Member Article

IN THIS ARTICLE, REENA ENBASEGARAM LOOKS AT THE LAW RELATING TO COMPETING UNIONS.

 

Introduction

The strength of a trade union is derived from its membership which is its paramount asset.

Upon being accorded recognition, a trade union will bargain on behalf of the employees and, in this regard, acts as a principal and not as an agent of its members[1]. The contracting rights - including those of non-union members and future employees - are transferred to the trade union. The collective agreement entered into by the union with the employer binds all employees who fall within the scope of representation of the trade union[2].

The Trade Unions Act 1959(“TUA”) governs the formation and regulation of unions and ensures the necessary checks and balances are in place.

 

One union for one group of employees

The guiding principle is that there should not be more than one union representing the same group of employees. The TUA has provisions to prevent a breach of this principle by clearly setting out the power of the Director General for Trade Unions (“DGTU”) to uphold this principle.

For example, when a union applies for registration, the DGTU is empowered to refuse it if he is satisfied that there is already in existence a trade union representing the employees in that particular establishment, trade, occupation or industry[3].

Apart from the above, the DGTU is also vested with the power to, where two or more registered trade unions exist, either cancel the certificate of registration of the trade union(s) which has the lesser number of members[4]or issue an order requiring the trade union(s) with the lesser number of members to remove from the membership register those members as are employed in that establishment, trade, occupation or industry[5].

Clearly, the power to register/de-register a union is entrusted to the DGTU. In fact, the TUA itself provides that the Yang di-Pertuan Agong shall appoint a DGTU who “shall have the general supervision, direction and control of all matters relating to trade unions throughout Malaysia”[6].

 

ABOM’s Case

Apart from legislation spelling out the authority of the DGTU to investigate rival claims, the role of the DGTU where there are competing unions was specifically dealt with in the 1999 case ofYb Menteri Sumber Manusia v Association of Bank Officers, Peninsular Malaysia[7](“ABOM’s Case”) where the Federal Court had the chance to consider a situation where both ABOM[8]and NUBE[9]purported to represent the same group of employees.

In that case, as a result of an upgrading/promotion exercise, tellers and receptionists who were within the scope of membership of NUBE became members of ABOM and, consequently, enjoyed certain benefits over and above what they had enjoyed prior to that. The Minister for Human Resources (“Minister”) had later ruled, based on investigations conducted by the Director General of Industrial Relations (“DGIR”), that the employees in question were non-executives which had the result of them ceasing to become members of ABOM and instead returning them within the scope of NUBE’s representation.

The Federal Court had noted that there was an acute conflict between ABOM and NUBE as to which union had the right to represent the employees in question. The Federal Court held that the competence of a particular union in the face of a competing claim of representation must first be established by the DGTU before the matter could be considered further.

 

What is meant by being competent?

The High Court inHSBC Bank Malaysia Bhd v Menteri Sumber Manusia, Malaysia & Anor[10]consideredsections 2[11]and26(1A)[12]of the TUA and explained that “it is an established principle of Trade Union law that a Trade Union of Employee’s is bound by its rules of membership and is only permitted to represent employees who are within the scope of their representation”.

What is important to take from ABOM’s Case is that although the DGIR was investigating a complaint raised undersection 9(1A)of theIndustrial Relations Act 1967(“IRA”)[13], and had the discretion whether or not to refer to the DGTU, the Federal Court confirmed that the DGIR ought to have done so undersection 9(4B)(b)of the IRA[14], as the issue of competency of a union falls within the exclusive jurisdiction of the DGTU.

The Federal Court specifically held that the competence of a particular union in the face of a competing claim of representation must first be established before its complaint under section 9(1A) of the IRA is to be investigated further.

 

The current situation

In the past decade, various banks have rolled out promotional exercises resulting in deserving and capable non-executive staff being promoted out of the scope of one union, and falling with the scope of another union.

In attempting to reclaim its members through indirect means, the original/former union has been raising trade disputes under section 9(1A) of the IRA alleging that the promotions are in reality union-busting exercises intended to take its members out of its scope of representation.

Pursuant to section 9(1A) of the IRA, the DGIR will conduct investigations into the job scope of the employees concerned in order to determine whether they are executives or otherwise. These investigations will eventually determine which union may represent the employees in question.

Although the DGTU has the responsibility of determining the competence of a union to represent a particular class of employees, his assistance and views are not sought by the DGIR during the investigations. The DGIR does not even involve the current union, even though it is the latter’s members who are being investigated. The Minister, in those spate of cases, had thereafter ruled in favour of the former union, based solely on the investigations/report of the DGIR - despite the undisputed fact that the employees of the subject-matter of the said trade dispute are now being represented by a different union.

Recent efforts to challenge the DGIR’s determinations through various judicial review applications have been unsuccessful.

As underscored in ABOM’s Case, it is a condition precedent that the DGTU should first determine if the union raising the trade dispute is in fact competent to represent the said employees before the DGIR can proceed to entertain the said complaint.

However, in these recent cases, the High Court had affirmed the position taken by the DGIR and Minister that the only relevant investigation is that as provided for under section 9(1A) of the IRA. In so doing, the authorities had failed to consider that sections 9(1A) and 9(1)[15]of the IRA are only concerned with ensuring that employees who are in the managerial, executive, confidential or security categories are not covered by the scope of the collective agreement entered into between parties.

The said provision does not cover the issue of whether a union is competent to represent the employees in question.

 

Conclusion

In light of the conflicting decisions above, it is hoped that the appellate courts clarify the position soon

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[1]Korea Development Corporation v Construction Workers Union[1983] 2 ILR 319

[2]Kelab Lumba Perak v Menteri Sumber Manusia, Malaysia & Ors[2005] 5 MLJ 193

[3]Section 12(2) TUA provides, “The Director General may refuse to register a trade union in respect of a particular establishment, trade, occupation or industry if he is satisfied that there is in existence a trade union representing the workmen in that particular establishment trade, occupation or industry and it is not in the interest of the workmen concerned that there be another trade union in respect thereof”.

[4]Section 15(2)(a) TUA provides, “Where two or more registered trade unions exist in a particular establishment, trade, occupation or industry, as the case may be, the Director General may, if he is satisfied that it is in the interest of the workmen in that establishment, trade, occupation or industry so to do

(a) cancel the certificate of registration of the trade union or trade unions other than the trade union which has the largest number of workmen in the said establishment, trade, occupation, or industry as its members”.

[5]Section 15(2)(b) TUA provides, “Where two or more registered trade unions exist in a particular establishment, trade, occupation or industry, as the case may be, the Director General may, if he is satisfied that it is in the interest of the workmen in that establishment, trade, occupation or industry so to do …

(b)issues an order requiring the trade union or trade unions other than the trade union which has the largest number of workmen in the said trade, occupation, industry or place of employment as its members to remove from the membership register those members as are employed in that establishment, trade, occupation or industry and thereafter the trade union or trade unions so ordered shall not enroll as members workmen in that establishment, trade, occupation or industry, except with the permission in writing of the Director General; an order under this paragraph shall have full force and effect notwithstanding any provision of the rules of the trade union concerned”.

[6]Section 3(1) TUA.

[7][1999] 2 CLJ 471.

[8]Association of Bank Officers, Peninsular Malaysia.

[9]National Union of Bank Employees, Peninsular Malaysia.

[10][2012] 6 CLJ 540.

[11]Section 2 TUA inter alia provides that, “trade union or union means any association or combination of workmen or employers, being workmen whose place of work is in Peninsular Malaysia, Sabah or Sarawak as the case may be, or employers employing workmen in Peninsular Malaysia, Sabah or Sarawak, as the case may be -

(a) within any particular establishment trade, occupation or industry or within any similar trades, occupations or industries”.

[12]Section 26(1A) TUA provides that, “No person shall join, or be a member of, or be accepted or retained as a member by, any trade union if he is not employed or engaged in any establishment, trade, occupation or industry in respect of which the trade union is registered”.

[13]“9(1A) Any dispute arising at any time, whether before or after recognition has been accorded, as to whether any workman or workmen are employed in a managerial, executive, confidential or security capacity may be referred to the Director General by a trade union of workmen or by an employer or by a trade union of employers.”

[14]“9(4B) For the purpose of carrying out his functions under subsection (1B) or (4A) the Director General:

…(b) may refer to the Director General of Trade Unions for him to ascertain the competence of the trade union of workmen concerned to represent any workmen or class of workmen in respect of whom recognition is sought to be accorded, and the performance of duties and functions by the Director General of Trade Unions under this paragraph shall be deemed to be a performance of his duties and functions under the written law relating to the registration of trade unions; ….”

[15]Section 9(1) IRA provides, “(1) No trade union of workmen the majority of whose membership consists of workmen who are not employed in any of the following capacities that is to say —

(a) managerial capacity;

(b) executive capacity;

(c) confidential capacity; or

(d) security capacity,

may seek recognition or serve an invitation under section 13 in respect of workmen employed in any of the above mentioned capacities.