FORMATION AND RECOGNITION OF TRADE UNION

TRADE UNION- FORMATION AND RECOGNITION

1. INTRODUCTION

In Malaysia, employee and employer are free to establish trade union based on :

i. Article 10(1) (c) Federal Constitution

ii. No.98 ILO Convention

iii. Sec 8 and 9 of Trade Union Act 1959

Malaysia ratified ILO convention No.98 concerning the “Application of The Principles of The Right to Organize and Collective Bargaining Convention 1949”. The right to form trade union and to engage in their legitimate activities are embodied in the Industrial Relation Act rather than in the Trade Union Act.

Sec 4(1) of IRA declares:

No person shall interfere with, restraint or coerce a workman or an employer in the exercise of his right to form of and join a trade union and to participate in its lawful activities – see also Sec 5 IRA. This right of unionism is enjoyed by both the employer and the employee.

As such the Trade Union Act (TUA) creates an offence to act against an employee who is or proposes to become an officer or member of a trade union or of an association that has applied to be registered as a trade union. The action can be that of dismissal, injury or threatened injury in employment and alteration /threatened alteration of position. Penalty can be up to imprisonment for a term up to one year and fine not exceeding RM2000 or both.

However there is no provision as regards to the right to join or not to join a trade union

2. DEFINITION

Trade union or union means any association or combination of workmen or employers, being workmen whose place of work is in Peninsular Malaysia, Sabah or Sarawak, as the case may be, or employers employing workmen in Peninsular Malaysia, Sabah or Sarawak, as the case may be:

(a) within any particular establishment, trade, occupation or industry or within any similar trades, occupations or industries;

(b) whether temporary or permanent; and

(c) having among its objects one or more of the following objects:

a.       the regulation of relations between workmen and employers for the purposes of promoting good industrial relations between workmen and employers, improving the working conditions of workmen or enhancing their economic and social status, or increasing productivity;

b.      the regulation of relations between workmen and workmen, or between employers and employers;

c.       the representation of either workmen or employers in trade disputes;

d.      the conducting of, or dealing with, trade disputes and matters related thereto; or

e.       the promotion or organization or financing of strikes or lock-outs in any trade or industry or the provision of pay or other benefits for its members during a strike or lock-out;

The definition above has certain implications:

1. A trade union need not be called a union. Many unions call themselves associations. For example : University of Malaya Academic Staff Association.

2. Membership of union is limited geographically. Workers in peninsular may join a union all of whose members work in peninsular. Workers in Sabah may join a union all of whose members work in Sabah and also applied for workers in Sarawak may join union all of whose members work in Sarawak. Therefore, exist three geographical regions. This leads to some duplication of unions.

3. Unions of a general nature are not permitted. Members of a trade union must be homogeneous, i.e, they must work in a particular establishment, trade, occupation or industry and therefore posses common interests.

In ELECTRICAL INDUSTRY WORKERS UNION v REGISTRAR OF TRADE UNION AND ANOR [1976] 1 MLJ 177, the workmen of Mosanto Electronics Sdn Bhd wanted to join the Electrical Industry Workers Union. The registrar ruled that the workers employed in the electronic industry cannot join the said union as their business is not similar. On appeal, the Federal Court held that the registrar was competent to decide whether there was similarity of business; the court should not make declaratory judgment where alternative remedy is available.

4. Employers and employees both have the right to form and join unions, but they must be separate from each other and must satisfy the condition of homogeneous.

5. Any organization or group of workers established to achieve one or more of the objectives stated in the Act is considered having formed a trade union and must therefore conform to all legislative requirements of a trade union.

3. TYPES OF TRADE UNION

Private Sector Union

Private sector unions are either national or in house. National unions attempt to cover all workers in the same industry, trade or occupation. Examples: National Union Of Plantation Workers (NUPW), National Union Of Commercial Workers, National Union Of Bank Employees (NUBE), Transport Workers Union.

An in-house union is one where members are employed by the same employer regardless of occupations.

Disadvantages of in-house unions:

—   In-house unions are generally weak due to limited membership

—   High possibility of employer exploitation on union leadership

—   Weak financially

—   Fear of victimization among union leaders

—   Unable to provide extra benefits such as scholarship to members

Public Sector Union

Public sector consists of the civil service, the statutory bodies, and local authorities. Example: National Union of Teaching Profession (NUTP), the Malayan Nurses Union and the Malayan Technical Services Union.

The TUA provides that workers in the public sector can only form and join unions whose members are in the same ministry, department or occupation. The number of union members in public sector is dropping due to government’s policy of privatization.

One significant difference between public vs. private sector unions - public sector unions are not involved in collective bargaining

Employers Union

Employers also have the right to form and join trade unions (normally known as associations). Employers’ unions are a response to the large and powerful national trade unions

The objectives: to promote and protect the interests of their members, to negotiate and deal with trade unions of employees, and to represent their members in any trade disputes between an individual member and the employees’ unions

The most active employers’ associations:

—   Malayan Agricultural Producers’ Association (MAPA) – Plantation industry

—   Commercial Employers’ Association of Peninsular Malaysia – Commercial industry

—   Malayan Commercial Banks’ Association (MCBA) – Banking industry

—   Association of Insurance Employers (AIE) – Insurance industry

4. FIRST STEP – ESTABLISHMENT

An establishment meeting needs to be done. There is no limitation about attendance but it supposes to have as many as members in.

Trade union is established on the first date on which any workmen or employers agree to become or to create an association or combination within any particular establishment, trade, occupation or industry (Sec 9(1) TUA 1959)

Things need to be done in establishment meeting as follow:-

i. Appoint a temporary chairman and minute writer in the meeting.

ii. A short discussion about the purpose of trade union.

iii. Determine a membership scope

iv. Determine a rate for entrance and monthly fee

v. Determine a name and registered address of trade union

vi. Discuss and approve trade union rules.

vii. Appoint of committee consist of Chairman, Secretary, Treasury and four committee members.

viii. Other matter

ix. Conclusion

Membership

Although workers have the right to join union, there are numbers of qualification to union membership. However ‘close shop practice in Malaysia is illegal. Any worker over 16 year of age is eligible to apply to join the union but is restricted in their union activities.

Not entitle to vote on matters involving strikes, imposition of levy, dissolution of union or amendment of union rules

Members under 21 cannot be union official. Also a worker cannot join or be retained as member of any trade union if he is not employed or engaged in any establishment, trade, occupation or industry in respect of which the TU is registered.

Certain group of government servants are also not allowed to join union – police, prison service, armed forces and those in confidential and security work

Officer  

According to section 26 and 28, Trade Union Acts 1959 there are conditions to become an officer which is :-

a) A Malaysian citizen;

b) He has been engaged or employed for a period of at least one year in any establishment, trade, occupation or industry with which the trade union or federation is connected;

c) Never been an executive in any trade union that has been cancelled or withdrawn under section 15(1)(b)(iv) or (v) or any law repealed by this Act;

d) Not an officer or employee in of a political party.

e) Never being convicted by court of law of criminal breach of trust, extortion or intimidation or any offence which in the opinion of the Director General renders him unfit to be a trade union officer of a trade union ;or

f) Not a bankrupt person.

5. SECOND STEP- REGISTRATION

Then the trade union shall apply to be registered within a period of one month reckoned from the date on which it is so established (Sec 8(1) TUA 1959)

Application for registration as a trade union shall be made to the Director General in the prescribed form, and shall be signed by at least seven members of the union, any of whom may be officers thereof. (Sec 10(1) TUA 1959)

Registration of trade union procedures as follows:-

a) Fill a registration form (Form B)

b) Prepare documents as needed to Trade Union Affairs Department within a

period of one month reckoned from the date on which it is so established.

i) Application Letter – 2 copies

ii) Minutes of trade union's meeting – 2 copies

iii) List of employees attendance – 2 copies

iv) List of employees support in establishment of trade union – 2 copies

v) Printed trade union rules – 1 copy

vi) Application for registration (Form B) – 4 copies

vii) Praecipe Form together with revenue stamp of RM30.00 – 1 copy

The application shall be accompanied by a printed copy of the rules of the trade union signed by the members of the trade union making the application and a statement of the following particulars, namely:

a.       the names, occupations and addresses of the members making the application;

b.      the name of the trade union and the address of its head office; and

c.       the titles, names, ages, addresses and occupations of the officers of the trade union

The Director General, then, may register the trade union. He may not register if he satisfied that there is in existence a trade union representing the workmen in that particular establishment, trade, occupation or industry and it is not in the interest of the workmen concerned that there be another trade union in respect thereof.

The Director General shall refuse to register a trade union if—

(a) he is of the opinion that the trade union is likely to be used for unlawful purposes or for purposes contrary to or inconsistent with its objects and rules;

(b) any of the objects of the trade union is unlawful;

(c) he is not satisfied that the trade union has complied with the Act and of the regulations;

(d) he is satisfied that the objects, rules, and constitution of the trade union conflict with any of the provisions of this Act or of any regulations; or

(e) the name under which the trade union is to be registered is—

(i) identical to that of any other existing trade union, or so nearly resembles the name of such other trade union as, in the opinion of the Director General, is likely to deceive the public or the members of either trade union; or

(ii) in the opinion of the Director General, undesirable, unless the trade union alters its name to one acceptable to the Director General.

The Director General shall issue to the trade union a certificate of registration and that certificate, shall be conclusive evidence for all purposes that the trade union has been duly registered.

6. RECOGNITION

Recognition is a formal acknowledgement by an employer that a particular trade union has the right to represent his employees. Recognition is an important concept in the Malaysian industrial relations system. The Industrial Relations Act 1967 makes union recognition a necessary prerequisite to collective bargaining. In other words, before an employee union can start to negotiate with an employer on behalf of the workers in a company, the union must get recognition from the employer.

Four conditions need to be met by an employee union before it obtains recognition from the employer:

—  the union must be a registered union, i.e. it must be registered as an employee union under the law governing the registration of trade unions, the Trade Union Act 1959

—  the union must be competent to represent the employees concerned. The union must be confined to some establishment, trade, occupation or industry as those employees

—  the union must be the appropriate union to represent the employees concerned, i.e. it must be a union of employees with managerial, executive, confidential or security capacities (MECS) if they are MECS employees, and non-MECS union if those employees are non-MECS employees

—  the union must be sufficiently representative of the employees concerned, i.e. it must represent at least 51% of those employees on the date on which claims for recognition is made.

However, even when all four conditions are met, there is no guarantee that the employer will recognize the union. This is because the IRA does not accord to unions a right to recognition nor impose on employers a duty to recognize. In considering whether to recognize a trade union, an employer is normally guided by certain well established principles.

Lord Denning in BEETHAM V TRINIDAD(1960) 1 ALL ER 274 summed the principles as follows:

If the members of a union are in the minority in the factory, the union may well claim to represent its own members in cases of individual grievances, but it cannot claim to bargain on behalf of all the workmen in the factory. In such a case, the employers may afford the union limited recognition, that is recognition limited to individual grievances. But if the members of the union are in majority, then the union may claim to make representation on behalf of everyone – whether members or not, and may claim full bargaining rights on general questions of wages and working conditions. In such a case, the employer may afford the union general recognition

Procedure for Recognition

Under Sec 9(2) IRA, trade union of employees may serve a claim for recognition in respect of all workers or any class of workers. There must be response from the employer - to be made within 21 days after the service of the claim.

The response may be one of the three as follows:

—  Accord recognition

—  Refuse to accord recognition – must notify the TU in writing for the grounds of refusal

—  Apply to the DG to ascertain whether the workers are members of the TU, and give written notice to the TU of such application

Should the employer refuse recognition or fail to reply to the request, the union may file a complaint to the Director-General of Industrial Relations who may require the parties to supply any information he deemed necessary to resolve the matter.

If the union fails to get recognition, it must wait a further six months before making another request and any other attempt to get recognition. If despite the Director-General's effort to resolve the disputes, he is required to notify the Minister of Human Resources. The decision of the Minister is final and shall not be questioned in any court of law.