2007 Annual Survey of violations of trade union rights - Malaysia

Population: 25,300,000
Capital: Kuala Lumpur
ILO Core Conventions Ratified: 29 – 98 – 100 – 138 – 182 – (105 – denounced)

Employers consistently refused to recognise trade unions, exploiting a requirement in the labour law, and workers regularly faced years of delays waiting for the government and courts to rule on union recognition and reinstatement of workers fired for union activity. The ban on the formation of industrial unions in the 'pioneer' electronics sector, and other extensive restrictions on union rights remained unchanged. Protests by migrant workers were attacked.

Trade union rights in law

The law recognises the right of most workers to form and join trade unions, although the procedure for obtaining union recognition is lengthy and cumbersome. Furthermore, the 1959 Trade Unions Act and the 1967 Industrial Relations Act (IRA), as well as subsequent amendments, 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 has decried the fact that, despite unambiguous recommendations made to the government (in this and other similar cases filed in the past 15 years), to amend the law, no such action has been taken.

Other laws not directly related to labour issues 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 Unions which do not register, or whose registration has been denied or withdrawn, are considered illegal organisations.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. For example, a union's registration can be withdrawn if the DGTU 'is of the opinion' that the union is "likely to be used for unlawful purposes". 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 Minister of Human Resources may also suspend a trade union for up to six months in the interests of national security or public order.

The DGTU can specify the category in which a union would be permitted to organise. He must also give his approval before a trade union is permitted to join an international organisation. Section 9 of the Trade Unions Act limits trade union membership to workers in similar trades and has allowed the DGTU to promote in-house, enterprise-level unions. This has served to keep the labour movement small and fragmented.

Restrictions on union officers: Membership of a trade union executive committee is reserved for citizens of Malaysia, who must have worked for at least one year in the establishment, trade, occupation or industry with which the trade union is connected. They cannot hold a position in a political party, nor can they work as an employee of a political party.

Banned from organising: The law prohibits industrial unions from organising employees in managerial and executive positions, or those entrusted with "confidential" matters or performing security-related tasks. This definition is extensively abused by most employers to deny union membership rights and often to demand the removal of experienced union leaders. The government does not allow national unions in the electronics industry, the country's largest sector, only in-house ones.

General unions are prohibited and mergers between unions in different professional sectors are practically impossible.

Requirement of union to receive recognition from employer: Section 9 of the Industrial Relations Act of 1967 provides that a trade union must apply for recognition from the employer, who then has the discretion to recognise the union, deny recognition, or appeal to the Director General for a ruling on whether the members of the union are, in fact, really members. This provision is systematically abused by employers to delay union recognition and thwart efforts by unions to organise and collectively bargain.

Prohibition on migrant workers forming or leading trade unions: Migrant 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. Given the ever increasing percentage of the Malaysian workforce which is comprised of migrants, this prohibition strips union rights from a significant section of Malaysia's workers. <<

The public sector: Trade unions in the public sector are permitted to organise unions per ministry, department, profession or activity, as well as to join federations. Employees in statutory bodies (such as ports and the Employees' Provident Fund) are only authorised to join internal trade unions, which, in turn, may join the Civil Service Federation and the national trade union centre. 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 either.

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" face additional restrictions on their right to strike, including the requirement to give at least 21 days' strike notice. Essential services are very broadly defined, but include health care, education and transportation.

It is almost impossible to strike in the public sector.

Restrictions on political activities by trade unions: Trade unions are not permitted to use their assets for political purposes, which are defined as an indirect or direct payment to a political party or "in furtherance of any political object." This is widely defined to include not only support for candidates, but also holding of political meetings, and distribution of political literature or documents of any kind.

Prior approval needed for international affiliation: Section 76a of the Trade Union Act requires that trade unions seek prior permission from the DGTU before affiliating with any "consultative body ... established outside of Malaysia" and that consideration of that application will be subject to whatever conditions the DGTU sees fit to impose.

Restrictions on collective bargaining

... In the private sector: The Industrial Relations Act excludes hiring and firing, transfer and promotion, dismissal and reinstatement from the scope of collective bargaining. This provision allows employers to get rid of union activists with impunity, and thus serves to intimidate other workers into leaving the union. The IRA also limits collective bargaining in "pioneer" companies. The electronics industry, among others, still has this status. Since 1994, the government has claimed that measures were being taken to repeal this provision, but nothing has been done so far.

... In the public sector: 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. Trade unions do not have the right to take their disputes to the industrial court without the specific permission of the King of Malaysia.

The ever present threat of the Internal Security Act (ISA): Under the Act, any person suspected of threatening national security may be detained by the police for up to 60 days without trial, a period during which the person is held incommunicado, with no access to lawyers or to family members. After this initial 60 day detention period, a two year detention order may be issued with the Home Minister's approval. The detention order is renewable indefinitely. Trade union leaders have been repeatedly threatened in the past with this draconian law.

Application of Employment Act limited to peninsular Malaysia: While the other labour laws apply to the Sabah and Sarawak, the Employment Act which regulates employment, contracts, termination, and minimum standards and conditions of work does not. These two Eastern States of Malaysia have their own State Labour Ordinances on wages and other terms and conditions of work.

Trade union rights in practice

Government interference: Only about 8 per cent of the total workforce is unionised. Unions try to maintain independence from both the government and political parties, but government control is pervasive, even extending to the internal affairs of a union.

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, but provides technical support to affiliated members.

Union recognition 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, as it gets taken to the Director General of Industrial Relations (DGIR), the DGTU, then to the Minister of Human Resources, who has the final say, unless that is challenged in the High Court. The High Court is fairly limited, in practice, in its ability to overturn a previous decision. It is not uncommon for recognition claims to take between 18 and 36 months to settle, particularly if a dispute develops. The President of the MTUC noted that some applications are taking as long as three to five years.

Arbitrary refusal of union recognition by Director-General of Trade Unions: In a complaint to the ILO lodged in September 2003, the MTUC listed cases over the previous 36 months in which the DGTU had arbitrarily denied organisational and collective bargaining rights to more than 8,000 workers in the manufacturing companies. At the end of 2006, the MTUC had listed many cases in which the DGTU had refused union recognition.

Employers impose extra restrictions: Employers tend to take advantage of the legal limitations on who can organise to prevent as many people as possible from joining a union. Employers often interpret the managerial and executive category to include supervisors, assistant supervisors, section leaders and lower level supervisory personnel. There has also been a tendency to consider all workers in information technology as being in the "confidential" category, which effectively prevents them from joining the same trade union as the rest of employees. In this manner, employers are able to maintain a series of small-sized, and therefore weaker, trade unions.

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 changed their name or ceased to exist during the court case.

At the end of 2005, information from the Industrial Court indicated that there were still 3,652 cases in the court that were pending. At the end of 2006 the MTUC President condemned the fact that a significant number of cases filed with the Government in 2003 had still not been referred to the Industrial Court. Furthermore, in other cases, no award handed was down as long as 12 months after completion of the case.

Migrant workers intimidated to not join trade unions: There are approximately 2.5 to 3 million migrant workers in Malaysia, 1.8 million of whom are documented. However, notices on work permits state that workers who are not Malaysian nationals are not allowed to join associations. Most migrant workers, who come from all over South East Asia and South Asia, work long hours, for very low pay, if any, and are often subject to verbal and physical abuse. The MTUC continually called for migrant workers to be given full rights to associate and form labour unions, and continued to advocate for that right. The system for registering migrant workers also discourages workers from asserting their rights because it grants total discretion to employers to terminate workers for virtually any reason.

Police intimidation: Intimidation and obstruction by police at legally conducted, peaceful pickets has become common. The MTUC has been called in on several occasions to seek the intervention of the Inspector General of Police.

Increasing anti-union activity: There has been increasing union-busting activity in recent years. Notably, the MTUC claimed that former officers of the Department of Trade Unions and the Department of Industrial Relations had been involved in obtaining information, from serving officers, on unions involved in recognition claims and collective bargaining. They then approached the employers with an offer to remove the union, and advice on how to prolong the settlement process.

Employers' challenges to Ministerial orders for recognition of trade unions were often encountered, and numerous cases were pending at the High Courts and Courts of Appeal. The MTUC noted that anti-union employers, including multinational companies, are increasingly choosing this path in order to evade union recognition for five to seven years.

Violations in 2006

Background: In November, the government announced its plan to revise the Employment Act in 2008, ostensibly to provide additional flexibility to employers to retrench workers and to encourage greater foreign investment.

Violent police attacks on union-led rallies: A peaceful protest against government fuel price hikes organised by the MTUC on 26 March in Kuala Lumpur city centre was violently suppressed by the police. A total of 22 protesters, including two minor girls were arrested. Police used batons, dogs, water cannon and mounted police to violently disperse the crowd. Police declared the protest illegal despite being informed of the protest in advance by written letter from the MTUC.

The next day, 27 March, a protest march of 500 members of the MTUC and allied civil society organisations was prevented by the police from presenting a petition protesting the fuel hike to the Prime Minister.

In an incident that became later popularly known as "Bloody Sunday", another anti-fuel hike protest in the city centre was violently suppressed by police on 28 May. Police again used excessive force against the protesters, which included labour leaders, and caused a number of serious injuries. A total of 20 protesters were also arrested.

Retaliating against union leaders at Universal Cable Berhad: On 19 September, the management of Universal Cable called in local police who arrested nine workers based on company allegations that the workers were involved in stealing company property. In fact, the nine workers were all leading members of the plant-level Electrical Industry Workers Union, and had been playing key roles in organising union activities and pressing workers demands. At year end, a union appeal to the Labour Department was still under consideration.

Six years on at Kaneka – and the union is still not recognised: In 2006 the DGTU turned down a recognition claim by the National Union of Petroleum and Chemical Industry Workers (NUPCIW) at four companies of the Kaneka group. The company's refusal to recognise the union and the slowness of official procedures meant the application had dragged on for five years, by which time many of the original union members had left. Hence the union no longer had enough members to be recognised.

Classifying workers out of the union at British American Tobacco: Exploiting a loophole in the labour legislation, a new title of "Process Specialist" was given to employees at British American Tobacco previously designated as "Process Technician." This pseudo promotion stripped 15 British American Tobacco Employees Union (BATEU) members of their right to belong to the union, and prevented another 38 workers from joining the union. The BATEU stands to lose as much as 60 per cent of their membership. An appeal to the Director-General for Industrial Relations against this action was pending at year end.

Fired for distributing union pamphlets – and court agrees!: Three workers at Guppy Plastics Industries were fired by their employer for distributing union pamphlets in the factory during working hours. When they appealed their dismissal as an anti-union action, an Industrial Court ruling in June, concurred with their dismissal on the specious grounds that the information in the pamphlets was not correct.

AmBank yellow union approved by court: In 2006 the National Union of Bank Employees (NUBE) lost a case in the High Court of Kuala Lumpur, seeking a court order to direct the DGTU to de-register a yellow union created by AmBank management. NUBE's evidence included the fact that management hand-picked the seven AmFinance Employees Union (KEPPA) officers, organised and paid for KEPPA meetings at its various branches, and the General Manager of the AmBank Branch Network required at those meetings that clerical and non-clerical staff sign KEPPA membership forms. Disregarding the evidence of management interference in setting up KEPPA, the High Court ruled based on a narrow technicality and denied the NUBE case.

People's Volunteer Corps (RELA) attack protesting migrant workers: Migrant workers from India recruited to work for Whitex Garments, JB Automobile Engineering Sdh. Bhd., Sri Sai Construction, and GSM Kajang conducted a one week protest in front of the Embassy of India in Kuala Lumpur to seek support to secure payment of unpaid wages from their employers. On the evening of 28 February, a squad of RELA members raided the encampment, attacking and beating workers with kicks, punches, and batons, and arrested 61 workers who were sent to the Lenggeng detention camp. Eyewitnesses stated that diplomats from the Embassy, who tried to intervene, telling the RELA captain that the men had legal papers and passports, were ignored. A number of the workers were seriously injured. Upon investigation, all 61 workers were found to have valid travel documents and to have entered Malaysia legally.

Retaliation against migrant workers for labour dispute: In April, a group of 68 migrant workers from India involved in a labour dispute with their Shah Alam-based company were fired for asserting their rights. While the proceedings were in court, the employer allegedly called in a RELA squad who placed them in a detention camp for nine days until their legal status could be proven. In July, a gang of hired thugs entered the workers' dormitory, intimidated the workers, ordered them out of their rooms, and then threw their belongings into the street.