Saturday, April 25, 2015

Malaysia needs strong trade and workers’ unions (an opinion)

Malaysia needs strong trade and workers’ unions – Ganeshwaran Kana

The concern over trade or workers’ unions in Malaysia has never been remarkable. Having repressive laws that inhibited the influence of trade unions even since t colonial era, Malaysians paid little attention to the role of trade unions in a society’s welfare. Moreover, with hudud and GST clogging up the public sphere, probably less Malaysians are concerned over the relevance of trade unions.

Trade unions are instrumental in creating and strengthening collective bargaining power between the employees and employers. A good relationship between a strong trade union and the employer helps the workers to enjoy more benefits and see better pay commensurate with increased productivity. Strong trade unions are pertinent in making sure the rights of the workers are not violated by the employers, besides being a medium to boost labour productivity.

Historically, the colonial master, the British Empire was never fond of workers’ unions. The British introduced the Societies Ordinance as far back as 1889 to prohibit the growing influence of the working class, apart from the nationalist fighters. The Communists, who have been painted negatively in Malaysian history, played a vital role in the growth of trade unions of Malaya back then. The Malayan Communist Party led the Open Front comprising of other political parties and organisations in the aftermath of the recapture of Malaya by British force. On this front, the General Labour Union (GLU) played a crucial role in fighting for Malayan independence. This GLU was later divided into two; one in-charge of Singapore’s labour unions, whilst Malaya’s was taken care by the Pan-Malayan Federation of Trade Union (PMFTU). The Communists also played a role in controlling the PMFTU and advocating against liberation of Malaya.

Looking at the possible damage that can be caused by such labour unions in many issues and particularly opposing the Federation of Malaya 1948 proposal, the British oppressors enforced registration of all trade unions. Government servants were prohibited from joining unions of non-government employees. This was in pursuit of a divide in unity of the domestic workforce. Further action was taken to mandate registration of trade unions in which trade unions’ membership could only be opened to workers’ in similar occupation and industries. This rendered PMFTU as illegal and further weakened trade unions’ activities in Malaya.
A comprehensive analysis of current legislation pertaining to Malaysia’s labour laws show that such provisions introduced by the British still exist.
Malaysia’s legislation on employment and industrial relations comprises of the Trade Union Act, Industrial Relations Act and the Employment Act. There are many existing provisions that weaken the influence of trade unions. For example, trade unions can only be regional, and not national, which means that a trade union can be formed to cover Peninsular Malaysia or Sabah or Sarawak, but a single trade union cannot include all three.
Besides, workers’ unions used to be not permissible in industries conferred with “pioneer” status under Section 15 of Industrial Relations Act, but has since been annulled after an amendment in 2007. To note, whilst trade unions can be formed within the electrical sector, in the electronics sector, trade unions were limited to “in-house establishment”, which means a trade union within a company and not inclusive of employees of the company’s subsidiary workers. This rule was only relaxed in 2009 when the Cabinet allowed regional trade unions for the electronics sector.
Thus, the status quo is establishment of four regional trade unions in Peninsular Malaysia – Western, Eastern, Northern and Southern. However, the rule is not fully liberalised since the Electronic Industry Employees Union covers only workers in Peninsular Malaysia, not
including workers of East Malaysia. As aforementioned, apart from not allowing civil servants to join trade unions with non-civil servants, only workers from similar occupation can form a trade union. This essentially means, while lorry drivers can form a trade union, it cannot include teachers and bankers.
Effects of Poor Labour Law
Such rules and provisions fragment the workforce and weaken collective bargaining power. This opens the way for “capitalists” to ill-treat the workers and not pay sufficient wages. This explains why there are claims of employers not adhering to the minimum wage rule and mistreating the employees. A study by Verite (a global NGO) and funded by the United States Department of Labour, found evidence of abuse of workers' rights in Malaysia's RM241 billion electronics industry.
Malaysia’s 1st Human Development Report specifically touches on effects of weak workers’ unions in Malaysia. The share of wages of national income has actually decreased from 33.8% in 1970 to 32.9% in 2012. In contrast, corporate profits have increased from about half of the national income to nearly two-thirds during the same period. Malaysia’s share of wages is low in comparison to other countries: South Korea’s share is 50.6%, Singapore’s 42.3% and the United Kingdom’s 62.6%.
It also reported that trade union density has dropped by about 40% since 1982 and currently only 8% of Malaysian workers belong to a union. This is despite the growing number of union members and trade unions in Malaysia.

In the past, workers’ who tried to fight for the rights of the other workers have been suspended and even fired. For instance, Keretapi Tanah Melayu Berhad (KTMB) took serious action (sacking, issuance of show-cause letter) over many employees after nearly 700 Railwaymen’s Union of Malaysia (RUM) picketed against the mismanagement of KTMB. They asked for the resignation of KTMB’s President, Datuk Kadir Elias.
Although the affected workers were re-instated, they were required to sign a memorandum which included a reduction of salaries, according to the President of RUM, Abdul Razak Md Hassan who refused to sign.
Apart from that, President of the National Union of Flight Attendants Malaysia (NUFAM), Ismail Nasaruddin was terminated by Malaysian Airlines Systems Berhad (MAS) for the issuance of a media statement urging MAS CEO Ahmad Jauhari Yahya (now former CEO) to resign. It was mentioned by NUFAM that the CEO had failed to take care of the workers’plight since his appointment. The list goes on and on about such actions by employers that weaken and inhibit the activities of the trade unions.
Malaysia’s productivity level, despite being lower than many developed nations such as Japan and Singapore, is actually growing ahead of other emerging economies. Data from the Malaysia’s Productivity Report 2013/2014 shows that productivity between 2009 and 2013 has increased by 11.7%.
But the bigger question is, has the salary increased as much too?

To recall,a  minimum wage policy was introduced after it was noticed that salary increment fell behind productivity growth. A few years ago, a World Bank report noted that in the past decade, Malaysia’s productivity growth was 6.7%, whilst the salary increment was merely 2.6%. Such a scenario may re-emerge, and thus strong trade unions (especially a national-level trade union comprising of all workers) can work towards helping the workers get the compensation that they deserve.

For that, Malaysia needs strong amendments to the existing laws with the workers’ welfare in mind, while at the same time, being fair to the employers. However, recent announcement by Deputy Human Resource Ministers, Datuk Seri Ismail Abdul Mutalib that the government will propose amendments to the Trade Unions Act 1959 to ensure it will be in tandem to the TPP trade agreement, creates more questions.

First, is the TPP sure to be ratified? Second, will the workers’ rights be trampled in order to satisfy foreign multi-national corporations (MNCs)?

Malaysians need to voice out for stronger trade unions; for your own benefit. – April 6, 2015.

* Ganeshwaran Kana is an Economics undergraduate in University of Malaya and the director of Economic Cluster, Anak Muda Harapan Malaysia.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.
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