Allegations: The complainant alleges interference by the Ministry of Human
Resources and the Industrial Court in the collective bargaining process, as well as the
Government’s lack of protection against anti-union practices
- 336. The complaint is contained in a communication dated 27 September
2024 submitted by the National Union of Bank Employees (NUBE).
- 337. The Government transmitted its observations in communications dated
23 June and 15 September 2025.
- 338. Malaysia has ratified the Right to Organise and Collective
Bargaining Convention, 1949 (No.98).
A. The complainant’s allegations
A. The complainant’s allegationsFestival aid – Memorandum of Agreement
20th collective agreement (2024–26)
Leave for trade union activities
- 339. In its communication dated 27 September 2024, the complainant
alleges interference by the Ministry of Human Resources and the Industrial Court in the
collective bargaining process, as well as the Government’s failure to provide adequate
protection against anti-union practices, in violation of the Freedom of Association and
Protection of the Right to Organise Convention, 1948 (No. 87), and Convention No.
98.
- 340. In this respect, the complainant, a trade union representing more
than 15,000 workers in the financial services sector, refers to incidents related to
disputes over collective bargaining agreements (concerning collective bargaining fees
and entitlements to bonus payments for national festivals), as well as incidents
relating to entitlements for trade union leave.
- 341. The complainant states that the 19th collective agreement, covering
the period 2021–23, was signed in April 2023 – following delays in negotiations due to
COVID-19 restrictions – between the complainant and the Malaysian Commercial Banks’
Association (MCBA) (hereinafter “the banking association”), and was subsequently
submitted by both parties to the Industrial Court as required under section 16 of the
Industrial Relations Act. The complainant indicates that the Industrial Court refused to
recognize the collective agreement, requested amendments to its article 38(b) (that is,
a clause on collective bargaining fees) and later requested that the article be removed
entirely. The complainant states that article 38(b) required member banks of the banking
association to deduct collective bargaining fees (amounting to 10 per cent of
outstanding salary adjustment arrears) from the salary of non-union members and transfer
the corresponding amounts to the complainant.
- 342. The complainant states that, at the request of the Industrial Court,
the parties attended a meeting in August 2023 with the Court’s President to provide
explanations regarding article 38(b). During the meeting, the President expressed the
view that the clause did not comply with the national legislation (among other
provisions, with section 5(1)(c) of the Industrial Relations Act on the prohibition of
discrimination of non-union members) and suggested that the complainant seek
authorization for the deduction of the collective bargaining fees from the Department of
Labour under section 24(7) of the Employment Act. The complainant adds that during a
meeting with the Department of Labour in November 2023, an official at the Ministry
advised the complainant to follow the Industrial Court’s direction to remove article
38(b) from the collective bargaining agreement. The complainant asserts that
subsequently, and seemingly with the intention of dismissing the complainant, they were
advised that a request for permission to deduct collective bargaining costs could be
submitted to the Director-General of Labour and that a relevant application had to
include supporting documents, including information on the number of employees
consenting to the deduction. The complainant chose to disregard this advice, considering
the process unreasonable due to the efforts required to gather such detailed information
(including the names of workers who had consented or not consented to the deduction),
and the need to obtain the approval of these workers to obtain that information. With
growing pressure from the members of the complainant group for the payment of the
outstanding salary adjustment arrears, and in view of the time that had passed since
April 2023, the complainant agreed to withdraw article 38(b) of the collective
bargaining agreement under pressure and signed a separate memorandum of understanding in
December 2023. In that memorandum of understanding, the parties agreed that the member
banks of the banking association would not claim a refund of the collective bargaining
fees that had already been paid in the amount originally foreseen in the collective
bargaining agreement (paid directly by the banking association without having deducted
the relevant amount from non-union members, as many of them had objected to that
deduction). Thereafter, the Industrial Court recognized the collective bargaining
agreement.
- 343. The complainant considers the actions by the Ministry and the
Industrial Court, including the request to alter the collective bargaining agreement, to
be interference in voluntary collective bargaining, in violation of Convention No. 87,
and Articles 3 and 4 of Convention No. 98. In this respect, the complainant also alleges
that the officials at the Ministry of Human Resources and the Industrial Court refused
to facilitate and assist in the registration of the collective bargaining agreement,
which the complainant considers to be an indication that the Ministry was not playing a
neutral role in assisting both parties to come to an agreement.
- 344. In relation to the Court’s refusal to accept “bargaining fees”, the
complainant also refers to the Compilation of decisions of the Committee on Freedom of
Association, namely paragraph 1438 of the Compilation which states that: “[m]aking the
validity of collective agreements signed by the parties subject to the approval of these
agreements by the authorities is contrary to the principles of collective bargaining and
of Convention No. 98”. The complainant further refers to paragraph 700 of the
Compilation, which states that: “When legislation admits trade union security clauses,
such as the withholding of trade union dues from the wages of non-members benefiting
from the conclusion of a collective agreement, those clauses should only take effect
through collective agreements.”
- 345. The complainant indicates that during the negotiations preceding the
19th collective agreement for 2021–23 (which mostly took place in the beginning of 2023
due to delays caused by COVID-19 restrictions), it was agreed between the parties that
the member banks of the banking association would provide a one month salary allowance
as “festival aid” to the members of the complainant working for these banks. It adds
that the banking association ultimately insisted on including the “festival aid” in a
separate agreement and not in the 19th collective agreement. The complainant states that
in April 2023, the complainant and the banking association signed a Memorandum of
Agreement (“Festival Aid Agreement”) which provided for the payment of a sum equivalent
to one month of salary “to assist employees in celebrating the religious festival in
2023” and stated that “both parties agree that this payment may be reviewed in the
following year”. In 2023, the member banks of the banking association paid the bank
employees one month of salary as “festival aid” in accordance with that agreement. The
complainant adds that in 2024, the banking association did not pay the bank employees
the one-month salary as “festival aid”, claiming that it was a one-time payment only for
2023, even though the agreement did not expressly refer to it as a one-off payment. The
complainant indicates that the intention of the parties was to try out the payment and
review it to see whether banks were making continuous profits – which was actually the
case, with some banks making record profits.
- 346. The complainant affirms that despite ongoing discussions between the
complainant and the banking association on the festival aid entitlement since the
beginning of 2024, the banking association referred the issue to the Industrial
Relations Department as a trade dispute without the knowledge of the complainant. The
complainant states that the referral was made without exhausting the internal remedies
provided in the collective agreement, namely the formation of a Standing Committee to
discuss and resolve disputes. Two conciliation meetings were then conducted at the
Industrial Relations Department. The complainant indicates that the Director-General had
given assurances that there would be ongoing conciliation meetings to find a
resolution.
- 347. The complainant alleges that while the conciliation process at the
Industrial Relations Department was still ongoing, the Minister of Human Resources
interfered by holding a secret meeting with the banking association to discuss the
festival aid issue, without the complainant’s knowledge. In this context, the
complainant contends that the Minister of Human Resources and the banking association
reached an agreement to provide the festival aid to the bank employees as follows: (i)
payment of half a month’s salary for clerical and special grade clerical staff (covering
95 per cent of the complainant’s members); (ii) payment of one month’s salary for
non-clerical bank employees (covering 5 per cent of the complainant’s members); and
(iii) payment of the festival aid as a one-off payment. The complainant indicates that
it only became aware of this “agreement” between the Minister and the banking
association when the banks issued an internal statement/circular expressing their
gratitude to the Minister of Human Resources for his support in resolving the trade
dispute. The complainant asserts that the intervention by the Minister of Human
Resources in the festival aid negotiations resulted in an inferior result for the
complainant, which had requested: (i) the payment of one month’s salary as festival aid;
and (ii) the payment on an annual basis. In view of the above, on 18 April 2024, the
complainant lodged a police report against the Minister of Human Resources for abusing
his power for unilaterally engaging with the banking association on the festival aid
issue, without the involvement of the complainant.
- 348. Also on 18 April 2024, despite ongoing conciliation efforts and to
the surprise of the complainant, the complainant indicates that it was informed through
email that the Minister of Human Resources had referred the festival aid dispute to the
Industrial Court. The complainant asserts that in referring the matter to the court, the
Minister knew that the complainant would not be able to carry out any picketing. The
complainant indicates that on 25 April 2024, the complainant filed a second report with
the police against the Minister of Human Resources for abuse of power.
- 349. The complainant considers the actions by the Ministry to be
interference in voluntary collective bargaining, in violation of Convention No. 98.
- 350. The complainant indicates that the banking association had requested
the Industrial Court to find, among other things, that the Memorandum of Agreement
should be declared null and void since it had not been deposited and recognized by the
Industrial Court based on past jurisprudence that all agreements between employers and
trade unions had to be recognized by the Industrial Court. The complainant contends that
there are technical restrictions in the recognition procedure by the Industrial Court as
provided for in section 16 of the Industrial Relations Act, that is, the requirement to
submit a collective agreement to the industrial Court within 30 days of signing it, the
requirement for joint submission by both parties, etc.
- 351. The complainant indicates that in December 2023, the banking
association submitted a proposal for the 20th collective agreement with the complainant
(covering the period 2024–26). The complainant states that the first negotiation meeting
for that collective agreement took place on 22 January 2024, and that discussions ended
in a deadlock between the parties over the amount of the festival aid to be paid. The
complainant subsequently declared a trade dispute, writing to the banking association to
call for social dialogue in line with the provisions of the collective agreement in
hopes of resolving the deadlock. However, no progress was made.
- 352. The complainant states that on 8 February 2024, it was surprised to
receive an invitation from the Industrial Relations Department for a conciliation
meeting on 19 February 2024. The complainant challenges the Minister’s action, including
his referral of the matter to the Industrial Court, rather than seeking a solution
through conciliation. The complainant contends that the Minister did not act in
accordance with national legislation, and that he should have referred the matter to the
Industrial Court only if it remained unresolved and only with the mutual agreement of
the parties. The complainant adds that the primary motive behind the Minister’s
expedited referral to the court was to prevent the complainant from engaging in
picketing over the issue, and that it asked the Minister to withdraw from the
process.
- 353. In the complainant’s view, the Minister for Human Resources went
behind the workers’ backs and interfered in the ongoing collective bargaining process,
abusing his powers and violating Convention No. 87 and Article 4 of Convention No.
98.
- 354. The complainant also asserts that the banking association and its
member banks had recently refused to grant leave for trade union activities and trade
union education to union officers and members, in violation of the 19th collective
agreement which specifies the duration of such paid leave. The complainant asserts that
some banks had even taken disciplinary action against members in this regard. Moreover,
in certain situations, union members and trade union officials had been compelled to use
their personal annual leave and forgo paid leave altogether. The complainant adds that
in the proposal for the 20th collective agreement, the banking association had sought to
weaken the provision on trade union leave by referencing section 6 of the Industrial
Relations Act, which is more applicable to enterprise-based trade unions that represent
members of a single employer. The complainant adds that it cannot be and should not be
applied to a national union representing members employed by multiple employers.
B. The Government’s reply
B. The Government’s replyCollective bargaining fees
Festival aid – Memorandum of Agreement
20th collective agreement 2024–26
Leave for trade union activities
- 355. In its communications dated 23 June and 15 September 2025, the
Government denies the complainant’s allegations that the Ministry of Human Resources and
the Industrial Court have violated Conventions Nos 87 and 98. It underscores and
reaffirms the Government’s commitment to uphold voluntary collective bargaining rights
under Convention No. 98.
- 356. The Government rejects the complainant’s allegations and asserts
that the Industrial Court provided active guidance and proposed viable solutions to the
complainant to facilitate the inclusion of collective bargaining fees in the 19th
collective agreement to ensure its compliance with legal and procedural requirements, as
per the Court’s statutory role. In this respect, the Government states that the
Industrial Court acted in conformity with section 16(2)(b) of the Industrial Relations
Act and particularly with section 14(3) of the Industrial Relations Act, which requires
collective agreements to comply with national law before recognition may be granted. The
Government indicates that the Industrial Court directed the removal of article 38(b)
from the 19th collective agreement, as it was in violation of section 24 of the
Employment Act (concerning deductions from wages), by imposing financial obligations on
non-union members without their explicit consent.
- 357. The Government states that section 14(3) of the Industrial Relations
Act provides that:
- Any term or condition of employment, contained in a collective
agreement, which is less favourable than or in contravention of the provisions of
any written law applicable to workmen covered by the said collective agreement,
shall be void and of no effect to that extent, and the provisions of such written
law shall be substituted thereof.
- 358. It further states that section 16(2)(b) of the Industrial Relations
Act provides that:
- The Court may in its discretion –
- …
- (b) before
taking cognizance of the collective agreement deposited under subsection (1),
require that such part thereof as does not comply with section 14 [of the Industrial
Relations Act] shall be amended in such manner as the Court may
direct.
- 359. The Government indicates that, in accordance with the Industrial
Court Rules, both parties were requested to appear before the President of the
Industrial Court and provide explanations concerning article 38(b) of the collective
agreement. During the hearing held in November 2023, the parties informed the Court that
additional time was needed to address the matter, following consultations with officers
from the Department of Labour regarding the salary adjustment deductions.
- 360. The Government further denies the allegations of the complainant
that the official at the Department of Labour had failed to listen or had attempted to
dismiss the complainant’s officers during the meeting in November 2023. The Government
emphasizes that rather, during the meeting, the Department of Labour provided the
following clarifications:
- (a) Salary deductions under article 38(b) of the 19th
collective agreement require prior approval from the Director-General of the
Department of Labour pursuant to sections 24(1) and 24(7) of the Employment
Act.
- (b) Employers must submit applications for approval including
supporting documents and employee consent.
- (c) Unauthorized salary
deductions are unlawful, and employers may face legal action.
- 361. The Government states that as of the date of its response, the
Department of Labour had not received any application for salary deduction approval from
the banking association or its members.
- 362. The Government indicates that the Minister of Human Resources
referred the festival aid dispute between the banking association and the complainant to
the Industrial Court on 16 April under section 26(2) of the Industrial Relations
Act.
- 363. The Government rejects the complainant’s allegations that the
Minister of Human Resources has interfered in the collective bargaining process in
violation of Convention No. 98. It indicates that in its Interim Award No. 1679 of 2024
delivered on 28 October 2024 and Award No. 174 of 2025 delivered on 3 February 2025, the
Industrial Court found that the complainant had not provided any concrete evidence for
its baseless and scandalous claim to prove that a meeting had taken place between the
Minister of Human Resources and the banking association regarding the payment of ex
gratia festival aid for 2024 and that the complainant was responsible for halting
negotiations, rather than the Government or the banking association. The Government
states that ultimately, the Industrial Court ruled in favour of the banking association,
determining that the Memorandum of Agreement on festival aid of April 2023 was
explicitly limited to the year 2023, and had no legal or binding effect, because it had
not been deposited with the Industrial Court for recognition as required under the
Industrial Relations Act. It indicates that as a result, the member banks of the banking
association were not required to provide festival aid payments to union members beyond
2023, with no automatic extension to subsequent years. The Government maintains,
however, that both parties remain at liberty to negotiate and review any future festival
aid payments at their discretion.
- 364. The Government also refers to a review application filed by the
complainant on 18 July 2024 concerning the alleged interference and unilateral
negotiations by the Minister of Human Resources with the banking association, in
relation to which the High Court scheduled a hearing of the substantive motion on 5
February 2026.
- 365. The Government affirms that it is seriously concerned about the
complainant’s ongoing campaign of harmful and misleading statements targeting the
Minister of Human Resources, especially on social media, which the Government considers
demonstrates a lack of good faith. The Government affirms that the Minister’s role has
consistently been that of a facilitator, not one of interference.
- 366. The Government indicates that the Minister of Human Resources
referred the dispute between the complainant and the banking association regarding the
20th collective agreement (covering the period 2024 to 2026) to the Industrial Court on
29 April 2024 under sections 18(5) and 26(2) of the Industrial Relations Act.
- 367. The Government emphasizes that this referral was made only after the
conciliation process conducted by the Department of Industrial Relations failed to
produce a resolution. The Government indicates that the failure was due to the fact that
only the banking association, and not the complainant, attended the two conciliation
meetings organized in April 2024 by the Department. The Government underscores that
these meetings which resulted in a deadlock were held in good faith efforts to resolve
the dispute. It further states that the referral process to the Industrial Court under
the Industrial Relations Act is intended to prevent prolonged disputes.
- 368. The Government provides information on the progress of the procedure
before the Industrial Court between January and June 2025, and indicates that hearings
were scheduled for 21, 22, 27 and 28 May 2025, as well as 19 and 20 June 2025.
- 369. In this context, the Government also refers to two recent interim
decisions of the Industrial Court. In Interim Award No. 1853 of 2024, the Court
unanimously dismissed the banking association’s application to restrain the complainant
from making defamatory public statements, engaging in industrial action, and resisting
participation in mandatory activities, such as e-learning programmes. Similarly, in
Award No. 434 of 2025, the Court unanimously dismissed the complainant’s application
seeking disclosure of detailed employment-related documents from the banking
association, including salary information, bonuses, allowances, and benefits, and
information on child daycare costs, disciplinary procedures, and insurance coverage for
employees and their families.
- 370. The Government expresses regret that, despite ongoing judicial
proceedings, the complainant continues to engage in industrial action, including
disseminating inaccurate and defamatory statements and videos through social media and
newspapers.
- 371. The Ministry reaffirms its impartiality and commitment to supporting
voluntary collective bargaining, in strict adherence to domestic labour laws governing
industrial relations and the principles enshrined in Convention No. 98.
- 372. In relation to the alleged existence of discriminatory practices by
employers, including the denial of union leave, the Government states that the
Industrial Relations Act provides safeguards against anti-union discrimination, and that
any such allegations will be thoroughly investigated under the Industrial Relations Act
and other relevant labour laws. Where employers fail to comply with provisions in
collective agreements, the Government will take appropriate action, including referring
unresolved trade disputes to the Industrial Court.
C. The Committee’s conclusions
C. The Committee’s conclusionsCollective bargaining fees
Actions of the Industrial Court and the Ministry of Human Resources
Union security clauses
Requirement of cognizance of collective agreement by the Industrial Court
Festival aid – Memorandum of Agreement
20th collective agreement 2024–26
Leave for trade union activities
- 373. The Committee notes the complainant’s allegations concerning
interference by the Ministry of Human Resources and the Industrial Court in voluntary
collective bargaining in violation of Convention No. 87 and Articles 3 and 4 of
Convention No. 98. It notes that the Government has not ratified Convention No. 87 and
has rejected these allegations.
- 374. The Committee notes the following facts as presented by the
complainant and not contested by the Government. The 19th collective agreement (covering
the period 2021–23) was signed in April 2023 between the complainant and the banking
association (negotiations had been delayed because of COVID-19 restrictions) and was
subsequently submitted by the parties for cognizance by the Industrial Court as required
under section 16 of the Industrial Relations Act. The Industrial Court did not grant
such recognition but requested the amendment/removal of article 38(b) of the collective
agreement, which required member banks of the banking association to deduct fees
(amounting to 10 per cent of outstanding salary adjustment arrears) from the salary of
non-union members and transfer the corresponding amount to the complainant. During a
meeting with the President of the Industrial Court in August 2023, with the objective of
giving the parties the opportunity to provide explanations in relation to article 38(b)
of the collective agreement, the President expressed the view that the clause did not
comply with the national legislation (among other provisions, with section 5(1)(c) of
the Industrial Relations Act on the prohibition of discrimination of non-union members)
and evoked the possibility of having the collective bargaining fees in article 38(b)
approved by the Department of Labour under section 24(7) of the Employment Act. During a
meeting with the Department of Labour in November 2023, an official at the Ministry
advised the complainant that the relevant application for approval had to include
supporting documents, including information on the number of employees consenting to the
deduction. The complainant did not make such an application (as it considered the
efforts required to obtain such information as well as the approval of the employees
concerned to be unreasonable) but ultimately agreed to withdraw article 38(b) of the
collective agreement, and together with the banking association, signed a separate
Memorandum of Understanding in December 2023. In that Memorandum of Understanding, the
parties agreed that the banking association and its member banks would not claim a
refund of the collective bargaining fees that had already been paid (directly by the
banking association without having deducted the relevant amount from non-union members,
as many of them had objected to such payment). Thereafter, the Industrial Court
recognized the collective agreement.
- 375. The Committee notes that the complainant considers the actions by
the Industrial Court and the Ministry of Human Resources, including the request to alter
the collective agreement, to be interference in voluntary collective bargaining, in
violation of Convention No. 87 and Articles 3 and 4 of Convention No. 98. In this
respect, it also notes that the complainant alleges that the Industrial Court and the
Ministry of Human Resources violated the above-mentioned Articles, by failing to
facilitate and assist in the registration of the collective agreement, with the Ministry
not playing a neutral role in assisting both parties to come to an agreement. The
Committee notes that the Government refutes those allegations and asserts that the
Industrial Court provided active guidance and proposed viable solutions to the
complainant to facilitate the inclusion of bargaining fees in the 19th collective
agreement to ensure its compliance with legal and procedural requirements, as per its
statutory role. The Committee also notes that the Government denies the allegations of
the complainant that the official at the Department of Labour had failed to listen or
had attempted to dismiss the complainants’ officers.
- 376. The Committee notes from the Government’s submission that the
request of the Industrial Court to amend or withdraw article 38(b) of the 19th
collective agreement was based on the Industrial Relations Act. In this respect, the
Committee notes that the Government indicates that the Industrial Court considered that
article 38(b) violated section 24(3) of the Employment Act by imposing financial
obligations on non-union members without their explicit consent.
- 377. The Committee notes, based on the parties’ submissions, that the
Industrial Court relied on sections 16(2) and 14(3) of the Industrial Relations Act in
requesting the amendment of article 38(b), following its assessment of all clauses in
the 19th collective agreement with the labour legislation. It notes that 16(2) of the
Industrial Relations Act provides that:
- The Court may in its discretion
–
- (a) refuse to take cognizance of the collective agreement deposited under
subsection (1) if it is of the opinion that the agreement does not comply with
section 14; or
- (b) before taking cognizance of the collective agreement
deposited under subsection (1), require that such part thereof as does not comply
with section 14 shall be amended in such manner as the Court may
direct.
- 378. It further notes that section 14(3) of the Industrial Relations Act
provides that:
- Any term or condition of employment, contained in a collective
agreement, which is less favourable than or in contravention of the provisions of
any written law applicable to workmen covered by the said collective agreement,
shall be void and of no effect to that extent and the provisions of such written law
shall be substituted thereof.
- 379. The Committee also notes from the parties’ submission that in the
interpretation of the Industrial Court, collective bargaining fees are incompatible with
section 24(3) of the Employment Act. It notes that section 24 of the Employment Act
provides that:
- (2) No deductions shall be made by an employer from the wages of
an employee otherwise than in accordance with this Act.
- …
- (3) The
following deductions shall only be made at the request in writing of the
employee:
- (a) deductions in respect of the payments to a registered trade
union …
- 380. The Committee notes that in the Court’s interpretation of that
section, any deductions from wages by the employer (and their transfer to a trade
union), cannot be made without the employee’s consent, and that this also applies to
union security clauses, which require the payment of dues by workers who are not members
of a trade union but who benefit from the advantages of the collective agreement
negotiated by a trade union.
- 381. The Committee further notes that section 24(7) of the Employment Act
grants the discretion to the Ministry of Human Resources to exceptionally authorize
deductions under section 24(3) of the Employment Act, in that it provides that “… the
Director-General, on application by an employer or a specified class or classes of
employers, may permit any deduction for a specified purpose from the wages of an
employee or a specified class or classes of employees subject to such conditions as he
may deem fit to impose”. The Committee observes that the Ministry of Human Resources, in
exercising this discretion, still regarded the extent of consent of non-unionized
employees to be a significant factor, and requested relevant information from the
complainant. In the Committee’s view, requiring this information effectively amounts to
a de facto refusal by the Ministry to grant permission for the deduction of collective
bargaining fees.
- 382. The Committee also considered that problems related to union
security clauses should be resolved at the national level, in conformity with national
practice and the industrial relations system in each country. In other words, both
situations where union security clauses are authorized and those where they are
prohibited can be considered to be in conformity with ILO principles and standards on
freedom of association [see Compilation, para. 554]. In light of the above, the
Committee considers that the national authorities’ current interpretation that the union
security clause in article 38(b) of the collective bargaining agreement does not conform
with national law, particularly section 24 of the Employment Act is not inconsistent
with ILO principles on freedom of association. The Committee recommends that the
Government take the necessary measures to formally regulate the matter in a manner that
fully respects principles of voluntary negotiation.
- 383. The Committee also notes that the complainant alleges that officials
at the Ministry of Human Resources and the Industrial Court refused to facilitate and
assist in the registration of the collective agreement, that a Department of Labour
official had failed to listen or attempted to dismiss the complainant’s officers, and
that the Ministry was not playing a neutral role in facilitating an agreement. It also
notes that these claims are contested by the Government, including as regards a
dismissive attitude and bias of Ministry officials. In this regard, the Committee notes
that according to the submission of both parties, meetings or hearings with the parties
were organized. As per the complainant’s submission, the Court had requested a meeting
with the parties to provide explanations regarding article 38(b), had discussed with the
parties and had evoked the possibility of requesting permission for the collective
bargaining fees from the Department of Labour under section 24(7) of the Employment Act.
Both parties also referred to a meeting to discuss article 38(b) of the Collective
Bargaining Agreement at the Department of Labour within the Ministry of Human Resources.
In this respect, the Committee notes that the complainant has not provided any
additional elements in relation to its allegations that the Ministry or Human Resources
had failed to play a neutral role in assisting the parties to come to an agreement,
other than referring to elements, which show that the Ministry had restrictively
exercised its discretion under the law and had effectively denied the authorization of
union security clauses. Similarly, as shown above, the Industrial Court acted in
conformity with the national legislation when assessing compliance with legal and
procedural requirements, and the complainant does not provide further elements, which
would show that it had refused to facilitate the registration of the collective
agreement, other than referring to elements which show that the Court had interpreted
collective bargaining fees (in collective bargaining agreements) to be incompatible with
section 24(3) of the Employment Act. In this respect, the Committee also notes that the
collective agreement was registered promptly by the Industrial Court after article 38(b)
had been removed.
- 384. The Committee understands from the complainant’s referral to
paragraph 1438 of the Compilation that it expresses reservation in respect of the
general requirement for a collective agreement to be submitted to and approved by the
Industrial Court under section 16 of the Industrial Relations Act, in order to become
binding.
- 385. The Committee notes that the following provisions in the national
legislation govern the procedure for the cognizance of collective agreements:
- 386. Section 16 of the Industrial Relations Act:
- (1) A signed copy
of the collective agreement shall be jointly deposited by the parties with the
Registrar within one month from the date on which the agreement has been entered
into and the Registrar shall thereupon bring it to the notice of the Court for its
cognizance.
- (2) The Court may in its discretion –
- (a) refuse to take
cognizance of the collective agreement deposited under subsection (1) if it is
of the opinion that the agreement does not comply with section 14;
or
- (b) before taking cognizance of the collective agreement deposited
under subsection (1), require that such part thereof as does not comply with
section 14 shall be amended in such manner as the Court may
direct.
- (3) If any party to the collective agreement fails to
carry out such direction the Court may, notwithstanding any other power exercisable
under this Act, amend the copy of the collective agreement in the manner directed
after giving the parties a reasonable opportunity of being heard and the agreement
so amended shall be deemed to be the collective agreement between the
parties.
- 387. Section 17 of the Industrial Relations Act:
- (1) A collective
agreement which has been taken cognizance of by the Court shall be deemed to be an
award and shall be binding on –
- (a) the parties to the agreement including in
any case where a party is a trade union of employers, all members of the trade
union to whom the agreement relates and their successors, assignees or
transferees; and
- (b) all workmen who are employed or subsequently
employed in the undertaking or part of the undertaking to which the agreement
relates.
- (2) As from such date and for such period as may be
specified in the collective agreement it shall be an implied term of the contract
between the workmen and employers bound by the agreement that the rates of wages to
be paid and the conditions of employment to be observed under the contract shall be
in accordance with the agreement unless varied by a subsequent agreement or a
decision of the Court.
- 388. Section 14 of the Industrial Relations Act:
- (1) A collective
agreement shall be in writing and signed by the parties to the agreement or by
persons authorized in that behalf.
- (2) A collective agreement shall set out
the terms of the agreement and shall, where appropriate –
- (a) name the
parties thereto;
- (b) specify the period it shall continue in force
which shall not be less than three years from the date of commencement of the
agreement;
- (c) prescribe the procedure for its modification and
termination; and
- (d) unless there exists appropriate machinery
established by virtue of an agreement between the parties for the settlement of
disputes, prescribe the procedure for the adjustment of any question that may
arise as to the implementation or interpretation of the agreement and reference
of any such question to the Court for a decision.
- (3) Any term
or condition of employment, contained in a collective agreement, which is less
favourable than or in contravention of the provisions of any written law applicable
to workmen covered by the said collective agreement, shall be void and of no effect
to that extent and the provisions of such written law shall be substituted
thereof.
- 389. The Committee notes that the required recognition of collective
agreements by the Industrial Court for it to become legally binding involves the Court’s
examination of some basic formal and procedural requirements, as well as an assessment
of its conformity with labour legislation. It further notes that under the Industrial
Relations Act, the Court may refuse to register the collective agreement, request that
amendments be made to it by the parties, or ultimately amend the collective agreement
itself.
- 390. The Committee notes that, in the present case, the Industrial
Court’s request for amendments was limited to a substantive issue, that is, collective
bargaining fees, and recalls from its considerations above that the Court relied on
section 14(3) of the Industrial Relations Act in making that request.
- 391. The Committee recalls that it has considered that “making the
validity of collective agreements signed by the parties subject to the approval of these
agreements by the authorities is contrary to the principles of collective bargaining and
of Convention No. 98” [Compilation, para. 1438, as referred to by the complainant in its
submission], and also that “the Government must ensure that the process of registration
and publication of collective agreements only involves checks on compliance with the
legal minima and questions of form, such as, for example, the determination of the
parties and the beneficiaries of the agreement with sufficient precision and the
duration of the agreement” [Compilation, para. 1440].
- 392. The Committee notes that the discretion under section 14(3) of the
Industrial Relations Act is constrained to ensuring compliance with labour law and does
not include additional considerations, such as, for instance, considerations relating to
policy. It also notes that under the Industrial Relations Act, before the Court may
proceed to amending any provisions in collective bargaining agreements (with precedence
given to amendments by the parties themselves), reasonable opportunity shall be given to
the parties to be heard.
- 393. Regarding the 19th collective agreement (covering the period from
2021 to 2023), the duration between its conclusion in April 2023 and its validation by
the Industrial Court (after withdrawal of the collective bargaining fee clause) in
November 2023 was six months. In this regard, the Committee considers that any potential
delays in the procedure, which might affect the implementation of agreements, including
those resulting from a high workload of the courts, should be avoided.
- 394. In light of the above, the Committee recommends that the Government
engage in consultations with the social partners to address any existing legal or
practical impediments in the procedure governing the registration of collective
agreements with a view to ensuring that the procedure is expeditious, respects the
autonomy of the parties, and promotes the effective exercise of the right to collective
bargaining.
- 395. The Committee notes that the complainant provides the following
facts, which are not disputed by the Government: In April 2023, the complainant and the
banking association signed a Memorandum of Agreement (“Festival Aid Agreement”) which
provided for the payment of a sum equivalent to one month of salary “to assist employees
in celebrating the religious festival in 2023”. The Memorandum of Agreement, which also
provided that “both parties agree that this payment may be reviewed in the following
year” was not submitted to the Industrial Court for recognition. While in 2023, the
member banks of the banking association paid the bank employees the “festival aid” in
accordance with that agreement, in 2024, the banking association did not pay any
“festival aid”, claiming that that allowance was a one-time payment only for 2023.
Following discussions between the complainant and the banking association on the
festival aid since the beginning of 2024, the latter referred the issue to the
Industrial Relations Department as a trade dispute where two conciliation meetings took
place. The Minister of Human Resources then referred the festival aid issue to the
Industrial Court in April 2024 without the knowledge of the complainant.
- 396. The Committee notes that the Government provides the following
additional information: The dispute was referred to the Industrial Court by the Minister
of Human Resources pursuant to section 26(2) of the Industrial Relations Act. The
Industrial Court found that the complainant had not provided any concrete evidence to
prove that a meeting had taken place between the Minister of Human Resources and the
banking association regarding the payment of ex gratia festival aid for 2024 and that
the complainant was responsible for halting negotiations, rather than the Government or
the banking association. The Committee also notes that the Government indicates that the
complainant filed a review application on 18 July 2024 concerning the alleged bilateral
meeting of the Minister of Human Resources with the banking association, in relation to
which the High Court scheduled a hearing in February 2026.
- 397. The Committee also notes that the Government indicates that the
Industrial Court ruled in favour of the banking association, determining that the
Memorandum of Agreement on the festival aid of April 2023 was explicitly limited to
2023, and that it had no legal or binding effect because it had not been deposited with
the Industrial Court for recognition as required under the Industrial Relations Act. As
a result, the member banks of the banking association were not required to provide
festival aid payments to union members.
- 398. The Committee notes that the complainant asserts that the Ministry
of Human Resources interfered in the collective bargaining process, first by holding an
undisclosed meeting with the banking association, and second by referring the festival
aid issue to the Industrial Court without the knowledge of the complainant, in violation
of Convention No. 98. In this respect, the Committee also notes that the complainant
submits that it lodged two police reports against the Minister of Human Resources for
alleged abuse of power.
- 399. In relation to the first issue, the Committee understands that it is
disputed between the parties whether the Minister of Human Resources, prior to the
referral of the festival aid issue to the Industrial Court, held an undisclosed meeting
with the banking association, engaged with the banking association unilaterally on the
matter without the complainant’s involvement, and reached an agreement with the banking
association on the festival aid issue providing for entitlements inferior to those
requested by the complainant. In this respect, the Committee notes the reference made by
the Government to the findings of the Industrial Court that the complainant had not
provided any concrete evidence to prove that a meeting had taken place between the
Minister of Human Resources and the banking association regarding the payment of ex
gratia festival aid for 2024. The Committee understands from the Government’s submission
that the complainant had also filed a review application on 18 July 2024 on this issue,
for which the High Court has scheduled a hearing in February 2026. In view of the
conflicting submissions of the parties, the Committee is not in a position to further
examine these allegations and requests the Government to provide information on the
outcome of both the High Court review application and the relevant police report
concerning the alleged interference in the collective bargaining process.
- 400. In relation to the second issue, the Committee also notes that the
complainant contends that the Ministry of Human Resources should not have referred the
trade dispute to the Industrial Court (which it did under section 26(2) of the
Industrial Relations Act) without the consent of the complainant, as this referral had
prevented the complainant from carrying out any industrial action.
- 401. The Committee notes that, at the time of the referral, in April
2024, section 26(1) and (2) of the Industrial Relations Act provided that:
- (1)
Where a trade dispute exists or is apprehended, the Minister may, if that dispute is
not otherwise resolved, refer the dispute to the Court on the joint request in
writing to the Minister by the trade union of workmen which is a party to the
dispute and the employer who is a party to the dispute or a trade union of employers
which is a party to the dispute.
- (2) The Minister may of his own motion or
upon receiving the notification of the Director General under subsection 18(5) refer
any trade dispute to the Court if he is satisfied that it is expedient so to do
…
- 402. In this context, it notes that section 18(5) of the Industrial
Relations Act (Conciliation) provides that:
- (5) Where, after having taken steps
under subsection (2) or (3), the Director General is satisfied that there is no
likelihood of the trade dispute being settled, he shall notify the Minister
accordingly.
- 403. The Committee also notes that section 40(2A) of the Industrial
Relations Act (Picketing) provides that:
- No workman shall go on picket
–
- …
- (b) after a trade dispute or matter involving such workman and
such employer has been referred to the Court and the parties concerned have been
notified of such reference; …
- 404. And that section 44 of the Industrial Relations Act (Prohibition of
strikes and lock-outs) provides that:
- No workman shall go on strike and no
employer of any such workman shall declare a lock-out –
- …;
- (b) after
a trade dispute or matter involving such workman and such employer has been referred
to the Court and the parties concerned have been notified of such
reference;
- 405. The Committee recalls that it considered that a system of compulsory
arbitration through the labour authorities, if a dispute is not settled by other means,
can result in a considerable restriction of the right of workers’ organizations to
organize their activities and may even involve an absolute prohibition of strikes,
contrary to the principles of freedom of association [see Compilation, para. 822). The
Committee also recalls that it has expressed the view that the mere existence of a
deadlock in a collective bargaining process is not in itself a sufficient ground to
justify an intervention from the public authorities to impose arbitration on the parties
to the labour dispute. Any intervention by the public authorities in collective disputes
must be consistent with the principle of free and voluntary negotiations; this implies
that the bodies appointed for the settlement of disputes between the parties to
collective bargaining should be independent and recourse to these bodies should be on a
voluntary basis, except where there is an acute national crisis [see Compilation, para.
1430).
- 406. In light of the above, and noting the undisputed allegations of the
complainant that the Ministry’s referral occurred without the knowledge of the
complainant, the Committee considers that the referral by the Ministry of Human
Resources of the trade dispute over the festival aid to the Industrial Court without the
mutual consent of both parties affects the voluntary nature of the collective bargaining
process. In this context, the Committee welcomes the amendments to section 26(2) of the
Industrial Relations Act, which further clarify that the mutual consent of both parties
is required to refer a deadlock in collective bargaining to the Industrial Court, except
under the conditions listed in indents (a)–(d). The Committee notes that these
amendments have come into force on 15 September 2024, that is, after the referral by the
Ministry of Human Resources to the Industrial Court in April 2024.
- 407. It notes that the following additions have been made to section
26(2) of the Industrial Relations Act:
- Provided further that where the trade
dispute relates to a refusal to commence collective bargaining or a deadlock in
collective bargaining, reference to the Court shall not be made without the consent
in writing of the parties unless –
- (a) the trade dispute relates to the
first collective agreement;
- (b) the trade dispute refers to any essential
services specified in the First Schedule;
- (c) the trade dispute would
result in acute crisis if not resolved expeditiously; or
- (d) the parties to
the trade dispute are not acting in good faith to resolve the trade dispute
expeditiously.
- 408. The Committee trusts that the Government and the social partners
shall ensure the faithful observance of the law as amended, in future referrals. It
further requests the Government to ensure that any future referrals for compulsory
arbitration without the content of the parties remain limited to cases of disputes in
the public service involving public servants exercising authority in the name of the
State or in essential services in the strict sense of the term, namely those services
whose interruption would endanger the life, personal safety or health of the whole or
part of the population.
- 409. Noting that the Industrial Court held that the festival aid
agreement is not legally binding under the national legislation, including because it
was not submitted to the Court for recognition, the Committee also notes that the
complainant refers to technical restrictions in section 16 of the Industrial Relations
Act as regards the requirement for recognition of collective agreements by the
Industrial Court, that is, the joint submission by the parties within 30 days of signing
the agreement, the joint submission by both parties, etc. The Committee notes from
sections 14 and 16 of the Industrial Relations Act above, that these provisions contain
a number of basic formal requirements, such as the requirement for the collective
agreement to: be in written form and signed by the parties (section 14(1)); to be
jointly deposited by them (section 16(1)); to be submitted within one month from its
entry into force (section 16(1)); and to be setting out the terms of the agreement,
where appropriate including: (a) the name of the parties thereto; (b) the duration of
the agreement; (c) the procedure for its modification and termination; and (d) the
procedure in relation to questions concerning the implementation or interpretation of
the collective agreement (section 14(2)).
- 410. In particular, the Committee recalls that section 16(1) of the
Industrial Relations Act provides that: “A signed copy of the collective agreement shall
be jointly deposited by the parties with the Registrar within one month from the date on
which the agreement has been entered into and the Registrar shall thereupon bring it to
the notice of the Court for its cognizance”.
- 411. The Committee notes that the parties have not provided any
information regarding the reasons why the Memorandum of Agreement on the festival aid
was not submitted to the Industrial Court. Recalling that the failure of one of the
parties to cooperate in the submission of a collective agreement, and thereby preventing
its entry into force, has already been raised in Case No. 3401, the Committee reiterates
its recommendation that the Government engage in consultations with the social partners
to address any existing legal or practical impediments in the procedure governing the
registration of collective agreements, with a view to ensuring that this procedure is
expeditious, respects the autonomy of the parties, and promotes the effective exercise
of the right to collective bargaining.
- 412. The Committee notes that the issue of the payment of festival aid
for 2024 remains unresolved. The Committee requests the Government to take appropriate
measures to foster a climate conducive to voluntary negotiation. This should include
supporting the parties in their continued efforts to reach a mutually acceptable
agreement.
- 413. The Committee notes the following indications of the complainant,
which are not disputed by the Government. A first negotiation meeting for the 20th
collective agreement (covering the period 2024– 26) took place on 22 January 2024, which
ended in a deadlock between the complainant and the banking association over the amount
of the festival aid. The complainant subsequently declared a trade dispute, writing to
the banking association to call for social dialogue in line with the provisions in the
collective agreement in hopes of resolving the deadlock. However, no progress was made.
On 8 February 2024, the complainant received an invitation from the Industrial Relations
Department for a conciliation meeting on 19 February 2024. The Committee also notes the
following information provided by the Government. Two conciliation meetings were
organized by the Department of Industrial Relations in 2024, which only the banking
association, but not the complainant attended. The dispute between the complainant and
the banking association regarding the 20th collective agreement was referred by the
Ministry of Human Resources to the Industrial Court on 29 April 2024 under sections
18(5) and 26(2) of the Industrial Relations Act as the conciliation process at the
Department of Industrial Relations failed to produce a resolution, and relevant
proceedings were still ongoing in June 2025.
- 414. The Committee notes that the complainant asserts that the Minister’s
action was in clear violation of Convention No. 87 and Article 4 of Convention No. 98
and constitutes gross interference in the ongoing collective bargaining process and
abuse of power. The Committee notes the complainant’s assertion that the Minister had
failed to act in accordance with national legislation, and that he should have referred
the matter to the Industrial Court only if it remained unresolved and only with the
mutual agreement of the parties. The complainant alleges that the primary motive behind
the Minister’s expedited referral to the court was to prevent the complainant from
engaging in picketing over the issue, and that it had asked the Minister to withdraw
from the process. The Committee notes that, on the other hand, the Government reaffirms
its impartiality and commitment in supporting voluntary collective bargaining, in strict
adherence to domestic labour laws governing industrial relations and the principles
enshrined in Convention No. 98. It emphasizes that the Ministry’s referral to the
Industrial Court was made only after the conciliation process at the Department of
Industrial Relations failed to produce a resolution, resulting in a deadlock. It notes
that the Government adds that the referral process to the Industrial Court under section
26(2) of the Industrial Relations Act is intended to prevent prolonged disputes. In this
context, the Committee also notes that the Government refers to a 2024 decision by the
Industrial Court, dismissing the banking association’s application to restrain the
complainant from engaging in industrial action, and that the Government indicates that
the complainant continued such action, which the Government raises objections to in
light of the ongoing judicial proceedings.
- 415. The Committee notes there is disagreement between the parties as to
whether the Minister of Human Resources should have referred the dispute over the 20th
collective agreement to the Industrial Court or not. While it observes that views
diverge on whether a deadlock had been reached at the time of referral – two months
after a conciliation meeting had been scheduled at the Department of Industrial
Relations – it also notes that the complainant’s claim that the referral was made
without the agreement by the parties, is not contested by the Government.
- 416. Similarly to its considerations above concerning the festival aid
Memorandum of Agreement, the Committee considers that the referral by the Ministry of
Human Resources of the trade dispute over the 20th collective agreement to the
Industrial Court without the mutual consent of both parties affects the voluntary nature
of the collective bargaining process. This may be the case even if, as indicated by the
Government, the Industrial Court rejected an application by the banking association to
restrain the complainant from engaging in industrial action (such action, pursuant to
sections 40(2A) and 44 of the Industrial Relations Act as referred to above would
normally not be permitted under these provisions after a referral to the Court). In this
context, the Committee welcomes the amendments to section 26(2) of the Industrial
Relations Act, which now require the mutual consent of both parties to refer a deadlock
in collective bargaining to the Industrial Court, except under the conditions listed in
indents (a)–(d). It requests the Government to ensure that any further referrals for
mandatory conciliation without the consent of the parties remain limited to cases of
disputes in the public service involving public servants exercising authority in the
name of the State or in essential services in the strict sense of the term, namely those
services whose interruption would endanger the life, personal safety or health of the
whole or part of the population.
- 417. The Committee notes that the issue of the payment of festival aid
for 2024 and beyond remains unresolved within the negotiations for the 2024–26
collective agreement. The Committee requests the Government to take appropriate measures
to foster a climate conducive to voluntary negotiation. This should include supporting
the parties in their continued efforts to reach a mutually acceptable agreement.
- 418. The Committee notes that the complainant alleges the Government’s
failure to protect the members of the complainant from anti-union and discriminatory
practices. It notes that the complainant refers to instances where the banking
association and its member banks recently refused to grant leave for trade union
activities and trade union education, in violation of the 19th collective agreement,
which specified the duration of such paid leave. The Committee notes that the
complainant asserts that in certain situations, members and trade union officials had
therefore been compelled to use their personal annual leave or forgo paid leave
altogether. The complainant further alleges that some member banks had even taken
disciplinary action against union members in this regard. The Committee notes that the
Government, in relation to the alleged existence of discriminatory practices by
employers, including the denial of union and other leave for union activities, states
that the Industrial Relations Act provides safeguards against anti-union discrimination,
and that any such allegations will be thoroughly investigated under that Act and other
relevant labour laws. It notes that the Government adds that where it is established
that employers fail to comply with provisions in collective agreements, the Government
will take appropriate action, including referring unresolved trade disputes to the
Industrial Court.
- 419. The Committee requests the Government to provide information on the
outcome of investigations under the Industrial Relations Act into alleged anti-union and
discriminatory practices by the banking association and its member banks, namely the
refusal of leave for trade union activities and education, contrary to the 19th
collective agreement, and the disciplinary action taken against members of the
complainant.
The Committee’s recommendations
The Committee’s recommendations- 420. In the light of its foregoing conclusions, the Committee invites the
Governing Body to approve the following recommendations:
- (a) The Committee
considers that the national authorities’ current interpretation that the union
security clause in article 38(b) of the collective bargaining agreement does not
conform with national law, particularly section 24 of the Employment Act is not
inconsistent with ILO principles on freedom of association. The Committee recommends
that, in consultation with the social partners, the Government take the necessary
measures to formally regulate the matter in a manner that fully respects the
principles of voluntary negotiation.
- (b) The Committee recommends that the
Government engage in consultations with the social partners to address any existing
legal or practical impediments in the procedure governing the registration of
collective agreements, with a view to ensuring that this procedure is expeditious,
respects the autonomy of the parties, and promotes the effective exercise of the
right to collective bargaining.
- (c) The Committee requests the Government to
provide information on the outcome of both the High Court review application and the
relevant police report concerning the alleged interference in the collective
bargaining process.
- (d) The Committee considers that the referral by the
Minister of Human Resources of the trade dispute over the festival aid and the 20th
collective agreement to the Industrial Court without the mutual consent of both
parties affects the voluntary nature of the collective bargaining process. In this
context, the Committee welcomes the amendments to section 26(2) of the Industrial
Relations Act, which now require the mutual consent of both parties to refer a
deadlock in collective bargaining to the Industrial Court, except under the
conditions listed in indents (a)–(d). The Committee trusts that the Government and
the social partners shall ensure the faithful observance of the law as amended, in
future referrals. It further requests the Government to ensure that any future
referrals for compulsory arbitration without the consent of the parties remain
limited to cases of disputes in the public service involving public servants
exercising authority in the name of the State or in essential services in the strict
sense of the term, namely those services whose interruption would endanger the life,
personal safety or health of the whole or part of the population.
- (e) The
Committee notes that the issues of the payment of festival aid for 2024 and beyond
remains unresolved within the negotiations for the 2024–26 collective agreement. The
Committee requests the Government to take appropriate measures to foster a climate
conducive to voluntary negotiation. This should include supporting the parties in
their continued efforts to reach a mutually acceptable agreement.
- (f) The
Committee requests the Government to provide information on the outcome of
investigations under the Industrial Relations Act into alleged anti-union and
discriminatory practices by the banking association and its member banks, namely the
refusal of leave for trade union activities and education, contrary to the
19th collective agreement, and the disciplinary action taken against members of the
complainant.
- (g) The Committee requests to be kept informed of developments
in respect of the above.
