Report in which the committee requests to be kept informed of development - Report No 383, October 2017

Case No 3126 (Malaysia) - Complaint date: 06-MAY-15 - Closed

Allegations: The complainant organization alleges the violation of the collective agreement in force by the employer, a bank, dismissal of union members and a series of other anti-union acts including the restriction of the right to industrial action by compulsory arbitration and an attempt to deregister the union following the declaration of a trade dispute by the complainant

1. 439. The Committee last examined this case at its October 2016 meeting, when it presented an interim report to the Governing Body [see 380th Report, paras 697–724, approved by the Governing Body at its 328th Session (November 2016)].
2. 440. The Government sent its observations in communications dated 21 February 2017 and 11 October 2017.
3. 441. Malaysia has ratified the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), but has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87).

A. Previous examination of the case

1. 442. At its November 2016 meeting, the Committee made the following recommendations [see 380th Report, para. 724]:
   • (a) The Committee urges the Government to keep it informed of the outcome of the judicial review by the High Court on the trade dispute case as well as of the ruling of the Court of Appeal concerning the case involving 27 dismissed employees, and of any follow-up to these court decisions.
   • (b) Recalling its principles on compulsory arbitration to end a collective labour dispute, the Committee expects the Government to ensure their full respect and to provide without delay its observations in relation to the case.
   • (c) With regard to the allegation that the company filed an Application for Mandamus for the Director-General of Trades Union to deregister NUBE which was heard on 1 April 2015, the Committee urges the Government to provide without delay information on the outcome of such application and any other information relevant to this serious allegation.

B. The Government’s reply

1. 443. In its communication dated 21 February 2017, the Government indicates that with respect to recommendation (a), the High Court has not fixed a date for the hearing of Case No. 22(5)/3-1449/13 (NUBE v. Hong Leong Bank (hereinafter “the bank”)), but has set a date of 1 September 2017 for case management for the parties to file affidavits, including their reply. With respect to Case No. 13/4-545/14 (Nur Hasmila Hafni Binti Hashim and 26 others v. the bank), the Government indicates that the Court of Appeal in Putrajaya set a date of 12 April 2017 for case management for the filing of submission and documents, and that the date of the hearing was set for the same date. In its communication dated 11 October 2017, the Government indicates that the Court of Appeal dismissed the application from the bank. The Government states that the Industrial Court awaits the sealed court order from the complainant’s lawyer before proceeding, and that it will process the case without delay.
2. 444. With respect to recommendation (b), the Government states that the policy of voluntary and compulsory arbitration generally has been practised and implemented in the industrial relations system in Malaysia in accordance with the Industrial Relations Act, 1967. The Government asserts that this policy has proved to be effective in maintaining industrial harmony and was well accepted by employers, employees and trade unions prior to the complaint made by the NUBE in 2015.
3. 445. Referring to the Committee’s previous recommendation concerning compulsory arbitration to end a collective labour dispute, the Government indicates that the principles stated in paragraph 564 of the Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, do not apply to the situation examined in the complaint. The Government asserts that the complaint concerns picketing activity, and that the paragraph does not cover compulsory arbitration in relation to picketing activity. Further, the Government indicates that the reference of the trade dispute to the Industrial Court by the Minister of Human Resources was done in good faith to pursue an immediate solution through arbitration, and not for the reasons previously asserted by the complainant.
4. 446. The Government indicates that a trade dispute is defined broadly in the Industrial Relations Act, as “any dispute between an employer and his workmen which is connected with the employment or non-employment or the terms of employment of the conditions of work of any such workmen” and covers both collective and individual disputes, and collective disputes relating to collective interest disputes and collective rights disputes. The Government states that while in some countries there are different laws for different categories of labour disputes, the Industrial Relations Act treats all trade disputes the same. Collective interest disputes refer to disagreements where negotiating parties disagree over the determination of terms and conditions of employment to be set out by a new collective agreement or the modification of an existing collective agreement, including disputes arising in the context of collective bargaining. Collective rights disputes arise in relation to the terms and conditions of work set out under law or in a collective agreement where that agreement carries the force of law. The Government indicates that such disputes commonly relate to situations which appear during the application of a collective agreement or when the interpretation of an existing collective agreement is challenged by one of the parties. The Government states that the complaint by the NUBE falls within the collective rights category of trade dispute as the dispute relates to articles 4(3), 6 and 15 of the collective agreement that required immediate arbitration by the Industrial Court.
5. 447. The Government refers to the recommendations of the Committee of Experts on the Application of Conventions and Recommendations (CEACR) stating that the imposition of compulsory arbitration by the authorities in interest disputes is contrary to the principle of the voluntary negotiation of collective agreements as established in Convention No. 98. The Government states that it is undeniable that there is a non-compliance issue on the principle of compulsory arbitration in trade disputes involving collective interest disputes in the Industrial Relations Act, but that this is not the case for all types of disputes. The Government states that it is, however, open to recommendations and suggestions that it may consider for future amendments.
6. 448. With respect to recommendation (c), the Government recalls that the bank had made an application to the Director-General of Trade Unions (DGTU) to deregister the NUBE, but that the DGTU decided not to deregister the union, and that the bank subsequently made a mandamus application to the High Court. The Government indicates that the High Court dismissed the bank’s mandamus application, and that no appeal has been made by the bank. The Government further indicates that the bank was ordered to pay 10,000 Malaysian ringgit (MYR) to both the DGTU and the NUBE.

C. The Committee’s conclusions

1. 449. The Committee notes the Government’s indication that, with respect to the judicial review by the High Court of the Industrial Court of Kuala Lumpur’s decision on the trade dispute (Case No. 22(5)/3-1449/13), the High Court has not fixed a date for the hearing, but has set a date of 1 September 2017 for case management for the parties to file affidavits, including their reply. With respect to the appeal of the bank of the first instance judgement in favour of the 27 dismissed employees (Case No. 13/4-545/14), it notes the Government’s indication that the Court of Appeal in Putrajaya set a date of 12 April 2017 for case management for the filing of submission and documents, and that the date of the hearing was set for the same date. The Government indicates in its latest communication that the Court of Appeal dismissed the application from the bank. The Government adds that the Industrial Court awaits the sealed court order from the complainant’s lawyer before proceeding, and that it will process the case without delay. The Committee once again urges the Government to keep it informed of the outcome of the judicial review by the High Court on the trade dispute case and any follow-up to this decision. It also requests the Government to provide information on the processing and implementation of the ruling of the Court of Appeal in favour of the 27 dismissed employees.
2. 450. As regards the issue of the collective action more generally, the Committee notes the Government’s indication that a trade dispute is defined broadly in the Industrial Relations Act, 1967, and covers both collective disputes relating to collective interest disputes and collective rights disputes. The Committee further notes the Government’s statement that the Industrial Relations Act treats all trade disputes the same, whether rights disputes or interest disputes, including disputes that arise in relation to the terms and conditions of work set out under law or in a collective agreement where the collective agreement carries the force of law.
3. 451. The Committee notes the Government’s statement that the complaint by the NUBE falls within the category of collective rights disputes as the dispute relates to articles of the collective agreement (articles 4(3), 6 and 15) that it considered required immediate arbitration by the Industrial Court, while the Government adds that the compulsory arbitration occurred within the context of picketing action.
4. 452. The Committee considers that it is not in a position to determine whether the issue in question in this specific case related to the application of the collective agreement or related to an interest dispute. The Committee does note however that the Government acknowledges that there is a non-compliance issue with compulsory arbitration in trade disputes involving collective interest disputes in the Industrial Relations Act in relation to the principle of voluntary negotiation of collective agreements under Convention No. 98. In this respect, the Committee, referring to its previous conclusions in this case [380th Report, para. 722], requests the Government to take measures in full consultation with the social partners to bring its legislation and practice into conformity with the principle that the referral of interest disputes to compulsory arbitration should be limited to cases where both parties involved in a dispute request it, or in the case of disputes 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. The Committee draws the legislative aspects of this case to the attention of the CEACR.
5. 453. The Committee takes due note of the Government’s indication that the High Court dismissed the bank’s mandamus application to have the NUBE deregistered, and that no appeal has been made by the bank. It further notes that the bank was ordered to pay MYR10,000 to both the DGTU and the NUBE.

The Committee’s recommendations

1. 454. In light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee once again urges the Government to keep it informed of the outcome of the judicial review by the High Court on the trade dispute case and any follow-up to this decision. It also requests the Government to provide information on the processing and implementation of the ruling of the Court of Appeal in favour of the 27 dismissed employees.
   • (b) The Committee requests the Government to take measures in full consultation with the social partners to bring its legislation and practice into conformity with the principle that the referral of interest disputes to compulsory arbitration should be limited to cases where both parties involved in a dispute request it, or in the case of disputes 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. The Committee draws the legislative aspects of this case to the attention of the CEACR.