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Recent Amendments to Trade Union and Industrial Relations laws

30 September 2024

A.  The Trade Unions (Amendment) Act 2024
 
The Trade Unions (Amendment) Act 2024 (“TUAA 2024”) came into operation on 15 September 2024.1 In summary, the main amendments to the Trade Unions Act 1959 (“TUA”) are as follows: 
  1. Definition of “trade union” 
The TUAA amends the definition of “trade union” under the TUA by removing reference to “within any particular establishment, trade, occupation or industry or within any similar trades, occupations or industries”. This is the most significant amendment under the TUAA as it has the effect of permitting multiplicity of trade unions which formation in the past, is limited by particular trades, occupations and industries.
 
This has impacted several provisions of the TUA, including the amalgamation of trade unions under Section 32, whereby the need for trade unions to be within similar trades, occupations and industries is removed. Amalgamation may now take place between two or more registered trade unions. Under the amended Section 74 of the TUA, a registered trade union may now also affiliate with a registered federation of trade unions irrespective of trades, occupations or industries so long as a resolution has been passed by majority of votes taken at a general meeting or a meeting of delegates, and upon the acceptance by the federation of such affiliation. 
  1. Deadline for Registration 
The TUAA extends the deadline for a trade union’s application to be registered under the TUA upon establishment from one month to six months. Additionally, the Director General of Trade Unions (“DGTU”) may grant an extension of this registration period to a period not exceeding 12 months in the aggregate – an increase from the original aggregate extension period of six months. 
  1. Penalty for Non-Compliance 
Section 18(8) of the TUA is amended by increasing the penalty for the non-compliance with any direction given by the Minister of Human Resources in conjunction with the suspension of a trade union under Section 18(1) of the TUA to a fine not exceeding RM10,000 (originally, RM3,000) and removing the liability to imprisonment. 
  1. Decreased Threshold for Strikes and Lock-Outs  
There are several amendments to Section 25A of the TUA. First, Section 25A(1)(a) is amended to decrease the threshold for a strike and/or lock-out. Now, only more than one-half of the votes, out of 60% of union members who are entitled to vote, in favour of the proposed strike and/or lock-out is required before a strike out and/or lock-out can be held. Previously, consent by secret ballot of at least two-thirds of its total number of members who are entitled to vote must be achieved before a strike and/or lock-out can be held. This amendment has significantly reduced the voting threshold for holding a strike and/or lock-out.
 
Secondly, the seven day time period before a strike can be called or a lockup declared after the results of the voting mentioned in the above paragraph has been submitted to the DGTU is now extended to seven business days.
 
Thirdly, the penalty for non-compliance with Section 25A(1) of the TUA is increased to a fine not exceeding RM5,000 (originally, RM2,000) and a further fine of RM200 (originally, RM 100) for every day during which such offence continues. 
  1. Membership of Minors  
The TUA now allows a person who attained the age of 15 years but is under the age of 21 years to be a member of a registered trade union. This is in line with the Children and Young Persons (Employment) Act 1966, which permits young persons attaining the age of 15 to be employed. 
  1. Changes to the Powers of the DGTU 
Certain provisions now limit the powers of the DGTU, including the following: 
  • Under the amended Section 40(6) of the TUA, the DGTU may now only prohibit a proposed strike and/or lock-out if he is satisfied that the same, if carried out, would contravene Sections 40 or 25A of the TUA or any of the provisions of Part IX of the Industrial Relations Act 1967 (“IRA”). Previously, the DGTU had the power to prohibit a strike and/or lock-out if it contravenes the TUA or any other written law. 

  • Under the amended Section 12 of the TUA, the DGTU’s power to refuse to register a trade union is now only exercisable if he is satisfied that the objects, rules and constitution of the trade union conflict with the provisions of the TUA or its regulations, or if the name under which the trade union is to be registered is identical to or resembles the name of other trade unions and is likely to be deceptive or will promote feelings of ill-will and hostility between the different races, religions or nationalities. Previously, the DGTU had a wider discretion to refuse to register a trade union. 

  • Under the amended Section 15 of the TUA, the DGTU’s powers to cancel a trade union’s certificate of registration is further limited. The DGTU may only do so, amongst others, if DGTU is satisfied that the certificate of registration was obtained by fraud or mistake, the membership of the trade union’s executive contravenes Section 28(1)(c) or (d) of the TUA, if the trade union’s funds are or have been expended for purposes prejudicial to or incompatible with the security of the Federation or any part thereof or public order, including for purposes which contravene Subsection 25A(2) or Section 52 of the TUA.   
The TUAA also confers new and additional enforcement powers on the DGTU. Five new provisions, namely Subsections 63A, 63B, 63C, 63D and 63E, are introduced to provide the DGTU with the power to investigate into any offence or enforce any provisions under the TUA or any regulations made thereunder, to take ancillary action, including appointing enforcement officers for the purposes of investigation and enforcement under the TUA or any regulations made thereunder and require any person to produce any article or document and inspect, make copies of, take extracts from, remove and detain such article or document in the course of investigation or examination. The DGTU may also seize any article or document produced and such article and document shall be admissible in evidence in any court proceedings. 
  1. Fourth Schedule 
A new Fourth Schedule is introduced to make offences under Chapters VI, VIA and VIB of the Penal Code an offence under Sections 15 and 76 of the TUA. 
  1. Liability imposed on President, Secretary, Treasurer and Other Officer of a Trade Union  
Under the newly introduced Section 65A, the president, secretary, treasurer or other officer of the trade union or person purporting to act on the instruction of the president, secretary, treasurer or such other officer of the trade union may be charged severally or jointly in the same proceedings with the trade union, and shall be liable to the same fine or penalty as an individual if the trade union is found guilty of the charge, unless he proves that such offence was committed without his knowledge, consent or connivance and he had taken all reasonable precautions and exercised due diligence to prevent the commission of the offence. 
The TUAA 2024 can be accessed here.

B.  The Industrial Relations (Amendment) Act 2020
 
Sections 4, 5(c), 5(d), 5(e), 5(f), 8(b), 10, 11(a), 11(b), 11(c), 18, 33 and 34 of the Industrial Relations (Amendment) Act 2020 (“IRAA 2020”) came into operation on 13 September 20242 in line with the amendments to the TUA coming into force.
 
The salient amendments to the IRA pursuant to the IRAA 2020 are as follows: 
  1. Changes to Recognition provisions 
The IRAA 2020 amends several sections in the IRA in relation to recognition of trade unions as follows: 
  • Under Section 9(3)(a) of the IRA, a new fetter is introduced whereby an employer or a trade union of employers upon whom a claim for recognition has been served to, within 21 days after the service of claim, accord recognition to the trade union subject to the scope of membership of the trade union of workmen concerned as on the date of claim and in accordance with the constitution of the trade union of workmen making the claim. Previously, the IRA did not require recognition to be accorded in consideration of scope of membership or in accordance with the trade union’s constitution. 

  • Under Section 11 of the IRA, where a trade union has been accorded recognition in respect of any workman or class of workmen whether by a decision of the Director General for Industrial Relations (“DGIR”) or otherwise, no other trade union shall make any claim for recognition in respect of the same workman or class of workmen unless a period of one year has elapsed (previously, three years) after such recognition has been accorded or the trade union which has been accorded recognition is no longer in existence. 
  1. Sole bargaining rights  
A New Section 12A is inserted into the IRA. This section requires that where there is more than one trade union of workmen who have been accorded recognition by the same employer to represent the same workmen or class of workmen, the trade unions may decide amongst themselves which trade union of workmen shall have the sole bargaining rights to represent the workmen or class of workmen concerned. Where no agreement can be reached, the employer or any of the trade unions concerned may apply to the DGIR to determine the trade union which is to have the sole bargaining rights.
 
A new Section 12B prohibits other trade unions, apart from the trade union which has obtained sole bargaining rights, from having the sole bargaining rights to represent such workmen or class of workmen until a period of three years has elapsed. 
  1. Collective bargaining  
Subsection 13(2) is amended. A new proviso is inserted which provides that where there is an existing collective agreement between an employer and a trade union of workmen which is still in force, an invitation to commence collective bargaining shall only be made 90days or less before the expiry of such collective agreement. 
  1. Reference of trade disputes to the Court  
Subsection 26(2) is amended to include a second proviso. The new proviso states that where the trade dispute relates to a refusal to commence collective bargaining or a deadlock in collective bargaining, reference to the Court shall not be made without the consent in writing of the parties unless: 
  1. the trade dispute relates to the first collective agreement;
  2. the trade dispute refers to any essential services specified in the First Schedule;
  3. the trade dispute would result in acute crisis if not resolved expeditiously; or
  4. the parties to the trade dispute are not acting in good faith to resolve the trade dispute expeditiously.
  1. First Schedule  
The First Schedule which sets out the essential services which are subject to additional requirements under the IRA, is amended to remove certain services, notably banking services, port, dock, harbour and airport services and undertakings, production, refining, storage, supply and distribution of fuel and lubricants, radio, communication services, including broadcasting and television services, transport services by land, water or air.
 
The IRAA 2020 can be accessed here.
 
With the coming into operation of sections 4, 5(c), 5(d), 5(e), 5(f), 8(b), 10, 11(a), 11(b), 11(c), 18, 33 and 34, all the provisions in the IRAA 2020 have been enforced.3
 
Alert by Sara Lau (Partner) of the Employment Law Practice of Skrine. 
 
3 The other provisions of the IRAA 2020 came into operation on 1 January 2021 pursuant to Gazette Notification P.U.(B) 695/2020.

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.

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