Recognition Claims and “Sole Bargaining Rights” under the IRA 1967 and “Multiplicity of Unions” under the TUA 1959

The Law on Union Recognition Claim Prior to the IR (Amendment) Act 2020

Prior to the IRA (Amendment) Act 2020, the process of recognition claims is governed by Sections 9, 10, 10A, 11 and 12 of the IRA 1967. Once a union has been recognized by the Company in respect of workmen or a class of workmen (in a managerial or Executive or confidential or security or “non-executive/bargainable” capacity), then no other trade union of workmen shall make a claim for recognition or be accorded recognition in respect of the same workmen or class of workmen until the claim has been resolved under paragraph 9 (3) (a) (i.e., recognition accorded) or deemed to have been withdrawn under subsection 9 (4) or decided by the Director General of Industrial Relations (DGIR) under subsection 9 (5) IRA: Sec. 10A IRA.

Where a trade union has been accorded recognition in respect of any workmen or class of workmen, then no other trade union shall make any claim for recognition in respect of the same workmen or class of workmen unless a period of three (3) years has elapsed after recognition has been accorded or such trade union is no longer in existence: Sec. 11 IRA.

In cases where the claim for recognition has been withdrawn by the trade union of workmen or where the DGIR has decided not to accord recognition subsection 9 (5), then such trade union shall not make any further claim for recognition until six (6) months have elapsed from the date of such withdrawal or decision of the DG of IR: Sec. 12 (a) and (b) IRA.

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The Law on Union Recognition Claims Once the IR (Amendment) Act 2020 comes into Force

Nothing in the law has changed with regards to the union’s capacity to represent workmen in either a managerial or executive or confidential or security or “non-executive/bargainable” capacity, in Peninsular Malaysia or Sabah or Sarawak.

However, once the new law becomes effective (as per the date appointed by the Minister of HR), the employer may only accord recognition to a union subject to the scope of membership of that trade union and in accordance with the constitution of that trade union: paragraph 9 (3) (a) IRA.

Another key difference is that the competence of the trade union in the establishment, i.e., in respect of trade, occupation or industry) will no longer be relevant, as it has been deleted from the Act. Instead, the scope of membership of the trade union and whether the claim for recognition was made in accordance with the constitution of that trade union shall be ascertained by the DGIR: Sec. 9 (4A) IRA.

Another difference post IRA amendment is that the DGIR shall take steps and make such inquiries by way of secret ballot to ascertain the percentage of the workmen or class of workmen in respect of whom recognition is being sought who indicated support (instead of who are members of the trade union as per the present process), for the trade union making the recognition claim: Sec. 9 (4B) IRA.

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Trade Unions Accorded Recognition and Not Accorded Recognition under the new IR (Amendment) Act 2020

Once the new law comes into force, another trade union can make a claim for recognition in respect of the workmen or class of workmen after a period of one (1) year has elapsed (instead of the present three (3) years), or if the trade union concerned is no longer in existence: Sec. 11 IRA. There is no change in the legal process where the trade union has not been accorded recognition (whether via a withdrawal by the union concerned or via a decision of the DGIR made under subsection 9 (5) IRA). In such cases, the trade union concerned is allowed under the IRA to make another claim for recognition once six (6) months have elapsed from the date of such withdrawal or decision: Sec. 12 (a) and (b) IRA.

New Definition of “Trade Union” or “Union” under Sec. 2 Trade Unions (Amendment) Act 2023 – Multiplicity of Unions

Due to the new definition of “trade union” or “union” as above post the Trade Unions (Amendment) Act 2023, this has opened the floodgates to allow any unions to represent workmen or a class of workmen in all establishments, trades, occupations or industries in Peninsular Malaysia, Sabah or Sarawak, provided their union’s constitution allows them to do so.

In this context, Sec. 12 (2) TUA 1959 which provides that:

 “The Director General of Trade Unions (DGTU) may refuse to register a trade union in respect of a particular establishment, trade, occupation or industry if he is satisfied that there is in existence a trade union representing the workmen in that particular establishment, trade, occupation or industry and it is not in the interest of workmen concerned that there be another trade union in respect thereof”

has been deleted, post TUA amendment.

Multiple Unions & Sole Bargaining Rights

Arising from the above deletion of Sec. 12 (2) TUA, there will be situations where more than one trade union have been accorded recognition by the same employer or trade union of employers to represent the same workmen or class of workmen. When this happens, under the amended IRA, the union of workmen may decide among themselves which of the unions shall have the “sole bargaining rights” to represent such workmen or class of workmen, and shall then notify the DGIR.

Alternatively, where the multiple unions do not agree as to who has the sole bargaining rights to represent the workmen or class of workmen, (which is more likely to be the case), then the employer or trade union of employers, or any of the unions concerned here may make an application in writing to the DGIR to determine which of the trade unions concerned has the sole bargaining rights to represent such workmen or class of workmen: Sec. 12A (1) (a) and (b) IRA.

Secret Ballot to be Carried out by the DGIR to determine which Union has the “Sole Bargaining Rights”

The DGIR is legally bound to take such steps and make such inquiries by way of secret ballot to ascertain which of the unions has the highest number of votes indicating the preference (or support) for a particular union to have the sole bargaining rights to represent them. In the event of a “tie”, a further secret ballot shall be carried out until one of the unions record the highest number of votes to represent such workmen or class of workmen has been ascertained: Sec. 12A (2) and (3) IRA. The DGIR shall decide that the union that obtained the highest number of votes as above shall have the sole bargaining rights to represent such workmen or class of workmen: Sec. 12A (4) IRA.

Subject to Sec. 12B IRA, the sole bargaining rights to represent such workmen or class of workmen granted under this Section shall cease to exist in the event another trade union of workmen has obtained the sole bargaining rights to represent such workmen or class of workmen: Sec. 12A (7) IRA.

Trade Unions Obtained Sole Bargaining Rights under Sec. 12A IRA

Where a trade union of workmen has obtained the sole bargaining rights to represent any workmen or class of workmen whether by a decision of the DGIR or otherwise, no other trade union of workmen shall have the sole bargaining rights to represent such workmen or class of workmen unless a period of three (3) years has elapsed after the sole bargaining rights to represent such workmen or class of workmen has been obtained, or the said trade union is no longer in existence: Sec. 12B IRA.

Sole Bargaining Rights Obtained by a “New Union” when the Collective Agreement (Current Union) is still In Force

Where a new union has obtained sole bargaining rights, say, on 1^st August 2024, and where the current CA is still in force (CA 1^st Jan 2023 till 31 Dec 2025), an invitation to commence collective bargaining for the workmen or class of workmen shall only be made ninety days or less before the expiry of such collective agreement: Proviso to Sec. 13 (2) IRA.

Key Takeaways

1. Currently, where a trade union failed to obtain recognition due to less than 50% plus one (1) members, then the union concerned may submit another claim for recognition after six (6) months. Post IRA amendment, the above legal process allowing the submission of   another recognition claim six (6) months later remains unchanged.

2. Currently, where a trade union has been accorded recognition, no other union shall make a claim for recognition to represent the workmen or class of workmen until a period of three (3) years has elapsed. Post IRA amendment, any other trade union may make a claim for recognition to represent such workmen or class of workmen after a period of one (1) year has elapsed.

3. Under the amended TUA, “multiplicity of unions” from different establishments, trades, occupations or industries may take place within an employer’s establishment, including those with an in-house union or national union, for as long as the respective unions’ constitution allows them to do so.

4. Under the new TUA, a union may submit a claim for recognition on any employer to represent workmen employed in a managerial, or executive, or confidential or security, or non-executive/bargainable capacity, in Peninsular Malaysia, or Sabah or Sarawak, which is the same as the current law.

5. Employers must be wary that post IRA and TUA amendments, there is foreseeably a likelihood of “union rivalry” taking place where ambitious unions will amend their constitution to legally enable them to represent employees working in different industries, including those with or without national unions, or in-house unions, to expand their union membership.

6. Where there is more than one (1) union accorded recognition (post IRA & TUA amendments), the union with the largest number of votes indicating support via a secret ballot will have the sole bargaining rights to represent the workmen or class of workmen.

7. Where one (1) union has been given the sole bargaining rights (where there is more than one (1) union in the Company), another union may legally be allowed to submit a claim for recognition in respect of the same workmen or class of workmen only after three (3) years has elapsed after the date of being given such sole bargaining rights.

Dato’ Dr. Lim Weng Khuan

Note:  This article is intended to be for the information of clients, interested readers and for intellectual discourse and does not constitute nor be relied upon as legal or professional advice.