A collective agreement must reflect the financial capacity of the employer, ensuring fairness in labor relations while considering economic conditions.

Wan Ahmad Farid Wan Salleh J:

[1] This case is about a trade dispute.

[2] The applicant Company is in the business of manufacturing specialised automotive metal-based components and modular assembly parts for cars. The manufacturing plant is located in Melaka.

[3] The 2nd respondent is a trade union having the exclusive bargaining agent in respect of the categories of employees of the 1st applicant Company.

[4] The Union entered into a first Collective Agreement ("1st CA") with the applicant for the period from 1 April 2016 to 31 March 2019. Art 41(a) of the 1st CA provides that it is to continue in force thereafter "until and unless superseded by a new collective Agreement or Award".

[5] A trade dispute arose when the parties could not conclude a 2nd Collective Agreement ("2nd CA"). The dispute was reported to the Director General of Industrial Relations. Unfortunately, the matter could not be resolved.

[6] The parties then made a joint request to the Minister of Human Resources ("the Minister") and thereafter, the Minister, acting under s 26(1) of the Industrial Relations Act 1967 (" IRA "), referred the dispute to the Industrial Court for adjudication and an award.

[7] The matter referred to by the Minister arose from the trade dispute in respect of Perjanjian Kolektif Ke-2 bagi tempoh 1 April 2019 hingga 31 March 2022 pertaining to the terms and conditions of employment applicable to the employees.

At The Industrial Court

[8] At the outset of the reference before the Industrial Court, the parties agreed to maintain the status quo of some of the articles in the 1st CA.

[9] Only the remaining un-agreed articles that were in dispute were referred to the Industrial Court for the adjudication and award. The un-agreed articles proposed under the new 2nd CA are as follows:

(i) Art 3 = Recognition of Union and Security

(ii) Art 6 = Scope of Agreement

(iii) Art 7 = Probation

(iv) Art 8 = Promotion

(v) Art 9 = Grade and Salary Range

(vi) Art 10(i) = Annual Increment

(vii) Art 11 = Hours of Work

(viii) Art 12 = Overtime

(ix) Art 13 = Payment for work done on Rest Days and Public Holidays

(x) Art 14 = Shift Allowance

(xi) Art 15 = Subsistence Allowance/ Heat Allowance/ Special Allowance

(xii) Art 15(ii) = Outstation Allowance

(xiii) Art 16 = Gazetted Public Holiday

(xiv) Art 17 = Annual Leave

(xv) Art 21(i) = Prolonged Illness

(xvi) Art 23 = Retirement

(xvii) Art 26 = Existing Benefits

(xviii) Art 29 = Check off

(xix) Art 39 = Attendance Allowance

(xx) Art 40 = Across the Board Adjustment

(xxi) Art 41 = Duration, Modification and Termination of Agreement

(xxii) Art 42 = Pilgrimage Leave and its equivalent

(xxiii) Appendix 1 = (Probation)

(xxiv) Appendix 2 = (Extension of Probation Appointment)

(xxv) Appendix 3 = (Confirmation of Appointment)

(xxvi) Appendix 4 = (Offer of Promotion on Probation)

(xxvii) Appendix 5 = (Offer of Confirmation of probation)

(xxviii) Appendix 7 = (Salary structure)

(xxix) Appendix 8 = (Deduction of Union Wages)

[10] After having heard the evidence, submissions of the parties and making a comparative analysis with other collective agreements in similar industries, the Industrial Court handed down the award, which can be summarised as follows:

Art 3: Recognition Of Union And Security

[11] The dispute is in respect of the existing art 3(g) which provides that the Union Room shall be provided upon request and subject to availability for the Union's legitimate use. The Union requested for the applicant company to provide a Union Room equipped with a notice board and sought to remove the phrase "subject to availability".

[12] The Industrial Court decided to retain the status quo in the 1st CA which provides that the applicant Company "shall provide a room upon request and subject to availability".

Art 6: Scope Of Agreement

[13] The Company proposed that art 6(f) be included and suggested that employees shall not be entitled to the benefits of the agreement if they resigned, are medically boarded out or are no longer in service. The Union, however, wa