Earlier this year, the Federal Court delivered its decision in the much-publicised case of Ismail Nasaruddin Abdul Wahab v Malaysian Airline System Bhd [2022] 9 CLJ 801 involving the dismissal of the president of the National Union of Flight Attendants Malaysia (“NUFAM”), Ismail Nasaruddin Abdul Wahab (“Ismail”), by Malaysia Airline System Bhd (“MAS”) in 2013 over statements that he made about MAS in his capacity as president of NUFAM, whilst employed with MAS.
 
BACKGROUND FACTS
 
In 2013, cabin crew employees of MAS were disgruntled and unhappy with MAS over the implementation of weight loss and fleet reassignment exercises. NUFAM referred the issue pertaining to the fleet reassignment exercise to the Director General of Industrial Relations (“DGIR”) as a trade dispute pursuant to section 18 of the Industrial Relations Act 1967 (“IRA”), but both parties failed to resolve the dispute.
 
This led Ismail to issue a press statement on 7 November 2013 in his capacity as president of NUFAM. The press statement highlighted, amongst others, the plight of overworked and underpaid cabin crew workers; and urged MAS to enact policies to ensure the welfare and safety of cabin crew members.
 
The press statement also contained a call for the resignation of MAS’ chief executive officer for his inability to resolve the problems faced by the cabin crew workers.
 
One day after the issuance of the press statement, Ismail was suspended from employment. After issuing Ismail with a show cause letter and considering his reply to the same, MAS dismissed him with immediate effect on the ground that it could no longer repose the necessary trust and confidence to maintain him in its employment. Ismail commenced an action against MAS under section 20 of the IRA contending dismissal without just cause or excuse. The matter commenced in the Industrial Court and wound its way up to the Federal Court.
 
Industrial Court
 
The Industrial Court held that Ismail’s dismissal was with just cause and excuse.
 
According to the Industrial Court, subsections 4(1)¹ and 5(1)² of the IRA (which protect against victimisation for participating in trade union activities) are inapplicable in circumstances where the employee is found to be guilty of allegations of misconduct. The Industrial Court added that even if there is a breach of subsections 4(1) and 5(1) of the IRA, the remedy lies in section 8, and not a reference under section 20(1) of the IRA.
 
High Court
 
The High Court set aside the Industrial Court’s award and decided, amongst others, that section 22³ of the Trade Unions Act 1959 (“TUA”) and subsections 4(1) and 5(1) of the IRA are applicable in this case and protect union members who participate in lawful union activities.
 
Additionally, the High Court held that the contents of Ismail’s press statement relate to the objective of a trade union as reflected in section 2 of the TUA and did not involve any illegal acts. Hence, Ismail’s conduct could not be labelled as misconduct warranting dismissal.
 
The High Court also held that the Industrial Court had erred in holding that section 8 of the IRA could remedy a breach of subsections 4(1) and 5(1) of the IRA as section 8(1) specifically provides that where there is a complaint of a contravention of subsections 4 and 5 relating to the dismissal of a workman, the provisions of section 20 are to come into play.
 
Court of Appeal
 
The Court of Appeal overturned the decision of the High Court and held in favour of MAS. In its judgement, the Court of Appeal held, inter alia, that: 

DECISION OF THE FEDERAL COURT
 
Ismail obtained leave to appeal to the Federal Court on the following three questions of law:
 
Question 1: What is the extent of the protection afforded to an employee in respect of a charge of misconduct by an employer in relation to the employee's acts carried out in his capacity as a trade union officer or member, having regard to the relevant legal principles including sections 4, 5 and 59 of the IRA, section 8⁵ of the Employment Act 1955 (“EA”), sections 21 and 22 of the TUA and the International Labour Organisation's "Right to Organise and Collective Bargaining Convention 1949"?
 
Question 2: Whether the dismissal of a trade union leader for participating in trade union activities is an act of victimisation and unfair labour practice?
 
Question 3: Is a trade union officer speaking on behalf of the trade union obliged under the law to exhaust the trade dispute processes under sections 18, 19 and 26 of the IRA before issuing a press statement on the nature of such trade dispute? If the said trade union leader has not exhausted the above process, is the issuance of the said press statement an act of misconduct justifying dismissal?
 
According to the Federal Court, an activity that can properly be regarded as trade union activity is protected against reprisals by the employer. Acts which are closely connected to an employee’s role as a union representative ought to come within the scope of trade union activities protected by law. It is when those acts are knowingly or recklessly false, or when they become tainted by unreasonableness, malice or illegality, that they fall outside the scope of protection afforded by law.
 
Therefore, it is incumbent on the employer to undertake the exercise of assessing whether the conduct in question falls within the scope of trade union activity for the furtherance of or in the interest of trade union affairs or whether it exceeds such scope of activity.
 
The Federal Court said that the following considerations should assist both an employer and a workman to determine whether an alleged misconduct which involves engagement in trade union activities amounts to misconduct warranting disciplinary action or dismissal:
   
In the Federal Court’s judgment, the Court of Appeal had erred in focusing solely on Ismail’s obligations under his contract of employment or collective agreement without according any or sufficient consideration to his duties as president of NUFAM. It also failed to give any consideration as to whether the acts were in furtherance of trade union activity. In doing so, the Court of Appeal had disregarded the statutory provisions of the EA, IRA, and TUA. Their Lordships added that a contract of service cannot be used to contract out of the rights of employees to join, participate in or organise trade unions in contravention of the prohibition in section 8 of the EA.
 
The Federal Court accepted that the contents of the press statement issued by Ismail related wholly to problems faced by employees at the workplace and criticism of the management for failing to address such issues. As such, the issuance of the press statement amounted to participation in lawful union activities and was not unreasonable, malicious or knowingly or recklessly false. Hence, Ismail’s conduct cannot be labelled as misconduct warranting dismissal.
 
Following from the above analysis, the Federal Court answered the questions of law in the following terms:
 
Question 1: An employee ought not to be dismissed for participating in trade union activities carried out in his capacity as a trade union officer or member, unless the activities are extraneous to trade union affairs, or are carried out maliciously, or in a manner which knowingly or recklessly disregards the truth.
 
Question 2: The Federal Court did not answer this question as it had been dealt with in its answer to Question 1.
 
Question 3: The Federal Court answered the first part of this Question in the negative (i.e. that a trade union officer speaking on behalf of the trade union is not obliged under the law to exhaust the trade dispute processes under sections 18, 19 and 26 of the IRA before issuing a press statement on the nature of such trade dispute) but declined to answer the second part as it is set out in the provisions of the Act.
 
It is pertinent to note that while accepting that the provisions of the IRA, TUA, EA that are referred to in Question 1 afford protection to union members participating in trade union activities, the Federal Court held that subsection 5(2) of the IRA makes it clear that an employer is not precluded from refusing to employ, suspending, transferring, laying off or discharging an employee “for proper cause”.
 
COMMENTS
 
The Federal Court’s decision is undoubtedly significant as it provides helpful guidance on the matters to be considered in determining whether an act of alleged misconduct involving engagement in trade union activities amounts to misconduct that warrants disciplinary action or dismissal. This decision underlines employees’ rights to participate in union activities without fear of retaliation, coercion or interference from their employers, so long as such activities relate wholly to the welfare of employees, are carried out in good faith and not knowingly or recklessly false, malicious, illegal or unreasonable.
 
However, the Federal Court also made it clear that trade unionists do not have a carte blanche to act as they please. The courts will evaluate the actions of the trade union members and the surrounding facts to assess whether the actions were unreasonable, malicious or knowingly or recklessly false. It remains to be seen how Malaysian Courts would apply the considerations in situations where the union activities carried out are not wholly for the benefit of the employees/ union.
 
Article by Selvamalar Alagaratnam (Partner) and Grace Mah (Associate) of the Employment Practice of Skrine
 

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