CHAPTER FOUR

THE LAW RELATED TO TRADE UNION

 Formation of a Union
The freedom to form a trade union for the protection of
one’s interest is a fundamental human right
The employers and employees who wish to form a union
will first convene a general meeting which may be
attended by about 20 founder members or so.
During this meeting, a resolution is passed to form a
union and adopt:
 The rules and constitution of the union which should
include all the matters specified in the 1st schedule of
TUA.
 The election of a pro-team committee comprising the
president, secretary and 4 or more committee members
 Application for Registration of a
Trade Union
Application for registration must be made within 1 month
of the establishment
7 members must signed the prescribe forms that require
details on:
 Name the trade union and address of its head quarters.
 Name, addresses and occupations of those members
making the application.
 Names, ages, addresses and occupations of union’s
officers.
 A printed copy of the rules or constitution of the trade
union.
 Other information ad required by the DGTU:
 Copy of the minutes of the inaugural meeting.
 Consequences of Failure to
Register
Section 19 of TUA. Failure to apply for registration
in due time or if the registration is refused,
withdrawn or cancelled:
i. The trade union is considered to be an unlawful
association.
ii. Members are forbidden to participate, promote,
organize or finance any strike or lock out.
iii. The trade union has to be dissolved and all of is
funds disposed in accordance with the rules
iv. No person shall, except for purpose of dissolving the
union and disposing of its funds, take part in its mgt
or organisation or act on behalf of the union
 Refusal of Registration of a Trade
Union
• The DGTU will refuse registration in the following
circumstances:
i. If any of the union’s objectives are unlawful
ii. If any part of the union’s constitution conflicts with
the TUA.
iii. If the name of the union is undesirable or identical
to another already existing, or if the name is
deceiving.
iv. If he is satisfied that there is in existence a union
representing workmen in that particular trade,
occupation or industry.
v. If the union is likely to be used for unlawful
purposes.
 Cancellation of Registration of a
Trade Union
• DGTU is also empowered to withdraw and cancel or
deregister a union’s registration on the following
grounds:
1. On the union’s own request.
2. The certificate of registration was obtained through
fraud.
3. The objects or rule or constitution of the trade union is
contrary to the law.
4. If the union was used, is being used or will be used for
purposes contrary to the law or to the rules and
regulations of the union itself.
Cancellation of Registration of a
Trade Union
6. If the union has broken the provision under TUA or any rules
and regulations as provided under TUA or any rules and
regulations of union or formulate any rules and regulations
that is contrary to that provision and continuously being
enforced.
7. If the union funds is used illegally or for purposes which is
contrary to the law or to the rules and regulations of the
union.
8. If the union is no more in existence.
9. If there is mor e than one union registered in the particular
trade, DGTU can cancel the certificate of registration of union
with lesser members (TUA 1959, Section 15).
 Dissolution of a Trade Union
• A trade union may voluntarily dissolve itself in accordance with its
rules
• The decision to dissolve a union must be made by a secret ballot
with the consent of at least 75% of members entitled to vote.
• The remaining assets of the union will be distributed amongst the
member or in accordance with the resolution passed by members
in the ballot.
• Notice of dissolution, signed by the secretary and 7 members must
be sent to the DGTU within 14 days of the dissolution.
• If the DGTU is satisfied that the dissolution has been effected
properly, he will register the dissolution and the union’s certificate
is cancelled.
 De-registration for Trade Union
• DGTU also has the power to de-register the
registration of the trade union on the
following grounds:
1. The certificate of registration was obtained
through fraud or mistake
2. The union fails to meet the obligations under
the Trade Union Act 1959.
3. If the union was used, is being used or will be
used for purposes contrary to the law or to the
rules and regulations of the union itself.
 Appeal to the Minister

• S71A of TUA provides that any person who is

dissatisfied with the opinion, order, declaration,
refusal, cancellation, withdrawal, or decision of
DGTU, may within 30 days appeal to the
Minister of Human Resources against the same.
• Although the decision of the Minister on such
appeal is “final and conclusive”, the aggrieved
person is at liberty to file certiorari proceedings
in the High Court to challenge such decision.
 MEMBERSHIP STRUCTURE OF TRADE UNIONS IN MALAYSIA
Trade Unions

Workers Unions Employers Unions

Peninsular Malaysia Sarawak Sabah

Government Sector Statutory Bodies (SB) Private Sector

Local Authorities (LA)
Particular/
Establishment
Particular Particular Particular Particular SB or
Particular/
Occupation Department Ministry one or more LA
Similar Trades

Particular/ Similar
Occupation
Particular/
Similar Industries
 Types Of Unions
• Unions in Malaysia may be categorized as
follows:
• Public sector employees’ unions.
• Private sector employees’ unions.
• National unions.
• In-house unions.
• Employers unions.
 Public Sector Employees’ Unions
• Consists of the public service (government
sector), statutory bodies and local authorities.
• Can form and become members of a union either
in the same ministry department or occupation.
• Discussion regarding wages and other
compensations is done at the national level
through Congress of the Unions of Employees in
the Public and Civil Services (CUEPACS).
• Not involved in CB.
 Public Sector Employees’ Unions
• Categories that are not allowed to join union
at all:
• Members of the Royal Malaysian police
• Members of any prison service
• Members of the Armed Forces
• Public officers engaged in a confidential or
security capacity
• Public officers holding any post in the Managerial
and Professional Group
 Private Sector Employees’ Unions
• Consists of workers that fall within the same
or similar occupation, trade or industry.
• Have the right to bargain on matters
pertaining to wages, allowances,
compensations and others.
• Have the right to take industrial actions such
as picket, strikes and other actions as
provided by the law.
 Private Sector Employees’ Unions
• National Unions:
o Attempt cover all workers in the same industry,
trade or occupation.
o Sophisticated structure with regional branches
and committees.
o Geographically limited.
 Private Sector Employees’ Unions
• In- House Unions:
o Formed in an organization for the benefit of
workers who work in that particular organization.
Members are all employed by the same employer.
o Workers from other organization are not allowed
to become members.
o In house unions are better acquainted with and
committed to the objectives and operation of the
establishment in which their members work
 Private Sector Employees’ Unions
• In- House Unions:
o Disadvantages:
 Weak as membership is limited.
 Exploitation by employers.
 Financial strength.
 Victimization among union leaders.
 Capability of promoting social benefits.
 Employers Unions
• Consists of a united group of employers formed
to achieve various objectives of which one of the
objectives is to establish a mutual policy in
bargaining with the worker’s union.
• Strengthens bargaining power:
o Promote and protect the interests of members.
o To negotiate and deal with trade unions of
employees.
o To represent members in any trade disputes.
• The employers’ Unions are affiliated to the Malaysia
Employers Federation (MEF), which is registered as a
society.
 CURRENT SCENARIO

2005 2007 2009 2012 2014

Sector
No. No. No. No. No.

Private 390 407 436 441 481

Government 127 130 137 144 145

Statutory
Bodies and 91 92 93 103 105
Local
Authorities

Employers 13 13 14 14 14

Total 621 642 680 702 745

HRM Principles & Practices

© Oxford University Press Malaysia, 2008 10– 20
 Malaysia’s Largest Employee Unions
(2014)
UNION MEMBERSHIP
• NU Teaching Profession 184,205
• NU Plantation Workers 35,376
• Malay Teachers Union, SM 38,215
• NU Bank Employees 14, 189
• Sarawak Teachers Union 18,994
• Algamated Union Of Local Authorities Employees
» 16,000
• Malayan Nurses Union 19,403
Structure of National Unions

Work Committee

Union Branch

National Executive
Council
 Structure of Unions
• Works Committee is set up in each company, elected by
members, and is responsible for liaising with the
management and gathering info on members’ problems
and grievances to be passed on the union hierarchy
• If the union large enough, groups of members in a
particular geographical region will form a branch and elect
committee to run the branch.
• At the national level, the officials of the union, known as
executive council, elected by the members at a national
delegates conference, will decide on policy matters and
ensure the efficient running of the union’s business.
 Affiliation to Other Bodies
• Trade Union in Malaysia are permitted to affiliate to other
bodies, both within and outside of the country.
• However, affiliation to foreign bodies requires the express
permission of the DGTU.
• Many trade union of employees join Malaysian Trades Union
Congress (MTUC) to get support and advice.
• Other unions affiliate with overseas organizations. For
example, Transport Workers Union affiliate with International
Transport Workers Federation (ITF).
 Federation of Trade Unions
• Section 72 TUA provides that:
– Two or more registered trade unions in Malaysia whose members are
employed in a similar trade, occupation or industry may form or create
a federation of trade unions if the consent of the members of each of
the registered trade unions wishing to form or create a federation has
been obtained by a majority of votes taken at a general meeting or a
meeting of delegates, as the case may be, after service on the Director
General and all members of the union, not less than fourteen days prior
to such meeting, of notice of the proposed resolution to participate in
the federation.
 Federation of Trade Unions
• A registered federation of trade unions enjoys all the rights
and must fulfill all obligations provided under TUA, however,
it cannot be a party to a collective agreement with any
employer although it may assist its affiliate in the
negotiations.
 Amalgamation of Trade Unions
• Under Section 32 TUA, any two or more registered trade
unions whose members are employed within similar trade,
occupations or industries may become amalgamated is:
– The votes of at least ½ of members of each amalgamating union are
recorded in a secret ballot, and
– At least 60% of the votes recorded are in favour of the proposal to
amalgamate
• Notice of the amalgamation signed by the secretary and by 7
members of each of the amalgamating unions should be
submitted to the DGTU
• An amalgamated union is regarded as a new entity and
should apply for registration in the usual manner.
 Union Funds
• Section 50 TUA 1959 - Unions funds can only be used for
paying of:

 Expenses related to salaries for employees of the union.

 Expenses related to the upkeep of an office.
 Expenses related to the settlement of a trade dispute.
 Compensation to members for losses arising out of trade
disputes.
 Expenses related to the organization of social, sports,
educational and charitable activities for members.

• Unions are required to submit annual, audited accounts to

DGTU for checking – failure would lead to de-registered
(TUA 1959, Section 15).
 Union Funds
• The main source of income of a trade union is from subscriptions
prescribed in its rules payable by its members monthly or
periodically.
• To facilitate the collection of such subscriptions, the trade union
seeks an employer’s agreement to include in the collective
agreement an article stipulating the check-off facility.
• Funds of a union that is not required for a day to day administration
may be invested in accordance with S49 of TUA.
• The union also with the prior approval of the Minster, invest its
funds:
• In a registered cooperative society
• In any commercial, industrial or agricultural undertaking or banking
enterprise which is incorporated and operating in Malaysia
 Officers and Employees of Trade
Unions
• Employees of trade unions must fulfill requirements under S29 of TU
– if he is a citizen of the Federation resident in West Malaysia, Sabah or Sarawak
– if he has not been convicted by any court of a criminal offence and has not received a
free pardon in respect thereof, and such conviction in the opinion of the Director
General renders him unfit to be employed by a trade union;
– if he is not an officer or employee of any other trade union; or
– if he is not an office-bearer or employee of a political party:
• A registered trade union may, employ and pay a secretary, treasurer and
such other persons as may be necessary for the purposes of such union or
of any federation of trade unions to which the union belongs:
• Provided that no employee of such union other than-
– (a) the holder of a full-time office as secretary, assistant secretary, treasurer or assistant
treasurer who is elected in accordance with the rules of such union; or
– (b) a secretary, assistant secretary, treasurer or assistant treasurer who is employed as
such immediately before the commencement of this paragraph and possessing no
power of voting in respect of the affairs of such union or of any of its committees,
• shall be a member of the executive of such union
 Officers and Employees of Trade
Unions
• An officer is defined as a member of the Executive Committee or
Council or the Branch Committee of a unio
• To be an officer, a person must fulfill the requirements stated in S28 of
TUA
– he is a citizen of the Federation;
– he has not been a member of the executive of any trade union the registration of which has
been cancelled or withdrawn under section 15 (1) (b) (iv), (v) or (vi)
– he is not an office-bearer or employee of a political party;
– he has not been convicted by any court of law of criminal breach of trust, extortion or
intimidation, or of an offence under section 49,50 or 50A which in the opinion of the Director
General renders him unfit to be an officer of a trade union; or
– he is not a bankrupt:
• Once a member is elected as a full time officer, he is deemed to be
employed in the industry with which the union is connected acc to
S26(1B) of TUA. Even after his retirement from the industry, he continues
to be an officer of the trade union as long as he is re elected at the end of
each term of his office.
 Powers of DGTU
• S4A of TUA : enable DGTU to exercise “all such powers, discharge
all such duties and perform all such functions as may be necessary
for all the purposes of giving effect to and carrying out the
provisions of this Act”
• S71 of TUA: empowers DGTU to seek information on any of the
activities of a trade union by summoning any person to his office.
• S71(3) of TUA: DGTU may administer oaths to and examine any
person on oath summoned before him
• S76B of TUA: TU must obtain DGTU approval with regards to
international affiliation with consultative bodies. TU must furnish
DGTU with a copy of the international organization’s constitutions
and rules, details of its office bearers, contact details and other
information.
• S76C of TUA: DGTU has power to order TU to cease its affiliation or
membership with an international consultative bodies.
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