Written Assignment:

Question 1 (History of Trade Union)

Prepared By

Muhammad Nurkhadzim bin Ahmad Sharibi (1727203)

Mohammad Hussaini Bin Mohammad Rozi (1729779)
Hazirah Binti Hassim (1727828)

Industrial Relations Law

Section 1

Prof Dr Nik Ahmad Kamal Nik Mahmod

11th November 2020

Introduction of Trade Union History in Malaysia before 1945

Trade union activities have generally started in Malaysia in 1894 with a group of Malay
seamen known as the “Kelab Kapitan- Kapitan dan Injinir”. The records also show that a
Pineapple Cutters’ Association was formed sometime in 1908. Trade union presence however
was significant during the early period of Japanese occupation when more Chinese and Indian
linked with Malayan People’s Anti Japanese Army bargain for higher wages and better
condition of work.

For Malaysia, the emergence of workers' struggles would have been in rubber
plantations and tin mines, whose labours were mostly Indian and Chinese workers. On other
hand, a fact since Malay workers opposed working in such mines and plantations, preferring
more self-employed workers, small enterprises, agriculture, fishing and the civil service. The
majority of staff in the civil service were Malays.

The origins of organised labour in the form of workers ' unions in Malaysia date back
to the 1920s. Workers then, mostly of Chinese and Indian ethnicity in the private sector and
Malay as civil service workers, organised what was known as General Labor Unions (GLUs).
Generally speaking, membership of the GLU was available to any worker, with no limitations
on any particular industry, sector or workplace, unlike what we have today in Malaysia.

Generally, GLUs were produced in various geographical areas across Malaya. They
attracted a lot of workers, and they were powerful in terms of getting support at that time. In
the struggle for rights, history indicates that several measures have been taken by the GLU,
including strikes. The labour movement was not limited to employer-employee concerns, but
also played an important role in the political, economic and socio-cultural life of the country.

The trade union movement, along with other pro-independence organizations, also was
heavily engaged in the fight for independence from the British. They were also involved in the
fight against Japanese occupying forces during the Second World War. An example of a union
was the Selangor Engineering Mechanics Association, which was registered in 1928, which
was possibly one of the first registered trade unions in Malaya.
Issue during This Period Of Wartime Labour Unrest
The British colonial powers, concerned about the increasing labour movement, decided
to try and regulate and manipulate it. The British colonial government was increasingly
concerned about the alleged impact of the Malayan Communist Party (MCP) and other pro-
independence parties on the labour movement. At that time, full production of rubber and tin
was virtually ensured by the high prices caused by wartime demands and unusually high quotas
set by international restriction. Both the rubber and tin industries were declared as 'essential
services' in June 1940. Full production at boom prices plus the lowering of real wages enabled
the rubber and tin mining interests to reap handsome profits.

The methods used by the British to disrupt and regulate the labour movement included
the introduction of legislation such as the 1940 Trade Union Ordinance and the appointment of
a Trade Union Counselor. One of the key goals of this Trade Union Ordinance was to stabilise
the labour condition in the hopes of growing productivity in order to support Britain's economy
and its war efforts. They were not worried about employers' or labour union interests.

At the time, the Malayan economy was directed towards serving Britain's wartime
needs. As such, labour and trade union interests and current struggles for better rights had to
be abolished and subordinated to what the British found more important as the Imperial
Defense. Malaya was still deemed a "dollar stockpile" for the British Empire, and the 1940
Ordinance was enacted to guarantee the continued influx of revenue to the British Empire.
According to a conservative estimate, the rubber and tin industries made an addition of more
than $150,000,000 to Malaya as national income in the first year of the war.

The issue during this period of time is all about wages. The workers demanded as high
as 40-50 per cent wage increase, which represented the target figure aiming at a positive
improvement of real wages, but they generally came to settle down at a lower rate of increase
in negotiation with their employers. The uniform wage policy of the government and the
European employers introduce rigidity into wage negotiations, in which any claim for a wage
increase was generally turned down.

The Struggle of Chinese and Indian Immigrants in the Trade Union Movement
 A notable feature of industrial disputes in this period played by Chinese Immigrants
was the part played by new labour associations in the process of collective bargaining. Some
of them were bold and confident, some hesitant and vacillating, and some had no following
among labourers. The Singapore Chinese Hairdressers' Association, which brought together
the Cantonese, Hokkienese, Kheh, Hailam, Henghua and Hokchiu hairdressers, won almost all
their claims after a one-week strike. The most important result was the adoption of a uniform
tribute system of wage payment in the Chinese hairdressing trade in Singapore.

Before the strike only the Cantonese hairdressers worked on tribute, receiving 40 per
cent of the total earning, while the rest of the hairdressers worked on monthly wages. Since
monthly wages compared unfavourably with the tribute system in terms of workers' income,
the general demand was for a uniform tribute system on the basis of equal share with the
employer. The achievement of this claim laid the foundation for further improvement of wages
in the post-war period when the hairdressers' share was successively raised to 60 per cent and
70 per cent.

Next, another major strike which involved the G.L.U. in some indirect way was the
Chinese rubber estate labourers' strike in December 1940, in the Bahau-Rompin area of Negeri
Sembilan. Dissatisfaction with the rubber planters' tardiness in granting higher wages led to
disputes on Bahau estates as early as May 1940. Before the December strike Chinese estate
labourers in the Bahau-Rompin area had formed the Negeri Sembilan Rubber Tung Yip Mutual
Aid Association with its centre at Bahau. The Labour Department revealed that the strike was
led by a 'committee of labourers' in contact with the G.L.U. he workers, who were paid a daily
rate of 85 cents plus 4 cents an lb. for scrap, demanded a daily rate of $1.10 for a task of 350-
400 trees.

In addition, on the Ladang Geddes Estate, 1,250 Chinese tapers were dissatisfied with
the 95 cents daily rate and started the strike. Labourers on other estates in the area soon joined
in the strike and came to involve about 3,000 labourers. A riot broke out on the Ladang Geddes
Estate in December when the police carried out an arrest order. One of the labourers arrested
was prosecuted for assisting in the management of an 'unlawful society', which might either be
the Mutual Aid Association or the G.L.U. Most of the labourers drifted
back to work on the offer of the management before the strike.
 As for the Indian immigrants, the first wave of strikes led by the Klang Indian
Association started in March 1941, on eight estates in the Klang area. Intermittent strikes by
Indian estate labourers in demand of equality with Chinese labourers. Strike committees were
formed on each estate and a petition presented setting out the strikers’ common demands. It
was the first time that Indian estate labourers formulated such a comprehensive list of demands
incorporating all their basic grievances. These demands included:

1. Parity of pay for Indian and Chinese labourers

2. The removal of estate staff who were brutal and their replacement with Tamil-speaking
staff
3. The provision of “proper” education for children
4. And end to the molesting of labourers’ womenfolk by Europeans and “black”
Europeans
5. The provision of proper medical facilities
6. The closing of toddy shops
7. The granting of freedom of speech and assembly
8. Free access to estates for relations and friends
9. Permission for labourers to mount bicycles in front of European managers and Asian
staff
10. The abolition of working days of 10 to 12 hours
11. No victimization of those presenting grievances
12. Permission for the labourers to have an association to look after their interests and put
forward their grievances

The strikes ended a few days later on the promise that the District Planters' Association
would meet in April to discuss their wage claims. The United Planting Association of Malaya
and the managers refused to negotiate and tried to force the strikers back to work. In February,
the UPAM had requested that the Klang District Indian Union be banned. The U.P.A.M. saw
in the first attempt of Indian estate labourers at trade unionism an ominous threat to the interests
of the rubber industry.

R.H. Nathan (Organizer) was detained on a Banishment Warrant on May 5 on charges

of 'offence against the State', which meant in fact nothing more than his trade union activities.
The strikes erupting after the detention of R.H. Nathan was largely the spontaneous reaction of
the Indian labourers. At this time, the number of strikers rose from 4,000 in early May to 15,000
on May 15, affecting rubber estates in Kuala Lumpur, Klang, Port Swettenham area and the
coastal districts also began to infect Negeri Sembilan.

On May 12 the Klang police station was surrounded by a large crowd of labourers, but
they were soon dispersed by baton charges. Clashes with the troops and police resulted in a
number of casualties, including 4 labourers killed. On May 16 a state of emergency was
declared in Selangor.A promise made by the High Commissioner, Sir Shenton Thomas, that
once the striker resumed work any representations they made would be fully considered. With
their most important leader gone and some 300 labourers imprisoned, the spontaneous strikes
could not last any longer. On May 21 the strikes virtually ended in Selangor.

Conclusion for this Period of Time

We can see in this period, central to the process of collective bargaining was the strike
weapon, whether used as a demonstration of protest or a trial of strength. Many of the strikes
were planned and led by labour organisations or workers' committees. The increasing
importance of organization characterized the use of the strike weapon in this period. Also, there
was a remarkable proliferation of labour organizations in 1940 - 1941. Altogether fifty-nine
labour associations were formed during the two years. For the first time in historical
associations of the estate, labourers appeared. These were the Malacca Rubber Workers'
Association, the Kinta Rubber Estate Employees' Association, the Sungai Siput Rubber Estate
Labourers' Association, the Negeri Sembilan Rubber Tung Yip Mutual Aid Association, and
the Sepang Valley Estate Indian Labourers Reform Association.
History of Trade Union in Malaysia after World War II (1946 – 1957)

Establishment of the Malaysian Trade Union Congress and Conference of Trade Union
After the Second World War in 1946, the government set up a Trade Union Advisers
Department with the appointment of a Registrar of Trade Unions to curb the communist. This
establishment was aimed to stop the communist which at that time in 1948, the government
declared First Emergency against insurgent communist activities. During Emergency, there
was no organization representing the right of workers, protecting their interest, and bringing
their views generally. But as at 1st January 1949, there were 163 registered Trade Unions with
a total membership of 68,814. To begin with, the strong base of Malayan Trade Union
Congress movement was actually a creature of British manipulation which emerged after
stronger unions, workers, and leaders were suppressed.

Then on 27th and 28th February 1949, a few union leaders under Conference of
Malayan Trade Unions Delegates who believed in free democratic trade unionism delegated a
conference of the trade union. The Delegates raised up their concern to form a central body
governing the workers for the interest of all Trade Unionists. Upon the opening of the
conference, 160 delegates from 83 of the 165 registered Trade Unions represented and many
leaders during that time supported the movement of Council of Trade Unions. Among some of
the notable leaders who attended the conference were Dato’ Onn bin Jaafar, Dato’ Tan Cheng
Lock, and Mr. R. Ramani.

The Outcomes of the Conference of Trade Union

The Conference of Malayan Trade Union Delegates had caused many positive
outcomes as a result of the commitment given by the delegates in forming an official Trade
Union body in Malaya. The Conference had passed a resolution to create peaceful negotiations
in all industrial and occupational disputes. This Conference will be responsible to recommend
to the government that they adopt more realistic and sympathetic solutions in dealing with the
issue of workers. Furthermore, the Conference also made an appointment of a small working
committee from among the member which the first Chairman was Mr. K C Chia, and the first
Secretary was Mr. V M N Menon. Among the terms that agreed upon by the Conference for
the establishment of Working Committee were to examine the Trade Union’s position and
ascertain what further steps could be taken to establish closer liaison between union and union.
Furthermore, it is the role of Working Committee to consider what type of machinery and
organization could be developed, which would allow regular consultation and discussion
between the Trade Union Movement and the Labour representatives serving on various
Government bodies and committees.

Not only that, the Trade Union Enactment was also passed during the Conference and
there are three important clauses included in the enactment. First, all trade unions had to be
registered. Second, federations of trade unions could only be formed by unions within the same
industry, and third, union officials had to be employed for a minimum of 3 years in the industry
which they represented. Subsequent to the introduction of the enactment, approximately 100
unions were deregistered and the Malayan Trade Union Congress (MTUC) emerged after a few
years later. The MTUC since then acted challenges to form Malayan Trade Union Congress

Although the establishment of MTUC seems easy as the British authorities who
were still involved in the government administration at that time accepted and supported the
idea of the Conference, there were still some British officials who were convinced that by
forming a federation of a trade union could be detrimental to Malaya. British officials who
supported the formation of the Trade Union movement gave Malaya an opportunity to bring
industrial peace to the country. On the other side, some British officials believed that Federation
of Trade Union would cause Indian domination thus contribute to racial hatred and social unrest
in Malaya. This is due to the fact that workers and labour primarily consisted of Indian and
Chinese origin which were brought by the British colonial while Malay labours basically
focused on self-employment, small businesses, farming, fishing and the civil service. Malay
workers at that time refused to work in such mines and plantations which already dominated
by Indian and Chinese.

There was also the third view that the establishment of Trade Union was aimed to
support communist insurgency and 1946’s social riots which referred by the British as the
second disaster in Malaya. Some also viewed that Trade Union is a threat to their positions as
leaders which by joining a larger standardized group would inevitably mean losing some of
their power and prestige. There was also doubt on question of finances as some of the groups
were not ready to contribute to its upkeep and they believed that such monies could better be
utilized rather than funding it to the federation of Trade Union. This is due to the fact that
being a member of the federation of Trade Union requires them to pay ‘subscription’ which
will be deducted automatically from their salary by employers and transferred to the unions.
Some members were uncertain and not confident with the directions that the Conference was
bringing to achieve the aims of labours.

However, the Working Committee and unofficial representative of Malayan Trade

Union Congress were responsible to campaign and carry out the message to all Unions so that
they understand that the Trade Union was established to promote the concept of workers
federation in Malaya. A worker alone is weak, but workers united are strong hence why the
appointed committees really worked hard to dispel all doubts among the workers that federation
of Trade Union was made to manipulate them. They believed that only together as strong
united workers will make them fight and get better rights and justice at their workplace. The
involvement and contribution of Bro Menon, Narayanan, and Rajagopal were among English
educated leaders who gained their inspiration from the West system while many Union leaders
especially those representing tradesmen were not English educated and they were not ready to
see changes in the trade union. The felt that joining a larger national body cannot bring any
interest in protecting their own members and they doubted the leadership of the Working
Committee which was not always agreed by dominant leaders of the Unions. But again, under
the right leadership and the will to fight and struggle despite all obstacles they were facing, the
Malaysian Trade Union Congress developed successfully because they believe there were
thousands of labours who realized the need for an official and standardized worker body to
represent their voices and inspirations. Not only that, the workers basically get benefit from
collective bargaining agreements which promise them for fixed salary increments and bonuses.

The advancement of Malaya in establishing Malayan Trade Union Congress at

that time can be considered as unexpected move as the British authorities never thought that
the movement was rising quite early thanks to Unionists and leaders who had the vision to push
for the formation of a Council of Trade Unions in the country. In 1951, the Malayan Trade
Union Congress was registered under the Societies Act 1951 as a society to represent workers
in specific industries during negotiations with employers. There are now approximately
500,000 members of the Unions affiliated with the MTUC representing all major industries and
sector. MTUC now has been recognized by the Government as the representative of workers
in Malaysia and remains its function as a consultant of the government on major changes in
labour laws through the National Joint Labour Advisory Council. At the international level,
MTUC also represents and involve at the International Labour Organization Conferences and
Meetings. That is the history of the Malayan Trade Union Congress as the oldest National
Centre representing workers in Malaysia.

Not everyone knows that Malayan Trade Union Congress had contributed their
role in the achievement of Independence from British colonial and they played significant
attribution to determine the future of Malaysia including the drafting of the Federal
Constitution of Malaysia. Among the functions and objectives of MTUC are to do everything
to promote the interest of its affiliated organizations, to improve the economic and social
conditions of workers and render them assistance. Moreover, it is MTUC’s role to ensure that
policies are developed and action is taken to ensure full employment, to work towards the
establishment of a minimum wage a legal maximum working week of 44 hours and to establish
training centres and extension of training facilities for workers.
How Effective is the Present Law to Control Trade Unionism

Trade unions have long served an important and vital role in the industry, acting as the
vanguard to protect the workers’ rights and financial livelihood, along with their health and
safety. The primary role of trade unions is to represent workers to ensure their welfare. The
union members also expect the leadership style to be consistent with meeting the union’s
policies and objectives.

There are several ways to measure the effectiveness of the present trade union laws and
a study initiated by the Department of Trade Union Affairs in collaboration with the Institute
of Labour Market Information and Analysis under the Ministry of Human Resources Malaysia
mentioned the effectiveness refers to the ability to be successful and produce the intended
results. Trade Union effectiveness is regarded as being caused by factors such as trade unions’
sustainability, its membership and leadership, its objectives, contributions, and achievements
or successes.

For the factors of union membership and leadership, the common ways to measure the
strength of a trade union is by the size of the membership as well as types of leadership. A trade
union that has a large membership among the labour force is considered effective if it has a
respectable leader. The effectiveness of a trade union is also determined by the degree and
character of support on the part of its structure. The capacity to deliver to its members is
determined by the success rate of collective bargaining and agreements. Other than that, The
ability of trade union to persevere in its working environment is an important factor that
contributes to trade union effectiveness.

A trade union is pointless and useless without members. The primary objective of a
trade union formation is to meet its members’ need by protecting and promoting their interest.
Trade unions also advocate for members’ rights as when representing them in court
proceedings, particularly in labour-related disputes. Thus, objective presented by the trade
unions that are consistent with their members’ aspirations does continue to their effectiveness
as a whole. Besides that, workers join a trade union partly because they believe that the entity
is able to contribute to their welfare and wellbeing with respect to their employment and the
common measures of trade union success include its ability in conducting collective bargaining
leading to sound agreements and favourable decisions in trade dispute. Trade Union that have
good track records and achievements exhibit a positive image to the existing and prospective
members. The good reputation will either directly or indirectly help in developing trust or
increase the interest of workers to join trade unions or remain as members.

To regulate the relations between workmen and employer. This is to promote good
industrial relations between the parties, to improve the workmen’s working conditions and
enhance their economic and social status which benefits the workmen and also to increase
productivity, in which the employer will benefit from it as mentioned in Section 2 (c) (i) of
Trade Union Act 1959. This is achieved through negotiation of collective bargaining to
conclude a collective agreement between employers and employees. The effectiveness of
Section 2(c)(i) of Trade Union Act 1959 is in the case of National Union of Bank Employees v
Director General of Trade Unions & Anor [2014] 3 MELR 614, where the court held that trade
union regulate the relationship between employer and employee to protect the rights of its
members by involving in the negotiation of collective bargaining and concluding a collective
agreement.

An employer is legally and morally bound to respect the employees’ right. This is
apparent in the Industrial Court decision in the case of Kesatuan Sekerja Industri Elektronik
Wilayah Barat Semenanjung Malaysia v Renesas Semiconductor KL Sdn Bhd [2016]. The
employer was found to have embarked on a planned course of action to stop one of its
employees from testifying for the union in the process of getting recognition. The learned
Chairman of the Industrial Court held that the employer is legally and morally bound to respect
the employees’ right to be involved in trade unionism and in the current case, the employer was
found to have breached the Trade Union Rights.

The Industrial Court made its ruling in accordance with equity, good science and having
regard to the substantial merits of the case. The court notes that employers are lawfully bound
to respect worker’s right to engage in unionism and to participate in the lawful activities of a
union. The Industrial Relations Act further makes the employer morally and ethically
constrained to do so. Article 8 of the Code of Conduct for Industrial Harmony dated 9 February
1975 declares that employers agree not to support or encourage any unfair labour practises such
as interfering with affairs of a Trade Union and the right of workers to organise, discriminate,
restrain, or coerce against any worker because of legitimate Trade Union activities and abuse
authority in any form. The protection of the right of the employees to unionise for their common
good is stated in Section 4(1) of the Industrial Relations Act 1967, no person shall interfere
with, restrain or coerce a workman or an employer 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.
Therefore, the court in the case of Kesatuan Sekerja Industri Elektronik Wilayah Barat
Semenanjung Malaysia v Renesas Semiconductor found that the company has violated the
employee’s right that needs to be protected under the law of trade unionism.

During the pandemic of Novel Corona Virus 2019, there was a mass laid off as what
happened with Malaysian Airlines when the company decided to get rid of about 6,000 workers
is an indication of the state of the labour movement. The workers that were being laid off were
all mostly unionised workers, with the unions affected having thousands of members, and yet
not a single dedicated mass protest took place. Even when pickets are carried out, the members
that do come out and participate in but a small percentage of the membership. The last few
large pickets or protests that occurred in Malaysia were from migrant workers, and many of
them are not even unionised. This shows the importance and effectiveness of the current law
to control trade unionism in Malaysia. When there are violations of worker or trade union
rights, many Malaysian unions still do not choose to struggle through pickets, strikes or
campaigns against employers. Instead, most of these unionised workers choose to lodge
complaints with relevant government institutions, which leads to court actions, and possibly
the appeal process, which can last for many years.

On the other hand, the Malaysian trade union movement is faced with a number of
challenges, such as neoliberal policies where in this regards, it does advocate the elimination
of government-imposed restrictions on involving or operating in several nations or nationalities
for movements of goods, capital and people and changing structures of employment. Malaysian
unions are in general small, fragmented and regional. This is also due to the strict requirements
of the Trade Union Act 1959.

Trade unions can be seen as important instruments for protecting workers’ interests but
yet the laws lacked strong involvement in national development policy and were quiet and
conservative. Malaysia continues with its divide and rule policy with the labour movement,
permitting only unions based on occupation, sector and industry, and disallowing the formation
of unions or federations across different sectors. Private and public sector workers alike are
still prevented from belonging to common unions. The Malaysian Trades Union Congress and
the Congress of Unions of Employees in the Public and Civil Services continue to be registered
as societies. The justification for the control of unions and labour rights is competitiveness, or
the need for Malaysia to attract foreign investors to set up factories, and hence create jobs and
income. Low wages and a passive workforce make Malaysia attractive, and the fact that there
have been no mass strikes for almost four or more decades is seen as a positive.

Labour related matters in Malaysia are governed by the Employment Act of 1955,
Industrial Relations Act of 1967 and the Trade Union Act 1959. There are several issues that
confront the labour movement and pose a great challenge to its ability to protect workers’
interests. These issues include implementation of technology without due regard to
implications on the workforce, unfavourable national labour laws, excluding trade unions from
many economic activities. Traditional work systems are changing, with an increasing focus on
flexibility of duty calls outside working hours. More women are joining the workforce;
therefore there is exposure of women to discrimination, such as low wages, harassment and
poor working conditions. Consumerism and environmentalism, and social issues such as drugs,
alcohol addiction, smoking and HIV/AIDS and health care need to widen the scope of coverage
for the employees.

The National Union of Bank Employees also voices out their opinion on the present
laws as Trade unions in our country play a vital role in the economy and in protecting workers
against injustices and exploitation. Hence, Labour laws with flaws must be amended to
accommodate Equitable Justice for all concerned. For example, the limit of RM 2, 000 to be
eligible for protection under the Employment Act 1955 must be repealed and the minimum
benefits stated therein must be enhanced, recognition and registrations of trade unions should
be simplified and the 6-month’s processing period reduced to accommodate unions’ priority,
shorter redress period for trade disputes and dismissals, dismissal cases should be referred to
the Industrial Court directly for a resolution.

In conclusion, regarding the effectiveness of the current law to control trade unionism
in Malaysia, Trade Unions need to be strengthened and consolidated to have a social dialogue
with government and employers to sort out and voice out about the current challenges to
achieve the above improvement in Labour Laws.
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