IN THE INDUSTRIAL COURT OF MALAYSIAIN THE INDUSTRIAL COURT OF MALAYSIAIN THE INDUSTRIAL COURT OF MALAYSIAIN THE INDUSTRIAL COURT OF MALAYSIA

CASE NO: 15(1)/2 - 1333/07CASE NO: 15(1)/2 - 1333/07CASE NO: 15(1)/2 - 1333/07CASE NO: 15(1)/2 - 1333/07

BETWEEN

KESATUAN PEKERJA-PEKERJA PERUSAHAAN LOGAMKESATUAN PEKERJA-PEKERJA PERUSAHAAN LOGAMKESATUAN PEKERJA-PEKERJA PERUSAHAAN LOGAMKESATUAN PEKERJA-PEKERJA PERUSAHAAN LOGAM SEMENANJUNG MALAYSA SEMENANJUNG MALAYSA SEMENANJUNG MALAYSA SEMENANJUNG MALAYSA

AND

SYARIKAT NSG (M) SDN. BHD.SYARIKAT NSG (M) SDN. BHD.SYARIKAT NSG (M) SDN. BHD.SYARIKAT NSG (M) SDN. BHD.

AWARD NO: 1615 OF 2010AWARD NO: 1615 OF 2010AWARD NO: 1615 OF 2010AWARD NO: 1615 OF 2010

Before: Before: Before: Before: PUAN ONG GEOK LANPUAN ONG GEOK LANPUAN ONG GEOK LANPUAN ONG GEOK LAN - - - - CHAIRMANCHAIRMANCHAIRMANCHAIRMAN

MR. OOI KOK WAHMR. OOI KOK WAHMR. OOI KOK WAHMR. OOI KOK WAH - EMPLOYER’S PANEL

MR. MOHAMED BIN OSMAN - EMPLOYEE’S PANEL

VenueVenueVenueVenue :::: Industrial Court Malaysia, Kuala Lumpur.

Date of ReferenceDate of ReferenceDate of ReferenceDate of Reference :::: 30.05.2007

Dates of MentionDates of MentionDates of MentionDates of Mention :::: 01.02.2007; 03.10.2007; 06.11.2007; 10.12.2007; 03.03.2008; 09.04.2008; 10.06.2008; 09.07.2008;22.07.2008; 21.01.2009; 26.05.2009; 14.04.2009;16.04.2009; 08.09.2009; 09.10.2009;

Date of HearingDate of HearingDate of HearingDate of Hearing :::: 21.04.2009; 22.04.2009; 14.09.2009; 04.02.2010;06.08.2010; 01.09.2010;

RepresentativeRepresentativeRepresentativeRepresentative :::: Mr. Vijayan VeeriahIndustrial Relation OfficerMetal Industry Employees' Unionrepresenting the Union.

Mr. Balan Nairfrom Messrs Seah Balan Ravi & CoCounsel for the Respondent.

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REFERENCE :REFERENCE :REFERENCE :REFERENCE :

This is a reference under section 26(2) of the Industrial Relations Act

1967 (“the Act”)(“the Act”)(“the Act”)(“the Act”) pertaining to the trade dispute involving the 1st Collective

Agreement between Kesatuan Pekerja-Pekerja Perusahaan LogamKesatuan Pekerja-Pekerja Perusahaan LogamKesatuan Pekerja-Pekerja Perusahaan LogamKesatuan Pekerja-Pekerja Perusahaan Logam

Semenanjung MalaysiaSemenanjung MalaysiaSemenanjung MalaysiaSemenanjung Malaysia (“the Union”) (“the Union”) (“the Union”) (“the Union”) and Syarikat NSG (M) Sdn. Bhd. (“theSyarikat NSG (M) Sdn. Bhd. (“theSyarikat NSG (M) Sdn. Bhd. (“theSyarikat NSG (M) Sdn. Bhd. (“the

Company”)Company”)Company”)Company”).

A W A R DA W A R DA W A R DA W A R D

The reference pertains to the trade dispute between the Kesatuan

Pekerja-Pekerja Perusahaan Logam Semenanjung Malaysia (“the Union”) and

Syarikat NSG (M) Sdn. Bhd. (“the Company”) over the terms and conditions of

employment to be incorporated into the 1st Collective Agreement for those of

the Company's employees who are within the Union's scope of

representation.

By his decision contained in the Form D dated 10.5.2005 the

Honourable Minister of Human Resources accorded recognition to the Union

pursuant to section 9(5) of the Act. The Union submitted to the Company its

proposals for the 1st Collective Agreement vide its letter dated 10.4.2006.

The Company, however, refused to negotiate with the Union of the ground

that they were challenging the decision of the Honourable Minister.

When the dispute was called up for hearing on 6.11.2008 before the

then President, Y.A. Dato' Umi Kalthum bt. Abdul Majid, Mr. Balan of Messrs

Seah Balan Ravi & Co. raised a preliminary objection that the Court had no

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jurisdiction to proceed with the hearing on merits of the dispute relating to

the Collective Agreement between the Company and the Union. It was the

Company's case that the Company had not granted recognition to the Union.

According to the Company, the Honourable Minister's decision under section

9(5) of the Act was only a deeming provision. The Company had applied to

the High Court to review the Minister's decision and until a final

determination of the issue of recognition is secured, the Court should not

proceed with the hearing of the dispute.

It was not disputed that the Company did not obtain a stay order from

the High Court. The Union's representative submitted that the Minister's

decision under section 9(5) of the Act was final. The Court unanimously

dismissed the preliminary objection and directed the parties to proceed with

the hearing. The parties requested for an adjournment to enable them to

negotiate on the terms. The Court noted that both parties were not ready for

trial.

The Union's representative informed the Court that out of 32 articles,

15 had been agreed upon leaving a balance of 17 articles which they

intended to negotiate on further. The Company on its part complained that

till that day it did not know who were the Union members. The Court directed

the Union to inform the Company on members of the Union post haste.

The dispute was fixed for mention on 3 occasions at the Industrial

Court in Kuala Lumpur before the then President, Puan Amelia Tee Hong

Geok. The parties were directed to file their witness statements.

This dispute was called up for hearing before Y.A. Puan Amelia Tee

Hong Geok on 21.4.2009.

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The parties informed this Court that they had reached an agreement on

the following 19 Articles:-

1. ARTICLE 1 – PARTIES TO THE AGREEMENTARTICLE 1 – PARTIES TO THE AGREEMENTARTICLE 1 – PARTIES TO THE AGREEMENTARTICLE 1 – PARTIES TO THE AGREEMENT

This Agreement is made this ____ day of _________ between the

METAL INDUSTRY EMPLOYEES' UNION being a trade Union of

employees registered pursuant to the Trade Union Act, 1959

(hereinafter called “the Union”) of the one part and NSG (M) SDN. BHD.

(hereinafter called “the Company”) of the other part wherein it is agreed

that the terms and conditions of employment shall be observed by the

Union and the employees coming within the scope of this Agreement

on the one part and the Company on the other part.

2.2.2.2. ARTICLE 3 – SCOPE OF AGREEMENTARTICLE 3 – SCOPE OF AGREEMENTARTICLE 3 – SCOPE OF AGREEMENTARTICLE 3 – SCOPE OF AGREEMENT

a) This Agreement shall cover all employees eligible for the Union

membership excluding:-

i) Directors and Managers

ii) Employees in confidential capacities

iii) Managerial and Executive Staff having authority in the interest of

the Company to hire, transfer, suspend, lay-off, recall, promote,

dismiss, assign, reward or discipline other employees or

responsible to direct them or rectify their grievances

iv) All employees engaged in security work

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3.3.3.3. ARTICLE 4 – INTERPRETATIONARTICLE 4 – INTERPRETATIONARTICLE 4 – INTERPRETATIONARTICLE 4 – INTERPRETATION

a) Where any clause in any current contract of service exists which

is in conflict with the terms of this agreement then such clause

shall be superseded by the relevant terms of this agreement.

b) If this agreement is translated into other languages, the English

version shall be the authoritative edition.

c) This agreement supersedes all contracts signed by any individual

employee with the Company regarding general terms and

conditions of employment which are covered by this agreement.

4. ARTICLE 6 – GENERAL UNDERTAKINGARTICLE 6 – GENERAL UNDERTAKINGARTICLE 6 – GENERAL UNDERTAKINGARTICLE 6 – GENERAL UNDERTAKING

The Union agree that none of its worksite officials, who are employees

of the Company, shall engage in the Union's activities in the Company's

time and in the Company's premises except with the Company's prior

consent. Provided that matters relating to members grievances shall

not be treated as union activity. Both parties shall ensure that Labour

Management relations shall always remain calm and harmonious.

5.5.5.5. ARTICLE 7 – RECOGNITION OF THE COMPANYARTICLE 7 – RECOGNITION OF THE COMPANYARTICLE 7 – RECOGNITION OF THE COMPANYARTICLE 7 – RECOGNITION OF THE COMPANY

The Union recognises the right of the Company to operate and manage

its business and authority to execute all the various duties, functions

and responsibilities incident thereof shall be vested with the Company.

However, such authority shall be exercised in a justifiable manner and

shall not, in anyway, violate any of the provisions of this agreement or

any law.

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6.6.6.6. ARTICLE 8 – PROBATIONARTICLE 8 – PROBATIONARTICLE 8 – PROBATIONARTICLE 8 – PROBATION

a) All newly engaged employees shall serve a probationary period

of three (3) months. This period of probation may be extended in

writing to the employee concerned, but the entire period of

probation shall not exceed six (6) months in total.

b) On completion of probationary period, the employee may be

confirmed in writing within seven (7) working days and shall be

considered as a permanent employee back-dated to the date of

appointment if the Company deems that the employee has

reached the set standards as in the appraisal form.

c) The Company may require new employees to undergo medical

examination either before appointment, on probation or before

confirmation. The fees incurred shall be borne by the Company.

7 ARTICLE 10 – TRANSFER/RELOCATIONARTICLE 10 – TRANSFER/RELOCATIONARTICLE 10 – TRANSFER/RELOCATIONARTICLE 10 – TRANSFER/RELOCATION

a) An employee may be transferred from one section to another

with the Company provided that such transfer does not entail a

change to the detriment of the employee in regard to his terms

and conditions of employment. The employee shall also retain

his salary or wages.

b) A female pregnant employee under her request shall be

transferred to light duty section which can protect her health

concern.

c) In the event that the Company relocates to different premises,

the employees would be required to relocate to new premises.

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d) In the event the transfer or relocation entails expenses on the

part of the employee, the Company will reimburse all reasonable

expenses in accordance with its policy.

8. ARTICLE 11- HOURS OF WORK/REST DAYSARTICLE 11- HOURS OF WORK/REST DAYSARTICLE 11- HOURS OF WORK/REST DAYSARTICLE 11- HOURS OF WORK/REST DAYS

a) All employees shall work an average of forty-eight (48) hours per

week with alternative Saturdays as off days.

b) The working hours are as follows:-

NormalNormalNormalNormal

7.30 a.m. to 4.30 p.m.

with one (1) tea break for 15 minutes

Lunch break for 45 minutes.

ShiftShiftShiftShift

A Shift - 7.30 a.m. to 4. 30 p.m.

1 tea break for 15 minutes.

Lunch break for 45 minutes.

B Shift - 4.30 p.m. to 12.30 a.m.

Dinner break for ½ hour from

7.30 p.m. to 8.00 p.m.

C Shift - 12.30 a.m. to 7.30 a.m.

Break for ½ hour.

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9. ARTICLE 12 – OVERTIME & OVERTIME PAY AND WORK ON REST DAY ARTICLE 12 – OVERTIME & OVERTIME PAY AND WORK ON REST DAY ARTICLE 12 – OVERTIME & OVERTIME PAY AND WORK ON REST DAY ARTICLE 12 – OVERTIME & OVERTIME PAY AND WORK ON REST DAY

AND PUBLIC HOLIDAYSAND PUBLIC HOLIDAYSAND PUBLIC HOLIDAYSAND PUBLIC HOLIDAYS

a) Employees may be required to work overtime and on rest days

and public holidays only at the request of the Company and with

the consent of the employees.

b) Employees would be paid at rates based on the ordinary rate of

pay (ORP) as follows for overtime work and work on rest days

and public holidays.

a) Rest days: (Normal hours)

i) Monthly Rated:

● For work not exceeding ½ the normal hours/day :1/2ORP

● For work exceeding ½ but not exceeding normal

hours/day : 1 ORP

b) Public Holidays (Normal hours)

● For any work not exceeding normal hours of work : 2 ORP

c) Overtime (Work in excess of normal hours)

● Normal days : 1.5 times the hourly rate for each hour

● Rest days : 2 times the hourly rate for each hour

● Public holiday : 3 times the hourly rate for each hour

c. Employees who are required to do such work shall not

unreasonably refuse to do so.

d. As far as possible, the Company shall distribute overtime work

equitably between personnel in each of the various job

categories.

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10).10).10).10). ARTICLE 15 – MATERNITY LEAVEARTICLE 15 – MATERNITY LEAVEARTICLE 15 – MATERNITY LEAVEARTICLE 15 – MATERNITY LEAVE

a) All female employees will be entitled to paid maternity leave for

a total of sixty (60) days for each confinement subject to the

following conditions:

(i) They have been in employment for some time during the

four (4) months preceding confinement and for 90 days

during the nine (9) months preceding confinement.

(ii) They do not have 5 or more surviving natural children.

b) Absence from work due to illness or miscarriage prior to 28th

week of pregnancy shall be considered as maternity leave but

normal sick leave. Any absence from work after maternity leave

supported by medical certificate from the Company's doctor or

the General Hospital or other registered medical practitioner

shall be treated as normal sick leave.

c. The Company shall grant paid time off to the pregnant

employees who go for medical check-up on presentation of

relevant documents.

d. Employees are expected to notify the Company at least 2

months before they intend to commence maternity leave inform

the Company of the person they have appointed as their

nominee.

11)11)11)11) ARTICLE 16 – PUBLIC HOLIDAYSARTICLE 16 – PUBLIC HOLIDAYSARTICLE 16 – PUBLIC HOLIDAYSARTICLE 16 – PUBLIC HOLIDAYS

a) All employees shall be granted paid holidays on all public

holidays, either gazetted or declared, by the Federal Government

of Malaysia or by the State Government of Penang.

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b) If a holiday falls on a weekly rest day, the next working day shall

be observed as the holiday.

c) Where a holiday falls during the period of sick leave, annual

leave or the period of temporary disablement under SOCSO,

another day shall be granted in substitution.

d) An employee who is absent on the working day before or after a

holiday, without reasonable excuse, shall not be entitled to the

holiday pay for that holiday.

12) ARTICLE 18 – RETIREMENTARTICLE 18 – RETIREMENTARTICLE 18 – RETIREMENTARTICLE 18 – RETIREMENT

a) Employees shall retire upon attaining the age of 55 years.

b) The Company may invite an employee to continue in the

employment of the Company for a further period beyond the age

of 55 years for male or female but such extension of

employment shall be with the written consent of the employee

concerned. The Company will give six (6) months' notice of its

intention to either call for retirement or to invite the employee to

extend the period of employment for one year.

c) All such extension of employment beyond the age of 55 years

for male or female employees shall be for a period of not more

the one (1) year at a time and shall be subject to the employee

being certified physically fit by the medical practitioner

appointed by the Company.

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13)13)13)13) ARTICLE 21 – UNIFORMSARTICLE 21 – UNIFORMSARTICLE 21 – UNIFORMSARTICLE 21 – UNIFORMS

The Company shall supply free uniforms and safety shoes to all

employees.

14)14)14)14) ARTICLE 24 – GREIVANCE PROCEDUREARTICLE 24 – GREIVANCE PROCEDUREARTICLE 24 – GREIVANCE PROCEDUREARTICLE 24 – GREIVANCE PROCEDURE

Objective Of Grievance Procedure

The objective of the grievance procedure machinery is to resolve

all complaints and/or grievances of employees swiftly and

equitably. Towards this objective the following procedure, for the

settlement of complaints and/or grievances, is agreed:-

a) All complaints and/or grievances shall be brought to the

attention of the Company by either the employee concerned or

by the Union.

b) The Company shall, on receipt of such a complaint and/or

grievances, investigate the said complaint and/or grievances,

within three (3) working days. Thereafter the Company shall take

all the necessary steps to resolve the issue within a further

period of seven (7) working days.

c) Where the Company fails to resolve the complaint and/or

grievance or where the employee or the Union is not satisfied

with the Company's actions in the matter, the complaint and/or

grievances shall be jointly referred to the Minister of Human

Resources or reported to the Director General for Industrial

Relations for conciliation.

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15) ARTICLE 25 – ARBITRATIONARTICLE 25 – ARBITRATIONARTICLE 25 – ARBITRATIONARTICLE 25 – ARBITRATION

Any dispute relating to the interpretation or implementation of this

agreement shall, unless settled by negotiations between the Company

and the Union, be referred to the Industrial Court in accordance with the

relevant provisions of the Industrial Relations Act 1967.

16).16).16).16). ARTICLE 27 – INDUSTRIAL ACCIDENTARTICLE 27 – INDUSTRIAL ACCIDENTARTICLE 27 – INDUSTRIAL ACCIDENTARTICLE 27 – INDUSTRIAL ACCIDENT

All employees are to be properly registered with SOCSO. Any employee

who meets with an accident during the course of employment will be

entitled to apply for benefits from SOCSO. The Company shall provide

all assistance to the employee in recovering benefits from SOCSO.

17).17).17).17). ARTICLE 28 – HEALTH AND SAFETYARTICLE 28 – HEALTH AND SAFETYARTICLE 28 – HEALTH AND SAFETYARTICLE 28 – HEALTH AND SAFETY

a) The Company shall agree that whilst the Union recognises its

right to operate and manage its business in all respects, it shall

at all times strictly follow the provisions of the Occupational

Safety And Health Act, 1994 or any subsequent amendments to

the said Act which will contribute to the well-being and interest

of all parties concerned.

b) In the event of the Union being able to justify that the Company

has breached any of the provisions as stipulated in the

Occupational Safety and Health Act, 1994, in relations to safety,

health and welfare, the Company shall make rectification in

accordance with the requirements of the said Act.

c) A Health and Safety committee, with Union representation shall

be formed and chaired by the departmental heads of either the

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production or maintenance departments. The said committee

shall be independent of its functions.

d) In recognition of the importance of a better working

environment, placing emphasis on the safety, health and

welfare of its employees, the Company shall endeavour to

implement any suggestion or recommendation that may be put

forward by the said committee.

18).18).18).18). ARTICLE 30 – LEGISLATIONARTICLE 30 – LEGISLATIONARTICLE 30 – LEGISLATIONARTICLE 30 – LEGISLATION

a) If any legislation provides for a lower level of benefits than which

is provided in this agreement, then the benefits to which the

employee is entitled to shall be the terms of this agreement.

b) If any legislation provides for terms which are more favourable

than of this agreement, then the terms of such legislation shall

supercede the relevant provisions contained in this agreement.

19).19).19).19). ARTICLE 31 – CASUAL/COMPASSIONATE LEAVEARTICLE 31 – CASUAL/COMPASSIONATE LEAVEARTICLE 31 – CASUAL/COMPASSIONATE LEAVEARTICLE 31 – CASUAL/COMPASSIONATE LEAVE

Casual leave with full pay shall be granted for the following:-

Employees' first legal marriage - 3 working days

Death of member of his immediate family

which expression shall include wife, husband,

children or parents - 2 working days

Death of parent-in-law, grandparents,

brothers or sisters - 2 working days

Birth of child - 2 working days

Natural Disaster affecting the employees

residence - 2 working days

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per occasion.

The dispute was called up for continued hearing on 22.4.2009 before

Y.A. Puan Amelia Tee Hong Geok. The parties informed the Court that after

further negotiations, they had agreed on another 4 articles. They were as

follows:-

1)1)1)1) ARTICLE 9 – PROMOTION/ACTING APPOINTMENTSARTICLE 9 – PROMOTION/ACTING APPOINTMENTSARTICLE 9 – PROMOTION/ACTING APPOINTMENTSARTICLE 9 – PROMOTION/ACTING APPOINTMENTS

a) Promotion

i) Where vacancies occur or are created in higher grades or

post, the Company shall promote serving employees.

Where no serving employee is found to be suitable, the

Company may fill such vacancy from outside recruitment.

ii) An employee of the Company who has been selected for

promotion to a new grade or group may be required to

serve a probationary period not exceeding three (3)

months. On completion of the prescribed probationary

period, if any, the employee shall be notified in writing

within 7 working days whether he has been confirmed in

his new grade or group.

iii) During the period of probation, an employee shall have his

wage or salary adjusted to the minimum starting wage or

salary for the new grade if his wage or salary in the

previous grade was lower than the minimum wage or

salary for the new grade but such adjustment shall not be

less than one (1) increment in the previous scale.

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On confirmation of probation, the employee shall be

granted a salary adjustment equivalent to one increment

of the promoted scale.

iv) Salary adjustments, granted under clause (iii) above shall

not affect the employee's entitlement to his normal

annual increment of the year.

v) Whenever it is decided not to confirm the promotion, the

employee shall revert to his former grade or group or be

given another job compatible to his capability and shall be

paid the same salary or wages that he last drew or would

have drawn including the annual increment in his former

post.

2). ARTICLE 13 – ANNUAL LEAVEARTICLE 13 – ANNUAL LEAVEARTICLE 13 – ANNUAL LEAVEARTICLE 13 – ANNUAL LEAVE

a) Employees shall be eligible for paid annual leave as follows for

every twelve (12) months of continuous service:

Calendar Year

● less than 2 years' service : 14 days

● More than 2 to 5 years' service : 16 days

● More than 5 years' service : 18 days

b) All applications for annual leave shall be submitted at least 3

days before such leave is required, and employees can only

physically commence such annual leave after the leave has been

approved.

c) Every effort will be made by the management to approve any

annual leave applied for, but if due to certain exigencies such

leave cannot be approved, then the employee concerned will be

compensated for such leave not taken.

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3). ARTICLE 19 – RETIREMENT BENEFITSARTICLE 19 – RETIREMENT BENEFITSARTICLE 19 – RETIREMENT BENEFITSARTICLE 19 – RETIREMENT BENEFITS

Employee who retire after 10 years of service with the Company shall

be paid an ex-gratia sum of RM1,500.00.

4) ARTICLE 22 – RETRENCHMENT/CLOSURE & RETRENCHMENT/ ARTICLE 22 – RETRENCHMENT/CLOSURE & RETRENCHMENT/ ARTICLE 22 – RETRENCHMENT/CLOSURE & RETRENCHMENT/ ARTICLE 22 – RETRENCHMENT/CLOSURE & RETRENCHMENT/

TERMINATION BENEFITSTERMINATION BENEFITSTERMINATION BENEFITSTERMINATION BENEFITS

22.1 The Company's general policy is not retrench employees and so

will take all necessary action to avert retrenchments. However if

retrenchment becomes inevitable, the Company will attempt to

give as much notice as is practically possible to employees and

will endeavour to obtain alternate employment for affected

employees.

22.2 Where the Company has to retrench employees, the selection

would made bona fide and based on the following criteria:

● Operational needs of the Company;

● Skill, experience and qualification of the employees;

● length of service;

● Age and family situation of employee;

● Other criteria like medical, performance and disciplinary

records.

22.3 Retrenchment benefits be paid based on the provisions of the

Employment (Termination and Lay Off Benefits) Regulations

1980.

In respect of all the agreed articles, this Court shall incorporate them

into this award as consent items. The Court then proceeded to hear the

parties on the remaining disputed articles. The Company's witness was Md.

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Rashid bin Abdul Rauf, the Human Resources Executive in charge of Human

Resources and General Affairs Department of the Company. However, during

the course of the hearing, the parties came to an agreement on certain of the

remaining disputed articles:-

1)1)1)1) ARTICLE 5 – RECOGNITION OF THE UNIONARTICLE 5 – RECOGNITION OF THE UNIONARTICLE 5 – RECOGNITION OF THE UNIONARTICLE 5 – RECOGNITION OF THE UNION

a) The Company recognises the Union as the exclusive Collective

Bargaining principal in respect of and on behalf of such

categories of employees who are eligible for Membership

thereof, and who are employed by the Company and defined as

coming within the scope of this agreement in accordance with

the provisions of Article 3 herein before stated.

b) The Company undertakes to inform all employees coming within

the scope of this agreement, that their terms of employment are

governed by the provisions of this agreement and a copy of the

notification shall be given to the Union Worksite Committee. The

Company shall supply free of charge to all employees a copy of

the collective agreement.

ARTICLE 6 – GENERAL UNDERTAKINGARTICLE 6 – GENERAL UNDERTAKINGARTICLE 6 – GENERAL UNDERTAKINGARTICLE 6 – GENERAL UNDERTAKING

The Union agreed that none of its worksite officials, who are

employees of the Company, shall engage in the Union's activities in the

Company's time and in the Company's premises except with the

Company's prior consent. Provided that matters relating to members'

grievances shall not be treated as union activity. Both parties shall

ensure that Labour Management relations shall always remain calm

and harmonious.

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2)2)2)2) ARTICLE 14 – SICK LEAVE/MEDICAL LEAVEARTICLE 14 – SICK LEAVE/MEDICAL LEAVEARTICLE 14 – SICK LEAVE/MEDICAL LEAVEARTICLE 14 – SICK LEAVE/MEDICAL LEAVE

a) Employees certified unfit for work by a registered medical

practitioner or by a registered dental surgeon shall be entitled to

paid sick leave.

b) Where no hospitalisation is necessary, an employee shall be

entitled to paid sick leave of:

(i) 14 days per year if an employee has been employed for

less than 2 years.

(ii) 18 days per year if an employee has been employed for 2

years or more but less than 5 years.

(iii) 22 days per year if an employee has been employed for 5

years or more.

c) Where hospitalisation is necessary, the sick leave entitlement

shall be sixty (60) days in each calendar year inclusive of the

days taken in preceding clause (b).

d) Sick leave granted immediately after the hospitalisation period

shall be considered as hospitalisation leave coming within the

meaning of clause( c ) of this article provided it is in respect of

the same clause of hospitalisation.

e) All employees will be entitled to medical treatment at any

registered medical clinic or dental clinic subject to a maximum

reimbursement of RM300.00 per year. Employees would be

required to submit claims for reimbursement of medical

expenses supported by receipts.

f) In the event of hospitalisation, the Company shall provide free

treatment at any government hospital.

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The case was called up for continued hearing on 13.7.2009. After

discussions, the parties agreed on the following provisions on Article 17:

3)3)3)3) ARTICLE 17 – ALLOWANCESARTICLE 17 – ALLOWANCESARTICLE 17 – ALLOWANCESARTICLE 17 – ALLOWANCES

a) Shift AllowanceShift AllowanceShift AllowanceShift Allowance

Shift allowance shall be paid to employees on shift duty as

scheduled below:-

A Shift - 7.30 a.m. to 4.30 p.m. - RM2.50

B Shift - 4.30 p.m. to 12.30 a.m. - RM5.50

C Shift - 12.30 a.m. to 7.30 a.m. - RM5.50

b) Transport AllowanceTransport AllowanceTransport AllowanceTransport Allowance

The Company shall pay transport allowance as follows to

employees who report for work:

(i) First 1 to 5 km - 45 sen/km

(ii) Next 5 to 9 km - 25 sen/km

(iii) 10 km and more - 20 sen/km

c) Mid-Day Meal AllowanceMid-Day Meal AllowanceMid-Day Meal AllowanceMid-Day Meal Allowance

Employees who are required to work outside the Company's

premises and who are unable to return to the Company before

their lunch break, shall be paid a meal allowance of RM2.00 per

occasion.

d) Full Attendance IncentiveFull Attendance IncentiveFull Attendance IncentiveFull Attendance Incentive

The Company shall pay full attendance incentive of RM50.00 per

month subject to full attendance at work.

e) Heat and Dust AllowanceHeat and Dust AllowanceHeat and Dust AllowanceHeat and Dust Allowance

Employees whose nature of regular duties entail exposure to

direct sunlight for more than one half (½) their normal hours of

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work shall be eligible to receive RM70.00 as Heat and Dust

Allowance.

f) Overtime Meal AllowanceOvertime Meal AllowanceOvertime Meal AllowanceOvertime Meal Allowance

A meal allowance of RM2.00 per occasion shall be paid to:

(i) An employees who works overtime up to 2 hours or more

on a normal working day

(ii) An employees who works on a rest day or public holiday

recognised by the Company

(iii) Employees who work overtime shall be provided with

transport. If transport is not provided, an allowance as per

clause (b) of this Article shall be given.

Upon Y.A. Puan Amelia Tee being appointed a Judicial Commissioner,

this dispute was then transferred to Court 15 for continued hearing. The

dispute was called up for continued hearing on 4.2.2010 and on 6.8.2010.

The parties informed the Court that after further discussions the parties had

agreed to the following Articles:

ARTICLE 20 – BONUSARTICLE 20 – BONUSARTICLE 20 – BONUSARTICLE 20 – BONUS

(a) All confirmed employees shall be paid an annual bonus

equivalent to one (1) month's salary and an additional one (1)

month's bonus shall be made at the discretion of the Company

based on the Company's appraisal process.

(b) Employees with less than one (1) year's service as at 31st

December will receive pro-rata bonus based on the number of

months' service during that calendar year.

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ARTICLE 23 – ANNUAL INCREMENT/INCREMENTAL DATEARTICLE 23 – ANNUAL INCREMENT/INCREMENTAL DATEARTICLE 23 – ANNUAL INCREMENT/INCREMENTAL DATEARTICLE 23 – ANNUAL INCREMENT/INCREMENTAL DATE

(a) Every employee shall receive an annual increment on 1st January

of each year at the flat rate of three (3) % on the maximum scale

across the board as set out in Article 32.

(b) Confirmed employees who have completed less than one (1)

year's service will have their 1st annual increment on 1st January

on a pro rata basis calculating from the date of 1st appointment

on probation. Thereafter they shall be granted one (1) full

increment on 1st January of each year.

ARTICLE 32 – SALARY SCALEARTICLE 32 – SALARY SCALEARTICLE 32 – SALARY SCALEARTICLE 32 – SALARY SCALE

Job PositionJob PositionJob PositionJob Position Minimum ScaleMinimum ScaleMinimum ScaleMinimum Scale Maximum ScaleMaximum ScaleMaximum ScaleMaximum Scale Annual IncrementAnnual IncrementAnnual IncrementAnnual Increment

(i) Operator RM546.00 RM850.00 RM26.00

(ii) QA/QC/Storehand RM600.00 RM1,020.00 RM31.00

(iii) Clerk RM750.00 RM1,275.00 RM38.00

(iv) Senior Clerk RM800.00 RM1,360.00 RM41.00

(v) Technician RM850.0 RM1,445.00 RM43.00

(vi) Leader/Storekeeper RM650.00 RM1,105.00 RM33.00

(vii) Assistant Supervisor RM850.00 RM1,445.00 RM43.00

(viii) Supervisor RM1,100.00 RM1,600.00 RM48.00

(ix) Boiler Man Grade II RM900.00 RM1,530.00 RM46.00

ARTICLE 29 – EXISTING BENEFITSARTICLE 29 – EXISTING BENEFITSARTICLE 29 – EXISTING BENEFITSARTICLE 29 – EXISTING BENEFITS

The Company shall continue any of the existing benefits not covered by

or in excess of the provisions of this Agreement.

21

The parties could not agree on Article 2 and Article 26 and this Court

proceeded to hear the parties on those Articles.

ARTICLE 2 – DURATION AND TERMINATION OF AGREEMENTARTICLE 2 – DURATION AND TERMINATION OF AGREEMENTARTICLE 2 – DURATION AND TERMINATION OF AGREEMENTARTICLE 2 – DURATION AND TERMINATION OF AGREEMENT

The date of the Honourable Minister's reference was 30.5.2007. The

Union requested that the effective date of commencement be 1.11.2006

which was about 6 months before the date of reference. It submitted that it

had first submitted its proposals to the Company on 10.4.2006.

The Company's Counsel had proposed that the effective date be

1.4.2009 which was the month when the hearing of this dispute began. He

submitted that if the Collective Agreement is backdated to the year 2006, it

would be a heavy burden for the Company in light of the present economic

climate.

Section 30(7) of the Act allows for an award to be retrospective to such

date which may not be earlier than 6 months from the date on which the

dispute was referred to the Industrial Court. Section 14(2)(b) of the Act

makes it mandatory for a Collective Agreement to continues in force for a

period of not less than 3 years.

The Court finds the demand by the Union for the effective date of the

Agreement to be on 1.11.2006 to be unacceptable. The agreement would

have expired on 31.10.2009 which is more than a year before the parties

could even execute the Agreement.

It was submitted for the Company that it has been giving increments to

its employees over the years except for the year 2009 when the Company's

22

volume of sales dropped. However, the Company did on 1.4.2010 give its

employees a salary adjustment. Therefore, the employees would not be

prejudiced if the effective date of the Agreement be brought forward.

The Court is of the view then that the Company's proposal for the

effective date to be on 1.4.2009 to be reasonable. Based on the mandatory

3 years' duration, the Collective Agreement would only expire on 31.3.2012.

Notwithstanding that the unexpired duration is about 1 year 3 months, that

would give the parties sufficient time to work out and implement the terms of

the Collective Agreement as in this case, the Company has only 188

employees. Accordingly, this Court orders that the effective date of this

Award be 1.4.2009. The Collective Agreement shall remain in force for a

period of 3 years expiring on 31.3.2012 and shall continue to apply

thereafter until superseded by a new Collective Agreement or an Award of the

Industrial Court.

ARTICLE 26 – SALARY ADJUSTMENT/CONVERSIONARTICLE 26 – SALARY ADJUSTMENT/CONVERSIONARTICLE 26 – SALARY ADJUSTMENT/CONVERSIONARTICLE 26 – SALARY ADJUSTMENT/CONVERSION

Counsel for the Company submitted that there should not be any

adjustment as the Company has been giving increment over the years and

the Company had recently made the necessary adjustment in April 2010. He

further submitted that if the Court is mindful of giving a salary adjustment, it

should be at the rate of 3%.

The Company is a subsidiary of Nansin Co. Ltd., a company

incorporated in Japan. The principal activity of the Company at its factory in

the Bukit Tengah Industrial Park in Bukit Mertajam is the manufacture of

castor wheels, wheels and moulded and extruded rubber products for

automotive, electrical and electronic industries and household applications.

23

The Annual Statement of the Company for the Financial Year ending

31.3.2009 shows a gross profit of RM2.2 million. For the Financial year

2008, the gross profit was RM3.3 million.

The Company pointed out that the profits for the year 2009 was due

mainly to the higher value of the Japanese Yen as the volume of sales had

dropped. The Company was making more money from the “Other Operating

Income” instead of sales. The Company was not doing well compared to the

Financial Years of 2004 and 2005 when its gross profits were in the region of

RM11 million.

The Union submitted that the Company paid annual increments based

on the number of years of service of the employees. The recent adjustment

by the Company was not given to all the employees. Looking at the

Company's Financial Statement for the year 2009, the Company did make

profits and therefore has the financial ability to pay. The Union demanded an

adjustment at the rate of 5%.

In the case between Arab-Malaysian Development BerhadArab-Malaysian Development BerhadArab-Malaysian Development BerhadArab-Malaysian Development Berhad and PerakPerakPerakPerak

Textile & Garments Manufacturing Employees' Union Textile & Garments Manufacturing Employees' Union Textile & Garments Manufacturing Employees' Union Textile & Garments Manufacturing Employees' Union [1987] ILR February

118 at page 129, the Industrial Court has set out the principles involved in

considering a revision of a wage system or a wage structure:-

“ In considering any revision of a wage system or

wage structure, it is well established that justice should be

done to the interests not only of employer but also of

employees. On the side of employees, the object of

constructing a wage structure would be to ensure that they

obtain a fair wage for their labour . This is their hope and

24

aspiration in a claim for pay revision. And there can be

little doubt that it the employees are paid a better wage,

which will enable them to live in fair comfort and

discharge their obligations to members of their families in

a reasonable way, they will be encouraged to work whole

heartedly and their work shall appreciably increase in

efficiency and productivity. On the side of employer, his

capacity to bear the burden of a new wage structure is a

primary consideration, bearing in mind, inter alia, that it is

right that he should be allowed a fair allocation from

profits to reserves and depreciation and a fair return for

his capital. Thus, the fixation of a wage structure is always

a delicate task, because a balance has to be struck

between the demands of social justice which require that

the employees should receive their proper share of

national income which they help to produce, with a view to

improving their standard of living and depletion which

every increase in wages makes in the profits, as this tends

to divert capital from industry into other channels thought

to be more profitable.”

It is well established in Industrial Law that in deciding on the question

of wage increases and wage structure, the Court has to take into account the

following factors:

(i) Wages and salaries prevailing in comparable establishments in

the same region;

(ii) Any rise in the cost of living since the existing wages or salaries

were last revised; and

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(iii) The financial capacity of the Company to pay the higher

wages/increases.

Of the aforementioned 3 factors, the primary consideration and

essential pre-requisite is the financial capacity of the Company to pay. It is

not the economic slow down as it has been found that there are companies

who can and do make substantial profits in the face of general downturn of

the economy. Cost of living generally and inevitably goes up and wages and

salaries prevailing in comparable establishments are higher but the financial

capacity of the Company has still to be considered. If the Company is not

able financially to bear the burden of the revised wage system, it may

eventually lead to the closure of its business resulting in the loss of jobs for

the employees. That would not be in the interest of both the Company and

its employees.

It is not disputed that the Company has made profits. However, there

had been a decline. The Company's Annual Statement for the Financial Year

ended March 2009 shows a gross profit of RM2.2 million compared to the

year 2008 where the gross profits was RM3.3. million. Notwithstanding the

said decline, the Company had proposed a wage adjustment of 3%.

The cumulative average increase in the Consumer Price Index (“CPI”)

for the years 2007 to 2009 was 7.42%. The Court is of the view that it is fair

and equitable that that the wage adjustment be fixed at 4.5% which

approximately 2/3 of 7.42%. In coming to its decision the Court took into

the account the following:-

26

(a) The general guideline laid down in the case between MalayanMalayanMalayanMalayan

Commercial Banks AssociationCommercial Banks AssociationCommercial Banks AssociationCommercial Banks Association vs. National Union of BankNational Union of BankNational Union of BankNational Union of Bank

Employees Employees Employees Employees [1982] M.L.L.R. 246 or better known as Harun J's

2/3rd principle:

“As a general rule, salary increases based purely on increase in

the CPI should not be less than 60% or more than 2/3 of the

average increase in the CPI over the previous 3 years' period.”

(b) The Company with the 188 employees within the Union's scope

of representation has the financial capacity to meet this

adjustment. Though the Company for the Financial Year ended

March 2009 had a decline in the amount of profits, there is an

increase in the cost of living . The Court acting according to

equity and good conscience is of the considered view that the

adjustment rate of 4.5% is fair and equitable.

We now come to the issue of conversion. The first principle of

conversion from present to new salary is that the employee should not take

home less then what he is at present receiving. Where there is no previous

wage structure and where a new wage structure is established for the first

time, the employee's salary, plus COLA/Special Relief Allowance, if any, will

be adjusted to scale with or without any additional step or steps, depending

upon the financial ability of the Company to pay. But where there is an

established salary scale and conditions of appointment and promotion are

the same or at least similar, conversion on a point to point basis is fair and

reasonable.

27

In this case there is no alteration to the established wage structure

except for the rates. This Court is of the view that the principle of point-to-

point conversion fits in very well. We therefore order that a point-to-point

conversion be adopted for all confirmed employees as at 1.4.2009. Hence

the order will be as follows:-

(i) If the salary of an employee is more than the minimum of the

new scale, convert to the same or the next higher point of the

new scale;

(ii) If the salary of the employee is less than the minimum, convert

to the minimum. However, if the difference between his salary

and the minimum of the new scale is less than one increment

to add one step;

(iii) If the employee is drawing the maximum or more than the

maximum of the new scale, he will continue to draw that scale

on a personal-to-holder basis and be given one increment.

Thereafter, he will not be given any annual increment.

In handing down this award, this Court did, as was required by section

30(4) of the Act, “have regard to the public interest, the financial implications

and the effect of the award on the economy of the country, and on the

industry concerned and also the probable effect in related or similar

industries.” It has also, in compliance with section 30(5) of the Act,

endeavoured to “act according to equity, good conscience and substantial

merits of the case.

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The parties may now draw up their Collective Agreement incorporating

the Articles that are not disputed and those they had agreed upon

subsequently together with the Award of this Court on the disputed articles.

HANDED DOWN AND DATED 22HANDED DOWN AND DATED 22HANDED DOWN AND DATED 22HANDED DOWN AND DATED 22NDNDNDND OF DECEMBER, 2010. OF DECEMBER, 2010. OF DECEMBER, 2010. OF DECEMBER, 2010.

( ONG GEOK LAN )( ONG GEOK LAN )( ONG GEOK LAN )( ONG GEOK LAN )CHAIRMANCHAIRMANCHAIRMANCHAIRMAN

INDUSTRIAL COURT MALAYSIAINDUSTRIAL COURT MALAYSIAINDUSTRIAL COURT MALAYSIAINDUSTRIAL COURT MALAYSIAKUALA LUMPUR.KUALA LUMPUR.KUALA LUMPUR.KUALA LUMPUR.

29