Interim Report - Report No 265, June 1989

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

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

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.