Observation (CEACR) - adopted 2006, published 96th ILC session (2007)

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

The Committee notes the Government’s reports and the comments submitted by the International Confederation of Free Trade Unions (ICFTU) on 10 August 2006. The ICFTU’s comments principally refer to matters previously raised by the Committee as well as to allegations of long delays in the disposition of claims for union recognition, and the establishment of a trade union by an employer in order to avoid recognizing and bargaining with another trade union. The Committee requests the Government to submit its observations thereon.

1. Article 4 of the Convention. Collective bargaining in “pioneer enterprises”. Previously, the Committee had urged the Government to repeal section 15 of the Industrial Relations Act (IRA), which limits the scope of collective agreements for companies granted “pioneer status”, and had requested a copy of the repealing legislation upon its adoption. The Committee notes the Government’s indication that discussions on the IRA with representatives of the employers and trade unions were in their final stages: the amendments to the IRA, which include the repeal of section 15, were expected to be submitted to Parliament for the December 2005 sitting. In this connection, the Committee, recalling that the repeal of section 15 of the IRA has been delayed for several years, once again urges the Government to ensure that there are no further delays in the repeal of this legislation and to keep it informed of developments respecting the adoption of the amendments to the IRA.

2. Restrictions on collective bargaining over certain issues. The Committee had previously urged the Government to amend the legislation so as to bring section 13(3) of the IRA, which contains restrictions on collective bargaining with regards to transfer, dismissal and reinstatement (some of the matters known as “internal management prerogatives”), into full conformity with Article 4 of the Convention. The Committee notes the Government’s statement that section 13(3) of the IRA is not intended to limit collective bargaining, but rather to provide for the right of employers to run their business in the most efficient way and to protect from the abuse of the collective bargaining process. The Government further indicates that these requirements are not absolute; matters relating to them may be brought to the Industrial Relations Department and, where no settlement is reached, the matter is referred to the Industrial Court for adjudication. The Committee notes this information. It recalls, in this respect, that measures taken unilaterally by the authorities to restrict the scope of negotiable issues are often incompatible with the Convention (see General Survey of 1994 on freedom of association and collective bargaining, paragraph 250) and once again urges the Government to amend section 13(3) of the IRA so as to remove the restrictions on collective bargaining. The Committee also requests the Government to indicate whether there are any decisions of the Industrial Court where the restrictions set forth in section 13(3) were successfully challenged and, if so, to transmit copies of the same in its next report.

3. Restrictions on collective bargaining in the public sector. The Committee had previously requested the Government to provide information on the scope of collective bargaining under the auspices of the National Joint Council and the Departmental Joint Council. Specifically, it had asked the Government to indicate whether any limitations on the agreements produced by the consultations taking place within these bodies exist – particularly as to terms and conditions of service, the remuneration structure, and the form and scope of any agreements reached. In this regard, the Committee notes the Government’s statement that the outcomes of consultations pertaining to salary and remuneration are subject to the decision of the Cabinet Committee on Establishment and Salaries of Employees in the Public Sector, and are to be tabled and legislated in Parliament. In these circumstances, the Committee recalls that, while the principle of autonomy of the parties to collective bargaining is valid as regards public servants covered by the Convention, the special characteristics of the public service described above require some flexibility in its application. Thus, legislative provisions allowing Parliament or the competent budgetary authority to set upper and lower limits for wage negotiations, or to establish an overall “budgetary package”, within which the parties may negotiate monetary or standard-setting clauses (i.e. reduction of working hours, varying wage increases according to levels of remuneration), are compatible with the Convention, provided they leave a significant role to collective bargaining (see General Survey, op. cit. paragraphs 261-264). The Committee considers that subjecting all of the outcomes reached by the Councils’ consultations on salaries and remuneration to the approval of the authorities, in particular the Cabinet Committee on Establishment and Salaries of Employees in the Public Sector, is not in conformity with Article 4 of the Convention. It requests the Government to take the necessary measures to ensure for public servants not engaged in the administration of the State the right to bargain collectively, including over wages and remuneration, in keeping with the abovementioned principle on collective bargaining in the public sector.