TPPA likely to have positive impact


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  • Friday, 15 Jan 2016

THE first Regional Conference on Current Developments in Employment Law in Malaysia and the Asean Countries is being held in Kuching with more than 100 participants from around the country and the region, including India.

The conference is organised by the Malaysian Chapter of the International Society for Labour and Social Security Law (MSLSSL). The international society is based in Geneva and brings together legal practitioners, judges, academicians, human resource practitioners and trade unionists.

It aims to enhance the development of labour and social security laws worldwide.

MSLSSL president Datuk Cyrus Das, a prominent senior lawyer, declared open the three-day conference and delivered a keynote address.

He raised two important issues – first, whether we should introduce direct filing of employment disputes with the industrial courts instead of referral by the Human Resources Minister and, second, that the current system of judicial review on industrial courts be replaced by direct appeal.

International and local speakers are sharing their experience and expertise on emerging trends in regional labour and employment law and practice, not just in Malaysia but in Asean. I am honoured to be among the speakers.

I would like to share my paper, which focuses on the impact of the Trans-Pacific Partnership Agreement (TPPA) on trade unions and what it means for both employers and employees.

Malaysia has agreed to join the TPPA and Parliament will decide whether or not to ratify the agreement by the end of this month. Despite some controversial chapters and objections from certain quarters, I would expect Parliament to ratify the TPPA as overall it should benefit the country.

TPPA will create a platform for economic integration across the 12 member countries in the Asia-Pacific region. The comprehensive agreement lays the foundations for economic growth that will facilitate the development and generation of employment in the member countries.

If Malaysia ratifies the TPPA, we will for the first time have a free trade agreement that has a labour chapter requiring Malaysia to integrate the principles of the 1998 International Labour Organisation (ILO) Declaration into our laws. Of particular interest is freedom of association, right to collective bargaining and right to strike.

This represents a significant recognition that to have free trade and economic integration, a labour chapter is needed to ensure a sustainable, fair and inclusive free trade agreement. Labour not only underpins economic activities; the fundamental objective of economic activities and greater trade is the creation of employment and decent jobs.

To ratify TPPA, Malaysia shall amend existing laws and practice to be in line with labour rights as stated in the ILO Declaration prior to the date of entry into the TPPA. These include:

1) Removing discretion of the Director General of Trade Unions (DGTU) to refuse to register a trade union and replace it with a process for determining representation of workers for the purposes of collective bargaining;

2) Removing the limitation on forming a union in only a “similar” trade, occupation or industry;

3) Removing broad restrictions on the scope of collective bargaining and strikes;

4) Ensuring that subcontracting or outsourcing is not used to circumvent the rights of association or collective bargaining; and

5) Undertaking the necessary institutional changes and capacity building to implement and enforce the new laws.

Long have I complained that our current laws relating to trade unions and collective bargaining are stifling, draconic and severely limit the effectiveness of the trade union movement in the country. Unions are segregated into almost 1,000 bodies divided by enterprise, industry, sector, establishment and job function, all at the discretion of the DGTU.

As a result, only 2% of private sector workers are members of trade unions.

This has contributed to suppression of wages in Malaysia. Real wages have fallen below productivity growth and inflation. Almost half of workers were paid less than RM700 in 2009, which is below the poverty line index.

It is no coincidence that in Malaysia, wages constitute only 33.2% of GDP while in Singapore it is 43% and in Taiwan 46.2%.

I believe the TPPA will have a positive impact for Malaysian workers in particular and the nation as a whole.

It will also push union leaders to be more professional as only the better managed, transparent, independent and effective unions will survive, as workers now have a choice.



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