Kesatuan Pekerja-Pekerja Bukan Eksekutif Maybank Bhd v Kesatuan Kebangsaan Pekerja-Pekerja Bank & Anor [2018] 2 MLJ 590

Nur Rasidah bt Jamaludin v Malayan Banking Bhd and other appeals [2018] 3 MLJ 127 Court of Appeal
September 20, 2018
Dato’ Low Mung Hua (in his personal capacity and as representative of the members of the Eng Bee family) v Banting Hock Hin Estate Co Sdn Bhd & 8 Ors [2003] 6 AMR 245.
September 20, 2018

Federal Court Upholds Trade Union’s Right to Be Heard

The Federal Court held that the Director General of Trade Unions had a duty to consult with all relevant parties before making a decision whether to register a trade union under s 12 of the Trade Unions Act 1959.

The High Court

The National Union of Bank Employees (NUBE) had challenged the decision of the Director General of Trade Unions (DG) in allowing the registration of an in-house trade union of non-executive employees of Maybank Bhd (MBB) without hearing or consulting any other interested party. The DG was of the view that he had absolute unfettered discretion under s 12 (1) of the Trade Unions Act (TUA) 1959 in deciding whether to register the trade union. NUBE filed an appeal with the DG under s 71A TUA 1959 to cancel the said registration. The DG did not respond. NUBE then filed a judicial review with the High Court to quash the decision of the DG on the ground that the DG had breached the rules of natural justice in failing to provide NUBE an opportunity to be heard before making the decision and the DG had failed to take into account that there would be overlapping or duplication of membership between the in-house union and NUBE since there were NUBE members who were MBB employees enjoying the terms and benefits of a collective agreement entered into between NUBE and the Malaysian Commercial Banks Association.

The High Court dismissed the judicial review application on the ground that s 12(2) TUA 1959 gave the DG wide discretion whether or not to allow the registration and there was no provision requiring the DG to consult any party before he decided to register.

Court of Appeal

NUBE filed an appeal to the Court of Appeal (CA). The CA unanimously quashed the DG’s decision and set aside the in-house union’s registration on the ground that there was gross failure on the DG’s part in complying with s 12 TUA 1959. The CA held that s 12 had to be read as a whole and it placed an investigative role on the DG before he could decide whether or not to register a trade union.

A relevant factor the DG should have considered was whether it was necessary to have another trade union representing workmen in MBB when the NUBE already existed. The CA held that the DG was duty-bound under s 12(2) and (3) of the TUA 1959 to give notice to all necessary and interested parties to obtain their feedback in order to decide whether or not to register the trade union. The CA held that common sense and the rule of natural justice dictated that NUBE’s views should have been heard before the decision to register the in-house trade union was made. The CA held that the failure to strictly comply with the statutory obligations set out in s 12 rendered the decision or decision-making process a nullity ab initio.

Federal Court

In the appeal to the Federal Court, the issue to be decided was whether when considering a new trade union’s application for registration, the DG was statutorily required under s 12 TUA 1959 to consult with any existing trade union that already represented workmen in the particular establishment, trade, occupation or industry which the new trade union sought to represent.

The decision of the DG in registering the appellant without consulting and hearing NUBE was in breach of the principle of natural justice namely the audi alteram partem rule and the DG did not have unfettered discretion. Counsel argued that the CA was not bound to follow the ABOM case because it was decided per incuriam and that it is settled principle that a public decision-making body must afford reason for its decisions.

The Decision

The FC held that the DG had not complied with s 12 TUA 1959 when he exercised his discretion to register the in-house union. In exercising his powers and/or discretion and making a decision under s 12 TUA 1959, it was reasonable to imply that the DG ought to have made a further deliberation and consideration before he arrived at his decision. There was already an existing trade union representing and catering for the same particular industry workmen (i.e. the NUBE). NUBE had an interest in the registration of the in-house trade union and a legitimate and reasonable expectation to be heard but it was denied that right. In the circumstances of the case, the failure to consult NUBE was fatal.

ABOM Case Decided Per Incuriam

The CA did not err in departing from its earlier decision in the ABOM case. When the CA decided the ABOM case, at least two other earlier decisions were not brought to its attention and were never considered or referred to. As such, the CA’s decision in the ABOM case was clearly per incuriam in ignorance of those two earlier binding decisions. In the present case, when faced with a situation where there were conflicting decisions, the CA was entitled to depart from its decision in ABOM and rely on the two earlier decisions if it chose to do so and it did.

Judgement was given in favour of NUBE with costs. Decision of the Court of Appeal affirmed.

Alex De Silva was co-counsel with Dato Ambiga Sreenevasan and acted for NUBE. For further information please contact