Stoppage of Work: Complication on Formation
Charles Ramendran SPRa, Dr. Che Supian Mohd Norb, Mitra Rajaduraic & Dr. Lawrence
Arokiasamyd
Abstract
Globalization has stirred the environment of countries around the world as reformation
taking place on changing of employment environment and structures. This leads to trade
unions today face the challenge of representing workers effectively in the rapidly changing
conditions of the global economy Malaysia already in advanced stages of industrialized
country though the labour legislations which originated from post-colonial are still
maintained and too traditional to practice. This challenging scenario is bringing impact on
worker’s rights in organizing industrial actions in Malaysia to express their frustrations
towards unfair treatment by employers and might be endanger its survival in the future. This
paper argues on possibilities of organizing stoppage of work or also known as strike
considered as an ultimate action taken by workmen when the bargaining pertaining to the
contract of employment is failed to resolved in a harmony situation due to stringent and
antiquated labour legislations. This paper divided into four parts. In the first part definition
of strike and number of strikes is presented. Second, the procedures of forming a legal strike
are highlighted briefly. Third, obstacles in complying exhaustive procedure of strike are
discussed. Fourth, positive and negative implications of organizing strike are explained. The
paper concludes with the importance of organizing strike and mandatory responsiveness for
workmen.
KEYWORD: Strike, Employment, Labour legislations & workmen
aFaculty of Business and Finance,University Tunku Abdul Rahman, Malaysia, charlesr@utar.edu.my
b
School of Distance Learning Education, Universiti Sains Malaysia, Malaysia, supian@usm.my
c
School of Business Studies Tunku Abdul Rahman College, Malaysia, mitramanisha@tarc.edu.my
d
Faculty of Business & Information Science, UCSI University,lawrence.arokiasamy@ucsi.edu.my
Introduction
The right to strike is one of the essential means available to workers and their trade
unions for promotion of their economic and social interests (Chen Voon Shian, 2008). In
order to offset the employers’ powers in exploiting the rights of employees, strike is one of
the industrial actions that can be taken by employees with a means to affect the production
service of workplace.
According to Section 2 of Industrial Relations Act 1967, strike means “the cessation
of work by a body of workmen acting in combination or a concerted refusal or a refusal under
a common understanding of a member of workmen to continue work or to accept
employment, and includes any act or mission by a body of workmen acting in combination or
under a common understanding, which is intended to or does result in any limitation,
restriction, reduction or cessation of, or dilatoriness in the performance or execution of the
whole or any part of the duties connected with their employment”. In other words, strike is
one of the industrial actions that force employers to accept employee’s demands by stop to
work due to unsettlement of trade dispute. In the context of Malaysia legal system, strikes are
allowed as a weapon that could be adopted by workers to fight for their rights in the relations
to the terms and conditions under the member’s contract of employment. However, some of
the procedures must be followed or otherwise it would be illegal to conduct a strike.
In order to legally carry out the strike, the strike must be carried out under the
conditions of furtherance of trade dispute. It carries out a meaning that a conflict or trade
dispute must be occurred between employer and employee that cannot be solved in a
harmonious situation in relation to terms and conditions of employment or matters relating to
employment or non-employment. When a conflict between an employer and employee cannot
be solved in a harmonious situation, employee can expresses the dissatisfaction of the result
by stoppage of work. Firstly, they must be a member of registered trade union. Secondly,
they must comply with the regulatory procedures as stated in Trade Unions Act 1959,
Employment Act 1955 and Industrial Relations Act 1967. If any trade union or workers
conduct strikes unlawfully, those workers or trade unions involved are deemed to be reliable
for that action.
Basically, there are three fundamentals allow the workers form strike and trade union.
Section 2 of Trade Union Act 1959 provides that the objects of a trade union include “the
promotion, organization or financing a strike… in any trade or industry or the provision of
pay or other benefits of its members during a strike (Trade Union Act, 1959). This act state
out the objectives of a trade union is to promoting, organizing and financing the strike
provided by the strike is carried out for the welfare of affected employees.
Section 4 (1) of the Industrial Relations Act 1967 states that, in protecting the rights
of a workmen, stipulates that “no person shall interfere with, restrain or coerce a workmen…
in the exercise of his rights to form and assist in the formation of and join a trade union and to
participate in its lawful activities” (Industrial Relation Act, 1967). Employers cannot stop and
obstruct the employees to take industrial action.
Another section for protecting the workmen to strike is Employment Act 1955,
Section 8, employers cannot include any conditions that prohibit the employees to join any
relating activities to trade union in the contract of service, whether expressly or implied. The
door of labour for employees is very tough and tedious procedures. In the context of Malaysia
system, the substantive and procedural reasons may frighten away the employees to go for a
legal strike.
Table 1.0 Comparative Strike Figures, 1998-2008
Country
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Malaysia
12
11
11
13
4
2
3
3
1
2
2
Singapore
0
0
0
0
0
0
0
0
0
0
0
Kong
8
3
5
1
0
1
2
1
3
3
4
Thailand
8
16
13
5
6
5
2
9
2
5
n/a
Zealand
35
32
21
42
46
26
34
60
42
31
23
Korea
129
197
250
235
322
320
462
287
138
115
108
Hong
New
Source: Year Book of Labour Statistics, Geneva: ILO. www.laborsta.ilo.org and
www.mohr.gov.my
The figure shown above is the comparison in amount of strikes of several countries
with Malaysia. Initially, Malaysia has few times of strike, due to the economic crisis. It
shows the number of strikes is in a declining stage as time goes by. The “strike problem” in
Malaysia is not severe compared with New Zealand and Korea, due to the substantive and
procedural reasons where there are too many obstacles in order to conduct a strike legally.
Apart from that, most of the parties will think that workers should not go for strikes, although
he or she may gain some benefits due to legal strike, but others are suffering because the
workers bring inconvenience to others such as DGTU, employers, and also workers
themselves due to tedious process in organizing a strike. Therefore, the argument here is why
there is a complexity in organizing legal strike?
History of Strike
Early of the 1930s, the earliest strike was conducted by Parti Komunis Malaya by
gathering all the labours with low education level as a union to conduct underground
movement and even held several times of strikes. For that time, Malaysia known as Malaya
requires a lot of labour in tin mining and rubber plantation. The import of labour from China
and India are encouraged to fulfill the demand of labour. This creates a multi-racial society in
today Malaysia. However, the catalysts that cause the strike are low wages and awful
working conditions for these labours. The initial strike in early of 1930s is the strikes held in
Ulu Langat, Selangor, held by hundreds of Chinese rubber-tappers to fight for their wages
and living conditions. It spread over to other areas in Selangor, as well as the other states
rapidly. The numbers of labours involved in strikes are estimated to be 30,000 workers on
strikes are in states of Selangor and Negeri Sembilan, where 25,000 out of 30,000 are rubbertapper (Jomo and Todd, 1992).
Trade Union Enactment Act was introduced by government sector during the year of
1946 due to this issue. The Enactment of 1940 was reintroduced and implemented from 1947
onwards. In the year of 1946, a new department was known as the registry of trade unions
(Ministry of Human resource, 2011). The union movements grew rapidly and by the end of
1947, there were a total 195 113 union membership recorded in 298 trade unions (Sharma,
1996). On 1st June 1959, a new legislation, the Trade Unions Act 1959 was introduced
(Ministry of Human resource, 2011). The enactment was made for the year 1946 is to limit
the involvement of Parti Komunis Malaya in worker union activities, to minimize the size of
the union, limit the power or influence of worker union in order to investigate the actions of
the worker union by forcing them to register the worker union as a legal trade union. The
trade union have revived under the monitoring of British Government in the early year of
1950. (Roza Hazli Zakaria, 2001). The reorganization was also included the Malayan Trades
Union Council (now known as the Malaysian Trades Union Congress, MTUC). They were
function to uphold the strike and other industrial relations activities. After a long time
progress, the former prime minister, Tun Abdul Razak had introduced restrictive labor
legislation with the aim of maintaining stable and manageable industrial peace. In 1971
several amendments were made to the Industrial Relations Act and the Trade Unions Act.
(Roza Hazli Zakaria, 2001).
While, despite these restrictive amendments, the Razak government was also adopting
more accommodative or corporatist policies towards trade unions (Jomo and Todd, 1994).
Until 1950s, the trade union was tearing apart from communist and towards a trend of
political party connection. At that time, Trade Union Act 1959 prohibits the unions from
expanding their fund into “political objects” (TUA Section 52, 1959) and the trade union
leader cannot be the office-bearer for any political party (TUA Section 28, 1959).
The first strike conducted in Malaysia which the postal workers resorted to strike
when the government refused to abide by wage terms in the Industrial Court Awards, and this
was followed by the 23-day strike in 1962 of the Railway men Union of Malaya 9,000
railway workers went on strike to demand conversion of daily wages be changed to monthly
salaries. The strike lasted 22 days and all government workers were converted to monthly
wages. The railway belonged to and was operated by the government at the time, but has
since been corporatized. In May 1965, the Union of Fine Brigade Workers gave notice to
strike, and there were also threats of strikes in banks, schools, oil refineries and depots (Dr
Sharifah Suhanah Syed Ahmad, 2011). In addition, The Essential (Prohibition of Strikes and
Proscribed Industrial Actions) Regulations 1965 prohibited strikes in the public service and
public utility services.
Procedure to Form a Strike
All of the workers above 16 years old can join a trade union under Section 26(1) of
Trade Unions Act 1959, except for police, armed-force and prison service people. However,
the workers below 18 years old shall not be entitled to vote on secret ballot of strike, lockouts
and all matters relating to strikes, the imposition to levy, dissolution of the trade union or the
federation with which it is connected; and amendments of the rules of trade union where such
amendment results in increasing the liability of the members to contribute or in decreasing
the benefits to which members are entitled. In other words, trade union members above 16
but below 18 years old cannot participate in activities relating to strike.
Figure 1: Process of strike
The figure 1 shows the procedural circumstances of strikes. It first explains that
strikes can be held legally by entail taking a secret ballot in a decision on all matters under
Section 40(1) Industrial Relations Act 1967 (Here in after, the Act). Section 40(2) of supra
Act stated that there must be a resolution setting clearly about the issues and describing the
nature of the acts to be or not to be done. S25(A) of the Act requires two-third majority vote
of the total number of the member of trade union. The result of the secret ballot must be
submitted to the Director General of Trade Union (DGTU) within 14 days of its date taken.
The DGTU has empowered to inspect and scrutinise ballot papers and documents before
being satisfied that the secret ballot has been conducted properly. There will be compulsory
seven days waiting period (cooling of period) if the balloting successful and all procedures
are complied after the submission of the results is observed before a strike can be commence
[S40(5)]. The S40(3) define that the whole validity period of a secret ballot is 90 days after
the date on which the secret ballot has been taken and strike action beyond this period needs a
fresh ballot. S43(1) stated that there is a requirements to give notice for public and private
companies which are essential services which includes bank, transport, health,
communication and others services. Strike without the notice is unlawful. A strike must be
carried out by giving notice period of 42 days before the strike can actually commence.
Discussion
In a broader context, strike was very destructive for industrial firms. Thus, the key
strategic foundation for a corporate success in unprecedented rise of competition was to build
up contrast or commitment between top management and subordinates. Without this
foundation, corporate strategies and path will either crumble. A frequent mistake that we
observed from the past studies is that some of the local company have tried to ‘cheat’ their
way into labour force by using some small tricks to reduce or avoid massive salary and
exercise unethical business practice among the workforce.
However, this has been a particularly significant problem in recent years because the
corporate has undertaken a critical decision in terms of protecting their self neither interest
nor organization profits. Eventually, a mismatch between corporate and the workmen will
start creating strains in the relationship and become an obstacle to faster growth. As for a
Malaysian worker, they have alternative to settle underlying problem by using strike. Strike
and other forms of industrial action were targeted by government action even prior to
Malaysia’s independence in 1957 (Dr. Sharifah Suhanah Syed Ahmad, 2011).
Unfortunately, the incidence of strike had been decreased dramatically on the year
1998 to 2011, the possibilities of organizing was quite complicate. The trade union and the
workmen must understand that sometimes it is the Industrial Relations Act 1967 who is the
bottleneck for progressing; the unions must take appropriate steps with the Industrial court in
order to fulfill what they protesting. In Malaysia, even though workers have the right to form
and join trade unions (Section 5 of the Industrial Relations Act, 1967), their movements are
carefully monitored and controlled under various labor legislations. Three major pieces of
labour legislation the Employment Act, 1955; the Trade Unions Act, 1959 and the Industrial
Relations Act, 1967 control and regulate the activities of trade unions in Malaysia
(Ramasamy, N., 2008). As the Industrial court was the preliminary or the only solution to
empower settle industrial dispute. From the previous study, The Industrial Relations Act 1967
(the Act) introduced in Malaysia a new legal regime that discarded many common law
concepts regarding employment. (Cyrus V. Das, 1998).
First of all, the organization needs to have a registered trade union. As for the legal
requirement, within one month to form up the union, however, the form up of Trade Union
shall submit up the Application of Form B, while this must allocated for at least 7 members
under the DGTU act. A trade union of workmen, the majority of whose membership consists
of non-managerial or non-executive workers. Third, they need to print the Union rules
respectively. Hence, another core of formation was to provide the office, address and the
name, this consideration was fragmented under the court’s injunction. Therefore, the last step
of success was to prove out the occupation of office bearers.
In the context of Malaysian Industrial Relations, the Regulations also provide that
pending recognition, no workmen was to go on strike “for whatever reasons.” (Dr. Sharifah
Suhanah Syed Ahmad, 2011). The strike can only be held, with lead of this trade union,
without this practice. A lawful strike can be carried out only by a registered union. In the
other hand, any other illegal strike may lead towards a negative consequence. The whole
action of strike was actually protected under the framework. To shake things up a little in
slow growing in term of success, most of the trade unions behaviour must increasingly,
systematic, controlling their best practice when under going for the formulation of strike.
The next procedural reasons to prohibit of strike must relate with certain mandatory
procedures, this consist sections and certain empowered from the top level of Industrial court.
The preliminary steps for organizing a strike were to gain the 2/3 of its total member who is
entitled to vote. This condition stipulated under the S25 (a). Subsequently, the continue
practice was to submit the secret ballot to the Industrial court within 14days before it expired.
This was subject to S40 (1). While there must also clearly state out the objective of strike,
this resolution was stipulated under S40 (2). Furthermore, one the trade union already submit
the results of the ballot to DGTU, they will gain the empowerment to carry out all necessary
action which it was legal. They have the chance to refuse the registration under some
circumstance, thus, DGTU will stop people going for strike. Simultaneously, if the DGTU
approved the strike it is provided that a validity of 90 days from the date which the secret
ballot had been selected out.
Trade unions are also required to give notice to the employer prior to the
commencement of a strike. They will gain a 7 days cooling off period under S40 (5). This
was clearly stated that within 7days for DGTU to convince the workmen not to go for strike.
This regulation was a certain period arrangement for negotiation to reduce the tension
between the disputing parties. This typically becomes extraordinary problem for the trade
union to work for. The strike may have come to an end, if the conversation was successful.
An illegal strike will be commenced if carried out without prior notice. The notice
period before strike was around 42days, this was clearly stipulated under S43 (1). Eventually,
this was another limitation of the workmen under an organization; as for another alternative,
they might have involved themselves on picketing compare with strike. This whole practice
will take around 90 day; the waiting result was frustrating and a lot of different rules and
regulation to regulate the workmen activities. They must overcome different obstacle such
the formation of trade union, procedure of commencement strike. Therefore, the statutory
injunctions and judicial action was not favourable towards the workmen industrial. The
opportunity for a trade union and his workmen to launch a strike, that would declare as legal
considered slim.
Even though the above statutory provision seems legitimate and perfect, there are
some issues which might be questionable. From the provisions available in the Trade Unions
Act 1967, there are trade unions representing workmen working in essential services for
instances the transportation, water, fire, health and other public utilities industries which are
under the purview of the government deemed as having a significant impact on Malaysia’s
economy. According to the Trade Union Act 1967, it gives the authority to the DGTU to
conduct an investigation deemed necessary. As we know that the DGTU mostly did not favor
strike, he/she might advise the trade union not to proceed with the planned strike. Hence,
surface a question, should trade unions wait for DGTU’s green light to commence a strike or
the trade unions can call for strike after the 21 days notice and the 7 days of cooling period
from the secret ballot result? Apart from that, if workmen carry out a strike while the DGTU
later announce it as illegal, does it mean that the retrospective illegality strike is illegal? Due
to this uncertainty, a likely interpretation for this issue can be found in S.40 of Trade Unions
Act 1967. S.40 of the Act states that any trade union must wait for the result from DGTU’s
resolution on the strike ballot. According to S.40(6) of the Act, the DGTU is obliged to find
out whether the planned strike which might be carried out will contravene with the Act. If it
turns out to be, then DGTU will prohibit the trade union from commencing the planned
strike. Thus, we can know that Trade Union Act 1959 makes the requirements of strikes even
tougher to strengthen the barriers to conduct a strike besides not favorable to the development
of organizing a strike.
The legal restrictions served as the major barriers to growth for the strike. It is very
difficult for employees or workmen to form a strike as simple as that compared with other
countries. Again, the red tape and bureaucratic structure, rules and regulations make the
compliances are so hard for trade union’s members to conduct a strike. If the strike is
considered unlawful, workmen who conducting the strike is reliable for the consequences
such as penalties due to illegal strikes. This is the reason contributing to the declining of
strike issues in Malaysia. One of the factors that contribute to difficulties in forming a strike
is that workers in the informal sector are not protected under labour legislation, and are
therefore not enjoy, exercise or demand their fundamental rights (Ramasamy, 2008). Informal
sector workers, such as labour in construction sector, are being hired in verbal agreement
form, they do not know the procedures to exercise a legal strike to demand their rights. In
case, if they wish to fight for their rights, they tend to form an illegal strike because they may
lack of legal and procedural knowledge.
Arudsothy and Littler (1993) stated that unions are prohibited to operate across
industries and its boundaries, hence they are defined narrowly to ensure the minimization of
union size and reach. There is an exemplary situation where union was replaced by in-house
unions where the Electrical Industry Workers Union could not represent electronic workers in
MNC Electronics industry due to the mounting pressure exerted by foreign investors. Jomo
and Todd (1994) and Maimunah (2003) state that there were tactics employed by employers
in controlling the workforce as well as indefinitely delaying on union recognition acceptance,
promoting or victimize activists to get rid of them and eventually establish in-house unions
which is company-sponsored.
Implications
Apparently, forming a strike in Malaysia is in a declining stage after the financial
crisis in 1999. The decline in union density worldwide in recent times seems to signify a
weakening of trade union’s influence as well. (Aminuddin 2008; Bramble, 2001; Benson &
Zhu, 2008 & Heery, 2002).
According to Waddington & Whitson (1993) membership decline, structural changes
in employment, management practices, membership participation and democracy, the
legislative framework, and the political influence of unions have been under scrutiny in the
developed countries. Freedom of association in human rights, Article 10 of the Constitution
of Malaysia does develops a law relate to it. Relates to strike, employees or workmen have
the rights to strike for their own basic interests based on the contract of employment.
However, strikes may bring harm to industries and even cripple a country’s economy.
They pose a threat to business and subsequently bring misery to workers especially those who
are the breadwinners of a family. Besides, workers who are working in related industries
together with consumers do feel the pinch where they will shoulder the burden due to the
actions of strikes. Even though it is employees’ right to strike for any inequalities or
mistreatment, but their work stoppage can create chaos on the daily lives of many which
eventually impede economic growth.
The establishment of a recognized and active trade union is the pre-requisite for
industrial peace. Decisions made during the process in collective bargaining as well as
negotiations among unions and employers prove to be more influential. They present advice
together with support to avoid major conflicts due to differences in opinions Trade unions
have vital roles in safeguarding workers’ interest and assist in effective communication
between the management and workers. Union structure and size were heavily regulated by
law which was under the purview of the Director General of Trade Unions. He has the power
to decide on the application in union registration and possibilities on going for strike.
Conclusion
Malaysia legal system is emphasises on the harmony of the workplace. Even in the
case of furtherance dispute, Industrial Relations Act 1967 listing out the procedures to carry
out a legal strikes to ensure the industrial harmony. Therefore, the Act is to strengthen the
barriers of conducting the strikes, in the sense of preventing the action of strikes affecting the
workdays lost that will suffer the employers to carry out the daily operations as well as the
economic performance of Malaysia. However, industrial actions are still deemed to be
important to employees. In order to demand several rights they are entitled from employers,
but the employers refuse to fulfil the demand according to the terms and conditions of
employment contract, perhaps, it is the only way to voice out their rights through the
assistance of union but the tiresome procedures and antiquated act lead to the sceptical of
workers to give up in forming a legal strike.
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