Industrial Relations and Trade Unions in Malaysia

Introduction

There is a tripartite labor system in Malaysia. Labor policies and laws are formulated and implemented by the Ministry of Human Resources. Moreover, the trade union federations of labors and employers represent their constituents regarding labor matters by giving advice and guidance, as well as actively participating on government advisory commissions.

There are 591 unions in Malaysia, with a membership of approximately 800,000. However; the Government continues to receive criticism of its longstanding policies regarding rights of workers to organize associations and their freedom in operating.

Industrial Relations

Most definitions of industrial relations acknowledge that industrial relations consider the complex interaction among three major elements of work, employer, workers and their representatives (Unions), and the government. Each of these three players has different needs and goals that determine how they interplay with the other two parties. In general, employer’s goals focus on labor costs, productivity, and profitability. In contrast, securing high wages and benefits, safe working conditions, fulfilling work, and a voice in the workplace concern with workers and their representatives. Finally, government as the representative of the society in which employers and unions reside looks for balancing the rights of both labor and employer to maintaining relative harmony between them.

Trade Unions

A trade union is an association of workman and employers which are occupied temporary or permanent in a trade or an occupation or an industry to follow lawful objectives such as association of University of Malaya Academic Staff. Moreover, there are three types of trade unions in Malaysia: Public sector, Private sector, and Employers union.

According to IRA S.2, a “Workman is any person, including an apprentice, employed by an employer under a COE to work for hire or reward, and for the purpose of any proceedings in relation to a trade union, includes any such person who has been dismissed, discharged or retrenched in connection with or in consequence of that dispute, or whose dismissal, discharge or retrenchment has led to that dispute”.

Objective

There are three major reasons to join trade unions for workers in a capitalist country like Malaysia. First, they use trade union financial benefits to improve their economic situation such as increased wages. Second, by joining to trade unions they would ensure that their rights are protected like as protection against unfair treatment or job security. Finally, trade unions avoid from social exploitation. For example, workers use trade unions

In addition, generally, a trade union is formed and formulated according the objectives to promote industrial, social and intellectual interests, to obtain and maintain for members just & proper rates of remuneration, to secure employment and its work condition and acceptable hours, to protection of interest of members, to promote the welfare of members in social and educational areas, to promote legislation affecting interests of members in particular and trade unions in general, to represent members in IC, LC etc, and to represent members in trade disputes with employers.

Right to form and join

According to S.5 of the IRA 1967, workers in Malaysia have the right to form and join trade union. No employer stall prevents a worker from joining a union by putting a condition in his COE. Moreover, no employer shall refuse to employ a worker on the grounds that he is a trade union member or officer. In addition, no employer shall discriminate against a worker on the grounds that he is a trade union member or officer and. Finally, no worker shall be threaten with dismissal or is dismissed if he proposes to join a trade union or if he participates in union activities.

TUA 1959

Trade Union Act 1959 seeks to control activities of trade unions “so that they can develop in an orderly and peaceful manner.” The Act lays down stringent statutory and procedural provisions for the formation and operations of trade unions in Malaysia.

Registration

According to TUA 1959 section 2, for forming and registration of a trade union, the following steps should be completed. Any group of seven or more workers can form a trade union providing they work in the same trade, occupation or industry and the intended membership all work either in the private sector or all in the public sector. First, once a decision is made to form a union within a month the application of registration must be made. All unions are required to register with the Director-General of Trade unions in order to operate legally. They must apply to the Director-General within 1 month of establishing a trade union (S.9) but they may ask for extension of 6 months. The completed application form signed by at least seven members (S10). Moreover, the application form must be accompanied by the required fees and printed copy of the rules or constitution of the union. Furthermore, the application must include the name of the union and its address. Moreover, the names, addresses and occupation of the members who are making the application along with the union’s officers’ should be mentioned on the application. Finally, Director-General may require other information such as a copy of the MOI meeting of the workers who wish to establish the union or etc.

Due to TUA 1959, Section 2, the most important criteria for a union to be registered is that its intended members must come from the same or similar trade, occupation or industry.

Refusal

According to TUA 1959 section 12, the registration process of trade unions is not automatic process and Director-General of Trade Unions may refuse registration if any of the union’s objectives are unlawful or if any part of the constitution of the union conflicts with the TUA. Moreover, if the name of the union is undesirable or identical to another union already existing or if the name is deceiving or if the union is seems to be used for unlawful purposes Director-General has the discretion to refuse the application of registration. Furthermore, He can refuse to register a union if he is not satisfied that the union has complied with the TUA or its regulations. The Director-General of Trade Unions has very wide powers in respect of registration of trade unions. Section 12 of the Trade Unions Act allows the Director –General to refuse to register a particular trade union. He shall refuse to register a trade union even if it has complied with all requirements of S.2 if he is satisfied that there is already another trade union representing the workers in that particular trade or industry or if he believes there should be another union in the interests of the workmen..

Deregistration

Under Section 15 of the TUA 1959, the Director-General of Trade Unions has powers to de-register or cancel the registration a union under certain circumstances, but it is not mandatory for him to do so. Specifically, he may withdraw or cancel the registration if the union has ceased to exist or if he is satisfied that the registration was issued by mistake or obtained by fraud or if any of the objects or rules of the union are unlawful. Moreover, if he fined that the constitution of the union executive is unlawful or the union has been or is being or is likely to be used for any unlawful purpose or for any purpose contrary to its objectives or rules he can cancel the registration of a union. Furthermore, if the union has broken any of the provision of the Trade union Act or its regulations or if a union has broken any of its rules he can deregister the union. Director-General has discretion to deregistration of a union if a union allowed any rule contravening any provision of the Trade Union act to continue or if the funds of the union are unlawfully used. If there are two or more unions registered which represent the same group of workers in a trade, occupation or industry or individual place of employment, the Director-General of Trade Unions has the power to deregister the union that covers a smaller number of the workers or to order that union to remove from its membership register the affected workers.

For example in a dispute between Airlines Employees Union and MAS, the union was found to have encouraged members to take part in an illegal strike. Workers refused to work overtime, which is considered an illegal strike in the transport industry. Union’s involvement in illegal strike led to deregistration by Director-General of Trade Unions.

Areas of Control

According to TUA 1959, there are several controls areas for Director-General to monitor trade unions behavior and characteristics to make proper decision regarding their status and deregistration.

Fist criteria are the name of the trade union. The name of the union should be acceptable to the Director-General of Trade Unions. Though this provision was intended to avoid confusion arising from unions having identical or similar names, the Act empowers him to refuse registration if the union fails to comply with the requirement. When Electrical Industry Workers Union applied to the DG to change its name to Electrical and Electronic Workers Union it was refused though there were no other unions with same name.

Second area is control over the size of unions. Section 2 of the Trade Union Act limits the membership of a trade union to workers of the same or similar trades, occupation or industries. Similar provision also applies to federation of unions; each federation is to consist of only of trade unions whose members are employed in similar trades, occupation or industries. This was introduced to prevent the formation of general unions or federations which might be led by persons having nothing to do with the occupational activities or interests represented by the organization and pursuing political or subversive aims

Other criteria are the objectives of the trade union. They must be in accordance with those prescribed by the Trade unions Act, Section 2 which mentioned before.

Moreover, Director-General of Trade Unions has control over officers and officials of trade unions. According TUA 1959, to become member of the executive of a trade union, a person must be a Malaysian citizen and have been engaged for a minimum of one year in any trade or occupation or industry with which the union is concerned. They must be elected at biennial or triennial conferences. They should not have been an officer or officials of any trade union whose registration has been cancelled because its funds were expended in a manner or for a purpose contrary to the law or its rules. They should not be an employee of a political party. They should not have been found guilty by any court of law of criminal breach of trust, extortion, intimidation or any offence in the opinion of the Director-General of Trade Unions renders unsuitable to be an officer of a trade union. They should not be bankrupt.

One of the critical areas is union funds. The TUA 1959 states that union funds can only be used for the stated purposes which include the paying of expenses related to salaries for employees of the union, expenses related to the upkeep of the office, expenses related to the settlement of a trade dispute, compensation to members against losses from trade disputes, expenses related to the publishing of a newsletter , expenses related to the organization of social, sports, and educational activities of the members, and allowances to members and their families due to unemployment, death, accident, and old age sickness. The law prohibits unions from using their funds for any political purposes, particularly providing funds for a political party. To ensure that union funds are only used for the purposes allowed by the law and the union constitution, unions are required to submit annual, audited accounts to the Department of Trade unions for checking. The accounts of the union must be audited annually and must be submitted to Director-General of Trade Unions before the first day of October of each year. Failure to send in accounts will, after adequate warning has been given lead to the union being deregistered.

Furthermore, the rules and constitution of the trade union must conform to the Trade unions Act 1959 and its regulation. Section 38 stipulates that the trade union must formulate rules for all matters intended in the first schedule of the act. These matters include the procedure governing the election of union executive, the procedure for changing the rules or constitution, the use and investment of union funds and issues to be decided by a secret ballot. The Minister is empowered to add to, or delete or amend the first schedule. The Act stipulates under Section 15 that the rules formulated by the union on these matters must not be inconsistent with the provisions of the Act. The TUA 1959 contains specific provisions governing these matters included in the first schedule

Conclusion

In the context of Malaysian Industrial Law, the right to industrial act is recognized but is severely restricted. While workmen are not denied their right to strike, this right is limited to achieve a balance between unrestricted freedom to strike and the need for industrial peace in the interest of economic development.

A trade union must comply with all the laws especially the provisions of the TUA 1959. It should deter any members from carrying out illegal activities such as strike. Administer funds of union on a proper manner and in accordance with the union rules as well as the law is responsibility of trade unions. Trade union must serve notice for recognition on employers or trade union of employers