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Advances in Social Sciences Research Journal – Vol.7, No.12

Publication Date: December 25, 2020

DOI:10.14738/assrj.712.9483.

Mahmod, N. A. K. N. (2020). Trade Union Laws In Malaysia And Japan: A Comparative Overview. Advances in Social Sciences Research

Journal, 7(12) 304-319.

Trade Union Laws In Malaysia And Japan: A Comparative Overview

Nik Ahmad Kamal Nik Mahmod

Department of Civil Law, Ahmad Ibrahim Kulliyyah of Laws,

International Islamic University Malaysia

ABSTRACT

Japan history on trade unionism has been imposing. Malaysia's chapter

was fully activated only post-second world war. The ethos of trade

unionism ethos differs tremendously between Malaysia and Japan. In

the absence of obligations under Convention 87 of the ILO, Malaysia's

treatment on trade unions has been very regimented. The study seeks

to evaluate the two different landscapes of law and policy on trade

unionism in Malaysia and Japan. The objective is to determine lessons

that Malaysia may learn from Japan's long history of trade unionism law

and practice.

Keywords: Trade unions; Malaysia; Japan; registration; recognition; trade

disputes; industrial actions; regimented; liberalization; reform.

INTRODUCTION

Malaysia and Japan have very different legislative and historical backgrounds for their trade union

laws. Japan's trade union law is based on the Wagner Act of the United States, leading to Japanese

legislation that is liberal and flexible. The underlying philosophy of Japanese trade union law was

the freedom of workers to establish trade unions of their own choice and the freedom to engage in

collective bargaining with minimal governmental interference in all aspects of trade union

management and activities. On the other hand, trade union laws in Malaysia arose out of the conflict

and turmoil before and after the end of the Second World War. The Malaysian Communist Party

(MCP) strove to wrest power from the British by all political and non-political means. MCP tactics

included infiltrating trade unions to cause economic disorder and labour unrest through industrial

actions.

After the end of the Japanese occupation in the Second World War, the British Military Authority

(BMA) in Malaya (Malaysia) struggled to maintain law and order and defend the country from the

communist onslaught and insurgency. This paper seeks to evaluate the differences between the

laws of the two countries and to offer a possible scenario of a changing legal environment among

trade unions in Malaysia if the current Act is amended under a more flexible regime based on the

Trans-Pacific Partnership Agreement (TPPA). The changing legal environment would be evaluated

based on existing laws and practices in Japan.

TRADE UNION LAWS IN MALAYSIA

The Trade Unions Ordinance was promulgated in the wake of the labour unrest and chaos created

by trade unions infiltrated by communists determined to wrest control of the country from the

British through civil disobedience.[1]1 The Trade Unions Ordinance was passed to require

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URL: http://dx.doi.org/10.14738/assrj.712.9483 305

Mahmod, N. A. K. N. (2020). Trade Union Laws In Malaysia And Japan: A Comparative Overview. Advances in Social Sciences Research Journal, 7(12) 304-319.

registration of trade unions, which were only permitted in particular workplaces, specific or similar

industries, trades or occupations. Officials and members had to belong to the workplace, industry,

trade or occupation maintained by the existing Trade Unions Act 1959 (TUA).[2]2 The law

successfully divided trade unions into smaller entities and tremendously reduced their ability to

affect industrial peace and harmony in the country. The threat by the communists through trade

unions was also substantially reduced because the law made it difficult for them to implant their

members into trade union management. The Trade Unions Ordinance did not change much after

Malaysia gained its independence in 1957, and the Ordinance was renamed the Trade Unions Act of

1959 (TUA). The strict legal regime regulating trade unions was maintained. The law not only

requires trade unions to be registered but also restricts the rights to collective bargaining and to

enter into collective agreements. Collective bargaining and collective agreements are governed by

the Industrial Relations Act 1967 (IRA).[3]3

The TUA requires trade unions to abide by a certain standard of management of their internal

affairs, and trade union constitutions must contain clauses dictated by the Act.[3]4 The law also

dictates the way that trade unions manage their financial resources. Section 12 of TUA gives the

Director-General of Trade Unions (DGTU) vast power to register and or deregister a trade union.

Sections 15 and 18 of TUA provide the Minister with the ability to suspend a trade union for reasons

of national security with the agreement of the Minister in charge of home affairs. Overall, the TUA

so strictly regulates trade unions that the law limits the freedom of workers in carrying out their

trade union activities within and outside the workplace.

The Industrial Relations Act of 1967 (IRA) regulates trade disputes and collective industrial action.

The IRA recognises but strictly controls strikes, pickets and lockouts. For instance, before strike

action is undertaken, the trade union must carry out a secret ballot among its members, and the

result of the ballot must be communicated to the Office of the Director-General of Trade Unions. The

strike should only commence a week after the notification of the ballot result to the Office. If the

strike is to be organised by a trade union in essential services, a minimum notice of 42 days is

required to inform employers of the planned strike action.[4]5 This requirement is also applicable

for lockouts by employers in the essential services. There is no notice requirement for organising a

picket, though it can only be held outside working hours.6 Trade unions need only ensure that the

picket is not carried out improperly: it cannot occur during work hours or away from the workplace,

obstruct any entry or exit at or near the workplace, nor grow to such a size that the number of

participants causes intimidation to others, especially the general public. Finally, the picket cannot

disrupt the peace or lead to any property damage.[5]7

Any collective action is prohibited if the Minister of Human Resource has referred the dispute to the

industrial court or the Board of Inquiry.[6]8 If the dispute involves matters agreed upon in the

collective agreement or a disagreement regarding an employer's prerogative regarding the process

of collective bargaining, industrial action is illegal. In the case of unlawful action, an employer has

the right to dismiss the workers. Similarly, collective action that contravenes statutory

requirements, such as striking without going through the proper secret ballot process or notice

requirement for essential services, opens trade unions, officials or members to civil action liability

in tort as well as in contract.[7]9 Even though the law recognises trade unions' right to immunity in

civil and selected criminal action; trade unions, officials and members are only protected if there is

a legal basis for their action.[8]10 First and foremost, any collective action must be based on a trade

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dispute. A trade dispute is defined as a dispute between employer and employee regarding terms

and conditions of employment such as wages, work hours, leave and safety and health, as well as

non-employment matters such as termination and dismissal, disciplinary action and suspension

from employment.[9]11

As the law that governs trade unions in Malaysia is relatively regimented, a liberal environment

would undoubtedly change how trade unions and employers address trade dispute and industrial

action. The government would have to consider the long-term effects of broader freedom for trade

unions, especially its impact on traditional investors. Would they turn away or close their factories

in Malaysia and move elsewhere? Such a move would undoubtedly have positive and negative

implications that must be considered by stakeholders.

JAPANESE LAW ON TRADE UNIONS

Establishment Of Trade Unions

The Constitution of Japan in Article 28 provides overarching rights for workers to organise

themselves and take collective action collectively. Article 28, among others, provides that "the right

of employees to organise and bargain and to act collectively is guaranteed".[10]12 There are

conditions set by the labour union laws before a trade union, and its members can enjoy

constitutional protection and rights in the Constitution. The Trade Union Law of 1949 (TUL) and

the Labour Relations Adjustment Law of 1946 (LRAL) impose the following requirements:

First, Art. 2 TUL states that the trade union should be established by workers, defined in the TUL as

"those who live by their wages, salaries or other remuneration assimilable to it".[11]13

Second, the trade union must be "independent" from the employer. "Independent' means that the

workers are not subject to the employer's control or supervision vis-à-vis the trade union

established by the workers. Araki considers "independent" as the "autonomy" of the workers when

the trade union is formed, and no members of the trade union are representing the employer's

interest.[12]14

Third, the trade union is financially independent, in that it should not receive financial support from

the employer in running the trade union. In Article 2, provision 2, TUL, there are exceptions to this

rule, such as an "employer permitting workers to confer or negotiate with the employer during the

working time without loss of time or pay, the employer's contributions for welfare funds and

furnishing of minimum office space".[13]15

Fourth, the primary objective of the trade union is to "maintain and improve working conditions

and to raise the economic status of workers".[14]16 The TUL is explicit in defining an organisation

that is not a trade union, namely one that has a narrow objective of "mutual aid or conducting other

welfare activities" or which "mainly aims at political or social movements".[15]17

Fifth, Art. 2 of the TUL states that the trade union must be an "organisation or a federation thereof"

and an "organisation" must have more than two members.[16]18 A trade union must have a

constitution that contains elements laid down in Article 5, Paragraph 2, of the TUL. Among others,

the trade union law must have provisions on "democratic administration of the internal affairs of