Malaysia Airlines employees, trade union rights at risk by new law being rushed through

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What will happen to existing MAS workers and their unions?

In trying to save the national carrier MAS, the Malaysian government must respect and make worker and trade union rights a priority, say 37 civil society groups.

What will happen to existing MAS workers and their unions?
What will happen to existing MAS workers and their unions?

We, the undersigned 37 organisations, groups and trade unions are appalled with the Malaysian government’s current attempt to pass a law that will seriously undermine the worker and trade union rights of employees in Malaysian Airline System Berhad (MAS), the operator of Malaysia’s national carrier.

Not only will the consequence of the new law be loss of employment of all employees of MaAS and its subsidiaries, but also the end of the existing trade unions and associations representing the employees of MAS.

The law also opens the possibility of loss of regular employment until retirement, to be replaced by precarious forms of employment like fixed-term contracts or other even more precarious forms of labour practices which even evade direct employment relationship by using workers supplied by third parties.

The Malaysian Airline System Berhad (Administration) Bill 2014 was tabled and the first reading was on 26 November 2014; the second reading was on 27 November 2014 and was speedily passed by the Dewan Rakyat on 27 November 2014. Now, it is on the agenda of the first day of the Senate sitting on 1 December 2014, and scheduled for a second reading the following day.

There was really no time for anyone, including parliamentarians, to even study it, let alone comment or object to this Bill before it was speedily rushed through and passed in the Lower House of our Malaysian Parliament.

Now, the objective of the Malaysian government is clear: they want the national carrier, MAS, now owned by Malaysian Airline System Berhad, a government linked company that is having financial problems, to be taken over by a new legal entity, which will be known as Malaysian Airlines Berhad, in an effort to save the airline.

We may have no objections to MAS and its subsidiaries being taken over by the Malaysian government or via a government-owned legal entity provided that the rights of the workers and their trade unions are respected and preserved. The current Bill, however, seems to totally disregard the rights and the welfare of the existing employees of MAS and its subsidiaries or their unions.

Workers, unlike assets, cannot be transferred from one legal entity to another new legal entity. Thus, all the employees of MAS will naturally be terminated when the present MAS ceases to exist. And the Bill is silent on whether the new entity, Malaysian Airlines Berhad, will employ all these MAS employees without loss of tenure and benefits – or will they be abandoned with no employment?

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The Bill makes it most clear that Malaysian Airlines Berhad (MAB) will be a new entity, and will not be an “assignee or transferee or a successor employer” (Clause 26).

MAB shall also not “be liable for any obligation relating to any retirement plan or other post-employment benefit plans in respect of the employees or former employees…” It shall also not be “liable for any sum which is calculated by reference to a period of time prior to Malaysia Airlines Berhad becoming the employer of the person in question”.

“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 Act1955 [Act 265], Sabah Labour Ordinance 1950 [Sabah Cap. 67], Sarawak Labour Ordinance 1952 [Sarawak Cap. 76] or the Trade Unions Act 1959 [Act 262].”

This means that the MAB or the Administrator will not step into the shoes of MAS, or be liable, even in cases, including pending cases, between employees/trade unions and MAS. This will result in not just in loss of rights under existing labour laws, but also will result in employees and trade unions having to bear all loss of money, time and effort sustained this far in the pursuance of justice.

The MAB will be able to employ whomever and under what terms and conditions, as is stated in Clause 25, which states, “Malaysia Airlines Berhad may, in its sole discretion, offer employment to any person who immediately before the date of that offer is in the employment or service of the Administered Companies on such terms and conditions as the Malaysia Airlines Berhad may determine.”

The LIFO (Last In First Out) principle when it comes to employee reduction in cases of retrenchment can be ignored here, and there is every possibility that those worker and union leaders, and workers who stand up for rights may all just not be employed by MAB.

Now, most of the 20,000 employees in MAS enjoy stable regular employment until retirement, but now the new MAB may use precarious forms of employment like short-term contracts or even use the contractor for labour system to get third parties to supply workers without entering into a direct employment relationship with these workers at the airline.

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The Bill, as it stands, also will see the end of all trade unions of current employees of MAS, most of which being in-house union of MAS employees, and the end of enforceability of all collective bargaining agreements (CBA) with MAS. There seems to be an implied indication that future employees of MAB will enjoy the right of freedom of association and have trade unions.

The provision in the Bill may mislead some into believing that the existing trade unions of MAS employees will continue to exist once MAB takes over, but clearly this is not the case. Clause 28 is talking only about “any trade union duly recognised by the Malaysia Airlines Berhad” and “any association recognised by the Malaysia Airlines Berhad” – which implies that employees may have to once again form new unions and once again go through the process of seeking MAB’s recognition.

Hence, this can be perceived to be a ‘union busting’ exercise done by way of the enactment of a new law.

Whilst Clause 14 says that “…any person is under a contract or obligation to provide goods or services or both…” if retained, may be “at the same rate as would have been paid’ by MAS may also cover employees, alas considering the later clauses that deal specifically with employees, MAB, even if they do employ former employees of MAS, may not be paying the same wages. MAB will have the legal authority to stipulate new wages, benefits and terms.

Usually, when a company is wound-up, what is due and payable to the employees is amongst the first to be settled, and as such this Bill is even more detrimental to employees of MAS as MAB is freed of all these obligations to workers.

Employees who are terminated will also most likely not be able to recover retrenchment/termination benefits provided for in law as MAS, even if it still exists, may most likely be devoid of capacity, assets and money. And MAB, according to this Bill, clearly has no obligation to be responsible for MAS’s obligations to its workers.

The secrecy and the blitz-like way this Bill has been tabled, passed and being made law is also wrong, when there really should have been prior discussion and agreements especially with regard to the 20,000 over employees of MAS and their trade unions who now are in a precarious position uncertain even about the future well-being and livelihood of these workers and their families.

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We call for:

a) the immediate suspension of the process of making the Malaysian Airline System Berhad (Administration) Bill 2014 into law, or the putting into force of this Act, until all matters concerning the rights, future employment security, well-being and livelihood of the about 20,0000 employees of MAS and their families are resolved and provided for. The future of the existing employee trade unions and rights must also be resolved.

b) the Malaysian government to respect and make worker and trade union rights a priority in this exercise to try and save the national carrier, MAS – for, after all, employees can reasonably not be blamed for the poor management that had put MAS in this financial predicament.

c) the Malaysian government to guarantee that the right to regular employment until retirement will not be sacrificed in favour of a precarious employment relationship and practices to the detriment of workers and their unions in this process of saving Malaysia’s national carrier.

Charles Hector
Mohd Roszeli bin Majid
Pranom Somwong

For and on behalf of the following 37 civil society groups, trade unions and organisations:

Angkatan Rakyat Muda Parti Rakyat Malaysia (ARM-PRM)
Cambodian Human Rights and Development Association- ADHOC
CAW (Committee for Asian Women)
Community Action Network (Can), Malaysia
CWI Malaysia (Committee For A Workers International Malaysia)
Hawaii Center for Human Rights Research & Action (HCHR2A)
Human Rights Ambassador for Salem-News.com, UK
Malaysians Against Death Penalty and Torture (Madpet)
Malaysian Physicians for Social Responsibility
Migrant Care, Indonesia
Migrante International
MTUC (Malaysian Trade Union Congress)
MTUC Sarawak on behalf of 28 affiliates union in Sarawak
National Union of Flight Attendants Malaysia (Nufam)
National Union of Transport Equipment & Allied Industries Workers (NUTEAIW)
Network of Action for Migrants in Malaysia (NAMM)
Parti Rakyat Malaysia (PRM)
Pax Romana-ICMICA Asia
Perak Women for Women Society (PWW)
Persatuan Kesedaran Komuniti Selangor
Persatuan Sahabat Wanita, Selangor
Pusat Komas (Komas)
School of Acting Justly, Loving Tenderly and Treading humbly (Salt)
Tenaga Nasional Junior Officers Union (TNBJOU)
Workers Hub For Change (WH4C)

Aliran
Kesatuan Pekerja-Pekerja Mitsui Copper Foil
MHS Employees Union
Sahabat Rakyat Working Committee
Clean Clothes Campaign
Association of Maybank Executives
Knowledge and Rights with Young People through Safer Spaces (KRYSS)
National Union of Journalist (NUJ) Cawangan Utusan Melayu
Kesatuan Eksekutif Airod
MTUC Selangor dan Wilayah Persekutuan
MTUC Pahang
Club Employees Union Peninsular Malaysia

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