JUDGMENTBY: WAN SULEIMAN SCJ, MOHAMED AZMI SCJ, HASHIM YEOP A SANI SCJ

WAN SULEIMAN SCJ I have had the advantage of considering the judgments of my brethren and I would with respect concur with that of Tan Sri Dato Haji Mohamed Azmi.

In particular I would say that his construction of sections 14(2) and 17(2) of the Act would be the one I would perforce adopt myself.

We were assured from the Bar that most collective agreements have a "continuation" clause keeping alive the "terminated" agreement until a new one is agreed upon, a negotiating exercise which may take considerable time.

Perhaps the majority judgment will ensure that such a continuation clause becomes a standard provision in all collective agreements.

MOHAMED AZMI SCJ This appeal arose from the interpretation of article 1 clause (b) of a collective agreement on terms and conditions of employment entered into on December 29, 1975 between the appellant (hereinafter referred to as "the union") and the respondent (hereinafter referred to as "the company"). Under the heading of "PERIOD AND TERMINATION OF AGREEMENT," article 1 is in the following terms:-

"Clause (a) This Agreement shall be effective and in force for three (3)

years from June 1, 1975 to May 31, 1978.

Clause (b) The Agreement shall continue to be in force for a period of

three (3) years from the said date and shall continue

thereafter unless terminated by either party giving three (3)

months notice in writing to re-negotiate but no such notice

shall be given before March 1, 1978.

Clause (c) During the period of this Agreement, neither the Company nor

the Union shall seek to alter, modify, annul or add to any of

its terms whatsoever except by mutual consent or by operation

of Law."

There can be no dispute that under article 1(a), the collective agreement must continue in force for a minimum period of three years with effect June 1, 1975 and thereafter article 1(b) made provision for the agreement to continue after the three-year period. In short, it would be binding until either party wishes to re-negotiate in which case such party must first terminate the agreement by giving three months notice in writing. Under article 1(c) the terms of the agreement cannot be altered or modified during the period when the agreement is still in force "except by mutual consent or by operation of Law." It cannot be challenged that the terms of article 1 are in compliance with section 14(2) of Industrial Relations Act, 1967 which inter alia provides:-

"A collective agreement shall set out the terms of the agreement and

shall, where appropriate --

(a) name the parties thereto;

(b) specify the period it shall continue in force which shall not be

less than three years from the date of commencement of the

agreement;

(c) prescribe the procedure for its modification and termination."

Well after the minimum three-year period had passed, the union decided to re-negotiate with a view to entering into a new collective agreement. For that purpose the company requested the union to terminate the agreement as required by article 1(b) which the union did by giving three months notice vide letter dated February 3, 1979. The agreement was thus terminated in May 1979. The crux of the dispute in the present appeal is: what is the legal effect of such termination? Does termination of the agreement mean what it normally means under the general principle of contract as for instance found in the Employment Ordinance 1955 in that all the terms of the agreement would cease to be binding on both parties; or does it mean something else having regard firstly to the words used in the agreement itself and secondly to the provisions of the Industrial Relations Act, 1967 in particular section 17 under which a collective agreement which has been taken cognizance of is deemed to be an award of the Industrial Court and therefore incapable of being terminated by the parties under the terms of

Click Here to Read the rest of this document