2008 Annual Survey of violations of trade union rights - Malaysia

Population: 26,600,000
Capital: Kuala Lumpur
ILO Core Conventions Ratified: 29 – 98 – 100 – 138 – 182 – (105 – denounced)

On July 2, the Malaysian government shocked the Malaysian Trades Union Congress (MTUC) and the workers of the country by tabling in Parliament several controversial amendments to the TUA and IRA. The MTUC accused the government of failing to consult the labour movement and making a mockery of the tripartite National Labour Advisory Council. But their protests fell on deaf ears as the government easily pushed the amendments through.

Trade union rights in law

Government weakens union rights in core labour laws: The law recognises the right of most workers to form and join trade unions, but the 1959 Trade Unions Act (TUA) and the 1967 Industrial Relations Act (IRA) place extensive restrictions on freedom of association. The ILO Committee on Freedom of Association (CFA) has found that many provisions of the Trade Unions Act violate the principles of freedom of association, and it noted in its 349th Report that recent amendments in the laws were done "without consideration" of the ILO's recommendations.

In a letter dated August 6 to the Minister of Human Resources, the MTUC accused the government of proposing amendments to the TUA and IRA that clearly violated the federal Constitution as well as international human rights covenants that Malaysia has ratified. On August 26, the MTUC General Council announced that it would temporarily suspend its participation in all tripartite bodies to protest the government's unilateral actions to legislate these anti-union amendments over the vehement protests of the unions. The MTUC promptly developed a case for submission to the ILO CFA, detailing the incompatibility of the new amendments with the principles of freedom of association.

Other laws also place restrictions on freedom of association. For example, the Malaysian Penal Code requires police permission for public gatherings of more than five people.

Many restrictions on union formation, wide discretion in de-registering unions: The Director General of Trade Unions (DGTU) has the power to supervise and inspect trade unions, can refuse to register a trade union without giving any reason for the refusal and can withdraw registration. Unions that do not register, or whose registration has been denied or withdrawn, are considered illegal organisations. The DGTU is given very broad discretion in deciding these matters. The DGTU may also deregister a union if he finds that two or more registered trade unions exist in a "particular establishment, trade, occupation or industry". The DGTU has the authority to suspend a branch of a trade union if he "is satisfied" that the branch has contravened any part of the Act or the rules of the union.

The DGTU can specify the sector and category in which a union would be permitted to organise. The TUA limits trade union membership to workers in similar trades. General unions are prohibited. The government continues to bar the formation of national unions in the electronics industry and only allows the creation of in-house, enterprise-level electronics unions.

A particularly worrying development is the new amendments to the IRA passed through Parliament by the government will allow the Director-General to delegate many of these expansive powers to local officials.

The Minister of Human Resources may also suspend a trade union for up to six months in the interests of national security or public order.

Banned from organising: The law prohibits industrial unions from organising employees in managerial and executive positions.

The new IRA adds "executive" and "security" employees to the classifications of "managerial" and "confidential" workers who are not protected against anti-union discrimination – but then fails to define the parameters of "executive" and "security" service. This causes a real possibility of systematic abuse by employers. The new law also provides that the Director General and the Minister have absolute authority to determine designations of workers' status as "executive", "security", "managerial" and "confidential". Their decisions cannot be appealed to any Court.

This definition is extensively abused by most employers to deny union membership rights and remove experienced union leaders – often by interpreting the managerial and executive category to include supervisors, assistant supervisors, section leaders and lower-level supervisory personnel.

Requirement of union to receive recognition from employer: The IRA provides that a trade union must apply for recognition from the employer, who then can recognise the union, deny recognition, or appeal to the Director General for a ruling on whether the members of the union are members. This provision is systematically abused by employers to delay union recognition and thwart efforts by unions to organise and collectively bargain.

The new IRA has further weakened union protections by abandoning the previous practice of requiring officials to use the register of trade union members (which is required by law) to determine the legitimacy of challenges to employers' refusal to recognise a union. The new practice will provide for a secret ballot of workers to be undertaken, but the law completely fails to provide adequate safeguards against employer manipulation of the size of the bargaining unit (through addition of temporary or fixed-term contract workers) for the purposes of the election. The new IRA law also contains provisions that are biased towards recognition of enterprise-level unions as opposed to industrial unions.

Another amendment to the IRA in 2007 provides that if the trade union fails to report to the Minister within 14 days about the employer's refusal to recognize the union, the Minister shall deem the union's application for recognition withdrawn. Furthermore, the law now states that workers in a union that has its recognition withdrawn in this manner shall have no protection against dismissal.

Prohibition on migrant workers forming or leading trade unions: The approximately 2.6 million migrant workers in Malaysia (out of a workforce of 10.5 million, or 25% of the workers) are prevented by law from organising or applying to register a trade union and are barred from serving as officers of the trade union. The MTUC claims that companies intimidate migrant workers to prevent them from joining the union and then use the fact that they are not members to deny recognition to unions by claiming they have the support of less than 50% of the workforce. Notices placed on migrant work permits state that these workers are prohibited to join unions. The system for registering migrant workers discourages workers from asserting their rights because it grants total discretion to employers to terminate workers for virtually any reason.

Restrictions on the public sector: In the public sector, employees working for the defence sector, police force or prisons do not have the right to form or join trade unions.

Restrictions on the right to strike: The right to strike is not specifically recognised, and legislative restrictions make it practically impossible for workers to hold a legal strike. Trade unions are not allowed to go on strike for disputes relating to trade union registration or illegal sackings. General strikes and sympathy strikes are not permitted.

Penalties for executive committee members of a union that engage in an illegal strike include fines and imprisonment for up to one year. Rank and file workers who engage in an illegal strike are considered by the government to be automatically stripped of their union membership and cannot join another trade union in the future without the written approval of the DGTU.

Pre-strike authorisation procedures are cumbersome. Two thirds of the members of a trade union must vote in favour of a strike in a secret ballot, and the ballot must include a resolution that states "the nature of the acts to be carried out or to be avoided during the strike". The results of the ballot are passed to the DGTU for verification. Once all procedures have been complied with, a seven-day cooling off period is imposed. During the cooling off period, the Ministry of Human Resources' Industrial Relations Department can attempt conciliation and, if this fails, refer the dispute to the Industrial Court. While the dispute is before the Industrial Court, strikes and lockouts are prohibited.

Trade unions in "essential services" must give at least 21 days' notice before going on strike. Essential services are very broadly defined and include health care, education and transportation.

Prior approval needed for international affiliation: The TUA requires that trade unions seek prior permission from the DGTU before affiliating with any "consultative body ... established outside of Malaysia". Consideration of that application is subject to whatever conditions the DGTU sees fit to impose.

Significant restrictions on collective bargaining: The IRA law excludes hiring and firing, transfer and promotion, dismissal and reinstatement from the scope of collective bargaining. The new amendment of the IRA has further restricted the scope of collective bargaining by setting out very narrow areas that can be proposed for bargaining. These topics include making provisions for training to enhance skills, annual review of the wage system and provision for a performance-based remuneration system.

The IRA also limits collective bargaining in companies in "pioneer" industries, such as the electronics industry.

In the public sector, the joint council system limits public sector unions to a consultative role where their only power is to "express their point of view" on principles regarding wages and working conditions.

Setting caps on court-ordered remedies in case of anti-union dismissals: The new IRA law sets firm instructions that judges must provide no more than 24 months of back-wages from the date of dismissal in an anti-union firing case and requires that money that a fired worker earns post-dismissal shall be deducted from the back wages awarded.

Trade union rights in practice and Violations in 2007

Ban on general confederations: Owing to the ban on forming general confederations of trade unions, the Malaysian Trades Union Congress (MTUC), which covers both private and public sectors and has 500,000 members, is not recognised as a trade union confederation in law. Instead, the MTUC is registered under the Societies Act and therefore does not have the right to conclude collective bargaining agreements nor to undertake industrial action.

Union recognition arbitrary and extremely slow: Obtaining a response from an employer to a request for union recognition should take a maximum of 21 days. However, in reality this takes much longer if a dispute occurs, because the matter must be taken to the Director General of Industrial Relations (DGIR), the DGTU, and then to the Minister of Human Resources, who has the final say, unless that is challenged in the High Court. Some applications take as long as three to five years.

In a previous complaint to the ILO, the MTUC listed cases in which the DGTU had arbitrarily denied organisational and collective bargaining rights to more than 8,000 workers in manufacturing companies. The ILO decried the fact that despite repeated requests, by the end of the year it still had not received any information on these cases from the government.

During the year, the Canon Opto union workers faced this difficulty when the company continually defied an order by the Minister of Human Resources to recognize the union. Meanwhile, according to the International Transport Workers Federation (ITF), Air Asia employees were denied the right to form a union and complained to ruling party MP Bung Moktar Radin, who raised the matter in Parliament on August 27.

Inefficient labour courts: So far, the government has failed to apply any sanctions against employers who have opposed its directives granting trade union recognition or who have refused to comply with industrial court orders to reinstate illegally dismissed workers. In some cases, companies have used tactics such as changing their name to thwart workers legal efforts.

Police intimidation: Intimidation and obstruction by police at legally conducted, peaceful pickets has occurred regularly over the years. For example, on 17 April, the police in Malacca forcibly broke up a peaceful picket by Panasonic workers.

Systematic management campaign to bust the union at British American Tobacco through job reclassifications and firings: Exploiting a loophole in the labour legislation, a new job category of "Process Specialist" was created by management as a managerial position not covered by the union contract, with no significant change in the duties of the previous "Process Technician" job that was covered by the union. In both cases, the employees served as machine operators. A total of 175 unionized "Process Technicians" were compelled by management to either change to the new designation or lose their jobs. The union, supported strongly by the MTUC and its affiliates, filed an appeal with the Ministry of Human Resources, but this appeal was denied by the Minster.

Management also unilaterally outsourced the work of the Technical Service Department, firing another 15 union members in the process.

In January, without prior consultation with the union, BAT management held consultations nation-wide with their 250 unionized Trade Marketing and Distribution Representatives. Playing with words, management informed all of them that they would be made either a "Trade Marking Representative" or a "Sales and Distribution Representative" and that these "managerial" positions were outside the scope of the union agreement. The workers were provided with new contracts for the positions, and ordered to sign – or face losing their jobs. BAT management then informed BATEU by letter on January 10 that all those representatives could no longer be considered union members. Within days, BATEU reports that 80% of these workers had signed letters expressing dissatisfaction at being forced out of the union. The union filed an appeal with the Ministry of Human Resources against management's action.

Another major blow was management's action to bar union membership of the workers employed in BAT's two wholly owned subsidiaries – Tobacco Importers and Manufacturers Sdn Bhd and Commercial Marketing and Distributors Sdn Bhd. The Director-General of the Department of Trade Union Affairs approved the company's petition to take this blatant union-busting action on 29 October despite the fact that the BATEU charter clearly states that the union represents workers in "British American Tobacco Malaysia Bhd and its subsidiaries".

The result of all these actions has been to reduce to only 17 the number of workers that BATEU can represent in negotiations. In December, the MTUC filed a formal complaint about BAT's anti-union actions with the OECD national contact point of Britain – and at year's end, this complaint was pending.

In November, the Standard Chartered Bank reclassified many employees into non-union categories in order to force them out of the union. The MTUC and the Standard Chartered Bank Officers Union mounted pickets and protests against this action.

People's Volunteer Corps (RELA) institute reign of fear among migrant workers: The RELA, a volunteer corps of civilians serving as auxiliaries to authorities and receiving a bounty for each undocumented migrant worker they apprehend, was implicated in numerous grievous human rights abuses against migrant workers during the year. The MTUC proclaimed in March that "law enforcement should always be done by professionally trained police and other law enforcement officers" and called for RELA to be abolished. However, the government was actively seeking a new law to formalize RELA as an organization under the Ministry of Home Affairs.

The MTUC estimates that 15 to 20% of the registered foreign workers in the country are being mistreated, and it noted that it receives hundreds of cases every month of migrant workers whose rights have been abused by employers and government authorities.