Malaysia: The Trade Union (Amendment) Bill 2022 – What Are The Proposed Changes To The Trade Union Act 1959?

Introduction

The Trade Union (Amendment) Bill 2022 ("Bill") was passed on 5 October 2022 at the Dewan Rakyat (House of Representatives) and the Bill is currently pending revision and approval by the Dewan Negara (Senate).

In this update, we highlight some of the key amendments proposed to the Trade Union Act 1959 ("TUA") pursuant to the Bill, and the potential impacts and concerns that may arise from the proposed amendments.

Key Amendments Proposed to the TUA

1. Definition of "trade union"/ "union"

Based on the Explanatory Statement to the Bill, the main objective of the Bill is to remove restrictions on the formation of a trade union based on a particular establishment or similarity in trade, occupation, or industry and to allow multiplicity of trade unions within any establishment, trade, occupation, or industry.

Currently, under the TUA, "trade union" or "union" is defined as

Therefore, the Bill is now proposing to remove the limitation of trade unions/unions to a particular establishment, trade, occupation, or industry or to similar trades, occupations, or industries.

Further to the proposed change in definition, the Bill also proposes some consequential amendments in line with the stated objective of the Bill, which includes a proposal to allow any person who is a workman or an employer (including any workman who had been dismissed, discharged, retrenched, or retired) to be a member of any trade union, provided that the rules of the particular trade union allow for it, regardless of the establishment, trade, occupation or industry in respect of which the trade union is registered.

Therefore, pursuant to the proposed amendments, more than one trade union could be formed in a single workplace and that a single trade union may potentially have unlimited types of members which can be from a different workplace, trade, occupation, industry, and locality altogether. In other words, multiplicity of trade unions and omnibus trade unions will be allowed pursuant to the proposed amendments.

2. Time frame for registration of a trade union

The time frame for an application for registration of trade union is proposed to be increased from one month to six months; and the maximum extension of time which may be granted by the DGTU is proposed to be increased from six months in aggregate to 12 months in aggregate.

3. Refusal of registration of a trade union

The Bill proposes to limit the grounds for refusal of registration of a trade union. Pursuant to the proposed amendments, the DGTU would only be able refuse to register a trade union if:

1. He is satisfied that the objects, rules, and constitution of the trade union conflict with any provisions of the TUA or of any regulations; or
2. The name under which the trade union is to be registered is:
   1. Identical to that of any other existing trade union, or so nearly resembles the name of such other trade union as, in the opinion of the DGTU, is likely to deceive the public or the members of either trade union; or
   2. In the opinion of the DGTU, would promote feelings of ill-will and hostility between different races, religions, and nationalities,

The Bill also introduces a requirement for the DGTU to inform the trade union in writing of his refusal and grounds for such refusal if he decides to refuse the trade union.

4. Grounds for cancellation of certificate of registration of trade union

The Bill proposes to limit the grounds for cancellation of certificate of registration of a trade union. Pursuant to the proposed amendments, the DGTU would only be able to cancel or withdraw the certificate of registration of a trade union:

1. At the request of the trade union upon its dissolution; or
2. If the DGTU is satisfied:
   1. That the certificate of registration was obtained or issued by fraud or mistake;
   2. That the executive(s) of the trade union has been a member of the executive of any trade union which have had its registration cancelled or withdrawn because the funds of the trade union are or have been expended for purposes prejudicial to or incompatible with the security of Malaysia or public order, or because the trade union has been convicted of any offences specified in the Fourth Schedule (see below);
   3. That the executive(s) of the trade union has been convicted by any court of law of criminal breach of trust, extortion or intimidation, or of an offence relating to investment of funds, application of funds, or collection of funds and moneys under the TUA;
   4. That the funds of the trade union are or have been expended for purposes prejudicial to or incompatible with the security of Malaysia or public order, including for purposes of illegal strikes or lock-outs, or political objects; or
   5. That the trade union has ceased to exist;
3. Upon the amalgamation of the trade union or the voluntary dissolution of the trade union; or
4. If the trade union has been convicted of any of the offences specified in the new Fourth Schedule (which are offences against the state, offences relating to terrorism and offences of organised crime as specified under the Penal Code).

5. Power of the DGTU to suspend branch of trade union

The Bill seeks to entirely remove the power of the DGTU to suspend a branch of a trade union.

6. Threshold requirement for a trade union to organise a strike or declare a lock-out

The Bill seeks to lower the threshold requirement for a trade union to organise a strike or declare a lock-out by reducing the majority needed. Pursuant to the proposed amendments:

1. In respect of organising a strike, the trade union of workmen would be required to first obtain, through secret ballot, at least 60% from the total number of its members who are entitled to vote and in respect of whom the strike is to be called, and at least more than half of the votes received are in favour of the proposed strike.
2. In respect of declaring a lock-out, trade union of employers would be required to first obtain, through secret ballot, at least 60% votes from the total number of its members who are entitled to vote, and at least more than half of the votes received are in favour of the proposed lock-out.

The Bill also seeks to give more time for the DGTU to conduct any necessary investigations in relation to the proposed strike/lock-out, by amending the period from seven days to seven working days.

Further to that, the Bill also proposes to limit the grounds which the DGTU may rely on to direct the trade union not to commence the proposed strike/lock-out. Pursuant to the amendments, the DGTU may only direct the trade union not to commence the proposed strike/lock-out if he is satisfied that proposed strike/lock-out if carried out would contravene the provisions of the TUA relating to secret ballots, strikes and lock-outs or any provisions of Part IX of the Industrial Relations Act 1967 ("IRA") (which relates to trade disputes, strikes and lock-outs, and matters arising therefrom). Currently, the DGTU may direct the trade union not to commence the proposed strike/lock-out if he is satisfied that the proposed strike/lock-out if carried out would contravene the TUA or any other written law.

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