64 Groups: Repeal MAS Law That Suspends Or Deny Existing Worker And Trade Union Rights And Access To Justice

Media Statement-    4 August 2015

Repeal MAS Law That Suspends Or Deny Existing Worker And Trade Union Rights And Access To Justice – Laws that deny worker rights to assist businesses should never be enacted

We, the undersigned 64 civil society organizations, trade unions and concerned groups, are disturbed by the Malaysian government’s unjust use of an Act of Parliament to suspend and/or deny existing worker rights in law, including also access to justice mechanisms, for the benefit of a private business and employer, being the Malaysian Airlines System Berhad(MAS Bhd), now wholly owned private company by Malaysia’s sovereign wealth fund, Khazanah Nasional Berhad, a company.

Malaysia tabled and passed speedily the Malaysian Airline System Berhad (Administration) Act 2015 [Act 765], which came into force on 20/2/2015. This Act is most unjust to workers and trade unions of employees of the airline.

The Act, in section 11, states that “…on the appointment of the Administrator, a moratorium shall take effect during which… (e) no proceedings and no execution or other legal process in any court or tribunal may be commenced or continued with, and no distress may be levied, against the Administered Companies or their property except with the prior written consent of the Administrator;” – whereby the Administered company includes MAS Bhd, its wholly owned subsidiaries and some partially owned subsidiaries. The Administrator was appointed on or about 25/5/2015, and the period of administration could last for a maximum period of 2 years commencing from the date of the appointment of the Administrator. 

What is disturbing is that when administration and moratorium ends, all monies, assets and business of MAS Bhd would most likely be transferred to a new legal entity Malaysian Airline Berhad(MAB). MAS Bhd would most likely be left an empty shell.

Worker Claiming Rights Cases Against MAS Bhd – Stopped and May Not Proceed 

There are currently many cases initiated and filed, now pending before access to justice mechanisms, including tribunals and courts between workers and MAS Bhd, the employer,   claiming wrongful dismissal and/or other worker rights, or between trade unions and MAS Bhd. The effect of the moratorium is that all these actions and cases will stop, and not proceed further until administration of MAS Bhd ends.  

At the end, when moratorium is lifted, MAS Bhd would most likely be an empty shell – with no work and no money. Hence, it will be workers and trade unions that will suffer. Workers and Trade Unions do not just lose their right to justice, but also will have to shoulder additional loses, including all the monies utilized for lawyer and court fees,  time and others. For many workers, it may also mean loss of wages for the days they could not work because they had to attend at relevant departments, tribunal or court in their pursuit for justice. Hence, not only will workers and trade unions be denied justice, but will suffer even more injustice by reason of this anti-worker legislation.

Right To Join Parties To Satisfy Worker Claims Against MAS Bhd Denied

Normally, when the employer has lost the ability to provide remedies, damages or compensation to satisfy the claims of the worker, to ensure justice, the worker can proceed with an application to join third parties to the suit, possibly the owners (Khazanah Nasional) or others. 

This MAS Act now unjustly prevents this ability to join parties, in amongst others, in section 25(2), which states that “ The Malaysia Airlines Berhad, the appointer and the Administrator shall not be named as a party in any claim or application made or joined as a party in any proceeding commenced or continued by or on behalf of any employees or former employees of the Administered Companies pursuant to the Industrial Relations Act 1967 [Act 177], Employment Act 1955 [Act 265], Sabah Labour Ordinance 1950 [Sabah Cap. 67], Sarawak Labour Ordinance 1952 [Sarawak Cap. 76] or the Trade Unions Act 1959 [Act 262].’

In fact, section 25(1) says clearly, amongst others, that ‘…the Administered Companies, the Administrator, appointer or the Malaysia Airlines Berhad shall not—(a) be regarded as the successor, assignee or transferee or a successor employer to the Administered Companies; (b) be liable for any obligation relating to any retirement plan or other post-employment benefit plans in respect of the employees or former employees of the Administered Companies or any predecessor of the Administered Companies that exists prior to the assumption of control or appointment; or (c) be liable for any sum which is calculated by reference to a period of time prior to the Malaysia Airlines Berhad becoming the employer of the person in question…’

Same Owner of both MAS Bhd and new Malaysian Airline Berhad(MAB)

Considering that the it is Khazanah Nasional that is the sole owner of MAS Bhd, and also the new company MAB, clearly all that is happening is really nothing other than the ‘same person changing shirts’ – and justice would demand that the new entity MAB or the owner, Khazanah, should be justly taking over the obligation and responsibility of MAS Bhd especially for cases involving worker and trade union rights. 

The new MAB and MAS Bhd, both owned by Khazanah, really is nothing other that the same owner forming a new company to escape responsibility and liability to workers, is also supported by the following:-

a.      Christoph Mueller, the new chief executive of MAS Bhd was appointed on 1/5/2015, would later assume the same position with MAB. Same CEO for MAS Bhd, and new MAB?

b.      When the employees of MAS Bhd received their termination letters in early June 2015, those that were offered employment by the new MAB, were offered a different termination package from those not offered employment in MAB. Those offered employment in MAB, which was to take effect from 1/9/2015, were asked to continue coming in to work in MAS Bhd, while the others, about 6,000, were asked to stop coming in to work with the assurance they will continue to receive normal salary but could not commence employment with another employer before 31/8/2015 unless they first get approval of MAS Bhd’s Human Resource Department. For many airline employees, other than basic wages, income from allowances and such if they are working makes up sometimes 50% or more of their monthly take home income. Rightly, all employees of MAS Bhd, irrespective of whether they will be later employed in MAB, should have received the same benefits and ex-gratia on termination by MAS Bhd.

In the name of justice, MAB or Khazanah or the Malaysian government should really take over the obligation of any or all claims of employees and trade unions against MAS Bhd.

Avoiding Just Principles of Lay-Off and Termination

When an employer wants to reduce staff, they would justly retrench the number of workers they no longer need – and there are just  requirements that need to be complied in any retrenchment exercise like the ‘Last In First Out’(LIFO) principle. Here, this is avoided by MAS Bhd simply terminating all employees on 31/8/2015. Justly, the about 6,000 who were no longer required to come into work since June, should have been laid off then and there and paid all their entitlements.

Union Busting?

With the termination of all employees of Malaysia Airlines Systems Bhd (MAS Bhd), it would also mean the demise of about 7 in-house trade unions. 

The only national trade union, the National Union of Flight Attendants Malaysia, managed to  show support of 62.73% of the qualified employees, and obtain the Minister’s order that made it  a recognized union in MAS Bhd. Rather than accept this, MAS Bhd  went  for judicial review challenging the Minister’s decision. NUFAM alleges that only 2 out 10 executive committee members of the Union, who are employees in MAS Bhd have been offered employment in the new MAB. 

As such, this ‘restructuring exercise of the airline’ and this new law can also be considered a means of union busting.

Loss of Regular Employment Until Retirement

Many workers who are regular employees until retirement in MAS Bhd, who have been offered employment in the new MAB find that they will now become precarious employees on short-term contracts, some even on 3 or 6 months employment contracts. There is no law in Malaysia that stipulates that short-term contract employees will continue as employees if the work they were hired to do still exist. Short-term and other precarious forms of employment also would likely deter union formation or involvement, deter workers from claiming rights and facilitate easier exploitation of workers.

Ignoring Worker and Families Financial Security and Wellbeing

Workers in Malaysia have families and dependents, and also many now have monthly loan-repayment obligations, and justly they should be provided secure regular employment until retirement, whereby they still could be terminated for misconducts, or laid off where the employers has to reduce jobs.

Whilst Malaysia says that it is concerned about the airline business, it has demonstrated a serious lack of concern for the welfare and wellbeing of workers.

We therefore urge:-

That the said Malaysian Airline System Berhad(Administration) Act 2015 be repealed, and the effect this Act has had on workers and trade unions be reversed. No law should be enacted to suspend/deny worker rights for selected employers;

That all pending cases with regard to labour matters, be it with workers or unions, shall be justly resolved or settled forthwith by MAS Bhd, and its owners Khazanah Nasional;

That for all worker and trade union cases against MAS Bhd,  MAB and Khazanah Nasional shall agree to be joined in as parties and assume obligations of MAS Bhd to workers;

That if the Malaysian Airlines is desirous of reducing the number of employees, it be done by letting go employees in compliance with the Last In First Out(LIFO) principle and other established just legal principles;

That if the Malaysian Airlines is to be taken over by another entity, like the Malaysian Airlines Berhad(MAB), workers should be employed by MAB as secure regular employees and not by means of precarious forms of employment like short-term contracts;

That Malaysia considers the rights, welfare and wellbeing of workers and their families are just as important, if not more, than the wellbeing and profits of government-owned or linked businesses.  

Charles Hector

Syed Shahir bin Syed Mohamud

Mohd Roszeli bin Majid

Pranom Somwong

For and on behalf the 64 organisations, trade unions and groups listed below

ALIRAN

Airlines Workers' Union Sarawak

Alternative ASEAN Network on Burma (Altsean-Burma)

Asia Monitor Resource Centre(AMRC), Hong Kong

Centro de Reflexión y Acción Laboral, CEREAL (Labour Studies and Action Centre), México

Center for Orang  Asli Concerns (COAC), Malaysia

Clean Clothes Campaign

Club Employees Union Peninsular Malaysia

Committee for Asian Women

CWI Malaysia (Committee For Workers’ International, Malaysia)

Daeduck Employees Union-Ind., CEPZ, Rosario, Cavite, Philippines

Eagle Ridge Golf Course and Residential Estate Employees Union, Cavite, Philippines

Electronic Industry Employees Union (EIEU) Southern Region, Peninsular Malaysia

Electronic Industry Employees Union(EIEU) Northern Region, Peninsular Malaysia

Garment and Allied Workers Union, Haryana, India

Globalization Monitor

Hye Sung Workers Union, CEPZ, Rosario, Cavite, Philippines

Institut PEREMPUAN (Indonesia)

Jaringan Kampung Orang Asli Semenanjung Malaysia(JKOASM)

Kesatuan Pekerja-Pekerja Perodua

Kesatuan Pekerja-Pekerja Mitsui Copper Foil(MCFEU)

Kesatuan Pekerja-Pekerja MHS Aviation Berhad(MHSEU)

Kesatuan Eksekutif AIROD

Kesatuan Pekerja-pekerja Perodua Engine Manufacturing Sdn. Bhd

Kesatuan Pekerja-Pekerja Perusahaan Otomobil Nasional Sdn Bhd (KPP Proton)

Knights For Peace, International

MADPET (Malaysians Against Death Penalty and Torture)

Network of Action for Migrants in Malaysia(NAMM)

Nagkakaisang Manggagawa ng Keyrin(trade union), CEPZ, Rosario, Cavite, Philippines

North South Initiative

Malaysian Humanist and Rationalist Movement ("myHARAM")

Malaysian Trade Union Congress(MTUC)

Metal Industry Employees' Union(MIEU), Malaysia

MAP Foundation, Chiangmai, Thailand

Masyarakat Akar Rumput (MAKAR Indonesia)

Migrante International

Myanmar Ethnic Rohingya Human Rights Organization Malaysia (MERHROM)

National Union of Transport Equipment & Allied Industries Workers (NUTEAIW)

National Union of Flight Attendants Malaysia (NUFAM)

National Union of Hotel, Bar and Restaurant Workers (NUHBRW)

National Union of Journalist (NUJ) Cawangan Utusan Melayu

National Union of Tobacco Industry Workers(NUTIW)

National Union Employees in Companies Manufacturing Rubber Products(NUECMRP)

Non-Metallic Mineral Products Manufacturing Employees Union (NMMPMEU)

NUBE (National Union of Banking Employees)

Paper Products Manufacturing Employees’ Union of Malaysia (PPMEU)

Parti Rakyat Malaysia (PRM)

Peoples Service Organization (PSO)

Perak Women for Women Society (PWW)

PERMAS (Persatuan Masyarakat Selangor & Wilayah Persekutuan)

Persatuan Sahabat Wanita Selangor

Persatuan Kesedaran Komuniti Selangor

Persatuan Komuniti Prihatin Selangor dan Kuala Lumpur

PINAY (Filipino Women's Organization in Quebec), Canada

Pusat KOMAS

Railwaymen's Union of Malaysia (RUM)

Sahabat Rakyat (人民之友)

School of Acting Justly, Loving Tenderly and Treading humbly (SALT)

Solidarity of Cavite Workers, Cavite, Philippines

Tenaga National  Berhad Junior Officers Union (TNBJOU)

Tenaganita

Workers Assistance Center, Inc (WAC),

WH4C (Workers Hub For Change)

Yayasan LINTAS NUSA Batam – Indonesia