Award

In this complaint under Section 56(1) of the Industrial Relations Act, 1967 (hereinafter referred to as "the Act") against Malaysian Prestressed Concrete Strand Manufacturing Sdn. Bhd., Ipoh (hereinafter referred to as "the Company") by Metal Industry Employees' Union (hereinafter referred to as "the Union") on 23rd February, 1989, the Union alleged that the Company had failed to comply with Article 24 of the collective agreement when it retrenched 42 of its employees on 31st January, 1989. It then prayed for an order of non-compliance against the Company.

At the proceedings before us, the facts emerged are briefly these. Malaysian Ropes Sdn. Bhd., Ipoh, a company incorporated in 1969, was in the business of manufacturing and sales of wire ropes and link chains. It was situated in Taman Meru Industrial Estate, Ipoh. It had a collective agreement with the Union. It was their 3rd collective agreement dated 18th August, 1984 (hereinafter referred to as "the 3rd Agreement"). The 3rd Agreement was for a period of three years, effective from 27th December, 1983. It was taken cognisance by the Industrial Court on 30th October, 1984 vide Cognisance No. 183/84. The 3rd Agreement was, on the application of Malaysian Ropes Sdn. Bhd./Malaysian Prestressed Concrete Strand Manufacturing Sdn. Bhd. and the Union, varied on 12th November, 1985 to the following extent-

"1) The Company shall pay the employees on a daily rate calculated as follows:

Monthly Rate

Daily rate = ------------

26

2) The Company shall provide not less than five (5) working days (inclusive of Public Holidays and Annual Leave) in one week.

3) The Company may provide work on Sunday and it shall not be considered as work on rest day.

4) This change shall only apply effective from 27th September, 1985 until 26th November, 1985, after which the usual terms and conditions of employment shall apply unless the Company and the Union agree to extend this period.

5) Further to the above conditions, if the situation of the Company improves within the stipulated period, then this agreement shall be void.

To date, the 3rd Agreement, as extended, is still in force.

3.Malaysian Prestressed Concrete Strand Manufacturing Sdn. Bhd., i.e. the Company, was a company incorporated in 1979. Its principal activities were the manufacturing of prestressed strands and wires. It was situated in Jelapang, Ipoh. It was a subsidiary of Malaysian Ropes Sdn. Bhd. and is now under receivership.

4.The Union strongly argued that the 3rd Agreement between Malaysian Ropes Sdn. Bhd. was binding on the Company because when Malaysian Ropes Sdn. Bhd. and the Union agreed to a variation to their collective agreement the Company was a party to the variation agreement. It further argued that Malaysian Ropes Sdn. Bhd. and the Union signed the memorandum of understanding with the Union on 6th February, 1986, agreeing to the following terms:

"In view of the difficulties faced by the Company and with the objective of rescuing the Company from shutting down, the Company and the Union agree to the following measures:

1) The Company recognises the Annual Increment as per the existing Collective Agreement.Payment of such increment will however be deferred for a year.

2) Medical Incentive as per Collective Agreement is recognised.Payment will be deferred until the end of the year.

3) To enable the shareholders to succeed in rescuing the Company's operations the Union agrees to seriously consider to extend the expiry date of the Collective Agreement for another year.

4) Promises made by BKB Management during the merger, viz payment of bonus and bringing forwards of Collective Agreement expiry date be waived.

5) Grading of employees shall be deferred until the next Collective Agreement.Management will consider upgrading or workers who have proven their efficiency and ability.

6) The Union assurs the Company of the continued cooperation and assistance of all the members to enable the Management to succeed in their efforts to rescue the Compan