Media Statement
REPEAL MAS LAW THAT SUSPENDS OR DENY EXISTING WORKER AND TRADE
UNION RIGHTS AND ACCESS TO JUSTICE – Regular Employment and No to
Precarious Employment
We, the undersigned ____ civil society organizations, trade unions and concerned groups, are
disturbed by the Malaysian government’s unjust use of an Act of Parliament to suspend
and/or deny existing worker rights in law, including also access to justice mechanisms, for the
benefit of a private business and employer, being the Malaysian Airlines System Berhad(MAS
Bhd), now wholly owned private company by Malaysia’s sovereign wealth fund, Khazanah
Nasional Berhad, a company.
Malaysia tabled and passed speedily the Malaysian Airline System Berhad (Administration) Act
2015 [Act 765], which came into force on 20/2/2015. This Act is most unjust to workers and
trade unions of employees of the airline.
The Act, in section 11, states that “…on the appointment of the Administrator, a moratorium
shall take effect during which… (e) no proceedings and no execution or other legal process in
any court or tribunal may be commenced or continued with, and no distress may be levied,
against the Administered Companies or their property except with the prior written consent of
the Administrator;” – whereby the Administered company includes MAS Bhd, its wholly owned
subsidiaries and some partially owned subsidiaries. The Administrator was appointed on or
about 25/5/2015, and the period of administration could last for a maximum period of 2 years
commencing from the date of the appointment of the Administrator.
What is disturbing is that when administration and moratorium ends, all monies, assets and
business of MAS Bhd would most likely be transferred to a new legal entity Malaysian Airline
Berhad(MAB). MAS Bhd would most likely be left an empty shell.
There are currently many cases initiated and filed, now pending before access to justice
mechanisms, tribunal and courts between workers and MAS Bhd, the employer, against
claiming wrongful dismissal and/or other worker rights, or between trade unions and the MAS
Bhd. The effect of the moratorium is that all these actions and cases will stop, and not proceed
further until administration of MAS Bhd ends.
At the end, when moratorium is lifted, MAS Bhd would most likely be an empty shell – with no
work and no money. Hence, it will be workers and trade unions that will suffer. Workers and
Trade Unions do not just lose their right to justice, but also will have to shoulder other loses,
including all the monies utilized in amongst others lawyer fees and court fees, time and others.
For many workers, it may also mean loss of wages for the days they could not work because
they had to attend at relevant departments, tribunal or court. Hence, not only will workers and
trade unions be denied justice, but will suffer even more injustice by reason of this anti-worker
legislation.
Normally, when the employer has lost the ability to provide remedies, damages or
compensation to satisfy the claims of the worker, to ensure justice, the worker will proceed
with an application to join third parties to the suit, possibly the owners (Khazanah Nasional) or
others.
This MAS Act now unjustly prevents this, in amongst others, in section 25(2), which states that “
The Malaysia Airlines Berhad, the appointer and the Administrator shall not be named as a
party in any claim or application made or joined as a party in any proceeding commenced or
continued by or on behalf of any employees or former employees of the Administered
Companies pursuant to the Industrial Relations Act 1967 [Act 177], Employment Act 1955 [Act
265], Sabah Labour Ordinance 1950 [Sabah Cap. 67], Sarawak Labour Ordinance 1952 [Sarawak
Cap. 76] or the Trade Unions Act 1959 [Act 262].
In fact, section 25(1) says clearly, amongst others, that ‘…the Administered Companies, the
Administrator, appointer or the Malaysia Airlines Berhad shall not—(a) be regarded as the
successor, assignee or transferee or a successor employer to the Administered Companies;(b)
be liable for any obligation relating to any retirement plan or other post-employment benefit
plans in respect of the employees or former employees of the Administered Companies or any
predecessor of the Administered Companies that exists prior to the assumption of control or
appointment; or (c) be liable for any sum which is calculated by reference to a period of time
prior to the Malaysia Airlines Berhad becoming the employer of the person in question…’
Considering that the it is Khazanah Nasional that is the sole owner of MAS Bhd, and also the
new company MAB, clearly all that is happening is really nothing other than the ‘same person
changing shirts’ – and justice would demand that the new entity MAB or the owner, Khazanah,
should be justly taking over the obligation and responsibility of MAS Bhd especially for cases
involving worker and trade union rights.
The new MAB and MAS Bhd, both owned by Khazanah, really is nothing other that the same
owner forming a new company to escape responsibility and liability to their workers, is
apparent also by the following:a. Christoph Mueller, the new chief executive of MAS Bhd was appointed on 1/5/2015,
would later assume the same position with MAB. Same CEO for MAS Bhd, and new
MAB?
b. When the employees of MAS Bhd received their termination letters in early June 2015,
those that were offered employment by the new MAB, were offered a different
termination package from those not offered employment in MAB. Those offered
employment in MAB, which was to take effect from 1/9/2015, were asked to continue
coming in to work in MAS Bhd, while the others, about 6,000, were asked to stop
coming in to work with the assurance they will continue to receive normal salary but
could not commence employment with another employer before 31/8/2015 unless they
first get approval of MAS Bhd’s Human Resource Department. For many airline
employees, other income from allowances and such make up sometimes 50% or more
of their monthly take home income. Rightly, all employees of MAS Bhd, irrespective of
whether they will be later employed in MAB, should have received the same benefits
and ex-gratia on termination by MAS Bhd.
The above, amongst others, supports the contention that in the name of justice, MAB or
Khazanah or the Malaysian government should really take over the obligation of any or all
claims of employees and trade unions against MAS Bhd.
When an employer wants to reduce staff, they would justly retrench the number of workers
they no longer need – and there are just requirements that need to be complied in any
retrenchment exercise like the ‘Last In First Out’(LIFO) principle. Here, this is avoided by MAS
Bhd simply terminating all employees on 31/8/2015. Justly, the about 6,000 who were no
longer required to come into work since June, should have been laid off then and there and
paid all their entitlements.
The move of transferring the airline business to MAB, it also resulted in now regular employees
until retirement losing this right, and now many allegedly are ending up with precarious shortterm employment, some even on 3 or 6 months contract.
With the termination of all employees of Malaysia Airlines Systems Bhd (MAS Bhd), it also
means the demise of all in-house trade unions. The only national trade union, the National
Union of Flight Attendants Malaysia, who was successful in showing support of 62.73% of the
qualified employees, and the Minister made the order that NUFAM is now a recognized union
in MAS Bhd. Rather than accept this decision, MAS Bhd went for judicial review of the
Minister’s decision. NUFAM alleges that now only 2 out 10 executive committee members of
the Union have been offered employment in the new MAB. As such, this ‘restructuring exercise’
and law may be considered a union busting activity.
Many workers who are regular employees until retirement in MAS Bhd, who have been offered
employment in the new MAB find that they will now become precarious employees on short-
term contracts, some even on 3 or 6 months employment contracts. There is no law in Malaysia
that stipulates that short-term contract employees will continue as employees if the work they
were hired to do still exist. Now, employers can simply hire new workers for the same work.
Short-term and other precarious forms of employment also deter union formation or
involvement, deters workers from claiming rights and facilitates easier exploitation of workers.
Workers in Malaysia have families and dependents, and also many now have monthly loanrepayment obligations, and justly they should be provided secure regular employment until
retirement, whereby they still can be terminated for misconducts, or laid off where the
employers has to reduce jobs.
Whilst Malaysia says that it is concerned about the airline business, it has demonstrated a lack
of concern for the welfare and wellbeing of workers.
We therefore call
That the said Malaysian Airline System Berhad (Administration) Act 2015 be repealed, and
the effect this Act has had on workers and trade unions be reversed. No law should be
enacted to suspend/deny worker rights for selected employers;
That if the Malaysian Airlines is to be taken over by another entity, like the Malaysian Airlines
Berhad(MAB), workers should be employed by MAB as secure regular employees and not by
means of precarious employment like short-term contracts;
That if the Malaysian Airlines is desirous of reducing the number of employees, it be done by
letting go employees on the basis of Last In First Out(LIFO) principles and other established
legal principles;
That all pending cases with regard to labour matters, be it with workers or unions, shall be
justly resolved or settled forthwith by MAS Bhd, and its owners Khazanah Nasional;
That for all worker and trade union cases against MAS Bhd, MAB and Khazanah Nasional shall
agree to be joined in parties and assume obligations of MAS Bhd, ready to do justice as per
court/tribunal orders;
That Malaysia considers the rights, welfare and wellbeing of workers and their families are
just as important, if not more, than the wellbeing and profits of government-owned or linked
businesses.