THIS week I would like to focus on the impact of the Trans-Pacific Partnership Agreement (TPPA) on trade unions and workers.
If Malaysia ratifies the TPPA, we will for the first time have a free trade agreement that has a labour chapter that requires 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.
Long have I complained that our current laws relating to trade unions are stifling, draconian and severely limits the effectiveness of the trade union movement in the country.
As a result only 2% of private workers are members of trade unions while wages constitute only 32% of GDP and have fallen way below productivity growth.
This in turn reduces domestic consumption and puts a damper on business prospects and economic growth.
To ratify the TPPA, Malaysia shall enact legal and institutional reforms to amend existing laws and practices to be line with labour rights as stated in the ILO Declaration prior to the date of entry into the TPPA. These reforms are to:
1. Ensure that trade unions have a right to judicial review of administrative decisions regarding trade union registration, suspension, withdrawal or cancellation of trade union registration; and determinations of strike illegality.
2. Ensure that decisions of the Minister are subject to judicial review.
3. Remove the discretion of the Director General of Trade Unions (DGTU) to refuse to register a trade union or cancel the registration when another exists, and replace it with a process for determining representation of workers for the purposes of collective bargaining in a particular establishment, trade, occupation, or industry.
4. Remove the discretion of the DGTU to cancel a trade union’s registration and to limit cancellation of a trade union’s registration only to serious breaches of law.
5. Remove the limitation on forming a union in only a “similar” trade, occupation or industry.
6. Remove the prohibitions on dismissed, suspended and retired workers remaining as union members.
7. Remove broad restrictions on the scope of collective bargaining, including the restrictions on terms and conditions of employment.
8. Relax the quorum required to carry out strikes.
9. Limit the discretion of the DGTU in determining whether a strike would contravene provisions of law.
10. Remove penal sanctions for peaceful strikes, regardless of whether such strikes are inconsistent with the Industrial Relations Act.
11. Limit the range of industries in which strikes are prohibited on the basis that the industries are essential services.
12. Ensure that the use of subcontracting or outsourcing is not used to circumvent the rights of association or collective bargaining; and require that subcontracting and outsourcing arrangements be made in writing, and be subject to verification by the Human Resources Ministry.
13. Undertake necessary institutional changes and capacity building to implement the amended statutes and regulations; expanding and adequately training labour inspectors and relevant criminal system authorities to effectively enforce the amended statutes and regulations; and providing the necessary resources to implement these changes.
14. Require the Enforcement Agencies Integrity Commission (EAIC) to report biannually statistics on the number of complaints received, investigations conducted and final disposition or remediation of those investigations that involve foreign workers.
15. Launch an outreach programme on the legal and institutional changes to inform and educate stakeholders, including employers and workers, of their rights and responsibilities under new laws, as well as related remedies and courses of action available to enforce those rights.
With the current stifling labour laws, our SMEs and businesses are not competitive as they rely on low-wage, low-cost, labour-intensive and therefore low-innovation business models.
There is a general concern among both trade unions and employers that compliance with the labour chapter will lead to multiplicity of unions. However, Malaysia already has multiplicity of unions as we have almost 1,000 unions, most of which are registered arbitrarily by the DGTU. Some have fewer than 15 members.
Experience in other countries suggests that within a very short time, most unions will consolidate and merge into industry-based unions.
Regulations can be adopted to verify which union has the majority to qualify as the sole bargaining unit for the employees. So employers will negotiate with one union, not multiple ones as feared by employers.
As can be seen, the required amendments also does NOT give absolute freedom on the right to strike. It does not protect abuses and failure to comply with reasonable requirements regarding lawfulness, and acts of a criminal nature will still be subject to relevant laws.
Adopting the labour chapter will also help to prevent anti-union discriminatory practices in Sarawak.
For the reasons above, I believe that the TPPA will have a positive impact on Malaysian workers in particular and the nation as a whole.
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