The Bumiputra-Commerce Bank Bhd Executive Staff Union Peninsula Malaysia (the Complainant) lodged a complaint under section 56(1) of the Industrial Relations Act 1967 ("the Act") that Bumiputra-Commerce Bank Bhd ("the Respondent") has failed to comply with Article 36.1 of the Collective Agreement Cognizance No. 1/2003 ("the C.A.")

AWARD

This is a Complaint lodged by Bumiputra-Commerce Bank Bhd Executive Staff Union Peninsula Malaysia (hereinafter referred to as "the Union") against Bumiputra-Commerce Bank Bhd (hereinafter referred to as "the Bank") under section 56(1) of the Industrial Relations Act 1967 for the non-compliance of Article 36.1 of the Collective Agreement entered between the Union and the Bank for the period effective from 1 January 2003 to 31 December 2005 which had been taken cognizance by the Industrial Court and registered as Cognizance No. 1/2003, "the C.A.".

Brief Facts of the Case

The allegation of non-compliance leveled by the Union against the Bank is on a specific provision of the C.A. ie, Article 36.1 which is reproduced as follows:

"Article 36.1: Existing Benefits

36.1 The Bank shall not remove any existing benefits being currently received daily or monthly in cash or in kind by the Officers which are not covered under the present terms of this Agreement, except that:

(a) Benefits given in kind for a specific reason, as and when such reason ceases to exist, shall stop being given.

(b) Allowances paid for the doing of a specific task, as and when such task ceases to be performed by the Officers concerned shall cease to be paid."

According to the Union, the Bank vide a briefing held on 5.3.2004, had informed its Treasury Dealers from the Treasury Department (hereinafter referred to as "the Officers") of its decision to cease payment of Dealing Allowance and announced the introduction of Treasury Incentive Plan (hereinafter referred to as "TIP") in place of the Dealing Allowance. The Union had voiced its objection as there was no consultation with the Union nor was its consent being given to the Bank. However, the Bank proceeded to seek acceptance from each individual Officers over the TIP by writing a letter dated 9.3.2004 to them. The Union further alleged that vide this same letter, the Bank had threatened disciplinary action against the Officers who failed to accept and comply with the new TIP. Hence the Union contended that the Bank's action in implementing the new TIP and ceasing the Dealing Allowance was in breach of Article 36.1 of the C.A.

The Issues before the Court

Several issues were raised in this case which can be deduced into the following main issues:

1. Is the Dealing Allowance paid to the Officers 'existing benefit' within the meaning and intent of Article 36.1 of the C.A.?

2. Was the Dealing Allowance being removed for good or was it being replaced by TIP and whether TIP was also an 'existing benefit' within the meaning and intent of Article 36.1 of the C.A.?

3. Was there a cessation of the 'existing benefit' by the payment vide TIP to satisfy the condition precedent thereby constituting a breach or non compliance of Article 36.1?

4. Was there a need to negotiate the TIP scheme with the Union and obtain its consent before the introduction of TIP under Article 9 of the C.A.?

5. Does the Dealing Allowance form a separate term of the contract of employment between the Bank and the Officers?

6. By removing the Dealing Allowance, discretionary bonus which was previously paid was not payable to the Officers. What is the status of this bonus?

7. Is it equitable and good conscience to order the Bank to retain Dealing Allowance instead of TIP?

The Law

The existence of a breach or non compliance of a term of the C.A. is a condition precedent to the exercise of the power under section 56 of the Industrial Relations Act 1967. The Supreme Court has held in Holiday Inn Kuala Lumpur v. National Union of Hotel, Bar & Restaurant Workers [1988] 1 CLJ (Rep) 116; [1988] 1 CLJ 133, inter alia,