convention.

The Government member of Bangladesh considered that the Committee should recognize the significant progress made by the Government in addressing the outstanding issues. He welcomed the Government’s legislative initiatives, in particular those aimed at amending the laws dealing with industrial relations and trade union activities, and encouraged the ILO to provide technical assistance to Malaysia in this regard.

The Government representative emphasized that, where trade unions and employers’ organizations existed at the national level, as was the case in the plantation, banking and insurance sectors, collective bargaining took place. The allegation that workers were not free to establish trade unions was not substantiated. He emphasized that the presidents of the Industrial Court were free from any external influence or pressure when making awards, and that there were therefore no privileges given to union leaders when the cases were adjudicated. With respect to the cases involving the dismissal of employees of the Hong Leong Bank, he explained that in 2013 the bank had decided to centralize its credit processing standards located across the country into three main regions in Peninsular Malaysia and that 27 employees who had refused to comply with the transfer order were dismissed following due inquiry. He said that the bank’s prerogative to transfer employees was part of the letter of appointment, as well as the collective agreement, and it was therefore issue of misconduct by employees and not an act of union victimization. In conclusion, he referred to the following benefits enjoyed by public sector employees achieved through negotiations between trade unions and management: security tenure, guaranteed annual increment, pension schemes, lump sum gratuity upon retirement, free health care, government quarters, fully paid maternity leave, low interest rate for certain loans, higher minimum wage compared to the private sector, annual leave of 35 days and other cash payments.

The Employer members recalled that this case had last been examined by the Committee in 1999. Nothing had changed since then and there was nothing to supervise, and thus discuss, until the holistic legislative reform announced by the Government was completed. Indeed, the Committee of Experts had duly noted the information provided by the Government to the effect that in the last two years no cases had been reported of employers opposing the directives of the authorities granting trade union recognition, except in cases where the employer had obtained a stay from court due to judicial review, or regarding employers refusing to comply with Industrial Court orders to reinstate unlawfully dismissed workers. They requested the Government to provide detailed information on the collective bargaining rights of public servants not engaged in the administration of the State and on the outcome of the holistic legislative review, once it had been completed.

The Worker members, while welcoming the Government’s commitment to provide details on the ongoing legislative review, considered that the challenges concerning the exercise of collective bargaining rights in Malaysia were enormous and a cause of concern. The Worker members, in response to the Employer members, noted that in order to assess compliance of the laws and practices in Malaysia with the principles of Article 4 of the Convention, it was unavoidable to look at the specifics and the details of those laws and practices, as the Committee of Experts had done in accordance with its mandate. They expressed the view that it was precisely those details of the laws and their implementation that hindered compliance with those principles and the promotion of collective bargaining in Malaysia. They believed that the Government had not taken adequate measures to encourage and promote voluntary negotiations between workers and employers to regulate terms and conditions of employment by means of collective bargaining. The percentage of workers in Malaysia covered by collective agreements was extremely low. Despite a unionization rate of almost 10 per cent, only 1–2 per cent of workers were covered by collective agreements. The right to collective bargaining was an essential element of freedom of association, as it was key to the representation of collective interests. Collective representation was only meaningful if workers could negotiate and improve their conditions. The Worker members urged the Government to bring its law and practice into line with the Convention, in consultation with the social partners. A conducive framework for collective bargaining required an efficient process for the recognition of trade unions for collective bargaining purposes. It was crucial to simplify and speed up the procedure for claims submitted by the unions to the Industrial Relations Department seeking recognition. This was necessary in order to ensure that the recognition of representative unions by employers was mandatory. It was also important to discourage employers from abusing lengthy recognition procedures as a means of protracting negotiations. The Worker members hoped that the criteria for determining the representativity of trade unions for collective bargaining would be reformed so as to ensure a genuinely democratic process. A trade union which could obtain the support of the majority of workers who cast a vote should be entitled to bargain on behalf of those workers. The holistic review of labour laws that was currently being undertaken should also include the repeal of sections 13(3) and 26(2) of the IRA which, respectively, limited the scope of collective bargaining and allowed compulsory arbitration without the agreement of the bargaining partners. Furthermore, section 27(a) of the Trade Unions Act should be amended to allow workers in the public sector to unionize and engage in collective bargaining. The number of workers, and trade union officials who had suffered from anti-union discrimination and the lack of remedies against such acts were shocking and unacceptable. The Government should immediately take legal and practical measures to ensure that remedies and penalties against acts of anti-union discrimination were effectively enforced and all outstanding legal cases be settled. The Worker members emphasized that there were over 2 million migrant workers in Malaysia. This number would rise dramatically, as the Government had just signed a Memorandum of Understanding with Bangladesh to bring 1.5 million workers into the country within the next three years. In practice, migrant workers were currently excluded from collective bargaining as the employment contracts of migrant workers had typically a duration of two years, the Worker members remained concerned that, even after reforms had been undertaken, most migrant workers would be excluded from the right to be elected as union officials. The Government should therefore explicitly grant migrant workers the full right to join unions and to engage in collective bargaining and ensure that all of its institutions respected and enforced this right, particularly the Industrial Court. The Worker members hoped that the Government would take guidance from the discussion in the Committee. They called for a direct contacts mission to visit the country and requested the Government to avail itself of ILO technical assistance.

Conclusions

The Committee took note of the information provided by the Government representative and the discussion that followed on issues raised by the Committee of Experts.

The Committee noted with interest the Government’s indication that it is undertaking a holistic review of its key labour legislation – the Employment Act 1955, the Trade Unions Act 1959 and the Industrial Relations Act 1967 (IRA).

Taking into account the discussion of the case, the Committee requested the Government to:

• - Provide further detailed information regarding the announced repeal of section 13(3) of the IRA on the limitations with respect to the scope of collective bargaining.
• - Report in detail on the holistic review of the national labour legislation described above to the next meeting of the Committee of Experts in November 2016.
• - Ensure that public sector workers not engaged in the administration of the State may enjoy their right to collective bargaining;
• - Provide detailed information on the scope of bargaining in the public sector.
• - Review section 9 of the IRA in order to guarantee that the criteria and procedure for union recognition are brought in line with the Convention.
• - Undertake legal and practical measures to ensure that remedies and penalties against acts of anti-union discrimination are effectively enforced.
• - Ensure that migrant workers are able to engage in collective bargaining in practice.

The Committee calls upon the Government of Malaysia to avail itself of ILO technical assistance with a view to implementing these recommendations and ensuring that its law and practice are in compliance with Convention No. 98.