Malaysian Trade Unions: The Missing Shield

Picture this: you’re working on a FELDA plantation. The hours are long, your pay has stayed the same for years, while the cost of all of your basic necessities steadily increases. You’ve asked for a raise, but you never get one. Management has no reason to increase your pay because you’re expendable; you need the job a lot more than they need you. You are replaceable.

What now?

Why Unions?

Workers in a specific sector who group together to negotiate for better rights with their employers are called a trade union. There are many benefits from joining a union, however, the most significant is bargaining power against their employer. This is typically achieved when the union collectively threatens to stop working until management agrees to negotiate with the union.

If all the plantation workers group together to negotiate as a single unit, FELDA is more likely to raise the pay of all workers, typically because union members can threaten to stop working, thereby impacting FELDA’s profits. “A worker alone is weak, but workers united are strong”

Unions are not a one-size-fits-all though. Each sector will have their own union to negotiate specific needs. For instance, the Transport Workers Union of Australia protects workers in public transport and the Canadian Federation of Nurses Unions protects nurses.

In Malaysia, trade unions as a whole are weak and this results in clear examples of worker exploitation. In 2016, the CEO of Malaysian Airlines cut about 6,000 jobs as most workers were “doing nothing”. More recently, five cleaners working in UEM Edgenta were arrested for protesting for the lack of personal protective equipment provided to them during the Covid-19 pandemic. These are two examples of a large pattern of abuse of worker’s rights in Malaysia.

Although, it hasn’t always been this way.

History of Unions in Malaysia

The origins of unions in Malaysia date back to the 1920s, where workers then formed what was known as General Labour Unions (GLUs). The GLUs were incredibly active in fighting for their rights, including strikes and playing an active role in politics, campaigning for independence from the British and fighting against the Japanese in World War II.

Unfortunately, trade unions are practically non-existent in Malaysia today. In general, trade unions seem to be weakening, with the number of unions and unionised workers steadily decreasing. 

The Trade Union Affairs Department reported that only six percent of the 14.5 million workers in the country, are currently union members. Think about that. As of 2017, 94% of Malaysian workers are not part of unions, which means those individuals are most likely unable to effectively negotiate for better rights.

Union membership in the private sector has fallen significantly over the past 10 years. The numbers dropped from over 400,000 in 2009 to 300,000 in 2017, despite unemployment dropping from 3.69% in 2009 to 3.32% in 2019.  More people have jobs, but less of them are joining unions.

So what happened?

Why Are They Ineffective?

Method

When there are violations of worker’s rights, Malaysian unions still do not organise pickets, strikes or campaigns against employers. Instead, they lodge complaints to government bodies, take their issues to court or suggest policy amendments to the Minister. This “soft” approach is a long and drawn-out process which can last many years. Ultimately, it is also much less likely to succeed.

This is a departure from how unions have historically secured worker’s rights. The truth is that heads of Malaysian industries have no reason to care about their workers unless their profits and losses are hit by strikes. The last major strike in Malaysia occurred in 1962, where 9,000 railway workers went on strike to demand conversion of daily wages be changed to monthly salaries. 

Despite average wages in Malaysia increasing the most amongst the bottom 40% of earners (“B40”) and the least amongst the top 20% of earners in Malaysia (“T20”) since 1970, this does not accurately show the gap between T20 and B40 salaries. This is because if Adam earns RM1000 and earns RM3000 in the following year, his salary triples. Whereas, if Bob earns RM10,000 and earns RM20,000 the following year, his salary only doubles. Adam’s growth of salary is higher than Bob, but the truth is Adam is still much closer to the poverty line (which is RM 2,208) than Bob. In reality, absolute income gap has increased.

The implication of this is that the CEOs and upper management on top are refusing to pay workers their fair share and are choosing to pay themselves more. This is doubly true as the pay of CEOs are often linked to their share prices, which are in turn linked to their profits and losses. By keeping employee pay low, firing employees, or cutting benefits, this allows CEOs to cut their costs and line their pockets while the poorest workers get poorer.

This will not change with bureaucratic processes and red-tape.

Photo by Markus Spiske

Laws

Despite the fact that the right to form unions are guaranteed by our Federal Constitution, the actual laws governing unions in Malaysia have failed to empower workers. 

The key issue with the Trade Unions Act (the primary union legislation) is that before a union can exist, they need to register with the Director General (typically a well-connected individual who is chosen by the Yang-di Pertuan Agong and is in charge of all union matters in Malaysia). This registration can be refused if the Director General believes the union “will be used for unlawful purposes”. To make matters worse, the Director General may also cancel a registration later on if he believes that the union is “used for unlawful purposes”.

After, the union needs to obtain recognition from the employer after it can prove by voting that the majority of the eligible employees are its members. If the employer does not recognise the union within this time, the matter will be taken to the Director General (who has no incentive to vote in favour of the employees), who will ultimately decide whether the union is recognised. This is a very slow process and disputes normally take years to resolve. 

Even if the union finally obtains the necessary recognition to represent the workers, the ability to strike is further restricted as it is very difficult to start the process.

The Industrial Relations Act defines legal and illegal strikes, where illegal strikes carry penalties such as fines up to RM2,000 + RM 200 per day that they continue to strike or imprisonment up to one year. Imagine being a worker on minimum wage with RM1,200, and being fined RM2,000 when trying to fight for better pay.

A legal strike needs to be confirmed by a ⅔ majority vote by the union members. The Director General has to be informed of the result of the vote. After that, the employer must be informed of the date of the strike. This is all required to prepare for a strike. 

If you don’t comply with any of the above requirements, you can be fined, jailed and even removed from the union by the Director General. Sound difficult and tiresome? It is. It’s no surprise that it’s been almost 60 years since the last strike. There are so many barriers that employees face before even getting to the point they can negotiate.

In short, there are multiple ways for a strike to fail, even before it begins. The system is built for you to fail.

Economics

The B40 group would benefit the most from strong unions as they are the ones who require the most protection and would be impacted the greatest by a reduction in pay or cutting back of benefits.

As a growing economy, Malaysia has not been very good at distributing wealth equally. Khazanah Research Institute has shown that despite the fact that the B40 income group has experienced the greatest income growth since 1979, that growth has stagnated after 2009. 

If the most vulnerable workers are worried about penalties such as jail or fines, on top of losing their jobs, joining a union will never be a viable option as they have too much to lose. 

The Path Forward for Malaysia 

The common narrative is “labour is expensive” or “cheap labour is needed for Malaysia to grow”. Justifications such as “competitiveness” or “growth” may be good for businesses, but it certainly is not helping workers. Their wages remain low, and their rights continue to be eroded. A brief read through of the laws will see that the prior UMNO-BN government has consistently eroded worker’s rights through various amendments of existing laws.

So how do we change this?

You can speak to your Member of Parliament and raise these concerns with them, or at the very least, vote for an MP who represents progressive labour rights. Alternatively, speaking to your friends and family about these issues help. For all the patriotic history in our sejarah textbooks, none of the chapters highlight the fight for labour rights or any labour movements.

There will always be risks in the struggle for rights. The question now is what Malaysian workers and trade unions are willing to do. Remain in the shadows, as desired by the then British colonial government, and the present government? Or will they wake up and fight for better worker and trade union rights, and bring about the re-emergence of a strong labour movement? 

Featured image by sol