The Court emphasized the necessity for the Company to demonstrate financial capacity when proposing reductions in employee benefits, affirming the Union's proposals for increased bonuses and fair salary adjustments.

AWARD

Rusita Md Lazim:

Reference

[1] This is a reference under s 26(2) of the Industrial Relations Act 1967 by the Honorable Minister of Human Resources Malaysia dated 23 August 2022 regarding the 16th Collective Agreement for the period of 1 February 2021 until 31 January 2024 between Kesatuan Pekerja-Pekerja Perkilangan Perusahaan Makanan and Khian Guan Biscuit Manufacturing Company Sdn Bhd.

[2] This was an order of reference by the Honourable Minister of Human Resources to the Industrial Court pursuant to s 26(2) of the Industrial Relations Act 1967 (hereinafter referred to as "the Act") between Kesatuan Pekerja-Pekerja Perkilangan Perusahaan Makanan (hereinafter referred to as "the Union") and Khian Guan Biscuit Manufacturing Company Sdn Bhd (hereinafter referred to as "the Respondent/Company") of the 16th Collective Agreement for the period from 1 February 2021 until 31 January 2024.

[3] Previously, the Industrial Court had given cognizance to the 15th Collective Agreement (CA) vide Cognizance No 021/2019 ("15th CA"). The 15th CA was entered into by both parties on 10 December 2018 and it took effect for three (3) years, which is from 1 February 2018 to 31 January 2021.

[4] The parties in this matter filed their respective written submissions dated 23 April 2024 (Union's Written Submissions), 26 April 2024 (Company's Written Submissions), and 4 June 2024 (Union's and Company's Written Reply Submissions).

[5] This Court considered all the notes of proceedings in this matter, documents and the cause papers in handing down this Award namely:

(i) The Union's Statement of Case dated 22 November 2022;

(ii) The Company's Statement in Reply dated 9 December 2022;

(iii) The Union's Rejoinder dated 16 December 2022;

(iv) The Union's Bundle of Documents dated 22 November 2022 - UW1;

(v) The Company's Bundles of Documents dated 3 January 2023 - COB1;

(vi) Union's Witness Statement - UW1 - (Mr Mahfudz bin Harun);

(vii) Company's Witness Statement - COW1 - (Mr Ong Chun Hoe);

(viii) Company's Witness Statement - COW2 - (Mr Louy Choon Seng);

A. Background

[6] The Respondent is in the business of manufacturing and trading biscuits and sweets.

[7] The Industrial Court has given cognizance to the Fifteenth (15th) Collective Agreement vide Cognizance No 021/2019 (hereinafter referred to as 15th CA). The 15th CA was entered into by both parties on 10 December 2018 and it took effect for three (3) years, which is from 1 February 2018 to 31 January 2021.

[8] The Union had proposed thirteen (13) Articles, which are arts 13, 14, 16, 25, 28, 29, 33, 35, 37, 38, 39, 40 and 41, in the renewal Collective Agreement (1 February 2021-31 January 2024) [hereinafter referred as 16th CA].

[9] Vide Interim Awards dated 16 February 2023 and 9 January 2024 the parties agreed upon seven (7) Articles: arts 16, 25, 28, 29, 33, 37 and 41.

[10] There are remaining six (6) Articles where the parties have not reached an agreement. The remaining disputed Articles are as follows:

(i) Article 13 - Bonus

(ii) Article 14 - Salaries/Wages

(iii) Article 35 - Implementation

(iv) Article 38 - Transport Allowance

(v) Article 39 - Incentive for Heavy Work, Machine Operators and Working in the Heat

(vi) Article 40 - shutdown

B. The Union's Case

[11] The Union proposed art 13 of the 16th CA to revise/increase the number of days in the formula to calculate the annual bonus from 40 days basic wages to 45 days basic wages for all confirmed employees with the Company at the end of the calendar year.

[12] The Union also proposed art 13 of the 16th CA to revise/increase the salaries/wages structure (minimum, maximum, and annual increment) based on daily/monthly rates according to their respective job designation.

[13] The Union also proposed that payment of salaries/wages be made within 3 working days and that any employees whose salary has reached the maximum will continue to receive full increments per the Collective Agreement.

[14] As regards art 35, the Union proposed to revise the adjustment of RM2.5