The Trade Unions (Amendment) Bill 2022 (“Bill”) passed at the Dewan Rakyat on 5 October 2022. At the time of writing, the Bill is pending approval by the Dewan Negara. 

Here are some of the key changes proposed by the Bill: –

Unfettered Multiplicity of Unions

Under the current Trade Unions Act 1959 (“Act”), the Director General of Trade Unions (“DG”) may refuse registration of new trade unions on the basis that: 

  • there are other trade unions representing the workmen in that establishment, trade, occupation or industry; or
  • it is not in the interest of the workmen concerned there be another trade union in respect thereof. 

The Bill seeks to allow multiple unions in the same establishment, trade, occupation or industry. Additionally, the Bill also seeks to allow amalgamation and transfer of engagements between unions not within similar trades, occupations or industries. 

Refusal of registration and cancellation of registration

In line with the overall changes proposed by the Bill, the Bill also seeks to alter the situations in which a DG can refuse registration of new trade unions, and situations in which a trade union registration can be cancelled. For example, the DG can refuse registration of a trade union if he is of the view that the name of the trade union will would “promote feelings of ill-will and hostility between different races, religions and nationalities” (currently, the DG can refuse registration if the name is “undesirable”, which is more general).

Membership of Trade Unions

The Bill seeks to lower the minimum age of joining a trade union to 15 years old (currently the minimum age is 16). However, the same restrictions towards minors (ie: between 15 to 21 years old) under the present law still applies.  

The Bill also seeks to remove the statutory bar that mandates prospective members of trade unions to be employed or engaged in any establishment, trade, occupation or industry in respect of which the trade union is registered. The Bill seeks to vest such power in the trade union themselves and allow them to regulate membership vide their own rules of the trade union.

Modification on Procedure to go on Strikes and Lock-Out

The Bill stipulates that for strikes and lock-out, trade unions must obtain one-half of the votes by secret ballot with at least 60 per centum of its total of members entitled to vote. Currently, under the Act, strikes and lock-outs can only be carried out with consent by secret ballot of at least two-thirds of its total of union members entitled to vote.

The Bill also provides that once the trade union has taken a secret ballot to call for a strike or lock-out, the DG can only investigate whether the proposed strike or lock-out had contravened sections 25A (strikes and lockouts) and 40 (secret ballot) of the Act or Part IX of the Industrial Relations Act 1967 (trade disputes, strikes and lockouts).  This contrasts with the present situation where the DG is empowered to investigate for any breaches of the Act or any other written law.

New Enforcement Powers of the Director General

Under the Bill, the DG is vested with new investigative and enforcement powers, such as: 

  • Appointing officers to investigate and enforce the Act; 
  • Summoning any person acquainted with facts and circumstances to appear before DG to be examined orally by him; and
  • requiring any person to produce documents in investigations and seize documents. 

Commentary

Since the unveiling of the Bill, the Malaysian Employers Federation and Coalition Against Multiplicity of Unions have objected to the Bill, as their chief concern is the multiplicity of trade unions in the same workplace or industry. 

During the second reading of the Bill at the Dewan Rakyat, the Human Resources Minister (“HR Minister”) said in his winding up speech that the diversity of trade unions is expected to have a positive impact, especially on workers. The HR Minister also stated that the Bill will create healthy competition between trade unions, in the hopes that the unions will strive to be in the best position in terms of administration, organising social activities, education or welfare. 

Under the current Act, limited multiplicity of trade unions is allowed (subject to the DG’s discretion to refuse registration as outlined above). However, unfettered multiplicity of trade unions and loosening of trade union membership may have the following impact:

  • Collective bargaining with multiple trade unions for the same class of employees would be a time-consuming and expensive affair;
  • There is a higher chance of trade disputes if there are disparity of terms with different trade unions; 
  • Employees may go “union-shopping”, which may result in inter-rivalry between unions in the same workplace or industry; 
  • The removal of the statutory bar regarding membership of union may result in a mismatch between the expected membership and the actual membership of an actual trade union (eg: an engineer can join a trade union for medical professionals); and
  • Diluting or fragmenting the bargaining power of trade unions generally.

Employers should take note of the above and integrate these factors into any present or future collective bargaining with trade unions.

***

This article was written by Leow Ho Eng, Associate from Donovan & Ho’s employment law practice. 

Donovan & Ho is a law firm in Malaysia, and our employment practice group has built a reputation for providing strategic employment advice to local and global organisations.  Our team of employment lawyers provide advice on employment law and industrial relations including review of employment contracts, policies and handbooks, advising on workforce reductions, and managing dismissals of employees for poor performance or misconduct. We also represent clients in unfair dismissal claims and employment-related litigation. Have a question? Please contact us.

 

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