Minimum wage must be paid from employers’ funds, not through service charges, respecting collective bargaining agreements.

Table of Content
1. negotiation processes prior to wage enforcement. (Para 5 , 6 , 7)
2. defining conditions for trade disputes under ira. (Para 10 , 11 , 12 , 13)
3. positioning of service charge amid wage policy. (Para 14 , 15 , 16)
4. clarification of service charge distribution. (Para 18 , 19 , 20 , 21)
5. equity considerations and public interest in wage enforcement. (Para 23)
6. final verdict ordering wage payments and restitution. (Para 24)
7. statement of final orders by the court. (Para 25)
8. court orders on minimum wage payments and service charge refunds. (Para 26)

(ii) The Hotels filed 5 respective judicial review applications. The parties have informed the Court that on 9 November 2018 the High Court dismissed the applications, and that Notice of Appeal to the Court of Appeal was filed on 6 December 2018. All 5 appeals now await hearing by the Court of Appeal and its decision.

Minimum Wages Order 2016

[5] On 27 April 2016 the Minister made the Minimum Wages Order 2016 ("MWO 2016") fixing the minimum wage at RM 1000.00 per month for employees in Peninsular Malaysia, and RM 920.00 per month for Sabah, Sarawak & Federal Territory of Labuan. When it came into effect on 1 July 2016 the Hotels continued to apply the Top-Up Structure.

Events Preceding The Ministerial Reference

[6] On 1 June 2016 and 7 June 2016, Shangri-La Hotels (Malaysia) Berhad ("SHMB"), acting on behalf of the Shangri-La group of hotels, wrote a letter seeking a meeting with the Union to discuss the implementation of the MWO 2016.

[7] On 14 June 2016, SHMB, acting on behalf of the hotels, had a meeting with the Union, at which meeting the Hotels tabled a paper on the Implementation of the MWO 2016, and informed the Union of its intention to apply the Top-Up Structure. The Union was not agreeable. Similar events occurred between Tanjung Aru and the Sabah Union.

[8] On 15 June 2016 the Hotels issued respective letters to the Director General of Industrial Relations (DGIR) referring the trade disputes for conciliation under s 18 of the IRA . Following this there was an exchange of letters by which the parties gave their respective versions of what had transpired at the meeting of 14 June 2016.

[9] The DGIR duly convened a conciliatory meeting on 3 August 2016 which was attended by all relevant parties. This meeting did not succeed in bringing about any amicable settlement between the parties. Hence, these 5 references to the Industrial Court.

The Union's Preliminary Objection

[10] The Union contends that the Hotel's representation to the DGIR was premature. It does not dispute that was disagreement at the meeting of 14 June 2016 but contends that a trade dispute had not yet come into existence. The short answer to this objection is provided by s 18(1) of the IRA itself which states:-

"Where a trade dispute exists or is apprehended, that dispute, if not otherwise resolved, may be reported to the Director General by:-

(a) An employer who is a party to the dispute-"

[Underlining For Emphasis]

[11] Furthermore, if the Union had felt truly aggrieved at the minister's decision to refer the disputes to the Court, it should have sought judicial review of such decision, not raise as a preliminary objection in this Court.

Issue To Be Decided

[12] In unionized situations hotels have collective agreements with unions which provide for the apportionment of service charge collected from customers in the ratio of 90:10. 10% is retained by the hotel. 90% goes to the employees within the scope of the collective agreement and is distributed to these employees in accordance with a points system. In a typical case the monthly income of the employee will be his basic wage plus the service charge points allotted to him. For example, if he is entitled to 3 points he will get his basic wage plus the value of these points which depends on the service charge collections. Thus, if the value of each point is RM500.00 and his monthly basic wage is RM 1,000.00, the employee will receive RM2,500.00 arri

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