TOPIC 3
TRADE UNIONS
UPON COMPLETING THIS TOPIC, STUDENTS
SHOULD BE ABLE TO:
• Define trade unions and explain the objectives of
trade unions
• Explain the types and categories of trade unions
• Discuss the composition of trade unions
• Explain the registration and management of
trade unions
• Explain the immunity, powers, liability and rights
of trade unions
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3.1 DEFINITION
• The term trade or labour unions can be understood as
organized workers with common goals particularly to
gain higher salaries, better working conditions, more
benefits etc. Part I of the Trade Unions Act (TUA), 1959
defines;
• “… a trade union as any association or combination of
employers (being employers employing employees in
West Malaysia, Sabah or Sarawak) or of employees
(whose place of work is in West Malaysia, Sabah or
Sarawak), as the case may be:
• whether temporary or permanent; and
• within any particular trade, occupation or industry or
within any similar, and
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DEFINITION …. CONT’D…..
• having one or more of the following objectives:
– the regulation of relations between employers and
employers or between workmen and workmen; or
– the representation of either employers or workmen in
trade disputes; or
– conducting of or dealing with trade disputes and
matters related thereto; or
– the promotion or organization or financing of strikes or
lockouts in any trade or industry, or the provision of
pay or other benefits for its members during a strike
or a lockout. (SEC. 2, TUA 1959)
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DEFINITION …. Cont’d
iv.
having one or more of the following objectives:
a. the regulation of relations between employers and
employers or between workmen and workmen; or
b. the representation of either employers or workmen
in trade disputes; or
c. conducting of or dealing with trade disputes and
matters related thereto; or
d. the promotion or organization or financing of strikes
or lockouts in any trade or industry, or the provision
of pay or other benefits for its members during a
strike or a lockout.
(SEC. 2, TUA 1959)
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3.1.1 IMPLICATION OF DEFINITION
Several interpretations can be made as the following:
i.
a union can be a temporary or permanent association
or combination of employers or of employees;
ii. a union must be an association or combination of
employers or of employees, and cannot be an
association or combination of both employers and
employees;
iii. a union (whether of employers or of employees) must
be confined to Malaya or Sabah or Sarawak, and
cannot embrace Malaysia as a whole;
iv. an employer union must be confined to a particular
industry or trade or to similar industries or trades
(‘similar’ in the opinion of the Director General of
Trade Unions);
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IMPLICATION OF DEFINITION … cont’d
v.
vi.
vii.
an employee union must be confined to a particular
establishment or industry or trade or occupation or to similar
industries or trade or occupations (again ‘similar’ in the opinion of
the Director General); and
any association or combination of employers or of employees
which fits the definition would be a union whether or not it has
been registered as one.
Furthermore, the union must be confined to the private sector or
to the public sector and, cannot embrace both sectors at once.
Therefore:
•
an employer union must be confined to either one of the two
sectors; and
•
an employee union must also be confined to one of the two
sectors.
(Ayadurai: 1998: pg 30-32)
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3.1.2 OBJECTIVES AND FUNCTIONS
The general objectives and functions of trade unions are
the following:
i.
to promote the industrial, social and intellectual
interests of their members;
ii. to obtain and maintain for its members just and proper
rates of remuneration, security of employment and
reasonable hours and conditions of work;
iii. to promote the material, social and educational
welfare of the members; and
iv. to promote legislation affecting the interests of the
members in particular or trade unionist in general.
(Maimunah Aminuddin: 2007: p.110)
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3.2
TYPES / CATEGORIES OF UNIONS
There are basically three (3) categories of unions in Malaysia:
(i) Public sector employees’ unions
• Consists of the civil service, the statutory bodies and the local
authorities.
(ii) Private sector employees’ unions
– are either national or in-house unions.
– National union – covers all workers in the same industry,
trade or occupation.
– In-house union – is one where members are all employed by
the same
employer.
(iii) Private sector employers’ unions
– consists of employers that employ employees in the private
sector.
– in response to the large and powerful national trade unions of
employees. (Maimunah Aminuddin: 2003: pg 136-140)
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TYPES OF UNIONS … cont’d
Other classifications:
i. Membership – employer or employees
ii. Location – Sabah / Sarawak / Peninsular
iii. Job nature – trades / occupations /
industries / establishments
iv. Sector – public / private
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3.3 Composition of trade unions
• Composition of trade unions is based on membership. It
is the impact of the definition in TUA that requires a
union may only be composed of:
i. either employers or employees,
ii. employers/employees in Sabah, Sarawak or Peninsular
Malaysia;
iii. employers/employees in the private sector or employees
in public sector;
iv. employers within a particular industry or trade or within
similar industry or trade;
v. employees within a particular
establishment/industries/trades/occupations or within
similar establishment/industries/trades/occupations
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3.4 REGISTRATION AND MANAGEMENT OF
TRADE UNIONS
3.4.1 Registration
• This is a process where a trade union applies for
registration and a certificate of registration will
be issued by the authority.
• The definition is silent on this matter (issue of
registration).
• But, registration is necessary for a union under
the TUA 1959 (TUA does insist on the
registration of every union).
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3.4.2 APPLICATION FOR REGISTRATION
An established trade union must fulfill several requirements to be
registered as the following:
i. It must make application to the DGTU,
ii. It must be signed at least by 7 members of the union,
iii. It must be made in the prescribed form,
iv. It must be accompanied by the prescribed fee,
v. It must make application to the DGTU,
vi. It must be accompanied by a printed copy of the rules of the union
signed by the members making the application, and
vi. It must specify:
The name of the union and the address of its head office;
i. The titles, names, ages, addresses and occupations of the
officers of the union…and such other information regarding such
officers as the DGTU may in any particular case require to be
furnished… and
ii. The names, addresses and occupations of the members
making the application. (Sec. 10, TUA 1959)
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3.4.3 THE MANAGEMENT OF TRADE UNIONS
The DGTU has enormous powers regarding management
of trade unions i.e. registration, de registration of and any
other matters related to trade unions.
They are the following:
3.4.3.1
REGISTRATION
TUA 1959 gives powers to the DGTU regarding
registration of trade union as follows;
i. To register a trade union in the prescribed manner.
(Sec. 12(1), TUA)
ii. To issue a certificate of registration in the prescribed
form. (Sec. 13, TUA)
iii. To call for further information for the purpose of
satisfying himself. (Sec.14, TUA)
iv. To extend the period of registration from one month as
to exceed a period of six month.
(Sec. 8, TUA)
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REGISTRATION … cont’d
v. To reject any application by a trade union if:
• He is satisfied that there is a trade union (exists) in
respect of the particular trade, occupation or industry
and in the interest of the workmen in that particular
trade, occupation or industry.
(Sec. 12(2), TUA)
vi. Shall refuse to register a trade union if:
(a) In his opinion the trade union is likely to be used for
unlawful purposes or for purposes contrary to or
inconsistent with its objectives and rules; or
(b) He is not satisfied that the trade union has complied
with the provisions of this Act and of any regulations
made thereunder; or
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3.4.3.2 DE REGISTRATION
• Removal of right to practice by local registering body,
usually as a disciplinary measure because of
professional misconduct, possibly because of inability to
perform because of psychiatric problem.
– DGTU has the right to cancel or withdraw a certificate
of registration of a trade union (to revoke the registration)
under the following circumstances:
i. At the request of a trade union; or
ii. If he is satisfied that:
– the certificate was issued by fraud or mistakes;
– any one of the objectives or rules of the trade union is
unlawful;
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DE REGISTRATION … cont’d …..
– the constitution of the trade union or its executive is
unlawful;
– the trade union has been contravened any provision of
this Act or of any regulations made thereunder;
– the funds of the trade union has been expended in
unlawful manner or unlawful objectives or on an
objective not authorized by the rules of the union; or
– the union has ceased to exist. (Sec. 15(1), TUA)
iii. upon amalgamation of trade union or dissolution of
trade union. (Sec.15(1), TUA)
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DE REGISTRATION …. Cont’d ….
(4) In addition, the DGTU has a power to order a
suspension of a branch of a trade union if he is satisfied
that the branch of a union has contravened the provision
of this Act or the rules of the union concerned.
– The suspension of an entire union or the entire class
of union is in the hand of the Minister of Human
Resources. (Sec.17, TUA)
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3.4.3.3
Effects of de registration
•
A legally registered union will enjoy all rights, power and privileges
that enable it to function effectively.
• However, the registration certificate can be withdrawn or cancelled
by the authority and it is called de registration of trade unions. De
registration puts a union at disadvantages as follows:
i. It is regarded as unlawful entity and stop from enjoying all rights,
immunities and privileges of registered unions. However the union
is responsible for all liabilities incurred or to be incurred by it.
ii. The union or members cannot take part in any trade dispute,
promote, organize or finance any strike or lockout.
iii. The union is to be dissolved and the funds disposed according to its
rules.
iv. No one can participate in the management or organization of the
union except those who are assigned to deal with dissolution of
union, disposal of funds or appeal against de registration.
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3.4.4 OTHER POWERS OF THE DGTU
Furthermore TUA also provides the DGTU
with powers which are related to trade
unions as follows:
i. Funds and accounts
ii. Memberships
iii. Executives or officers or employees of a
union
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3.4.4.1 FUNDS AND ACCOUNTS
• Unions are responsible to manage their funds and accounts
according to Part VIII, TUA. The compliance to this Part is
important to avoid mismanagement of funds and accounts.
• Section 50, TUA outlines the use of union funds for specific
purposes as follows:
i. paying salary to the union’s employees
ii. maintenance or up-keeping of the union office
iii. settlement of trade dispute
iv. payment of compensation such as strike allowance to the members
for the losses arising out of trade disputes
v. paying allowances to members and their family on account of death,
old age, sickness, accident or unemployment.
vi. printing, publishing and circulation of any printed literature such as
newsletters, brochures, flyers and banners
vii. financing union activities such as picket, strike, social events, sports
activities, educational trips, dinner, family day and charitable
activities
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FUNDS AND ACCOUNTS …… cont’d…
Furthermore,
• Section 50A, TUA allows unions to undertake
fund-raising and collection of money with prior
approval from DGTU.
• Section 51, TUA prohibits unions from using
their funds to pay any fine or penalty imposed to
any person by sentence or court order.
• In addition, Section 52 prohibits unions from
using their funds for any political purposes or
supports.
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OTHER POWERS OF THE DGTU ….. Cont’d
Unions are responsible for proper financial accounts management
as outlined in Sections 55, 56 and 57, TUA.
i.
Section 55, TUA requires union treasurers (or officer-in-charged) to
submit annual audited accounts for checking.
ii. Section 56, TUA states the requirement for a trade union submits
to the DGTU an audited general statements of the receipts, funds,
effects and expenditure of the union in the 12 months (ending on
the 31st March in each year); before 1st October of each year.
iii. Section 57, TUA requires a trade union to make account books or
other records of a trade union to be available for inspection or for
audit by a fit and proper person approved by him.
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OTHER POWERS OF THE DGTU ….. Cont’d
3.4.4.2 The DGTU also has certain extent of power in terms of
membership i.e. membership of minors and membership of public
officers and employees of statutory authorities.
a) Membership of minors
Minors refer to persons that are under the age of 21 but above the
age of 16. Therefore the DGTU is responsible to prohibit the
following persons from joining a trade union;
i. Any person below the age of 16 years;
ii. Any student of an educational institution (school, polytechnic,
college, university, etc.) established under any written law, unless he
is also employed as an employee and is over the age of 18 years;
iii. Any person not engaged or employed in the establishment or
industry or trade or occupation in respect of which the union is
registered. (Sec. 26(1A), TUA)
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MEMBERSHIPS … cont’d
b) Membership of public officers and employees of statutory
authorities
• In these categories of membership, the Yang Di-Pertuan Agong
has certain extent of power i.e. in terms of exemption from
prohibition. However there are several groups of who are
prohibited from establishing and joining trade unions
i. members of the armed forces, the police force, any prison
service;
ii. public officers prohibited under any law from forming or joining a
union;
iii. public officers employed in a confidential or security capacity;
and
iv. public officers holding any post in the Managerial and
Professional Group, unless they have been permitted to be
members of a union by the Chief Secretary to the Government.
(Sec. 27(2), TUA)
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MEMBERSHIPS … cont’d
Concept of ‘closed shop’
- Closed shop/ union shop means, some unions
make agreement with employer that only union
members shall be employed in particular
organizations.
- the concept of “closed shop” is not applied in
Malaysia but practised in certain countries such
as United States and United Kingdom.
(Maimunah Aminuddin: 2006: pg 114 – 115)
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MEMBERSHIPS … cont’d
• The Trade Unions Act, 1959 regulates the right of
employees to membership in trade unions.
• In some cases the Act merely restricts this right, but in
other cases it completely negates it.
• This regulations affects public sector employees more
than private sector, and
• among public sector employees, it more affects
government employees more than statutory and local
authority employees.
(Dunston Ayadurai: 1998: pg 34)
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MEMBERSHIPS … cont’d
Classes of persons prohibited from joining a trade
union
i. any person below the age of 18 years;
ii.
Any student of an educational institution (school,
polytechnic, college, university, etc.) established
under any written law, unless he is also employed
as an employee and is over the age of 18 years;
iii.
Any person not engaged or employed in the
establishment or industry or trade or occupation in
respect of which the union is registered; and
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MEMBERSHIPS … cont’d
iv.
Any “public officer” (‘ a person in the permanent or temporary
employment of any government (federal or state) in Malaysia).
But, TUA adds that the Yang Di-Pertuan Agong may, by
notification in the Government Gazette, exempt any public officer
or any group of them (i.e. any government employee or any group
of them) from this prohibition, except:
(a) members of the armed forces, the police force, any prison
service;
(b) public officers prohibited under any law from forming or joining
a union;
(c) public officers employed in a confidential or security capacity;
and
(d) public officers holding any post in the Managerial and
Professional Group, unless they have been permitted to be
members of a union by the Chief Secretary to the Federal General
Government.
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MEMBERSHIPS … cont’d
v.
An employee of a statutory authority can be a
member only of a union whose membership is
confined exclusively to employees of that
particular statutory authority; even then, an
employee of a statutory authority:
(a) who is employed in a confidential or security
capacity cannot be a member of a union; or
(b) who holds any post in the Managerial and
Professional Group cannot be a member of a
union, unless he has been permitted to be a
member of one by the Chief Secretary to the
Federal Government.
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MEMBERSHIPS … cont’d
vi.
An employee of a financially autonomous local authority
can be a member only of a union whose membership is
confined exclusively to employees of one or more
financially autonomous local authorities; even then, an
employee of a financially autonomous local authority:
(a) who is employed in a confidential or security capacity
cannot be a member of a union; or
(b) who holds any post in the Managerial and Professional
Group cannot be a member of a union, unless he has been
permitted to be a member of one by the Chief Secretary to
the Federal Government. (Sec. 26 (1A) & Sec. 27 TUA
1959)
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OTHER POWERS OF THE DGTU ….. Cont’d
3.4.4.3 OFFICERS OF THE UNION
• After the rules of the union have been accepted by
the members, officers may be elected in accordance
with the rules.
• This must be done through secret ballots. The rules
of the union must ensure that every member has an
equal right and a reasonable opportunity to record
his vote freely, and that the secrecy of the ballot is
properly secured.
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OFFICERS OF THE UNION … cont’d
• According to Section 28 TUA, the following persons are disqualified
for election to be the executive of the union or federation of trade
unions:
i.
He is not a citizen of the federation;
ii.
A person who has been a member of the executive of any trade
union the registration of which has been cancelled or withdrawn
under certain circumstances.
iii. An office-bearer or employee of a political party; “
iv. He has been convicted by any court of law of criminal breach of
trust, extortion, or intimidation, or of any offence which in the opinion
of the Director General renders him unfit to be an officer of a trade
union; or
v. He is a bankrupt.
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3.5 Rights, Powers, Liabilities, Immunities and privileges of
registered trade unions
The Trade Union Act 1959 has stipulated several matters related to a
legally registered trade union. They are the following:
3.5.1 Rights of Trade Union
There are several rights enjoyed by trade union as conferred by the
law. These rights are also enjoyed by non-registered trade union. At
this point, you may need to refer to Part IV of the Trade Union Act,
1959. The rights outlined by Part IV of the Act are:
3.5.1.1 Legal action
• Section 25 (1) of TUA, provides a union to institute legal action and
similarly the union too can be charged. Section 25 (2) of the same
Act specified that an unregistered union can be charged under the
name it used or the name it is referred to. While Section 25 (3) of the
TUA states
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Rights of Trade Union …. Continued…
3.5.1.2 Financial support
• The financing of trade union is very much supported by its members
through entrance fee payment and monthly membership
subscription made by members once they join in as a member of a
union.
• Section 25(5) of the Trade Unions Act provides that any fines
imposed and be born by the union, can be derived from the sales of
its movable properties or any monetary held under its trust fund in
accordance with the related criminal procedure.
3.5.1.3 Representation in court proceeding
• Section 25(6) of the Trade Unions Act, clarifies a trade union must
appear in any civil or criminal proceeding. The Act grants the rights
to the union to be represented by its executive, solicitor or advocate.
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Rights of Trade Union …. Continued…
3.5.1.4 Industrial action
• As stipulated in the Trade Unions Act, 1959 (Section 25A), both
trade union of employee and employer alike can take actions to stop
a trade by launching legal strike and lock out.
• However, the provision also states that penalties are enforceable if a
trade union does not comply with the requirements or the
regulations.
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3.5.2 POWERS
Powers mean the ability to do or act.
• We learn earlier that a union may institute legal action and can be
charged, which means an unregistered trade union can also be
charged.
• However only a registered trade union will have the power to:
3.5.2 .1 run activities/perform roles
– regulate relations between employers and employees (Sec. 2,
TUA)
– represent employers/employees in trade disputes
– conduct/deal with trade disputes and related matters
– promote, organize or finance strikes/lockouts and provide
pay/other benefits during industrial actions
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POWERS … cont’d
3.5.2.3 collect money or other property for its purpose of the union
(Sec. 11, TUA) i.e. collect entrance fee and monthly subscription
from the members.
3.5.2.4 organize its funds and expenditure to
i.
purchase or take upon lease for the purposes of the union any
land or building and, subject to any written law or other law
which may be applicable, to sell, exchange, charge or lease
any such land or building which may be so purchased
ii. invest in any securities or in any loans to any company in
accordance with any law relating to trustees
iii. deposit its funds in any bank incorporated in Malaysia or any
finance company which is a subsidiary company of such bank
invest its funds in any registered cooperative society or in any
commercial, industrial or agricultural undertaking or banking
enterprise, which is incorporated and operating in Malaysia
(Sec. 49, TUA) with the prior written approval of the Minister
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POWERS … cont’d
However the fund of a trade union is designated only to be spent for the
following purposes:
a. paying salary to the union’s employees
b. maintenance or up-keeping of the union office
c. settlement of trade dispute
d. payment of compensation such as strike allowance to the members for
the losses arising out of trade disputes
e. allowances to members and their family on account of death, old age,
sickness, accident or unemployment.
f. printing, publishing and circulation of any printed literature such as
newsletters, brochures, flyers and banners
g. financing union activities such as picket, strike, social events, sports
activities, educational trips, dinner, family day and charitable activities
The law also mentioned that it prohibits trade unions from spending or
utilizing their funds for any political purpose including financially
supporting a political party.
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3.5.3.2 IMMUNITIES
Immunities can be understood as exemption or
exception conferred to a person, a group of people
etc
3.5.3.1 Civil suit
• According to Trade Unions Act, 1959 section 21, no
suit or legal proceeding shall be maintainable at any
civil court against registered trade union except in
certain cases such as breaching a contract of an
employment, interference with the trade, business or
employment of others, and interference with the
rights of others to dispose of his capital or his labor
as he wills.
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IMMUNITIES …. Cont’d …
• Under normal circumstances, an employer can
take civil action against his employees when
they are found to join a strike. They do not go to
work. By involving themselves in the strike, the
employees had breached their contract of
service.
• However, if the strike is legal and done in
contemplation or furtherance of a trade dispute,
then no action shall be taken against the
employee as the law provides them immunity in
civil suit.
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2.
IMMUNITIES …. Cont’d …
3.5.3.2 Tortuous act
• According to section 22 of the Trade Unions Act, a
registered trade union is immune from any tortuous act
allegation. Its trustees and officials are protected too.
• Tortuous act is referring to any act which can make a
person liable to pay compensation on damages other
than breaching the contract of service.
• Such allegation will not be heard or entertained by any
court, unless in the case for breach of contract such as
compensation payment prior to retrenchment practices.
• No consideration will be acknowledged for any
undertakings of the union concerning its specific property
or rights, unless in respect of contemplation or
furtherance of a trade dispute.
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3.5.4 Privileges
A privilege means special honour or restricted
rights/benefits.
• A registered trade union has the right to make decision
together with the employer either by invitation from the
employer or by inducing the employer to arrive at a
decision.
• An employee can interfere in decision making by
organizing and launching strike against an employer. A
union can stop or cease a trade through the act of strike
in the case of employee union or lock-out for the case of
employer union.
• Such privilege is provided in Section 24 of the Trade
Unions Act. The consent awards a registered union’s
officers and members with immunity of not liable to
criminal prosecution for conspiracy and inducement.
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Liabilities can be interpreted as a state of being
responsible according to law.
3.5.3.1 LIABILITY IN TORT
• A registered trade union is liable for ‘… any tortuous act
alleged to have been committed by or on behalf of a
trade union’. (Sec. 22 (1) & (2), TUA)
3.5.3.2 LIABILITY TO CONTRACT
• Every registered trade union is liable on … any contract
entered into by it or by agent acting on behalf. But, they
are not so liable on any contract which is void or
unenforceable at law…”(Sec. 28, TUA)
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3.5.5 LIABILITIES
Liabilities can be interpreted as a state of being responsible according
to law.
3.5.5.1 Tortuous act
• Although earlier it was mentioned that a trade union will not be
charged for any act committed in contemplation or furtherance of a
trade dispute, however the law did states that a union, its trustees
and officials is responsible for torts done involving specific property
or rights of a trade union or its usage.
• As such, a trade union can be charged for the tort of nuisance if its
premise is being used in a way that can cause nuisance to its
neighbors. (Sec. 22 (1) & (2), TUA)
3.5.5.2 Contract
• Section 23 of the Trade Unions Act states that every registered
Trade Union shall be liable on any contract entered into by it or by
an agent acting on its behalf, except a contract which is void and
unenforceable at laws.
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3.5.4 PRIVILEGE
TUA Sec. 24 provides the privilege of
having objects in restraint of trade,
• “…shall not be deemed to be unlawful, so
as to render any member of such trade
union liable to criminal or conspiracy or
otherwise, or to render void or voidable
any agreement or trust…”
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3.5.6 DUTIES
Duties mean what one is obliged to do by
law or morality etc (responsibilities).
•
The basic duty of a trade union is to
comply with the law, particularly the
TUA itself i.e. the provisions that
governing/ regulating the registration,
formation, composition and
memberships.
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DUTIES … cont’d
(Sec 63, TUA) provides that all unions must comply to these provisions:
i) To have a registered office. (Sec. 37, TUA).
ii) To take a secret ballot (to make any decisions as listed by this
Act) (Sec. 40, TUA).
iii) To ensure that all the property to be vested in its trustees.
(Sec. 47, TUA)
iv) To ensure the registered trade union:
a) to keep a record (Sec. 57 (1) & (2), TUA)
b) to submit a general statement to DGTU (Sec. 57 (3), TUA)
• Therefore, any trade union which contravene those provisions shall
be guilty of an offence” – consequences : fine not exceeding
RM1,000/ or imprisonment not exceeding 6 months or both. (Sec 57
(4), TUA)
Norhayati Mohd Salleh
ADS 465
Discussion Questions:
1.
Describe any FOUR (4) factors why workers join trade unions
2.
Elaborate on the causes and effects of small size of unions in
Malaysia.
3.
Evaluate the necessity of registration for a trade union.
4.
Explain any four (4) problems might occur in a registration
process.
6. Evaluate the establishment of in–house unions in a country
7. Describe four (4) groups of Malaysian public sector employees who
are excluded from establishing and joining trade unions .
8. Elaborate on the causes and effects of a de-registered trade union.
Norhayati Mohd Salleh
ADS 465
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