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Union Trade in Malaysia

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Malaysia Airlines (MAS), a government linked company continues to violate worker and trade union rights. Recently, MAS commenced disciplinary action against Mohd Akram bin Osman, the Secretary General of the National Union of Flight Attendants Malaysia (NUFAM), and 30 other NUFAM members. The show cause letter date on or about 14/2/2014 asked why disciplinary action should not be taken against them by reason of their participation in an ‘illegal’ gathering on 27/11/2013 at the Ministry of Human Resources in Putrajaya. The National Union of Flight Attendants Malaysia (NUFAM) is a registered trade union, and it had sought recognition from Malaysia Airlines, the employer of the some of its members.

Recognition is a legal requirement in Malaysia before an employer can be compelled to sit down, negotiate and agree to a Collective Bargaining Agreement (CBA). When MAS rejected the application, the Director General of Industrial Relations (DGIR) conducted a secret ballot which involved all qualified employees, NUFAM succeeded in getting 62.73% of the votes, and thereafter on August 2013, the DGIR issued the formal letter acknowledging NUFAM as a recognized union. It must be noted that in Malaysian law, MAS, as employer, would had to agree on the list of qualified employees entitled to vote before the secret ballot, and as such challenging the result and the subsequent recognition of the union is bad. CHRONOLOGIES

On 4/10/2013, MAS challenged the decision of the Minister to accord recognition to NUFAM, and filed a Judical Review application in the High Court. MAS also allegedly applied for an interim stay order thus depriving NUFAM the ability to move forward towards a Collective Bargaining Agreement (CBA).

On 29/2/2013, MAS terminated Ismail Nasaruddin, the President of NUFAM, without even having a domestic Inquiry, hence denying him the right to heard and a fair hearing. Ismail was first suspended and then terminated allegedly by reason of a statement he issued in his capacity as President of NUFAM, which appeared in the media, which among others stated: ‘
NUFAM Secretariat said it is calling on the prime minister to review Jauhari’s contract and remove him as the CEO of MAS, which is government appointed position, unhappy that there has been no changes in resolving cabin crew’s problem
’ It also raised other worker issues (The Sun Daily, 8/11/2013, NUFAM calls for resignation of MAS’ CEO) On February 2014, disciplinary action was taken by MAS against 10 NUFAM member allegedly based on comments made by them in their NUFAM Facebook Group.

But, the disciplinary action seems to have been discontinued against 9. However, one flight attendant Ms. Farahtina Kassim is still suspended from her flying duties and was later on been terminated. On Mid February, a show cause letter is given to 30 employees for allegation of participate in an ‘illegal gathering’ at the Human Resources Ministry is absurd given the reason that it is fundamental right for workers and/or their union to file complaints and make representation to the government, including Human Resource Minister. Malaysia, being a member of the international community, must also act in accordance with International Standards including the Ruggie’s Guiding Principles on Business and Human Rights: Implement the United Nations “Protect, Respect and Remedy” framework, whereby in cases of government-linked companies like MAS, the obligation is even greater.

Section 2of the Trade Union Act, 1959 has defined a trade union as; “Any association or combination of workmen or employers, being workmen or employers whose place of work is in West Malaysia, Sabah or Sarawak”.

a. Representation
Trade unions represent individual workers when they have a problem at work. If an employee feels he is being unfairly treated, he can ask the union representative to help sort out the difficulty with the manager or employer. Unions also offer their members legal representation. Normally this is to help people get financial compensation for work-related injuries or to assist people who have to take their employer to court. b. Negotiation

Negotiation is where union representatives, discuss with management, the issues which affect people working in an organization. There may be a difference of opinion between management and union members. Trade unions negotiate with the employers to find out a solution to these differences. Pay, working hours, holidays and changes to working practices are the sorts of issues that are negotiated. c. Member service

During the last few years, trade unions have increased the range of services they offer their members. These include education and training, legal assistance, legal discount and welfare benefits.


a) Greater Bargaining power
The individual employee possesses very little bargaining power as compared to that of his employer. If the employee is not satisfied with the wage and other conditions of employment, the employee can leave the job. It is not practicable to continually resign from one job after another when dissatisfied. This imposes a great financial and emotional burden upon the worker. The better course for him is to join a union that can take concerted action against the employer. The threat or actuality of a strike by a union is a powerful tool that often causes the employer to accept the demands of the workers for better conditions of employment. b) Minimize discrimination

The decisions regarding pay, work, transfer, promotion, etc. are highly subjective in nature. The personal relationships existing between the supervisor and each of his subordinates may influence the management. Thus, there are chances of favoritisms and discriminations. A trade union can compel the management to formulate personnel policies that press for equality of treatment to the workers. All the labor decisions of the management are under close scrutiny of the labor union. This has the effect of minimizing favoritism and discrimination. c) Platform for self expression

The desire for self-expression is a fundamental human drive for most people. All of us wish to share our feelings, ideas and opinions with others. Similarly the workers also want the management to listen to them. A trade union provides such a forum where the feelings, ideas and opinions of the workers could be discussed. It can also transmit the feelings, ideas, opinions and complaints of the workers to the management. The collective voice of the workers is heard by the management and give due consideration while taking policy decisions by the management. d) Sense of participation

The employees can participate in management of matters affecting their interests only if they join trade unions. They can influence the decisions that are taken as a result of collective bargaining between the union and the management. TRADE UNION FROM THE EMPLOYERS PERSPECTIVE

While Trade Unions provide many benefits for workers, they create a variety of disadvantages from the employers’ perspectives. Based on the case study, Malaysian Airlines (MAS), a government-linked company, has a disturbing track record when it comes to worker and trade unions. First problem arise when the secret ballot proving that flight attendants in MAS agree that NUFAM is their chosen union, MAS is now challenging the secret ballot and the recognition in the High Court. Second is when the President of NUFAM makes a statement in his capacity of the President, suddenly he has been terminated by MAS and also followed by 4 others from the Union. Third is when the Trade Union members take their grievances to the Ministry of Human Resources, MAS reacts with show cause letters.

The employers do not display a positive attitude towards the unions at workplace. The employers create internal mechanisms for the purpose of challenging workers collective identification with unions. Fewer employers consider the need to use union to mediate their dealings with employees, reflecting an antipathy to unions. Gall and McKay suggests that employers may use suppression strategy or the substitution strategy to make the organization free from Trade Union.

Employers using the suppression strategy create an atmosphere of fear and through intimidation they aim to sabotage or put an end to existing or expected attempts at union organization and requests for union recognition or at the least, prevent unions from getting to a critical mass. Like in the case, MAS terminated Ismail Nasaruddin, the President of NUFAM, without even having a domestic Inquiry, hence denying him the right to heard and a fair hearing. Ismail was terminated allegedly by reason because of his statement about the cabin crew’s problem and workers issues which appeared in the media and calls for resignation of MAS CEO.

Actions such as dismissals, terminate and disciplinary action seek to try to prevent or stop Trade Union office bearers from being active in dealing with members concerns, organizing meetings, producing publicity material and recruiting new members.

The substitution strategy, on the other hand, seeks to make the organisation an issue-free company. The employer attempts to convince workers that the Trade Union is redundant, and that there are no contentious issues, and even if these should arise they can be easily resolved to the satisfaction of both the parties. In doing so, the employer is being seen to resolve grievances. It is a non-union related mechanism for resolving grievances and giving expression to employees ‘voice’.

In Malaysia, the problem of union recognition by employers has been a common issue, with the Trade Union accusing employers of intentionally delaying recognition of unions while using allegedly unfair practices to dampen unionism in the workplace (The Star 1996). The National Union of Flight Attendants Malaysia (NUFAM) is a registered trade union, and it had sought recognition from Malaysian Airlines. MAS rejected the application and filed a Judicial Review application in the High Court after General of Industrial Relations (DGIR) issued the formal letter acknowledging NUFAM as a recognized union based on the secret ballot result. MAS also allegedly applied for an interim stay order thus depriving NUFAM the ability to move forward towards a CBA.

Recognition is a legal requirement in Malaysia before an employer can be compelled to sit down, negotiate and agree to a Collective Bargaining Agreement (CBA). Union recognition, according to Gall and McKay, “is a highly sensitive issue because it provides the potential for collective organisation to infringe upon managerial prerogative in order to defend and advance workers terms and conditions of employment”. In Malaysian law, MAS, as employer, would have had to agree on the list of qualified employees entitled to vote before the secret ballot, and as such challenging the result and the subsequent recognition of the Union is bad.

According to Rajasekaran, the Secretary General of Malaysian Trades Union Congress (MTUC), there are increasing anti-union activities by major corporations. They are demanding for the removal of legal safeguards that provide employment security to workers on the ground that removal of these safeguards is essential to face the increasing global competition.

So, employers see Trade Unions as barriers to efforts at restructuring their workforce. Trade Union makes some of disadvantages in the employer’s perception. Some of the disadvantages are:

Higher Wages
One of the main disadvantages for the company is the labor costs will likely rise. Trade Union workers make approximately 22 percent more than their non-union counterparts, according to data provided at the website of the U.S. Bureau of Labor Statistics. With collective bargaining, employees are free to talk with each other before sending a representative on their behalf to negotiate wages, benefits and working conditions, all of which can lead to higher production costs. Strikes

If the company does not agree to the wage, benefits or workplace rules requested by Trade Union members, they are legally allowed to strike. Federal laws will limit the company ability to fire striking workers. A strike not only costs money directly from lost production, but causes other problems, as well. Publicity from a strike can cause a decrease in sales if sympathetic customers boycott the company products or services. Companies vendors and commercial customers may stop working, anticipating that the company may not be able to pay the bills or deliver what the customers buy. Decreased Human Resources Control

If the company promotes workers based on parameters such as merit, productivity or other objective means, it may lose the opportunity with a union workforce. Many unions negotiate workplace rules that promote and protect workers based on seniority, rather than merit. This means that if the company needs to terminate a number of workers, it must terminate those workers hired most recently, not those workers who are the least productive. The company ability to discipline workers will also decrease, as union rules and reactions to instances of employee discipline limit the options to deal with workers that deem poor performers. More Lawsuits and Arbitrations

With an organized labor force, the company will face more challenges to actions that will be taking regarding an employee’s status. While individual employees might not have the financial resources or will to contest such things as a termination, a demotion, a lack of promotion, or alleged harassment or discrimination, a union worker may be encouraged to file a suit or appeal the company actions, and may be offered union support to do so. RECOMMENDATIONS

The presence of a labor union can be quite challenges for a company especially Human Resource Department to handle. However, there are few suggestions for company to deal with union problems without compromising the spirit and output of the workplace.

Improve communication
Trade union often use as a medium to convey voices from workers toward the management. In this issue, seems that MAS is tried to eliminate the union member one by one as they actually unwillingly accept the union. It shows that there is no clear communication between MAS and the union which is NUFAM. In order to solve the problems, the employer needs to improve communication with the unions. In this context, MAS did not give chances to NUFAM to communicate with the management about what the union wants from the employer. There is a need of two way communication between employer and employees.

As employer it is important to acknowledge the validity of the feelings of the union workers where they have right to voice out the issues and as employer they need to accept it. For employees, they also need to hear what employer’s opinion regards their concern. Two way communication can be seen other than union is to create a Joint Consultative Committee (JCC). HR department can take charge of this committee whereby the member will be from the trade union and the meeting needs to be held monthly in order to address the employees’ concerns.

Improve perceptions
With clear communication, then the perceptions can be improved for both sides. Right now, the employer perception toward the union is a negative thing instead it can actually benefit the employer. Set a positive perception that a union is the solution for an organization not a problem. According to Trade Union Congress (2007), union has been a helping hand toward an organization whereby it actually help to ease communication between staff and employer and it also help to improve working conditions and practices as employer accept the union and fulfill some of their needs. Apart from that, employees also need to view employer as person who running the business, who fighting to keep the business alive each day whereas by doing that, employees can understand the challenges face by employer in order to fulfill employees’ concern.

Make union as partnership
Instead of treating union as enemy by eliminating them one by one, the employer should make union as their partnership. By working together to find solutions toward the problems, indirectly it will close the gap between the employer and the union. Eventually, they will develop a positive relationship and if the employer can gain the trust and respect from the union, their representatives will likely come to the employer before any problems turn into strikes or other major incidents. Asking them to involve in decision making and their ideas to work in some passing issues can make the workers feel more appreciated by the employer.

According to this issue, we believe that it is important for the MAS and NUFAM to negotiate the conflicts between both through collective bargaining. Purpose of collective bargaining is to improve conditions in some way to make things more efficient, economical, safe or enjoyable. Going through these processes therefore keeps employers or employees from being taken advantage of or hurt. Collective bargaining is a tool people use to end conflict and get things going again in business. Occurring in either continuous or periodic forms, its aim is to make things better for both the employer and employee overall, or to initiate social changes. The disadvantages such as expense and creating divisions in companies are significant, but this technique also provides some big advantages such as giving workers a safe way to voice their concerns and opinions.

Other than that, as mention in the recommendation, we do think that communication is very important when the employer dealing with the trade union. This is because Trade unions play an important role and are helpful in effective communication between the workers and the management. They provide the advice and support to ensure that the differences of opinion do not turn into major conflicts. The central function of a trade union is to represent people at work. But they also have a wider role in protecting their interests. They also play an important educational role, organizing courses for their members on a wide range of matters.

Besides, employers need to implement work practices that accommodate legitimate workers’ interests, and the unions legitimate interests, as well. There are employers who are unethical and immoral when it comes to worker issues. As such, unions are important, and in fact necessary, to protect workers’ interest.Employers and management at various organizationsshould change their mindset and consider trade unions as close partners in their development and also in enhancing effectiveness and efficiency at work places.They can be partners by supporting the employers’ business, rather than merely being seen as by employers, as the opposition.

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