INDUSTRIAL COURT OF MALAYSIA

CASE NO: 23(3)/3-254/15

BETWEEN

MALAYSIAN AIRLINE SYSTEM EMPLOYEES’ UNION

PENINSULAR MALAYSIA (MASEU)

AND

MALAYSIA AIRLINE SYSTEM BERHAD

AWARD NO: 1258 OF 2018

BEFORE : Y.A. TUAN RAJENDRAN NAYAGAM - CHAIRMAN

: MR. ALAN NETTO -Employer's Panel
: MR. KAMARUL BAHRAIN -Employee's Panel

VENUE : Industrial Court Malaysia, Kuala Lumpur

DATE OF REFERENCE : 31.03.2015

DATES OF MENTION : 11.05.2015, 22.06.2015, 28.07.2015, 01.09.2015,

02.11.2015, 15.01.2016, 15.03.2016, 01.06.2016,
28.11.2016, 26.05.2017, 15.06.2017, 16.08.2017,
03.10.2017, 09.01.2018, 23.01.2018, 07.02.2018,
28.02.2018,11.05.2018

DATE OF HEARING : 25.05.2018

DATES OF HEARING OF : -
APPLICATION

REPRESENTATION : Mr. Foo Kon Syn (MASEU)

(Representative for the Union)

Mr. Vijayan Venugopal

Messrs Shearn Delamore & CO.
(Counsel for the Company)

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 Award

[1] This is a reference under section 26[2] of the Industrial Relations Act 1967 [“the

Act”] made on 31st March 2015 pertaining to the trade dispute between Malaysian

Airline System Employees’ Union Peninsular Malaysia [“the union’’] and Malaysian

Airline System Berhad [“the company’’].

[2] The trade dispute relates to insufficient payments made by the company in lieu

of annual leave in respect of unutilised annual leave of 1452 cabin crew members .

[3] [i] Preliminary Objection by the company.

The counsel for the company raised an objection as to the locus standi of the

union to appear as a ''party''. The counsel submitted that the union was an in-house

union. That by virtue of Rule 3.1 of the Constitution of the union, membership of the

union was only open to employees of the company . Further, Rule 3.6 of the said

Constitution states that any person who ceases to be employed by the company shall

cease to be a union member. As at 1 st September 2015, the Company was no longer

in operation and had completely closed down its business operations and all

employees were terminated. As such, the Union has no members and therefore has no

locus standi to appear as a'' party'' in the present matter.

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[ii] Union's reply

The union representative relied on two cases to state that it had locus standi to

appear as a ''party.'' The first case was Erect Engineering Press Work Sdn Bhd v

Kesatuan Kebangsaan Pekerja- Pekerja Perusahaan Alat-Alat Peengangkutan

dan Sekutu & Anor [2001] 6 MLJ193. With respect, in that case the High Court said

that ‘’The Company at the date of complaint and hearing was in existence and is still in

existence’’ In the present case, the company had ceased operations on 1 st September

2015.

The second case was Kesatuan Kebangsaan Pekerja-Pekerja Perdagangan

[NUCW] v Nisso Iwai Corporation and Sojitz Corporation [2008] 4 ILR 112. In that

case, at the time of reference, the Industrial Court found that Lee, whom the Union

was representing, had retired from the company and as such ceased to be a Union

member. Therefore, the Industrial Court dismissed the Union’s case. However, the

Union representative produced an order from the Court of Appeal in respect of the

matter, which seems to indicate that the Industrial Court award was reversed.

Unfortunately, the grounds of judgement is not forthcoming and this Court is clueless

about the basis of the judgement. Be that as it may, in that case , the Company still

existed at the time of hearing. In the present case, at the time of hearing, the

Company had ceased all operations.

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[iii] Locus standi issue

In considering the issue of locus standi, we have to consider the reference. This

is a reference of a trade dispute under section 26[2] of the Act. The Act defines a

‘’trade dispute’’ as follows;

“any dispute between an employer and his workmen which is connected with the

employment or non-employment or the terms of employment or the conditions of work

of any such workmen’’

In the present case, the union has appeared as ‘’a party’’ in the trade dispute

before the Industrial Court to make a claim on behalf of 1452 cabin crew employees of

the defunct company. The Act declares who can be a ''party'' to a trade dispute.

Section 2 of the Act inter alia defines ‘’party’’ with reference to a trade dispute, to mean

a trade union of workmen acting for all or any number of its members in the trade

dispute. This means parties to a trade dispute can only be [a] on the one side, the

Company involved in the dispute and [b] on the other, an employee union acting for all

or any number of its members involved in the dispute. Hence, an employee Union is

indispensable in a trade dispute. [see Industrial Relations in Malaysia by Dunston

Ayadurai at p171]

In the present case, the union on 26 th February 2014 lodged a complaint under

section 18[1] of the Act to the Director of Industrial Relations. At that material time, the

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company existed and the 1452 cabin crew were members of the union. The dispute

was referred as a trade dispute to the Industrial Court on 31 st March 2015. While the

matter was still pending in Court, on 1 st September 2015, the Company ceased

operations and all its employees were dismissed. When the matter finally came up for

hearing on 25th May2018, the company had become defunct and there were no

employees.

The union claims that it now has 11 fee paying members. The question is

whether the in-house union with 11 so-called members has locus standi to espouse the

claim of the 1452 persons. Firstly, all workmen of the Company have been dismissed.

Secondly, by virtue of Rule 3.1 of the Constitution of the union, the union has no

members and with respect, the 11 fee paying persons cannot be considered as

members of the union, as they not the workmen of the company. This being the

case,the union being an in-house union cannot be a ‘’ party’’ to the trade dispute as

defined by section 2 of the Act. This is because it is not “a trade union of workman”.

Therefore based on the definition of “party’’ in section 2, it follows that the union must

have the company’s workmen as its members not only at the time of lodging the

complaint under section 18[1] but that they must remain as workmen and be members

of the union during the pendency of the trade dispute.

In the case of Dunlop Agro- Management Sdn. Bhd v Association of West

Malaysian Plantation Executives[1993]1ILR231, the learned President dismissed the

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union’s claim after the submission that union no longer had any members in the

Company and thus did not have the locus standi to represent any of its employees.

In conclusion, for the reasons given, we are of the view that the union has no

locus standi to espouse the claim of the dismissed 1452 workmen of the defunct

company.

Order

Accordingly, the claim is dismissed.

HANDED DOWN AND DATED THIS 4th DAY OF JUN 2018.

-signed-

( RAJENDRAN NAYAGAM )

CHAIRMAN

INDUSTRIAL COURT MALAYSIA

KUALA LUMPUR