Observation (CEACR) - adopted 2024, published 113rd ILC session (2025)

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

The Committee notes the response of the Government to the 2022 Observations of the National Union Bank Employees (NUBE) concerning, to a large extent, issues considered by the Committee on Freedom of Association in Case No. 3401.

Legislative reform. The Committee previously noted the comprehensive technical assistance provided by the Office in the context of the Labour Law and Industrial Relations Reform project (2016–26). It also noted the conclusions of the Committee on the Application of Standards of the International Labour Conference (Conference Committee) in 2022, requesting the Government to amend without delay the national legislation to bring it into conformity with the Convention. In this respect, the Committee welcomes the information provided by the Government about the coming into force, on 15 September 2024, of several amendments to the Industrial Relations Act (IRA), the Industrial Relations Regulations, the Trade Unions Act (TUA) and the Trade Union Regulations.

Article 1 of the Convention. Adequate protection against anti-union discrimination. In its previous comment, the Committee noted the observations by the International Trade Union Confederation (ITUC) on ineffective remedies for anti-union discrimination and lengthy procedures. The Committee also noted that the Conference Committee in 2022 requested the Government to ensure, in law and practice, adequate protection against anti-union discrimination, including through effective and expeditious access to courts, adequate compensation and the imposition of sufficiently dissuasive sanctions.

The Committee notes from the information provided by the Government that the majority of cases filed in 2023 under section 8 of the IRA (concerning anti-union discrimination) were resolved at the Industrial Relations Department, that the conciliation and mediation procedure at the Industrial Relations Department facilitates the expeditious settlement of cases, and that cases referred to the Industrial Court might involve a lengthy procedure. It notes however with regret that the Government has not provided the requested information on the outcome and duration of the procedures concerning anti-union discrimination cases. In this respect, the Committee also notes with regret that despite the recent legislative amendments, no changes have been made to section 8 of the IRA, which provides for discretionary powers of the Director-General of Industrial Relations to refer or not a complaint on anti-union discrimination to the Industrial Court, without the workers having the right to access the courts directly. The Committee once again recalls that effective protection against acts of anti-union discrimination requires rapid and effective procedures and remedies through reinstatement and adequate compensation, as well as sufficiently dissuasive sanctions. In this respect, the Committee requests the Government to provide information on: (i) the number of cases of anti-union discrimination filed and pending under section 8 of the IRA (concerning anti-union discrimination), and sections 20 and 59 of the IRA (concerning anti-union dismissals); (ii) the outcome of these proceedings, including the remedies provided (such as compensation, reinstatement and penalties imposed); and (iii) the duration of cases dealt with by the Industrial Relations Department, the Industrial Court and other courts. It also once again urges the Government to take the necessary measures to ensure that workers who are victims of anti-union discrimination have the right to directly lodge a complaint before the courts, and to provide information on the criteria followed by the Director-General of Industrial Relations to determine the actions to take in the treatment of anti-union discrimination cases, including to refer or not the matter to the courts. In this context, it also recalls its recommendation to consider the reversal of the burden of proof once a prima facie case is made.

Articles 2 and 4. Trade union recognition for the purposes of collective bargaining. Criteria and procedure for recognition. The Committee noted that the Conference Committee in 2022, having observed the concerns expressed during the discussions concerning ongoing challenges including instances of undue interference during the procedure, requested the Government to ensure that effective protection against undue interference is adopted and that the procedure for trade union recognition is simplified.

The Committee notes the Government’s reference to improvements in the recognition procedure. In this respect, it notes with satisfaction the coming into force of a number of amendments, including: (i) the removal of several provisions in the TUA, that provided for the possibility to refuse registration of a trade union in respect of a particular establishment, trade, occupation or industry, where another trade union exists, thereby allowing for the plurality of trade unions, and (ii) the removal of the restrictive definition of trade unions, pursuant to which workers employed in different industries were prohibited from establishing a single union or joining the same organization. Moreover, it notes that, in conformity with the provisions in the IRA and the Industrial Relations Regulations that have now come into force, the Director-General of Industrial Relations is competent to take a decision based on the conduct of a secret ballot in the following cases: (i) claims concerning the recognition of a trade union in the event that an employer refuses recognition (section 9(4)(A) of the IRA); (ii) applications concerning the recognition of the sole bargaining right to represent a group of workers, in the event that an employer has granted recognition to more than one trade union, and that there is no agreement between the trade unions as to which trade union shall exercise that right (section 12(A) of the IRA). The Committee notes the Government’s information, in response to its request on the application in practice of the recognition procedure, that 116 cases were handled by the Department of Industrial Relations, of which 96 were resolved. It notes however that the Government has not provided the requested information on whether recognition was granted (or not granted) in relation to these cases. Concerning the Committee’s reiterated request to ensure effective protection against undue interference in the recognition process, the Committee notes with regret that the Government limits itself to referring, once again, to the possibility to raise complaints with the Director-General of Industrial Relations (under sections 4, 5, 7 and 8 of the IRA), and that it does not provide information on any such claims that have been successfully brought, or on the measures taken, such as any competences entrusted to the Department of Industrial Relations or other competent authorities, to prevent and address, at their own initiative, acts of interference that may take place during the recognition process. Recalling that the recognition processes should provide safeguards to prevent acts of employer interference, the Committee once again requests the Government to provide information on any specific measures taken to prevent or repress acts of interference during the recognition process. It also requests the Government to specify whether any claims were actually brought against employer inference during the recognition procedure under sections 4, 5, 7 and 8 of the IRA, and provide information on their outcome. It once again requests the Government to provide detailed information on the application in practice of the recognition procedures (under sections 9(4)(A) and 12(A) of the IRA), including as regards the number of processes for trade union recognition filed and those that remain pending, and their outcome (i.e. the number of recognitions granted or not granted, specifying the reasons for these decisions).

Duration of recognition proceedings. The Committee recalls its reiterated request, in light of the discussions in the Conference Committee in 2022 and a considerable number of cases considered by the Committee on Freedom of Association over the years, to ensure that that the duration of the recognition process is reasonable. Having previously noted that the average duration of the recognition procedure at the Department of Industrial Relations was four to nine months, and that a decision of recognition may be appealed before the courts, the Committee notes that the Government does not provide any up-to-date information on the duration of the recognition procedure, especially as regards those cases that were subject to an appeal before the courts.

In this context, the Committee observes that the Committee on Freedom of Association examined the issue of administrative and judicial delays in the context of challenges to the recognition of a union by an employer, in Case No. 3414 and referred the legislative aspect of this case to it (401st Report, March 2023, paragraph 595). Concerning potential delays as a result of certain particularities in the recognition procedure, the Committee notes with interest the removal of the possibility of a “competency” check of a trade union seeking recognition (see mainly former sections 9(4)(A)(a) and 9(4)(B)(b) of the IRA). It notes however that the Committee on Freedom of Association observed that disagreements on the meaning of the terms of section 9(1) of the IRA (which was not amended and prohibits the representation of workers employed in managerial, executive, confidential and security capacities together with other workers in a bargaining unit), had entailed excessively long administrative and judicial procedures under section 9(1)(A) of the IRA on the question of whether workers were entitled to vote in the secret ballot. Noting that section 5(2)(b) and (c) of the IRA gives the right to employers to require a worker promoted to a managerial, an executive or a security position to cease membership of a trade union (except as in unions representing those categories of workers), the Committee also recalls that the NUBE, in its 2022 Observations alleges pseudo-promotions of their members to managerial positions to restrict union membership. In respect of the above, the Committee observes that there are no provisions providing for any definition of the categories under section 9(1) of the IRA but that the question of whether a particular occupation falls into any of the above-mentioned categories is a matter to be determined by the Director-General of Industrial Relations, and that a relevant decision can be appealed before the courts. While recalling that these categories of workers are covered by the Convention, the Committee stresses that the exclusion of managerial and executive staff from the vote concerning the recognition of a trade union should be limited to those persons who genuinely represent the interests of the employer to avoid any risks of interference by the employer. As a result, the determination of the categories, aimed at avoiding any risks of interference by the employer, should be limited to those persons who genuinely represent the interests of the employer. As a result, the determination of the categories of workers excluded from the vote should be expeditious and the possibilities for the employer to challenge the decision strictly delimited and swiftly examined so that the said determination does not become an obstacle to the exercise of the right to collective bargaining. The Committee once again firmly expects the Government to take measures to ensure that the administrative and judicial proceedings for the recognition of trade unions for the purpose of collective bargaining are reasonable. In this respect, it requests the Government to provide detailed information on the duration of the recognition proceedings, under sections 9(4)(A) and 12(A) of the IRA, including those that were treated administratively by the Department of Industrial Relations and those that were appealed and dealt with by the courts, with particular information as regards the number and duration of complaints filed and treated under section 9(1)(A) of the IRA. The Committee requests the Government to provide information on the impact of the recent legislative amendments on the duration of the recognition procedure, and to further review the legal framework governing the procedure for recognition of unions for collective bargaining purposes, including as regards the above-mentioned issues in relation to section 9(1)(A) of the IRA, with a view to significantly simplifying and expediting the administrative and judicial processes.

Exclusive bargaining rights. Minority unions. The Committee notes that the IRA and the Industrial Relations Regulations, as amended, require: (i) for a trade union seeking recognition in the event that an employer refuses recognition: a simple majority of votes cast by not less than half of the total number of workers entitled to vote (see section 2(1)(a) and 11 of the Industrial Relations Regulations); and (ii) for a trade union seeking sole bargaining rights: to obtain the highest number of votes (see section 12(A)(2), (3) and (4) of the IRA and section 2(1)(b) of the Industrial Relations Regulations). The Committee welcomes certain amendments to the formula in section 2(1)(a) and 11 of the Industrial Relations Regulations for a trade union seeking recognition (as regards the mode of calculation, namely the division in the number of votes in favour of a union by the number of votes cast, instead of, as in the former version, a division by the number of votes in favour of a union by the number of workers entitled to vote). It considers however that the new formula still requires broad support by the workers in a bargaining unit, which might be difficult to achieve. As highlighted in its previous comments, the Committee therefore requests the Government, to take, in consultation with the social partners, measures to ensure that, in situations where no union is declared the exclusive bargaining agent, all unions in the unit are able to negotiate, jointly or separately, at least on behalf of their own members. The Committee requests the Government to provide information in this respect.

Migrant workers. The Committee notes the reiterated indications of the Government that foreign workers are eligible to hold office upon approval of the Minister of Human Resources if it is in the interest of such a union and should the circumstances request as such. It also notes the Government’s reference to a schoolteachers’ union as an example of a trade union with most officers being non-Malaysian citizens. However, the Committee notes with regret that despite its reiterated requests, section 28(1)(a) of the Trade Union Act still provides that a person who is not a citizen of the Federation of Malaysia may not be elected to be a member of the executive entity of a trade union, unless the Minister of Human Resources considers that this is necessary for the representation of persons or interests of persons not residing within the Federation of Malaysia. Recalling that the requirement of prior approval of the Minister of Human Resources for foreign workers to hold trade union office may hinder the right of trade unions to freely choose their representatives for the purpose of collective bargaining, the Committee once again requests the Government to take the necessary legislative measures to ensure that foreign workers are able to run for trade union office without prior authorization.

Scope of collective bargaining. In its previous comments, the Committee noted that section 13(3) of the IRA provides for restrictions on the inclusion of subject matters in collective agreements relating to: (a) promotions; (b) transfers; (c) appointment of workers in case of vacancies; (d) termination of services due to redundancy; (e) dismissal, reinstatement; and (f) assignment or allocation of work. It also noted that the same section provides that trade unions can raise questions of a general character in relation to these matters.

The Committee notes the Government’s reiterated indications, in response to the Committee’s request, that section 13(3) is not compulsory and that if both parties agree, they may negotiate and include those matters in relevant collective agreements. The Government further contests the ITUC’s previous observation that section 13 of the IRA permits employers to dismiss questions of a general character raised by trade unions, and it indicates that in the event of a dispute on this matter, the aggrieved party may file a complaint under section 18 of the IRA as a trade dispute. The Government also indicates that the Department of Industrial Relations has not received any complaints regarding questions of a general character under section 13(3) of the IRA, and that the Department does not currently have data on the number of collective agreements that include the above-mentioned subject matters as this matter has not been specifically analysed. Taking due note of the above-mentioned indications, the Committee nevertheless observes that there appears to remain legal uncertainty on the practical application of section 13(3) of the IRA and its effect on the scope of negotiable issues. The Committee reiterates its invitation to the Government to consider lifting the broad legislative restrictions on the scope of collective bargaining, so as to promote the right to bargain freely between the parties, without any intervention by the Government.It once again requests the Government to provide information on the number of collective agreements that include the above-mentioned subject matters as negotiated subjects, as well as any complaints raised in this respect, and the outcome of relevant disputes as decided by the Industrial Relations Department and the courts.

Compulsory arbitration. The Committee had previously noted with interest that following amendments to certain provisions of the IRA (which have now entered into force) compulsory arbitration had been restricted to instances generally compatible with the Convention. However, it had also noted that section 26(2) provides that: trade disputes concerning “any Government service” and “the service of any statutory authority” may be referred to compulsory arbitration (with the consent of the King or State Authority); and it had also noted that the designation of a number of Government services in point 8 of the First Schedule of the IRA, may not be considered as services composed solely of public servants engaged in the administration of the State. It also noted that point 10 of the First Schedule, qualifies as essential services businesses and industries connected with the defence and security of the country (and recalled in this context that while the armed forces may be exempt from the provisions of the Convention, businesses and industries connected with them should be afforded the full guarantees of the Convention). Noting an absence of information in relation to any legislative developments as regards the issues noted above, the Committee once again requests the Government to provide information on the measures taken or envisaged to: (i) further delimit the categories of Government services in section 26(2) of the IRA and point 8 of the First Schedule of that Act, so as to ensure that compulsory arbitration may only be imposed on those public servants engaged in the administration of the State; and (ii) remove businesses and industries mentioned in point 10 of the First Schedule of the IRA from the list of essential services so that their workers can be afforded the full guarantees of the Convention.

Restrictions on collective bargaining of public servants not engaged in the administration of the State. In its previous comments, the Committee noted the exclusion of public sector employees from the chapter in the IRA on collective bargaining (see section 52(1), read in conjunction with Part IV of the IRA). In this respect, it also noted the ITUC’s allegations that public servants are only consulted, but not integrated in processes of collective bargaining. The Committee also noted that the National Joint Council (NJC) and the Departmental Joint Council appeared to have a consultative status as opposed to being used as a platform for collective negotiation on issues relating to terms and conditions of employment of public servants not engaged in the administration of the State.

The Committee notes that the Government reiterates its view that the NJC is not a forum for mere consultations with public sector unions. To corroborate this view, the Government refers to a number of elements, including that: (i) the minutes of the meetings in the NJC are signed by the parties of the NJC, implying a binding effect of any mutually-agreed decisions; (ii) the Government/employer is required, subject to financial and social implications, to transpose any decisions taken in the NJC into rules and regulations (i.e. service circulars); (iii) as a result of negotiations and bargaining in the NJC in 2022, three new service circulars were issued, which provide for improvements for public sector employees as regards their remuneration and benefits. While taking due note of all the elements above, including the advanced level of consultations, the Committee observes that the functions of the NJC as provided for in section 10 of Service Circular No. 6 are to “give opinions and discuss”, “enable employees to propose changes for consideration by the Government”, and “make recommendations”, and that the functions of the Departmental Joint Council, pursuant to section 3 of Service Circular 7 are to “enable employees to express opinions” and “actively participate in discussions”. The Committee therefore considers that the elements considered do not demonstrate the existence of a complete bargaining machinery on issues relating to the terms and conditions of employment of public servants not engaged in the administration of the State. Also recalling the conclusions of the Conference Committee in 2022 in this respect, the Committee therefore requests the Government to take the necessary measures, in law and practice, to enable collective bargaining machinery for public servants not engaged in the administration of the State.

Collective bargaining in practice. In its previous comment, the Committee noted with concern the very low coverage of collective bargaining and observed that according to public statistics available in ILOSTAT in 2018, the collective bargaining coverage rate in Malaysia was 0.4 per cent. The Committee considered that this very low coverage could be related to the restrictive requirements in law and practice to engage in collective bargaining as discussed in its previous observation.

The Committee notes that the Government refers to measures taken to increase the membership of trade unions in the country (including legislative amendments, the allocation of a special budget and training activities), as well as to the total number of trade union members (which had reached one million in 2024). The Committee notes however with regret, that the Government has still not provided any statistical information in relation to collective bargaining in the country. The Committee therefore once again requests the Government to provide updated statistical information on the number of collective agreements concluded and in force, the sectors concerned, and the number of workers covered by these agreements.

While welcoming again the above-mentioned amendments that entered into force on 15 September 2024, the Committee requests the Government to take the necessary action to remove all the remaining legal and practical obstacles to collective bargaining addressed in this comment and to take concrete measures to promote the full development and utilization of collective bargaining. In this respect, it strongly encourages the Government to continue to avail itself of the technical assistance of the Office to work towards the full conformity of the national legislation with the principles of the Convention.

The Committee is raising other matters in a request addressed directly to the Government.