Chapter 2

Introduction to Trade Union

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 Learning Objectives
This chapter aims to provide clear understanding on issues
related to trade unions based on the Trade Unions Act 1959
(TUA). The TUA sets out the rules and regulations for trade
union to comply. At the end of this chapter, students should
be able to:
1. Define a trade union
2. Describe the objectives, types, categories, and
composition of a trade union
3. Identify the requirements to register a trade union
4. Elaborate on the effects of registration and de-registration
5. Describe the duties, immunity, rights, privileges and
powers of trade unions under the TUA 1959

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 Definition of a Trade Union
Part I Sec. 2 of the Trade Unions Act (TUA), 1959 defines:

a “trade union” or “union” as any association

or combination of workmen or employers, being
workmen whose place of work is in West
Malaysia, Sabah or Sarawak, as the case may
be, or employers, employing workmen in West
Malaysia, Sabah or Sarawak, as the case may be

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a) Within any particular establishment trade,
occupation or industry or within any similar
trades, occupations or industries; and
b) Whether temporary or permanent; and
c) Having among its objects one or more of the
following objects –
i. The regulation of relations between workmen and
employers, for the purposes of promoting good industrial
relations between workmen and employers, improving the
working conditions of workmen or enhancing their
economic and social status, or increasing productivity;

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ia) the regulation of relations between workmen and
workmen, or between employers and employers;
ii) the representation of either workmen or employers in
trade disputes;
iiA) the conducting of, or dealing with, trade disputes and
matters related thereto; or
iii) the promotion or organisation or financing of strikes or
lock-outs in any trade or industry or the provision of pay
or other benefits for its members during a strike or
lock-out;

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 Implications of Definition
Several implications/ interpretations can be made based
on the above definition as the following:
1. A union need not be called a union.
– It can be called an association.
– Particularly common where the members are professionals
or senior officers (i.e. UM Academic Staff Association,
Association of Maybank Class One Officer)
– All unions of employers are labelled association (i.e. Malayan
Commercial Banks Association);

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2. Membership of unions is limited
geographically, i.e. it must be confined to West Malaysia, or
Sabah, or Sarawak, and cannot embrace Malaysia as a whole;

3. Membership must be homogenous, i.e. they must

work in a particular establishment, trade, occupation or industry;

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4. Must bean association or combination of
employers or of employees;
5. Must be confined to the private sector or to the
public sector;
6. Any organisation or group of employers or
employees established to achieve one or
more of the objective stated in the Act is
considered having formed a trade union, and must therefore conform to
all legislative requirements of a trade union.

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 Trade Union Objectives
The legal objectives of a trade union are stipulated by Sec. 2, TUA 1959.

The general objectives of a trade union are as the following, (i.e. Rules and
Constitution of the Electrical Industry Workers Union):

1. To promote the industrial, social and intellectual interests of their

members;
2. To obtain and maintain for its members just and proper rates of
remuneration, security of employment and reasonable hours and
conditions of work;
3. To promote the material, social and educational welfare of the
members; and
4. To promote legislation affecting the interests of the members in
particular of trade unionist in general.

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Types/ Categories of a Trade Union
It is categorised as follows:

1. Public sector employees’ unions;

2. Private sector employees’ unions; and
3. Employers’ unions

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1. Public sector employees’ unions;
workers in the civil service, statutory
• The unions represent
bodies and local authorities
• The TUA provides that workers in the public sector can only
form and join unions whose members are in the same
ministry, department or occupation – to ensure discussions
are possible with the employer on a logical basis
• Does not involve in collective bargaining
• Large Union, i.e. 2003 - National Union of the Teaching
Profession (104,000 members), the Malayan Nurses Union (12, 000
members), The Malayan Technical Services Union (6,000 members)
• Small union, i.e. Dental Technicians Union (295 members), Union of
Industrial Relations Officers, MHR (73 members)

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2. Private sector employees’ unions
• Are either national or in-house
• Attempt to cover all workers in the same industry,
trade or occupation

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a) National trade union:
• Not necessarily large in term of membership
• The no. of membership depends on the no. of
potential members and the degree of success of the
trade officers in persuading potential members to
join the trade union
• Do not cover workers throughout Malaysia

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b) In-house union:
• Is one where members are all employed by the same employer

• Members can and will be involved in different occupations

• Approximately 36% of private sector union members

belong to in-house unions, i.e. 2003 – 313 in-house unions (145, 600 members)
• Most had membership of less than 500
• Large in-house unions, i.e. Malaysian Airlines Employees Union (> 7, 000
members), the UMW Employees Union (> 2,000 members), Alam Flora Employees
Union (2, 200 members, Proton Employees Union (nearly 5, 000 members)

• Largest unions – i.e. Telekom Bhd Employees Union, TNB Employees Union

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 Reasons for increase no. of in-house union:
i. most new unions being registered are in-house unions,
ii. has been affected by the attitudes of employers and the
government – are more amenable to and more co-operative with
such unions, i.e. the government believes the in-house unions are more
likely to be appreciative of the situation in their workplace and
problems of their employer and less influenced by outsiders, i.e. the
employer will encourage the establishment of the in-house union when
his workers start to join the national union
iii. a closer relationship between employer and union
which will lead to more peaceful industrial relations – will develop
co-operative spirits and lead to higher levels of productivity, and should
encourage more and continued foreign investmests in the country

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Disadvantages of in-house union (Latiff Sher Mohamed, 1988):
1. Are generally weak – membership is limited and confined to workers in one
particular co.
2. The leadership are chosen from the small no. of
members – is possible for the employer to try to exploit such leaders
3. The financial strength will not enable it to carry out its normal
trade union activities
4. Fear of victimisation among union leaders in relation to
promotion, termination of employment, transfers and assignment of
duties which are management prerogatives
5. Unable to provide scholarship and other social benefits
for their members

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3. Employers’ unions
– Mostly known as associations
large and powerful national trade
– In response to the
unions of employees
– Main objectives:
i. To promote and protect the interests of their members;
ii. To negotiate and deal with trade unions of employees;
iii. To represent their members in any trade dispute
between an individual member and the employees’ union

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– The rules to form and join a trade union: similar for
both unions of employees and employers – must apply to the
Director-General of Trade Union
– Members: must be from the same trade, industry or
occupation
– 2003: 14 employers’ union, 9 are in West Malaysia
– Most active:
i. Malayan Agricultural Producers’ Association (MAPA) – Plantation
industry;
ii. Commercial Employers’ Association of Peninsular Malaysia –
Commercial industry;
iii. Malayan Commercial Banks’ Association (MCBA) – Banking industry;
iv. Association of Insurance Employers (AIE) – Insurance industry

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 Composition of a Trade Union
Composition of trade unions is based on membership. It is the impact of the
definition in the TUA 1959 which requires a union may only be composed of:
i. Either employers or employees;
ii. Employers/ employees either in Sabah or Sarawak or West
Malaysia;
iii. Employers/ employees in the private sector or employees in the
public sector;
iv. Employers within a particular industry or trade or
within similar industry or trade;
v. Employees within a particular establishment/
industries/ trades/ occupations or within similar
establishment/ industries/ trades/ occupations

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Requirement to register a Trade Union
a process where a trade union
• Registration is
applies for registration and a certificate of
registration will be issued by the authority
necessary for a union under the TUA 1959
• Registration is
although it does not insist on the registration of every union
• The necessity to register every established trade union can be seen from
several provisions stipulated in the TUA 1959 i.e. Section 8, 12, 19, 59,
and 67.

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 The requirements to register a trade union are as the
following:
i. Mustapply to the Director-General of the Trade
Unions for registration within one month of establishing the
union, should the period of one month be insufficient, a
request for an extension of up to six months can be made to the
Director-General
ii. The application form must be signed by at least seven
members, which is the minimum no. needed to form a union
iii. The application form must be accompanied by the required
fees and a printed copy of the rules or constitution of
the union

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iv. The application must include:
a) The name of the union and its address;
b) The names, addresses, and occupations of the
members making the application; and
c) The names, ages, addresses, and occupations of the
union’s officers;
d) Additional information i.e. copy of the minutes of the
inaugural meeting of the workers who wish to
establish the union

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 Circumstances where the DGTU will refuse
registration:
i. If any of the union’s objectives are unlawful;
ii. If any part of the union’s constitution conflicts with the
Trade Unions Act;
iii. If the name of the union is undesirable or identical
to another already existing or if the name is
deceiving;
iv. union is likely to be used for unlawful
If the
purposes.
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 Effects of de-registration
De-registration puts a union disadvantages as follows:
i. It is regarded as unlawful entity and stop from
enjoying all rights, immunities and privileges
of registered unions. However, the union is responsible
for all liabilities incurred or to be incurred by it.
ii. The union or members cannot take part in any
trade disputes, promote, organise, or finance any
strike, or lockout.

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iii. The union is to be dissolved and the funds disposed
according to its rules;

iv. No one can participate in the management

or organisation of the union except
those

who are assigned to deal with dissolution of

union, disposal of funds or appeal against
de-registration.

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 Summary
The discussion on this chapter is based on the
Part I, II, III, IV, and V of the TUA. It covers all
matters which are pertinent to the
establishment and management of trade unions
in Malaysia.

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 Duties
- same of the objects as stipulated in Section 2,
TUA
 IMMUNITIES OF A REGISTERED
TRADE UNION
Immunity From Civil Suit In Certain Cases (Sec 21
TUA)
• No suit or legal proceeding shall be maintainable
at any civil court against registered trade union
accept in certain cases such as breaching a
contract of an employment, interference with the
trade, business or employment of others, and
interference with the rights of others to dispose
of his capital or his labor as he wills.
Interpretation:
• Under normal circumstances, an employer can take civil action
against his employees when they are found to join a strike. Why?
It is because they do not go to work. So.. By involving
themselves in the strike, the employees had breached their
contract of service.
• However, if the strike is legal and done in
contemplation or furtherance of a trade
dispute, then no action shall be taken against
the employee as the law provides them
immunity in civil suit.
• It must NOT be a coercive action unconnected
with a trade dispute
• E.g. A union objects to a man’s political belief
and tells the employer to dismiss him FAILING
WHICH its members will go on STRIKE. Since
there is no trade dispute here, the union
and its officers will not enjoy the protection.
Immunity From Liability In Tort (Tortuous Act) Sec 22
TUA
• Tort covers subject such as trespass to the person
(assault), negligence, defamation and trespass to
land and nuisance (i.e. cause harm to the peaceful
and harmonious live of its neighbours).
• A registered trade union is immune from any
tortuous act allegation. Its trustees and officials are
protected too.
• Tortuous act refers to any act which can make a
person liable to pay compensation on damages
other than breaching the contract of service.
• Interpretation: The trade union, its trustees and
officials do not need to pay compensation to the
employer eventhough the members of trade
union do not go to work due to participating in
strike and cause a loss to the employer.
• Such allegation will not be heard or
entertained by any court, unless in the case
for breach of contract such as compensation
payment prior to retrenchment practices.
• No consideration will be acknowledged for
any undertakings of the union concerning its
specific property or rights, unless in respect of
contemplation or furtherance of a trade
dispute.
 RIGHTS OF A TRADE UNION
The rights are outlined by Part IV of TUA 1959.
1. Legal Action
• a union to institute legal action and similarly the
union too can be charged Sec 25 (1) TUA.
• an unregistered union can be charged under
the name it used or the name it is referred to
Sec 25 (2) TUA
• a de-registered union can also be charged
under the name it was formerly registered Sec
25 (3) TUA
2. Financial Support
• The financing of trade union – is supported by its
members through entrance fee payment and
monthly membership subscription
• Any fines ordered to be paid by a trade union – can
be derived from the sales of its movable
properties or any monetary held under its
trust fund in accordance with the related criminal
procedure Sec 25(5) TUA
3. Representation In Court Proceeding
• A trade union must appear in any civil or
criminal proceeding Sec 25(6) TUA
• The union to be represented by its executive,
solicitor or advocate.
4. Industrial Action
• Both trade union of employee and employer can
take actions to stop a trade by launching legal
strike and lock out Sec 25A
• However, the provision also states that penalties
are enforceable if a trade union does not
comply with the requirements or the
regulations.
 PRIVILEGE OF A REGISTERED TRADE
UNION
• Privilege is provided in Section 24 TUA.
• The consent awards a registered union’s
officers and members with immunity of not
liable to criminal prosecution for conspiracy
and inducement.
• A registered trade union has the right to
make decision together with the employer
either by invitation from the employer or by
inducing the employer to arrive at a decision.
• An employee can interfere in decision making
by organizing and launching strike against an
employer.
• A union can stop or cease a trade through the
act of strike in the case of employee union or
lock-out for the case of employer union.
 POWERS OF A TRADE UNION
1. Run Activities / Perform Roles (Sec. 2, TUA)
a) To regulate relations between employers and
employees
b) To represent employers/employees in trade
disputes
c) To conduct/deal with trade disputes and related
matters
d) To promote, organize or finance strikes/lockouts
and provide pay/other benefits during industrial
actions
2. Collect Money Or Other Property For
Its Purpose Of The Union (Sec. 11, TUA)
i.e. Collects Entrance Fee And Monthly
Subscription From The Members.
3. Organize Its Funds And Expenditure To
a. purchase or take upon lease for the purposes of
the union any land or building and, subject to any
written law or other law which may be applicable, to
sell, exchange, charge or lease any such land or
building which may be so purchased
b. Invest in any securities or in any loans to any
company in accordance with any law relating to
trustees
c. Deposit its funds in any bank incorporated in
Malaysia or any finance company which is a
subsidiary company of such bank
d. Invest its funds in any registered cooperative
society or in any commercial, industrial or
agricultural undertaking or banking enterprise,
which is incorporated and operating in Malaysia
(Sec. 49, TUA) with the prior written approval of the
Minister
4. Other
a. Employ and pay a secretary, treasurer and other
persons as may be necessary for its purpose (Sec. 24,
TUA)
b. Be amalgamated with one or more registered
union within similar trades or occupations or
industries (sec. 32, 34 & 36, TUA)
c. Form a union federation of trade unions with one
or more registered unions in a similar trade or
occupation or industry (Sec 72, TUA)
d. Affiliate itself with a registered federation of
trade unions representing unions in similar
trade or occupation or industry
e. Form or to affiliate with local or foreign
‘consultative body’ with the prior written
permission of the Director General of Trade
Unions, and subject to such conditions as the
Director General may impose.
f. Transfer any engagement/agreement to
another trade union within similar trades or
occupations or industries (Sec. 33, TUA)
g. Change its name with the consent of not less
than two-thirds of the total number of its
members.
LIABILITIES ENDURE BY A REGISTERED
TRADE UNION
Tortuous Act
• Although earlier it was mentioned that a trade
union will not be charged for any act committed
in contemplation or furtherance of a trade
dispute, HOWEVER the law did states that a
union, its trustees and officials are
responsible for torts done involving
specific property or rights of a trade
union or its usage.
• A trade union can be charged for the tort of nuisance
such as in:
• Situation 1: If its premise is being used in a way that
can cause nuisance to its neighbors (interferes the
enjoyment of their home). E.g. long grass, noice etc
• Situation 2: If a van belongs to a union being driven
negligently by a member and it goes off the road and
injures a passerby. Therefore, he may bring an action
for damages against the union and the union cannot
disclaim liability in such tort
Contract
• Section 23 TUA
• Every registered trade union shall be LIABLE
on any contract entered into by it or by an
agent acting on its behalf, EXCEPT a contract
which is void and unenforceable at law.
 SUMMARY
• The provisions on protections for trade union as
stipulated in Part IV TUA are AVAILABLE ONLY for
registered trade union, where they are concern of
rights, power or jurisdiction, immunities and
privileges.
• Any unregistered trade unions are DISQUALIFIED
from such protections.
• HOWEVER, a registered trade union is also LIABLE
for tortuous act and any contract it entered into.