The Industrial Court must consider the financial capacity of the employer when adjudicating salary adjustments, prioritizing public interest and economic implications over union demands.

AWARD

Zulhemy Hassan:

Reference

[1] This is a reference by the Honourable Minister of Human Resources to the Industrial Court of Malaysia dated 13 January 2022 pursuant to s 26(2) of the Industrial Relations Act 1967 regarding the trade dispute between Kesatuan Kakitangan Ipoh Cargo Terminal Sdn Bhd (hereinafter referred to as "Union") and Ipoh Cargo Terminal Sdn Bhd (hereinafter referred to as "the Company") regarding the 8th Collective Agreement (hereinafter referred to as "8th CA") for the period 1 January 2021 to 31 December 2023 for adjudication.

Brief Backgrounds & Facts:

[2] The trade dispute before this division of the Industrial Court is in respect of the Union's proposal of an across the board salary adjustment at the rate of 6% (as pleaded in paragraphs' 31A, 33 and 40 respectively of the Amended Statement of Case) based on members salary at 31 December 2020 and in the annual salary scales (Article 20.1 and 20.2) for each grade of the terms and conditions to be incorporated into the 8th Collective Agreement for the period of three (3) years effective from 1 January 2021 until 31 December 2023 in favour of the Union including arrears of increments from 1 January 2021.

[3] The purpose for the Union's proposals for the 8th CA was to seek an improvement to the terms and conditions that were stipulated in the earlier 7th CA in respect of its member. That prior to the proposal for the 8th CA, there existed the 7th CA between the Union and the Company for the period from 1 January 2018 to 31 December 2020 whereof prior to the conclusion of the 7th CA, both Union and the Company were unable to resolve several matters through negotiations which then had resulted in a trade dispute, and subsequently the Honuorable Minister of Human Resources referred the trade dispute relating to the 7th CA to this Industrial Court under s 26(2) of the Industrial Relations Act 1967 for an Award.

[4] However, while the case for the 7th CA was pending trial at this Industrial Court , both parties to the trade dispute in good faith and in the spirit of Industrial Harmony amicably resolve the disputed issues and therefore requested for the Court to hand down a Consent Award No 3167 of 2018 dated 11 December 2018 incorporated the entire provisions, terms and conditions of the 7th CA into the said Consent Award.

[5] Over the time, prior to the expiry of the 7th CA, the Union submitted its proposal for the 8th CA to the Company by way of its letter dated 12 August 2020 and invited the Company to commence negotiations. The Union duly submitted its proposals for the 8th CA to the Company inter alia had ask the Company to consider a salary adjustment at the rate of 10% based on salary at 31 December 2020 across the board for its members with effect from 1 January 2021 and also sought for adjustment to the annual salary increment and salary scale respectively.

[6] The Union pleads that the formal meeting for the conclusion and signing of the 8th CA was convened on 28th to 30 September 2020. The agreed provisions of the 8th CA were duly signed by the Company's CEO namely Hj. Hilmi bin Hassan and the Union's President namely Muniandy @ Thayaalen a/l Marimuthu (pages 53-134 of UB-1).

[7] On the contrary, the Company contends that the meeting convened on 28th to 30 September 2020 is only for the purpose of discussion and/or negotiation on the draft of 8th CA proposed by the Union to be finalized and to be brought into Nomination and Remuneration Committee (NRC) meeting for recommendation and hence to Board of Directors for approval. As such, the Company strongly denies that there was final agree CA and the signatory referred by the Union is only on the agreed draft for further action.

[8] The Union avers that prior to the 7th CA being finalized and adopted by the parties, the Company had requested the Union to forgo the salary adjustment for the 7th CA due to the Company's financial status that did not permit for the salary adjustment at that material tim