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Interim Report - Report No 265, June 1989

Case No 1480 (Malaysia) - Complaint date: 01-DEC-88 - Closed

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  1. 550. In a communication dated 1 December 1988 the International
    • Metalworkers' Federation (IMF) presented allegations of violations of trade
    • union rights against the Government of Malaysia. The International
    • Confederation of Free Trade Unions (ICFTU) joined in this complaint in a
    • communication dated 22 December 1988. In a communication dated 19 January
  2. 1989, the Malaysian Trades Union Congress (MTUC) also joined in the complaint,
    • and provided further information relating to the matters raised by the IMF in
    • its letter of 1 December 1988.
  3. 551. The Government sent its observations on the case in a communication
    • dated 5 April 1989.
  4. 552. Malaysia has not ratified the Freedom of Association and Protection of
    • the Right to Organise Convention, 1948 (No.87); it has ratified the Right to
    • Organise and Collective Bargaining Convention, 1949 (No.98).

A. The complainants' allegations

A. The complainants' allegations
  1. 553. The IMF points out that since 1977 it has presented no less than four
  2. complaints of violations of trade union rights in Malaysia (see Case No. 879
  3. (177th Report of the Committee, paras. 88-113, approved by the Governing Body
  4. at its 205th Session February-March 1978); Case No. 911 (190th Report of the
  5. Committee, paras. 410-429, approved by the Governing Body at its 209th
  6. Session, February-March 1979, and 202nd Report of the Committee, paras.
  7. 122-142, approved by the Governing Body at its 213th Session, May-June 1980);
  8. Case No. 1022 (211th Report of the Committee, paras. 515-525, approved by the
  9. Governing Body at its 218th Session, November 1981, 217th Report of the
  10. Committee, paras. 379-388, approved by the Governing Body at its 220th
  11. Session, May-June 1982, and 218th Report of the Committee, para. 18, approved
  12. by the Governing Body at its 221st Session, November 1982); and Case No. 1380
  13. (248th Report of the Committee, paras. 363-380, approved by the Governing Body
  14. at its 235th Session, March 1987) (on this last case, see also para. 17 of the
  15. present Report)). The MTUC was also a complainant in Case No. 879.
  16. 554. All of these complaints related, in part at least, to the difficulties
  17. which had been encountered by the Electrical Industry Workers' Union (EIWU) in
  18. seeking to organise workers in the electronics industry. These difficulties
  19. centre around the fact that the Trade Unions Act, 1959 (TUA) limits the right
  20. to associate within the same trade union to workers within a particular trade,
  21. occupation or industry, or within any similar trades, occupations or
  22. industries. It is for the Registrar of Trade Unions to determine what
  23. constitutes "similarity" for these purposes (subject to a right of appeal to
  24. the relevant Minister, and to judicial review by the High Court and,
  25. ultimately, the Supreme Court). Over the years, the Registrar has exercised
  26. this discretion so as to deny the EIWU the right to organise workers in the
  27. electronics industry - even in situations where a substantial proportion of
  28. workers in an enterprise had in fact joined the EIWU.
  29. 555. The complainants point out that in all four of the previous cases, the
  30. Committee asked the Government, inter alia, to take steps to ensure that the
  31. provisions on the establishment of first-degree trade unions are interpreted
  32. in a less restrictive manner by the administrative authorities. This the
  33. Government has consistently failed to do.
  34. 556. From the late 1970s onwards the MTUC has sponsored a number of attempts
  35. to obtain registration for a separate trade union in the electronics industry
  36. - the most recent application to the Registrar being lodged on 15 October
  37. 1988. However, it has proved impossible to obtain a favourable decision from
  38. the Registrar, the Minister or the High Court. Moreover, employers in the
  39. industry have actively obstructed both the organisational activities of the
  40. EIWU and MTUC-sponsored attempts to establish a separate union for the
  41. industry. On the other hand, the Registrar has, in recent years, agreed to
  42. register two "in-house" unions in the industry (the Union of Employees of
  43. Perwira Ericsson Peninsular Malaysia and the Union of Employees in Amalgamated
  44. Parts Manufacturers).
  45. 557. According to the complainants, at a meeting of the tripartite National
  46. Labour Advisory Council on 22 September 1988 the Minister announced that
  47. workers in the electronics industry would be permitted to form their own
  48. union. He reportedly stated that the industry was now sufficiently "strong and
  49. stable" to have a union, and that it was up to the workers to organise
  50. themselves "with the help of the MTUC". This wholly unexpected announcement
  51. was warmly welcomed by workers in the industry, by the MTUC and "even by the
  52. government-controlled press through their editorials". Despite intimidatory
  53. tactics on the part of some employers, hundreds of workers held meetings and
  54. decided to establish a new union, the National Union of Electronic Industry
  55. Workers. It was this union which formally applied for registration on 15
  56. October 1988.
  57. 558. With equal suddenness, the Minister announced on 19 October 1988 that
  58. the Government had changed its mind, and that workers in the industry would be
  59. permitted only to establish "in-house" unions.
  60. 559. The complainants allege that this change of attitude was brought about
  61. largely as a result of pressure which was exerted on the Government by the
  62. foreign-owned employers in the industry.
  63. 560. The MTUC asserts that in-house unions in the electronics industry are
  64. totally unsuitable: first, because by and large workers in the industry are
  65. not experienced in trade unionism; secondly, because the possibility of
  66. victimisation and/or favouritism by management cannot be ruled out; thirdly,
  67. because there is a real possibility that the employers will seek to influence
  68. the leadership of such unions by means of subtle financial and material
  69. contributions to the unions; and fourthly, the establishment of such unions is
  70. bound to create economic imbalance in the industry. The MTUC also alleges that
  71. the Government's insistence on in-house unions is contrary to its own
  72. legislation relating to the registration and recognition of trade unions.
  73. B. The Government's reply
  74. 561. In its communication of 5 April 1989 the Government refers to earlier
  75. attempts by the EIWU to organise workers in the electronics industry and to
  76. that union's unsuccessful appeal to the High Court in 1985. The Government
  77. states that clear guide-lines have now been given to the EIWU to enable it
  78. accurately to identify and organise workers in the industries that fall under
  79. its scope, and that this situation has been accepted by the union. The
  80. Government states that the MTUC has also accepted the situation and that it is
  81. currently actively involved in assisting workers in the electronics sector to
  82. form unions of their own choice.
  83. 562. The Government points out that the wishes of the workers in a given
  84. workplace is one of the factors which is taken into account by the Registrar
  85. in considering applications for registration. This is reflected in the fact
  86. that four unions have been registered in the electronics sector in recent
  87. years: the Mitsumi Electric Employees' Union (registered 25 March 1986); the
  88. Perwira Ericsson Employees' Union (registered 30 May 1986); the Audio
  89. Electronics Employees' Union (registered 18 August 1987); and the RCA Sdn.
  90. Bhd. Employees' Union (registered 31 January 1989). In addition, the Registrar
  91. is currently considering the application for registration by the National
  92. Union of Electronic Industry Workers.
  93. 563. Finally, the Government emphatically states that under Malaysian law
  94. all registered unions have the same rights and responsibilities, be they
  95. in-house, industry-wide or whatever. It is not for the MTUC or any other body
  96. to determine the type of organisation workers should join - that is purely a
  97. matter for the workers in the unit concerned.

C. The Committee's conclusions

C. The Committee's conclusions
  1. 564. The complainants' allegations touch upon four aspects of the principles
  2. of freedom of association: i) workers' right to establish and to join
  3. organisations of their own choosing; (ii) workers' right to establish and to
  4. join organisations of their own choice without previous authorisation; (iii)
  5. the need for protection against acts which are designed to promote the
  6. establishment of organisations which are under the domination of employers or
  7. employers' organisations, or to support workers' organisations by financial or
  8. other means, with the object of placing such organisations under the control
  9. of employers or employers' organisations, as required by Article 2 of
  10. Convention No. 98; and (iv) the need to ensure that the right of workers to
  11. form and join organisations of their own choosing is established and respected
  12. both in law and in fact. Freedom of choice
  13. 565. The Committee has always attached the utmost importance to the fact
  14. that workers and employers should in practice be able to form and to join
  15. organisations of their own choosing in full freedom (Digest of Decisions and
  16. Principles of the Freedom of Association Committee, 1985, para. 222). It has
  17. accordingly taken the view that a situation in which an individual is denied
  18. any possibility of choice between different organisations by reason of the
  19. fact that the legislation permits the existence of only one organisation in
  20. the area in which (s)he carries on her/his occupation is not compatible with
  21. this principle (Digest, op. cit., para. 226).
  22. 566. The Committee has also recognised that governments may quite properly
  23. seek to promote a strong trade union movement by avoiding the defects
  24. resulting from an undue multiplicity of small and competing trade unions,
  25. whose independence may be endangered by their weakness. However, this
  26. objective can most appropriately be attained by encouraging trade unions
  27. voluntarily to form strong and united organisations, rather than by imposing
  28. upon them a compulsory form of unification which deprives workers of the free
  29. exercise of their right of association (See Digest, op. cit., para. 224).
  30. 567. In the present case, the Government states that the choice of unions is
  31. a matter for the workers employed in the unit concerned.
  32. 568. The Committee notes:
  33. i)that registration of trade unions is compulsory by virtue of section 8 of
  34. the TUA; (ii) that section 12(2) of the TUA confers upon the Registrar a
  35. discretionary power to refuse to register a trade union if he is satisfied
  36. that there is in existence a trade union in respect of a particular trade,
  37. occupation or industry and it is not in the interest of the workmen in that
  38. particular trade, occupation or industry that there be another trade union in
  39. respect thereof; and (iii) that section 15(2) of the same Act states that:
  40. Where two or more trade unions registered in respect of a particular trade,
  41. occupation, industry or place of employment exist, the Registrar may, if he is
  42. satisfied that it is in the interests of the workmen of the said trade,
  43. occupation, industry or place of employment so to do -
  44. a) cancel the certificate of registration of the trade union or trade unions
  45. other than the trade union which has the largest number of workmen in the said
  46. trade, occupation, industry or place of employment as its members; or
  47. b) issue an order requiring the trade union or trade unions other than the
  48. trade union which has the largest number of workmen in the said trade,
  49. occupation, industry or place of employment as its members to remove from the
  50. membership register those members as are employed in that trade, occupation,
  51. industry or place of employment; and thereafter the trade union or trade
  52. unions so ordered shall not enrol as members workmen in any trade, occupation,
  53. industry or place of employment similar to that trade, occupation, industry or
  54. place of employment except with the permission in writing of the Registrar ...
  55. The Committee also notes that decisions of the Registrar are subject to appeal
  56. to the Minister by virtue of section 71A of the Act, and to judicial review by
  57. means of the prerogative writs.
  58. 569. Bearing in mind that the registration of unions is compulsory in
  59. Malaysia, the Committee considers that workers cannot be said to have the
  60. right to join the union of their choice in a situation where the public
  61. authorities have the right to deny such registration in the circumstances set
  62. out in section 12(2) of the TUA. The powers conferred upon the Registrar by
  63. section 15(2) of the Act also appear to be incompatible with the right of
  64. workers to join, or (subject only to the rules of the union) to remain members
  65. of the union of their choice.
  66. 570. The existence of a right of appeal to the Minister against the exercise
  67. of the Registrar's discretion does not alter the fact that the public
  68. authorities have the capacity improperly to interfere with workers' right
  69. freely to choose the union to which they wish to belong. As regards the
  70. availability of judicial review, the Committee recognises that it is
  71. appropriate that means be available of ensuring that the Registrar's powers
  72. are exercised in a lawful manner. But that does not alter the fact that those
  73. powers are themselves incompatible with the principles of freedom of
  74. association. Previous authorisation
  75. 571. The Committee has always taken the view that the principle of freedom
  76. of association would remain a dead letter if workers and employers were
  77. required to obtain any kind of previous authorisation to enable them to
  78. establish an organisation (See Digest, op. cit., para. 263). It does not
  79. necessarily follow that it would be incompatible with the principles to
  80. require unions to adhere to certain basic requirements as to publicity or as
  81. to the form or content of their rules. Clearly, however, such requirements
  82. must not be of such a nature as to be equivalent in practice to previous
  83. authorisation, nor must they constitute such an obstacle to the establishment
  84. of an organisation that they amount in practice to outright prohibition (ibid.
  85. ).
  86. 572. This suggests that any system of compulsory registration which makes
  87. registration subject to the discretion of the public authorities must be
  88. regarded as incompatible with the principle of freedom of association (see
  89. Digest, op. cit., para. 264).
  90. 573. The Committee has also determined that the formalities prescribed by
  91. law for the establishment of trade unions should not be applied in such a way
  92. as to delay or prevent the setting up of occupational organisations (Digest,
  93. op. cit., para. 271).
  94. 574. The TUA does not require the Registrar to make a decision in relation
  95. to an application within any specified period. However, section 11 of the Act
  96. does state that between the date of establishment of a trade union (as
  97. determined in accordance with section 9) and the grant or refusal of a
  98. certificate of registration "no person shall organise or take part in any
  99. collection of money or other property for or on behalf of such trade union
  100. without the prior written permission of the Registrar and subject to such
  101. conditions as may be specified by the Registrar".
  102. 575. In the Committee's opinion it would be exceedingly difficult for a
  103. trade union to survive, let alone seek to strengthen its organisational base,
  104. if it is deprived of the capacity to raise funds for any extended period. It
  105. follows that, even assuming that section 11 is not in itself incompatible with
  106. the principles of freedom of association, it is clearly most important that
  107. the Registrar deal with all applications for registration in an expeditious
  108. manner.
  109. 576. The Committee notes that the National Union of Electronic Workers
  110. applied for registration on 15 October 1988 and that that application was
  111. still under consideration at the date of the Government's reply. The Committee
  112. also notes that a union of the same name made an application for registration
  113. on 22 January 1980 and that on 13 December 1983 the MTUC initiated proceedings
  114. in the High Court because that application had still not been determined. The
  115. Committee considers that a delay of almost four years in dealing with a matter
  116. of this nature is grossly excessive and calls upon the Government to use its
  117. good offices to ensure that there is no such delay in dealing with the
  118. application for registration which was submitted on 15 October 1988. It also
  119. asks the Government to advise the Office as to the outcome of this
  120. application.
  121. Protection against interference
  122. 577. The Government has not made any direct comment upon the complainants'
  123. allegation that on 19 October 1988 the Minister of Labour had announced that
  124. the Government would allow workers in the electronics industry to establish
  125. only in-house unions. It has, however, referred to the fact that four "house"
  126. unions have been registered in the electronics sector in recent years and has
  127. also stated that the choice of union in that industry "is confined to the
  128. workers employed in the unit concerned".
  129. 578. The complainants have drawn attention to a number of factors which they
  130. consider make in-house unions in the electronics industry "totally
  131. unsuitable". These include the lack of experience of trade unionism of workers
  132. in the industry, the possibility of victimisation or favouritism by management
  133. and the danger of managerial control of such unions by means of financial or
  134. material contributions.
  135. 579. The Committee has repeatedly stressed the need for legislation which
  136. makes explicit provision for remedies and penalties against acts of
  137. interference by employers in workers' organisations in order to ensure the
  138. effective application of Article 2 of Convention No. 98 (see Digest, op. cit.,
  139. para. 577). The Committee notes that section 4(2) and (3) of the Industrial
  140. Relations Act, 1967 provides a substantial measure of protection for these
  141. purposes: (2) No trade union of workmen and no trade union of employers shall
  142. interfere with each other in the establishment, functioning or administration
  143. of that trade union. (3) No employer or trade union of employers and no person
  144. acting on behalf of such employer or such trade union shall support any trade
  145. union of workmen by financial or other means, with the object of placing it
  146. under the control or influence of such employer or such trade union of
  147. employers. Sections 4(1), 5 and 59 of the 1967 Act provide complementary
  148. protection against acts of anti-union discrimination for individual workers
  149. (as required by Article 1 of Convention No. 98).
  150. 580. The Committee notes that the complainants have not presented any
  151. evidence to suggest that existing unions in the electronics industry have in
  152. fact been subject to interference (financial or otherwise) by management. If
  153. such interference were to occur, section 4(2) and (3) of the Industrial
  154. Relations Act would appear to provide an appropriate means of recourse.
  155. 581. The Committee notes that there is some conflict of evidence as to
  156. precisely which "in-house" unions have been registered. The complainants refer
  157. to two such unions: the Union of Employees of Permira Ericsson Peninsula
  158. Malaysia and the Union of Employees in Amalgamated Parts Manufacturers. Both
  159. of these unions were also referred to in Case No. 1380. The Government,
  160. however, lists four "in-house" unions, including the Ericsson union, but not
  161. the Union of Employees in Amalgamated Parts Manufacturers.
  162. Protection in law and in fact
  163. 582. The Committee has always taken the view that the right of workers to
  164. establish and join organisations of their own choosing cannot be said to exist
  165. unless such freedom is fully established and respected in law and in fact
  166. (Digest, op. cit., para. 654).
  167. 583. The Committee considers that these rights are not fully established and
  168. respected by law in Malaysia. Section 8 of the TUA makes registration
  169. compulsory, whilst section 12 confers a discretion upon the public authorities
  170. (in the person of the Registrar and, on appeal, the Minister of Labour) to
  171. accept or to refuse an application for registration even though the union in
  172. question has complied with all of the formal requirements of the legislation.
  173. These provisions deny workers the right to belong to the union of their
  174. choice, and amount to a requirement of previous authorisation. The Committee,
  175. therefore, calls upon the Government to amend sections 8 and 12 of the TUA so
  176. as to bring them into conformity with the principles of freedom of
  177. association.
  178. 584. Bearing in mind that sections 8 and 12 of the TUA are in themselves
  179. incompatible with the principles of freedom of association, the extent and
  180. practical impact of that incompatibility will depend upon the manner in which
  181. the Registrar and (ultimately) the Minister exercise their discretions under
  182. section 12. Accordingly, the Committee requests the Government, as it has done
  183. in Cases Nos. 879, 911, 1022 and 1380, to take steps to ensure that section 12
  184. of the TUA is interpreted and applied in a manner which gives effect to the
  185. principle that the choice of the unions to which workers wish to belong should
  186. be that of the workers themselves.
  187. 585. The Committee notes that the Government has not responded to the
  188. complainants' allegation that its change of mind in October 1988 in relation
  189. to the establishment of an industry union in the electronics sector was the
  190. result of pressure from the foreign-owned corporations which dominate the
  191. industry. The Committee notes that the Tripartite Declaration of Principles
  192. concerning Multinational Enterprises and Social Policy which was adopted by
  193. the Governing Body of the ILO in November 1977 states that (para. 45): "Where
  194. governments of host countries offer special incentives to attract foreign
  195. investment, these incentives should not include any limitation of the workers'
  196. freedom of association or the right to organise and bargain collectively." It
  197. accordingly urges the Government to provide a reply to this allegation.
  198. 586. Finally, the Committee feels bound to express its concern at the fact
  199. that this is the fifth occasion since 1977 upon which it has had to deal with
  200. allegations of denial of the right to organise in the electronics industry in
  201. Malaysia. It asks the Government to give serious consideration to making use
  202. of the assistance of the ILO in order to help it bring the law and practice
  203. relating to the registration of trade unions into conformity with the
  204. principles of freedom of association.

The Committee's recommendations

The Committee's recommendations
  1. 587. In the light of its foregoing interim conclusions, the Committee
    • invites the Governing Body to approve the following recommendations:
      • a) That the Government introduce legislation to amend sections 8 and 12 of
    • the Trade Union Act so as to bring them into conformity with the principles of
    • freedom of association.
      • b) That pending legislative change the Government take steps to ensure that
    • section 12 of the Trade Union Act is interpreted and applied in a manner which
    • gives effect to the principle that the choice of the unions to which workers
    • wish to belong should be that of the workers themselves.
      • c) That the Government use its good offices to ensure that the application
    • for registration which was submitted by the National Union of Electronic
    • Workers on 15 October 1988 is dealt with in an expeditious manner, and that it
    • advise the Office as to the outcome of that application.
      • d) The Committee expresses its concern at the fact that it has examined
    • allegations of breaches of the right to organise in the electronics industry
    • on five occasions. It considers that the Government should now give serious
    • consideration to making use of the assistance of the ILO in order to help it
    • bring law and practice relating to the registration of trade unions into
    • conformity with the principles of freedom of association.
      • e) The Committee urges the Government to respond to the allegation that its
    • position in 1988 relating to the establishment of a trade union in the
    • electronics industry was due to pressure exerted by the foreign-owned
    • companies who dominate this industry.
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