While trade unions are entitled to lodge trade disputes complaints, are employers always on the defensive? After all, there may be instances where employers are legitimately aggrieved by the actions of the trade union.  

In the employers’ arsenal of rights, section 18(1) of the Industrial Relations Act 1967 (“IRA 1967”) allows an employer to report any trade dispute to the Director General of Industrial Relations.  How does this sit with trade unions’ immunity for tortious actions under section 22(1) of the Trade Union Acts 1959 (“TUA 1959”)? 

This article discusses the case of National Union of Bank Employees v Mahkamah Perusahaan Malaysia & Anor [2023] CLJU 137, where the High Court’s findings shed light on the intersection of an employer’s right of access to the Industrial Court, and the immunity of trade unions.

Brief Facts

  • The Bank lodged a trade dispute complaint to the Director General of Industrial Relations in relation to the Union’s industrial activities, including but not limited to the Union’s actions of publishing statements that were disparaging or defamatory against the Bank (“Statements”). The Statements alluded to alleged breaches of the collective agreement by the Bank. As part of the Bank’s case, the Bank alleged that the Union had breached an article of the Collective Agreement through the Statements, although details of this alleged breach and the article were not mentioned in the Court decisions.
  • When the trade dispute complaint was referred to the Industrial Court, the Bank sought an order from the Industrial Court to direct the Union to cease and desist, and to strike down the alleged derogatory and defamatory media posting. 
  • The Union filed an application to strike out the complaint on the basis that it enjoyed immunity for any alleged tortious actions committed by or on behalf of the trade union, under section 22(1) of the TUA 1959.
  • The Industrial Court dismissed the Union’s application, on the basis that the dispute between parties was still a “trade dispute”, since the issues in dispute related to the implementation or application of a clause in the collective agreement. Furthermore, the Industrial Court held that the power to strike out must not be used to summarily dispose the case purely on a preliminary objection without giving the parties all the opportunity to ventilate their respective cases to the fullest. 
  • Dissatisfied with the decision, the Union lodged an application for judicial review at the High Court.

Court’s Findings
The High Court distilled the issues to the following: –

  1. Whether the claim filed by the Bank at the Industrial Court can be considered as a “suit” that the Union would have immunity against, pursuant to  section 22(1) of the TUA 1959?
  2. What amounts to a tortious act? 
  3. What is the cause of action at the Industrial Court? 

For ease of reference, section 22(1) of the TUA 1959 is reproduced here: –

“(1) A suit against a registered trade union or against any members or officers thereof on behalf of themselves and all other members of the trade union in respect of any tortious act alleged to have been committed by or on behalf of the trade union shall not be entertained by any Court.

The High Court held that that the trade dispute was ultimately anchored on an alleged breach of the collective agreement and therefore not a “tortious act” that attracts immunity.

When interpreting section 22(1) of the TUA 1959, the High Court held that the union’s immunity is only applicable for actions filed in the civil courts (and not the Industrial Court). 

On a procedural note, the High Court also held that if the applicant is aggrieved by the Ministerial reference, the proper cause of action would be to commence a judicial review action to challenge the reference and seek an order of prohibition against the Industrial Court. 

Key Takeaways
The High Court’s decision provides reassurance to employers that its day in the Industrial Court for any grievances pertaining to the collective agreement, is assured by the IRA 1967. In other words, employers too have the right to seek the appropriate relief from the Industrial Court.

This decision also illustrates the importance of accurately identifying the root cause of the complained actions and determining whether it stems from the breach of the collective agreement or not. As seen above, even a seemingly tortious action such as defamation can still fall within the meaning of “trade dispute”, provided there is sufficient nexus between the complained actions and the collective agreement.

***

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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