Malaysia - Country baselines under the ILO Declaration Annual Review (2000-2008): Freedom of association and the effective recognition of the right to collective bargaining (FACB)

Involvement of Employers’ and Workers’ organizations in the reporting process

YES, according to the Government: Involvement of the Malaysian Employers Federation (MEF) and Malaysian Trades Union Congress (MTUC) through communication of government reports and tripartite meetings on reporting issues.

OBSERVATIONS BY THE SOCIAL PARTNERS

Employers’ organizations

2007 AR: Observations by the MEF.

Workers’ organizations

2008 AR: Observations by the Malaysian Trades Union Congress (MTUC).

Observations by the International Trade Union Confederation (ITUC).

2007 AR: Observations by the International Confederation of Free Trade Unions (ICFTU).

2006 AR: Observations by the ICFTU.

2005 AR: Observations by the ICFTU.

2002 AR: Observations by the ICFTU.

2000 AR: Observations by the ICFTU.

EFFORTS AND PROGRESS MADE IN REALIZING THE PRINCIPLE AND RIGHT

Ratification

Ratification status

Malaysia ratified in 1961 the Right to Organise and Collective Bargaining Convention, 1949 (No.98) (C.98). However, it has not yet ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No.87) (C.87).

Ratification intention

NIL

Recognition of the principle and right (prospect(s), means of action, basic legal provisions)

Constitution

YES

The Constitution (article 10(1)(c)) provides for freedom of assembly and association.

Policy, legislation and/or regulations

Legislation

2000-2006 ARs: The Trade Unions Act, 1959 and the Industrial Relations Act, 1967 recognize the principle and right (PR) but impose some restrictions on joining and forming trade unions and on the right to collective bargaining.

Regulations

The Trade Unions Notification 1981 deals with the PR.

Basic legal provisions

(i) The Trade Unions Act, 1959; (ii) the Industrial Relations Act, 1967; (iii) the Employment Act, 1955; and (iv) the Act and Trade Unions Notification 1981, section 27.

Judicial decisions

AR 2008: In response to the ITUC comments, the Government referred to the High Court decision on the issues raised by the National Union of Bank Employees (NUBE) on the registration of AmBank (M) Bhd. According to the Government this decision is now the subject of further appeal to the Appellate Court, and any comments made would be subjudice.

Exercise of the principle and right

At national level (enterprise, sector/industry, national)

For Employers

2002-2006 ARs: All categories of employers can set up their organizations, but prior Government authorization is necessary to operate these organizations.

EFFORTS AND PROGRESS MADE IN REALIZING THE PRINCIPLE AND RIGHT

Exercise of the principle and right

At national level (enterprise, sector/industry, national)

For Workers

2000-2006 ARs: Freedom of association can be exercised by medical professionals, teachers, agricultural workers, workers engaged in domestic work, workers in export processing zones (EPZs) or enterprises/industries with EPZ status, and migrant workers. However, prior Government authorization is necessary to operate workers’ organizations (compulsory registration under the Trade Unions Act 1959 and recognition for collective bargaining under the Industrial Relations Act of 1967 and its subsequent amendments).

Freedom of association (FOA) cannot be exercised by workers in the informal economy, members of the Royal Malaysian Police; members of any prison service; members of the armed forces; public officers engaged in confidential or security capacity; public officers holding any post in the managerial and professional group; and officers prohibited by any other law from joining a trade union, except those exempted by the Chief Secretary to the Government.

Special attention to particular situations

NIL

Information/

Data collection and dissemination

2008 AR: According to the ITUC: only 8.5% of the total workforce is unionised.

2002 AR: The Government provided information and data that show a decrease of registered collective agreements under the 2002 Annual Review regarding number of trade unions and memberships by sectors, number of collective agreements, claims for union recognition, etc.

At international level

According to the Government: There are no particular restrictions on the international affiliation of employers’ and workers’ organizations. However, a trade union must have an approval from the Director General of Trade Unions before it can affiliate internationally.

Monitoring, enforcement and sanctions mechanisms

2000-2006 ARs: According to the Government: The registration of a trade union is provided for under the Trade Unions Act, 1959. Every application for registration of any trade unions must be in compliance with this law and shall be made to the Director-General of Trade Unions (DGTU) for registration in the prescribed form, and shall be signed by at least seven members of the union in order to ensure an orderly development of trade unions in this country, under the Trade Unions Act, 1959. The DGTU can also cancel or suspend the registration of a trade union under certain conditions (Trade Unions Act, 1959).

Machinery appropriate to national conditions has been established in the public sector for purposes of discussing and to some extent negotiating terms and conditions of employment.

EFFORTS AND PROGRESS MADE IN REALIZING THE PRINCIPLE AND RIGHT

Monitoring, enforcement and sanctions mechanisms

2000-2006 ARs: The PR is enforced through law, collective agreements, free dispute settlement procedures and tripartite consultations at all levels. The Minister of Labour has the power to order recognition to be granted by the employer if the union claiming recognition is found competent and/or represents the majority of the workmen concerned.

According to the Government: In instances where the PR has not been respected in the public sector, discussions and to some extent negotiations are held by the officers of National Joint Councils, the Congress of Unions of Employees in the Public and Civil Service (CUEPACS) and the Public Services Department. These discussions and negotiations are related to terms and conditions of employment, including remuneration and to issues affecting employees in the public service, including the statutory bodies and local authorities. Furthermore, in the private sector, the issue of complaints relating to anti-union practices by employers, including dismissal, is addressed by the Director-General of Industrial Relations (DGIR) or by the Industrial Court when the DGIR fails to resolve the complaint.

Involvement of the social partners

2000-2006 ARs: According to the Government: Employers’ and workers’ organizations have been involved in regular consultations in respect of their terms and conditions of employment, including remuneration.

Promotional activities

NIL

Special initiatives/Progress

2004 AR: According to the Government: Successful example: The number of collective agreements voluntarily concluded on an annual basis and for a minimum duration of three years.

CHALLENGES IN REALIZING THE PRINCIPLE AND RIGHT

According to the social partners

Employers’ organizations

2007 AR: According to the MEF: Employers abide by the laws and guidelines issued by the authorities in dealing with recognition claims by unions. It is never the intention of an employer to prolong or delay the process of a recognition claim. Such a procedure may involve referring the issues to the civil court, which may take longer to be decided. Referring the issue to the court for decision is a right, which may be exercised by the unions or the employers, and it should not be seen as anti-union tactics when the employer takes matter to the court.

In fact the number of trade unions inclusive of employers’ organizations increased by 569 in 2005. The membership in to the trade unions increased from 734,455 to 801,604 between 2001 and 2005.

Workers’ organizations

2008 AR: The MTUC indicated that the multinational corporations «set up shop» in Malaysia in 1974 and workers have been without a national union since then. Therefore, the Government must grant it as soon as possible.

According to the ITUC: (i) the 30 year ban on the formation of a independent industrial union in the electronics industry in still in force; (ii) slow and cumbersome recognition process of the trade unions due to extensive power of the DGTU; (iii) restrictions on union formation and wide discretion in de-registering unions; (iv) restrictions on union officers; (v) prohibition of industrial union from organizing in managerial, executive positions and security-related tasks; (vi) requirement of union to receive recognition from employer prior to organizing; (vii) restrictions on the right to strike; (vii) trade unions are not permitted to use their assets for political purposes; (viii) in the private sector, the Industrial Relations Act (IRA) excludes hiring and firing, transfer and promotion, dismissal and reinstatement from the scope of collective bargaining and the IRA also limits collective bargaining in «pioneer» companies; (ix) in the public sector, the joint council system limits public sector unions to a consultative role and they do not have the right to take their disputes to the industrial court without the specific permission of the King of Malaysia; (x) threat of the Internal Security Act (ISA); (xi) the Malaysian Trades Union Congress is not recognized as a trade union confederation in law and does not therefore have the right to conclude collective bargaining agreements nor undertake industrial action; (xii) arbitrary refusal of union recognition; (xiii) inefficient labour courts; (xiv) migrants workers are not allowed to join associations; (xv) police intimidation.

2006-2007 ARs: The ICFTU raised the following additional challenges: (i) no measures have been taken to speed up union recognition, despite previous promises, and the Government remained opposed to ratifying Convention No. 87; (ii) trade unions whose registration has been denied or withdrawn are considered as illegal associations; (iii) the Trade Unions Act establishes restrictions regarding the scope of a union’s membership, its size and who may qualify as a candidate to become a trade union official; (iv) restrictions on the right to form trade unions in the public sector; (v) the right to strike is not specifically recognised and is restricted; (vi) the Government has threatened to invoke the 1960 Internal Security Act to prevent unions from undertaking protest action; (vii) only about 8.5 per cent of the total workforce is unionised; (viii) lack of independence of trade unions; (ix) slow union recognition by employers, (x) employers impose extra restrictions; (xi) the Government has failed to apply sanctions against employers who have violated directives granting trade union recognition or who have refused to reinstate illegally dismissed workers; (xii) migrants workers are not allowed to join associations; and (xiii) the labour courts are inefficient.

2000-2005 ARs: The ICFTU raised the following challenges: (i) slow and cumbersome recognition process of the trade unions; (ii) denial of union recognition by many employers, including some multinational corporations; (iii) prohibition of general unions or mergers unions to most workers who can only form in-house unions as exemplified in the case of women workers employed by multinational electronics companies who have been denied the right to organize a national union in the electronics industry since the early 1970; (iv) persisting political and legal obstacles to the organizing of trade unions; (v) extensive power of the DGTU (supervision, inspection, approval or withdrawal of registration, etc.); (vi) the serious obstacle to trade union organizing activities resulting in the establishment of often very risky and time consuming in-house unions by workers disqualified from union membership; (vii) hostility and threats of dismissal affecting workers forming in-house unions; (viii) legal and legislative restrictions and regulations on trade unions rights and activities, including the right to strike; (ix) police intimidation; (x) restrictions on joining trade unions for certain categories of workers including migrant workers; (xi) compulsory arbitration for parties involved in a dispute; (xii) weakness of the conciliation machinery; (xiii) inefficiency of the industrial court; (xiv) employees’ demand for higher wages and a guaranteed minimum wage in their companies.

CHALLENGES IN REALIZING THE PRINCIPLE AND RIGHT

According to the Government

2008 AR: In a late response to the ICFTU’s observations, the Government stated that it has not ratified C.87, but nevertheless continues to strive towards the principles embodied in the Convention, and has assimilated the spirit of this instrument in the national laws, with several modifications to allow the continuous development and growth of the Malaysian economy. The Government further indicated the following: (i) the power of the DGTU on union formation and de-registration are meant to enable him to have a general supervision, discretion and control over relevant matters pertaining to trade unions. The same principle applies to de-registration — these powers are not absolute as the DGTU will only cancel the registration of a trade union if he is satisfied that a particular trade union has contravened the Trade Unions Act 1959 (Act 262), Trade Unions Regulations or the respective trade union’s rules and regulations; (ii) As a matter of fact, It Is not uncommon that the Director General's decision has often been the Subject of judicial review by the High Court. Thus, the Director General walks the track cautiously; (iii) Contrary to ITUC's comments, the Director General does not have wide discretion in de-registering trade unions under the Trade Unions Act 1959. It has to confine itself to the limits of powers conferred by the Act; (iv) the Malaysian Government considers it necessary to impose conditions, rectrictions and regulations on the birth and growth of trade unions in the country (in order: (a)to ensure that trade unions operate in a healthy, democratic and responsible way and that do not pose any threat to the security of the country; (b) to prevent the existence of multiple trade unions within any particular establishment, trade, occupation and industry which would trigger inter trade union rivalry; and (c) to ensure that in the exercise of trade union's rights, the interests of the people and the country as a whole are not sacrificed for the benefits of individuals who controls the unions); (iv) with regards to the Minister's power to suspend a trade union, the power can only be exercised with the concurrence of the Minister of Internal Security (the sale purpose of having this provision in the law is to protect public interest and maintain public order); (v) restrictions on unions officers (A non-citizen of Malaysia can stand for election to become an executive committee of a trade union provided that his trade union has obtained an order of exemption from the application of section 28 of Act 262 from the Minister. However, with regard to the provision of section 28 of Act 262 which limits membership in a trade union executive committee to persons who have worked for at least one year in the establishment, trade, occupation or industry with which the trade union is connected, this particular provision has been repealed in the recent amendment and has been passed by the Parliament. The restriction imposed by Act 262 on assuming trade union leadership are meant to ensure that trade union leaders are responsible people who can protect not only the interest of the members of their respective unions but also the interest of the country and people at large); (vi) Ban from organizing (with the exception of public officers employed by the government or statutory authorities, workmen that come exclusively from either managerial, executive, confidential or security capacities are free to form unions that cater particularly for their own groups. Electronics sector workers were not totally precluded from forming trade unions. As a matter of policy, the government encourages the formation of enterprise or in-house unions for workmen in the electronics industry); (vii) Requirement of unions to receive recognition from employer (recognition is a pre-requisite for trade union to embark on collective bargaining process with the employer. Recognition is essential to ensure that the trade union is a competent union to represent the workers in that particular establishment); (viii) The Public Sector (public sector employees working for defence sector, police force or prisons do not have the right to form or join trade unions in order to ensure that the security and national interest of the country are well protected and preserved); (ix) Restrictions on the right to strike (a trade union is not denied its right to strike as long as stipulated procedures are observed. The requirement of two-third majority and a clear motion on the acts to be carried out during the strike are aimed to obtain majority support from union members concerned before proceeding on industrial actions to be taken against the employer. It aims to ensure democratic prevails in a trade union. It is to be noted that strikes are only prohibited when the dispute leading to the strike has been referred to the Industrial Court and the parties so informed and not anytime earlier in order not to disrupt the court proceedings. The imposition of certain notice requirement before strike is necessary to enable contingency actions to be taken. It does not in any way deny the right to strike. The right to strike under the Trade Union Act 1959 is a serious right and it was for this reason that the right to strike should be mandated by a not less than 2/3 majority from the union's eligible members. The right to strike should be a means to an end and not the end itself. As such, the Government has a strong position that the posture of strike or strike itself should not over spilled into a lose-lose situation. Conflict resolution mechanism should be allowed an opportunity to address and resolve the dispute, and if possible to create a win-win situation. It was for this reason that the cooling off period of seven days was incorporated into the Trade Unions Act 1959); (x) Restrictions on political activities by trade unions (the prohibition as provided under section 72 of Act 262 only refers to the use of unions fund for political objectives. An officer or individual union members are not prohibited from contributing to any political parties provided that the rules

CHALLENGES IN REALIZING THE PRINCIPLE AND RIGHT

According to the Government

and regulations are observed. In the private sector: Industrial Relations Act 1967 (Act 177) merely states the rights of employers When negotiating collective agreements. These rights are not to exert limitation on collective bargaining. It provides for employers to run their business in the most efficient way and to protect from the abuse of collective bargaining process. These rights are not absolute as the matter can be brought up to the Department of Industrial Relations for conciliation process. In matters pertaining to procedures for procedures for promotion, parties are allowed to discuss it on a general character. In the public sector: The public sector employees through their unions have been holding regular discussions and consultations in respect of their terms and conditions of employment including remuneration. The Congress of Union of Employees in the Public and Civil Services (CUEPACS), the officers of the Joint Councils and the Public Services Department meet regularly to discuss issues affecting employees in the public service. Through these discussions, the public sector unions do contribute to the deliberations on remuneration and terms and conditions of employment); (xi) Application of Employment Act limited to Peninsular Malaysia (major amendments have been done in order to have uniformity in the application of the main labour legislation throughout Peninsular Malaysia, Sabah and Sarawak. Through this amendment, many provisions of the Sabah Labour Ordinance and Sarawak Labour Ordinance were repealed and the provisions from the Employment Act 1955 were incorporated into the Ordinances.); (xii) Government interference (the Government does not interfere in the administration of trade unions unless explicitly authorized by law); (xiii) Ban on general confederations (MTUC registration as a society instead of as being a general confederation of trade union is not the choice of the government. If MTUC wants itself to be registered as a federation of trade unions, its original sponsors should have opted for registration under the Trade Unions Act 1959 and comply with all the conditions laid down under the Act); (xiv) Arbitrary refusal of union recognition by Director General of Trade Unions (in a recognition claim under Section 9 of the Industrial Relations Act 1967, the DGTU does not arbitrarily decide on the competency question of whether a trade union could represent any workmen or class of workmen. The DGTU has to perform a statutory function and his powers were not absolute or arbitrary. It is often subjected to judicial review by the High Court. In Marulee (M) Sdn Bhd v. Minister of Human Resources & Anor (2007) 5 CLJ 51, the Court of Appeal observed and held that as far as the rule of natural justice in relation to the right to be heard was concerned, this rule had been strictly observed by the DGTU and the Director General of Industrial Relations is arriving at the conclusions that they did.); (xv) Employers impose extra restrictions (Limitations on the right of workmen who are employed in managerial, executive, confidential or security capacities to join trade unions of workmen that do not cater exclusively for these groups, are to avoid possible cases of conflict of interest. Any questions arising from the differing interpretation on the above stated capacities could be best addressed by the DGTU or the courts.); (xvi) Inefficient labour courts (the Industrial Court is aware of some delays in the handing down of some of the awards by the court. However, with the implementation of the «electronic Industrial Court» (aIC), a computerized case management system for the whole country, the Industrial Court President has been monitoring closely cases being heard and awards handed down in the Court With the close supervision, it is expected that cases of awards not handed down for more than 12 months can soon be resolved.); (xvii) Migrant workers Intimidated to not join trade unions (existing provisions in the Trade Unions Act 1959 do not expressly qualify that trade unions membership should be confined to citizens of Malaysia. The right to unhindered membership in trade unions is protected under the Employment Act 1955 and the Industrial Relations Act 1967. Any grouses of misdemeanour on the part of employers should be reported directly to the relevant authorities for proper action.); and (xviii) Increasing anti-union activity: (MTUC claims that former officers of the Department of Trade Unions and the Department of Industrial Relations had been involved obtaining information from salving officers, on unions involved recognition claims and collective bargaining and then approaching employers with an offer to remove the union, and advice on how to prolong the settlement process is a general statement. As a matter of department's policy and ethics, all official information are confidential information and unauthorized people should not have access to such information.).

CHALLENGES IN REALIZING THE PRINCIPLE AND RIGHT

According to the Government

2007 AR: In response to the ICFTU’s observations, the Government indicated the following: (i) under the Trade Unions Act 1959 and the Industrial Relations Act 1967, the formation and the activities of trade unions, laws and procedures are to be observed; (ii) to speed up union recognition the Government has taken steps to amend the Industrial Relations Act 1967 and the Trade Unions Act 1959; (iii) the powers conferred on the DGTU are meant to enable him to have the general supervision, direction and control of all matters relating to trade unions, and the DGTU only de-registers a trade union if a trade union has contravened the Trade Unions Act 1959, the Trade Unions Regulations or its own rules and regulations; (iv) the establishment of an industrial trade union by electronic workers is not encouraged. This policy is aimed at protecting the national interest as well as the interests of workers in the electronics industry. Trade unions may refer to the Minister of Human Resources for his decision on matters relating to the definition of employees in managerial, executive, confidential or security capacities and their eligibility to be union members. Disputes relating to the scope of representation of such workers by industrial unions, should they arise, will be dealt with under section 9(1A) of the Industrial Relations Act.

2006 AR: In response to the ICFTU’s observations, the Government made the following comments: (i) in order to speed up union recognition, the Government has taken steps to amend the Industrial Relations Act, 1967 and the Trade Unions Act, 1959. The cause of delay is mainly due to legal proceedings against the decision of DGTU; (ii) the laws and procedures relating to the formation and activities of trade unions are meant to grant trade unions certain rights, immunities and liabilities as a legal entity and to protect the interests of workers; (iii) it is necessary to impose conditions, restrictions and regulations on the formation and growth of trade unions to prevent the multiplication of trade unions within a particular establishment, trade, occupation or industry so as to avoid unions rivalry; (iv) a trade union is not denied the right to strike as long as the stipulated procedures are observed; (v) the Industrial Relations Act, 1967, deals adequately with disputes relating to illegal dismissals; (vi) essential services have already been identified specifically in the Schedule to the Industrial Relations Act; (vii) the Internal Security Act has been effective and relevant in maintaining national security; (viii) workers are granted the right to form or join a trade union under the Federal Constitution as well as the Employment Act, 1955, the Trade Unions Act, 1959 and the Industrial Relations Act, 1967; (ix) the DGTU decides if a trade union is competent to represent workers or not; if not the workers may join a competent trade union or, in the absence of such a trade union, they may form an establishment-based trade union; (x) trade unions are allowed to form or join federation of trade unions under the Trade Unions Act, 1959; (xi) employees in managerial and executive positions, employees entrusted with confidential matters or employees performing security–related tasks are not to be organized by industrial unions, but are free to form or join a union of their own particular category of workers; (xii) non-compliance of Industrial Court awards by employers is dealt with in accordance with the provisions of the Industrial Relations Act; (xiii) under the Trade Unions Act, 1959, migrant workers may join a trade union as union members, but they are not to be elected as trade union officials; (xiv) section 8 of the Industrial Relations Act allows for complaints relating to anti-union practices by employers, including dismissals, to be lodged with the DGIR.

2004 AR: The Government identified the main difficulties encountered in Malaysia in realizing the PR as follows: (i) social values; (ii) cultural traditions; and (iii) social and economic circumstances.

2000-2002 ARs: In response to the ICFTU’s observations, the Government made the following comments: (i) the Federal Constitution and the labour laws provide for the right to form or join a trade union; (ii) the Minister has the power to order recognition to be granted by the employer concerned if the union claiming recognition is found competent and/or represents the majority of the workers concerned; (iii) some restrictions on basic trade union rights are necessary in order to preserve national interests; (iv) general trade unions are prohibited so as to avoid competition among trade unions; (v) the power of regulation conferred on the DGTU and the Minister of Human Resources (MHR) is meant to ensure that trade unions operate in compliance with national, peoples’ and the workers’ interests; (vi) trade unions can affiliate only with lawful and responsible international consultative bodies or similar bodies; (vii) the Government recognizes the important role of trade unionism and has supported its growth in a regularized manner and is concerned for the welfare and interest of workers. Furthermore, the main reason for the backlog was the economic crisis prevailing in Malaysia since late 1997. The Government has taken appropriate measures to address the issue of the backlog of cases.

TECHNICAL COOPERATION

Request

NIL

Offer

NIL

EXPERT-ADVISERS’ OBSERVATIONS/

RECOMMENDATIONS

2008 AR: The ILO Declaration Expert-Advisers (IDEAs) were concerned that Malaysia (and another State) reported that it did not intend to ratify Convention No. 87. They also noted that restrictions on the right to organise of certain categories of workers in Malaysia (and some other countries), such as migrant workers and workers in the informal economy, were not compatible with the realization of this principle and right (Cf. Paragraphs 30 and 38 of the 2008 AR Introduction – ILO: GB.301/3).

2007 AR: The IDEAs observed that with a view to giving full effect to this principle and right, the Government should be able to offer to all workers the opportunity to exercise their rights, and not have restrictions on the right to organize for migrant workers. (Paragraph 37 of the 2007 AR Introduction). Furthermore, the IDEAs noted with concern that several countries had not yet expressed their intention to ratify and urged Malaysia to do so. (Paragraph 33 of the 2007 AR Introduction – ILO: GB.298/3).

2006 AR: The IDEAs listed Malaysia among the countries where government authorization was required to establish employers’ or workers’ organizations and indicated that such restrictions would clearly deny the full potential of the principle of freedom of association (Cf. Paragraph 36 of the 2006 Annual Review Introduction – ILO: GB.295/5).

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GOVERNING BODY OBSERVATIONS/

RECOMMENDATIONS

NIL