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Trade union v company

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Muhamad Syakirin
Muhamad Syakirin

The union claimed workers who reached the maximum salary scale should receive annual increments for 2010 based on legitimate expectations. However, the court ruled the 2006 collective agreement did not obligate increments beyond 2008, and the company granting 2009 increments did not set precedent, so there was no legitimate expectation of increments for 2010.

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• MUHAMAD SYAKIRIN BIN TAJUL ANUAR • 2011881526 • ABM2235C
INDUSTRIAL COURT OF MALAYSIA NATIONAL UNION OF DRINK INDUSTRY WORKERS PENINSULAR MALAYSIA AND F&NCC BEVERAGES SDN. BHD. AWARD NO: 1055 OF 2011
AWARD • Application by the National Union of Drink Industry Workers Peninsular Malaysia (the union) for an order of non-compliance of articles 54.2 and 54.3 of the collective agreement dated 13 November 2006 between the union and F&NCC Beverages Sdn Bhd. • The 2006 collective agreement • Period of three years – 1st Jan 2006 to 31st Dec 2008. • Provision in Article 5 – The 2006 collective agreement shall continue in force until changed by new collective agreement.
RELEVANT PROVOSIONS IN THE 2006 COLLECTIVE AGREEMENT Article 54 read: ‘ARTICLE 54 WAGE CONVERSION AND ARREARS 54.1 The Company shall calculate wage conversion and arrears as follows: Basic Salary as at 31/12/2005 = RM + 7% Adjustment = RM Basic Salary as at 1/1/2006 = RM 54.2 Employees who are on the maximum of the salary scale will continue to receive their annual increments for years 2006, 2007 and 2008. 54.3 Employees who are over and above the maximum of the salary scale shall continue to receive their annual increments for the year 2006, 2007 and 2008’
THE COMPLAINT • The union stressed that the affected workmen who had reached the maximum of the salary scale had a legitimate expectation that they be paid an annual increment for 2010. • Workmen been paid the increment for 2009 even the C.A had expired on 31st Dec 2008. • UW-1, the General Secretary explained that the affected workmen who had reached the maximum of the salary scale had received an annual increment since 2000.
THE COMPANY’S REPLY • Company contended that no such provision in the 2006 collective agreement that the affected workmen who had reached the maximum of the salary scale be paid an annual increment for 2010. (referring to the C.A) • The company decided to give an annual increment to the workmen who had already reached the maximum of the salary scale an annual increment for 2009 in order to maintain the industrial harmony.
THE LAW The principles on the interpretation of the terms of a collective agreement was based on reference case: Kesatuan Pekerja-Pekerja Perkayuan v Syarikat Jengka Sdn Bhd (1997) 2 CLJ 276: • Bare in mind that the standard rules of construction that assist courts often pray in aid to determine contractual intention- this do not apply in interpret the C.A. • Involve strict and legalistic approach which is to be avoided in a case such as present. • Collective agreement is not a commercial document entered into between businessmen aided by legal advice. • C.A deals with more basic issues that relate to the live of workmen such wages and basic benefits.
The doctrine of legitimate expectation was explained by the Court of Appeal in Law Pang Ching and Anor v Tawau Municipal Council (2010) 2 CLJ 821: • Legitimate expectation of the right to be heard by a public authority was applied with respect to the cancellation of an immigration permit, non- renewal of license, eviction from land, etc. Dr Chandra Muzaffar v University Malaya (2002) 5 MLJ 369: • Applicant was appointed as a Professor on contract by University Malaya. • Initially appointed for a period of one year – continue renewed for another year. • When the contract come to end at the end of second year, his contract was not extended. • High Court found that applicant’s appointment on contract was a merely formality before he was confirmed as permanent employee.
• In JV Technologies Sdn Bhd v Hassan Osman (1998) 2 ILR 604 and Koperasi Koswip (M) Bhd v Roslan Abd Rashid (2001), the Industrial Court held that probationers had a legitimate expectation to be confirmed in employment if they performed to the satisfaction of the employer.
THE DECISION • The clear express provision in article 54.2 in the 2006 collective agreement. • No provision in the 2006 collective agreement for the payment of annual increment for 2009 and beyond • The parties involved also very clear. • Company give the annual increment for 2009 did not make it obligatory for the company to continue in 2010. • The Court held that the workmen who had reached the maximum of the salary scale DID NOT HAVE a legitimate expectation to receive an annual increment for 2010.

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Trade union v company

  • 1. • MUHAMAD SYAKIRIN BIN TAJUL ANUAR • 2011881526 • ABM2235C
  • 2. INDUSTRIAL COURT OF MALAYSIA NATIONAL UNION OF DRINK INDUSTRY WORKERS PENINSULAR MALAYSIA AND F&NCC BEVERAGES SDN. BHD. AWARD NO: 1055 OF 2011
  • 3. AWARD • Application by the National Union of Drink Industry Workers Peninsular Malaysia (the union) for an order of non-compliance of articles 54.2 and 54.3 of the collective agreement dated 13 November 2006 between the union and F&NCC Beverages Sdn Bhd. • The 2006 collective agreement • Period of three years – 1st Jan 2006 to 31st Dec 2008. • Provision in Article 5 – The 2006 collective agreement shall continue in force until changed by new collective agreement.
  • 4. RELEVANT PROVOSIONS IN THE 2006 COLLECTIVE AGREEMENT Article 54 read: ‘ARTICLE 54 WAGE CONVERSION AND ARREARS 54.1 The Company shall calculate wage conversion and arrears as follows: Basic Salary as at 31/12/2005 = RM + 7% Adjustment = RM Basic Salary as at 1/1/2006 = RM 54.2 Employees who are on the maximum of the salary scale will continue to receive their annual increments for years 2006, 2007 and 2008. 54.3 Employees who are over and above the maximum of the salary scale shall continue to receive their annual increments for the year 2006, 2007 and 2008’
  • 5. THE COMPLAINT • The union stressed that the affected workmen who had reached the maximum of the salary scale had a legitimate expectation that they be paid an annual increment for 2010. • Workmen been paid the increment for 2009 even the C.A had expired on 31st Dec 2008. • UW-1, the General Secretary explained that the affected workmen who had reached the maximum of the salary scale had received an annual increment since 2000.
  • 6. THE COMPANY’S REPLY • Company contended that no such provision in the 2006 collective agreement that the affected workmen who had reached the maximum of the salary scale be paid an annual increment for 2010. (referring to the C.A) • The company decided to give an annual increment to the workmen who had already reached the maximum of the salary scale an annual increment for 2009 in order to maintain the industrial harmony.
  • 7. THE LAW The principles on the interpretation of the terms of a collective agreement was based on reference case: Kesatuan Pekerja-Pekerja Perkayuan v Syarikat Jengka Sdn Bhd (1997) 2 CLJ 276: • Bare in mind that the standard rules of construction that assist courts often pray in aid to determine contractual intention- this do not apply in interpret the C.A. • Involve strict and legalistic approach which is to be avoided in a case such as present. • Collective agreement is not a commercial document entered into between businessmen aided by legal advice. • C.A deals with more basic issues that relate to the live of workmen such wages and basic benefits.
  • 8. The doctrine of legitimate expectation was explained by the Court of Appeal in Law Pang Ching and Anor v Tawau Municipal Council (2010) 2 CLJ 821: • Legitimate expectation of the right to be heard by a public authority was applied with respect to the cancellation of an immigration permit, non- renewal of license, eviction from land, etc. Dr Chandra Muzaffar v University Malaya (2002) 5 MLJ 369: • Applicant was appointed as a Professor on contract by University Malaya. • Initially appointed for a period of one year – continue renewed for another year. • When the contract come to end at the end of second year, his contract was not extended. • High Court found that applicant’s appointment on contract was a merely formality before he was confirmed as permanent employee.
  • 9. • In JV Technologies Sdn Bhd v Hassan Osman (1998) 2 ILR 604 and Koperasi Koswip (M) Bhd v Roslan Abd Rashid (2001), the Industrial Court held that probationers had a legitimate expectation to be confirmed in employment if they performed to the satisfaction of the employer.
  • 10. THE DECISION • The clear express provision in article 54.2 in the 2006 collective agreement. • No provision in the 2006 collective agreement for the payment of annual increment for 2009 and beyond • The parties involved also very clear. • Company give the annual increment for 2009 did not make it obligatory for the company to continue in 2010. • The Court held that the workmen who had reached the maximum of the salary scale DID NOT HAVE a legitimate expectation to receive an annual increment for 2010.
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