30 September 2001

IN THE INDUSTRIAL COURT OF MALAYSIA

IN THE MATTER OF INDUSTRIAL COURT CASE NO: 1/2 - 280/01


BETWEEN

SARAWAK COMMERCIAL BANKS ASSOCIATION

AND

SARAWAK BANK EMPLOYEES' UNION



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SBEU'S
SUBMISSION

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SARAWAK BANK EMPLOYEES' UNION
2ND FLOOR, LOT 79, BLOCK B, QUEEN'S COURT,
KING CENTRE, JALAN WAN ALWI
93350 KUCHING
SARAWAK

TEL. No. 082-453027
FAX No. 082-461829

SBEU'S SUBMISSION

May it please your Honour and members of this Court.

As the Sarawak Commercial Banks Association (SCBA) has tendered a written submission during the hearing, we would reply to these submissions in the order in which SCBA set up their submission. For ease of reference we have laid the submission side by side. We have left out those parts of the submissions where parties have since agreed to.

Further we would make our own submission on those areas where we feel necessary.

We append list of agreed articles (Appendix 1).

The following articles remain in dispute:

DEFINITION

The Act means Industrial Relations Act 1967.

"SCBA" means the Sarawak Commercial Bank Association.

"SBEU" means the workers union.

"U2" means Unions Bundle of Documents.

We enclosed working paper on difference between 2% annual increment and 5% annual increment (Appendix 2).

"U1" means Unions Bundle of Authorities.

We have enclosed the recent decision of the Federal Court in the case of Kesatuan Kebangsaan Wartawan Malaysia V Syarikat Permandangan Sinar Sdn Bhd (2001) 3 CLJ 547 (Appendix 3).

"Court" means Industrial Court.


INTRODUCTION

The Industrial Relations Act 1967 was enacted on 7th August 1967 with the following purpose.

"An Act to provide for the regulation of relations between employers and workers and their trade unions and the prevention and settlement of any difference arising from their relationship and generally to deal with trade disputes and matters arising thereon."

Section 30 (5) the Act make a very loud pronouncement that the Court

"Shall act accordingly to equity, good conscience and the substantial merits of the case without regard to technicalities and legal form".

Recently the Federal Court has recognised the original purpose of the Act and has consistently held that there must be a liberal and purposive interpretation of the Act.

Here SCBA wanted the Court to adopt the narrow and literal interpretation of what is within the definition of a "trade dispute" and what is not. Not because of any substantial merits of the case but just because SBEU do not wish to sign the CA on their terms - i.e. agree to their demands to surrender fundamental safeguards and terms and conditions of employment of part time and temporary employees. Can they be allowed to succeed?

Can they be allowed to impose that if SBEU articles on relations between parties, we are compelled to agree with whatever they offer (in this case, agree that they take out existing safeguards) otherwise they will apply the full force of the law and deny us Leave on trade union courses, notice board, and even the Article on Inter Relations Committees (IRCs).

IRCs have all these years form a fundamental and crucial part of the CA and in maintaining and promoting industrial peace in the Industry.



A.  ARTICLE 2 EFFECTIVE DATE AND DURATION

1. We may be forced by the law (we strongly submit otherwise) that the effective date shall not be more than 6 months from date of Minister's reference, but we do not agree that the Award shall expire in Aug 2003. Expiry should be 31 Dec 2002.

2. Apart from the law authorising the court not to go beyond the original expiry date, the losses to be incurred by the workers will be compounded if it is extended as demanded by SCBA. Already they will lose Jan to Aug 2000; they will lose from Jan 2003 to Aug 2003.

3. While similar workers in Sabah have their salary increases from Jan 2000 and will get their next salary increase in Jan 2003, Sarawak employees will be left out on both ends. Further, the losses will be felt in every subsequent CA.

4. This is not good for industrial harmony and is not conducive towards settling disputes because the 1st eight months of every CA will cause grievances and dissatisfaction amongst the employees concerned.

5. The court must not take the view that since SBEU did not agree to the settlement together with the other unions, we must now faced punitive consequences. We come here to seek justice, not punishment.

6. We must emphasise that both the law and the requirement of harmonious relationship and with equity and good conscience, this award should expire on 31 December 2002, i.e., together with the other two agreements so that SBEU is at par with the other unions for the next negotiations. Please bear in mind that employees are transferable throughout Malaysia and if common terms vary we will have a very untenable situation.

7. As we go into the other areas of the dispute, we hope the court will understand why we could not accept the settlement with the other unions ?in Sabah and West Malaysia. The easy answer must never be that we must always follow what is agreed by the other unions. Rather it is for this court to decide whether what is offered to us is equitable and fair.

8. We also submit that by signing the memorandum of understanding dated 7 July 2000, SCBA has consented to the effective date to be from 1st January 2000 to 31st December 2002 (please see our reply to SCBA's submission).


B.  SECTION 13

1. SCBA is relying on the so-called Management rights in section 13 of the Act to wipe out what are long existing Articles in the Collective Agreement. We must point out that this is not a case where the Union is proposing these Articles into the CA for the 1st time.

2. Some of these articles have been in the Collective Agreement for more than 20 years. And they cover terms and conditions of employment which SCBA wanted to exclude all together on the pretext of Section 13.

3. Nevertheless, we submit that both the law and good conscience will dictate that our proposals do not offend section 13. They are proactive articles that have served both parties well during the last 20 years and will continue to be a crucial part of this award.


C.  SALARY

1. We must express disbelief that SCBA attempt to convince the court that the Sarawak Allowance and the annual increment are built in mechanism to defray inflation. We will address each point as they appear in their submission.

2. One of the principles of salary adjustment is Industrial Practice. If bank saw it fit to granting 11.5% to 12 % to Sabah our request for Sarawak is fair and reasonable considering the loss of 8 months adjustment. Further, the figures would indicate that the economy of Sabah is worse off than Sarawak in most indicators.

3. Here again we would want to strongly express that the banks management should not get the message that unions will lose out if they come to court for a decision, instead of accepting the offers made by them. In normal circumstances we would accept the offer but the price we were asked to pay were just too much.

4. We come to this court for fairness, not punishment. We must categorically state that both parties tried very hard, and without acrimony to resolve the dispute.

5. Finally, we come here because of our confidence that the court can fairly decide on the areas of dispute without sending the wrong message to either party.

6. We respectively disagree with SCBA's contention that it is trite law that salary adjustment is only made for the purpose of compensating for the loss of value of their salaries on account of inflation. There are several other well-laid down principles of salary adjustment.

They are:

I. Cost of Living
II. Comparable Industry
III. Rate for the Job
IV. Financial Capacity
V. Reasonable profits
VI. Section 30(4)

We will address these principles one by one.

Further in Harun, the Court held that the so-called 2/3 only apply to cases where salary increase are based on purely increase in the CPI. It was held as follows (at page 38 U1):

In this country we think, the general rule should be that salary increase based purely on the increase in the CPI should not be less than 60% or more than 2/3 of the average increase of the CPI over the previous 3 year period."

In our case there are other factors.


I. COST OF LIVING

1. It is opportune now for the Court to closely re-examine the Harun case.

2. The Harun case was decided 20 years ago in 1981 over a dispute involving the same parties in the Banking Industry. It was during a period of very high inflation (21.5%). We submit that the Court, being mindful of Section 30 (4) was much concerned that the impact of salary adjustment may further escalate inflation.

3. The Court went on to say

4. "Salary increases in the private sector, however, are further subject to the employer's ability to pay, the salary levels in related and comparable industries and its effect on the economy of the country as a whole"

5. With due respect to Harun, we submit that the 2/3 guide is grossly unfair to employees because they lose 1/3 of their real income every three years.

6. An employee who earns a salary of RM1000 will lose more than RM51,000 in this real income in his basic salary alone. We have not yet calculated resulting losses in allowances, EPF contributions Bonuses, etc. (Please see page 136 U2).

7. This not tenable, especially in view of the fact that Banks made a cumulative total of more than 16 Billion Ringgit during the past 10 years alone and more than 25 billion the past 20 years and 9.7 Billion in year 2000 alone. (Please see page 23, 43 & 44 U2).

8. Employees will continue to suffer these losses and they are already built and compounded for the rest of their employment.

9. In Rothmans Pall Mall M Bhd V Rothmans Employees Union, the Court award more than the CPI (Page 270A to 270H U1). Similarly in SCBA v SBEU (1991) page 230-234 U1) the High Court upheld the Industrial Decision to award more than CPI.

10. In these cases

• Syarikat Telekom Malaysia Bhd & Kesatuan Pekerja-Pekerja Syarikat Telekom Malaysia Bhd, Award 149/91 page 235-240 U1.

• Petroleum National Berhad V. Kesatuan Kakitangan Petroleum National Berhad Sarawak Award 86/95 Page 241-251 U1.

• Hospital Assunta V. Kesatuan Pekerja-Pekerja Dalam Perkhidmatan Perubatan Dan Kesihatan Award 540-/94 page 264-270 U1.

the Court awards much higher the 2/3 of CPI.

We urge this Court to banish the 2/3 rule once and for all so that the standard of living for employees will at least be maintained, not be lowered by 1/3 every three years. This Court must at least stop one inequitable situation from deteriorating further.

Whilst there are numerous Courts Awards that have not followed the 2/3 principle for very sound reasons, it is time this Honourable Court finally banish Harun to the annals of history and make a pronouncement that CPI based purely on increase in CPI should at least match the CPI.

II. COMPARABLE INDUSTRY

1. We submit that the closest comparison is with the banking industry in Sabah. In Sabah the Court award an 11% increase in the salary structure and 11.5 to 12% salary adjustment.

2. One of the principles of salary adjustment is Industrial Practice. If bank saw it fit to granting 11.5% to 12 % to Sabah, our request for Sarawak is fair and reasonable considering the loss of 8 months adjustment/arrears.

3. Further, the figures would indicate that the economy of Sabah is worse off than Sarawak.

4. Here again we would want to strongly express that the banks management should not get the message that unions will lose out if they come to Court for a decision, instead of accepting the offers made by them. In normal circumstances we would accept the offer but the price we were asked to pay were just too much.

5. We come to this Court for fairness, not punishment. We must categorically state that both parties tried very hard, and without acrimony to resolve the dispute.

6. In SCBA v SBEU Award 178/81 at page 32 U1 the Court held

"The majority of the employees in the three regions work for the same employer and perform the same job functions."

7. In Hongkong Bank, the Court award 9% salary increase even though the Union strongly oppose the introduction of a performance related remuneration system.

8. The banks granted officers covered under the Scope of the Association of Banks Officers Malaysia an increase of 11%

9. Wah Tat Bank, a bank based in Sarawak granted salary increase of an average of 17% to its officers.

10. Bank Utama Malaysia another Sarawak based bank granted salary increase of up to 31%.

11. Please note the salary of officers are already higher than those under the scope of this award and they will get much higher increases in terms of absolute amounts.

III. RATE FOR THE JOB

We have shown the rate for the job has increased tremendously.

1. Clerical employees are also relieving Branch Managers. They are required to conduct staff meetings and to motivate and train fellow staff as well.

2. Authority limits have increased drastically.

3. Office boys are performing receptionist duties.

4. They have to go out on the streets to do marketing.

5. They have to go to exhibition booth and sales outlets at shopping centres during evenings, weekends and public holidays.

See U2 at pages 23-31, 154-172, 173-182 & 188 to 192.

This is recognised by the Banks themselves in that they granted revision of 11% in the salary structure in Sabah.

IV. FINANCIAL CAPACITY

The Financial Capacity of the Banks to pay is not in question. (Please see page 23 U2)

V. REASONABLE PROFITS

1. Banks made a cumulative total of more than 16 Billion Ringgit during the past 10 years alone and more than 25 billion the past 20 years and 9.7 Billion in year 2000 alone. (Please see page 23, 43 & 44 U2).

2. Standard Chartered Bank repatriated back to the United Kingdom RM210 Million in 1999 alone.

3. Shareholders of Maybank enjoy earnings of 58 sen for every RM1.00 share. Hong Leong Bank pays 58 sen for every share. OCBC pays 84 sen for every share. (Please see page 83 to 90 U2)

4. What SBEU is asking is just a reasonable share in these profits.


VI. SECTION 30(4)

1. We are mindful of the impact of the award on the economy of the country as a whole. We believe that our proposal will generate positive impact and is in line with the economic management of the country. The Government has made it clear that we need to stimulate domestic demand. This can be achieved by putting more income in the pockets of consumers.

2. The government's decision to reduce EPF contribution is indicative of this policy. We do not experience hyperinflation like in the 80's.

Please see page 193 to 196 U2.


VII. COMPENSATION FOR LOSSES DUE TO EFFECTIVE DATE

1. The average salary of our members is RM1500 per month (Please see page 22 U2). If the effective date is 1st September 2000 than our members will lose out 8 months of arrears of salary plus overtime and EPF contribution.

2. Assuming salary increase matches the salary increase granted to employees in Sabah this will translate as follows:

3. RM1500 X 12% + EPF = RM210.20 X 8 months = total of RM1681 for each employee.

4. This translates into RM60.00 difference per month over the remaining 28 months of the Award (assuming award expire on 31 Dec 2002).

5. RM52 equates to 3.99% (4%) of the average salary.

6. Therefore, we humbly request that if the awards that the effective date is 1 September 2000, the Court compensate employees by awarding 4 % salary increase over and above what it may award based on other principles above. We are not asking anything more; just compensation for loss suffered due to SCBA refusal to honour their commitment under Memorandum of Understanding dated 7 July 2001.

7. In Petronas case (supra) the Court does take into consideration loss suffered due to the change in the effective date.


VIII. CONVERSION

We request to follow the examples used in Sabah including for those at top of scale. Please see page 348 to 359 U1.


IX. SUMMARY

Having considered all factors and principles listed above we believe that our revised proposal of

Salary Structure Revision of 11 %

Comparable industry in Sabah is granted an 11% increase. Please note that there are numerous monetary packages that are inferior in Sarawak as well as SBEU's initiative to reduce sick leave, compassionate leave, maternity allowance etc., and the standard of living and economic development higher in Sarawak.

SALARY ADJUSTMENT

Taking the salaries adjustment granted to Sabah as a base (11.5 to 12%) plus the higher standard of living (see (household expenditure survey), the loss suffered by Sarawak employees in the arrears due, and the above principle into account, we are requesting salary adjustments of 18% for Non- Clerical, 16% for Clerical and 14% for Special Grade.


Here again we would want to strongly express that the banks management should not get the message that unions will lose out if they come to Court for a decision, instead of accepting the offers made by them. In normal circumstances we would accept the offer but the price we were asked to pay were just too much.

We come to this Court for fairness, not punishment. We must categorically state that both parties tried very hard, and without acrimony to resolve the dispute.

Be that as it may be, we humbly pray that after carefully considering the evidence and submission from both sides, this Honourable Court will make its awards in terms of SBEU's proposals.


D.  HOURS OF WORK 3RD SATURDAY

1. Because of the geographical location of Sarawak the day begins much earlier by at least 40 minutes. Business in Sarawak start at 8.00 AM and our proposal will enable banks to open earlier to serve customers better.

2. Latest advances in Computer and Information Technology allow banks to operate 24 hours a day. There is no operations or technical obstacles to prevent banks from opening earlier in Sarawak than other parts of the Country. Currently, different parts of the country observe different weekends/rest days and Banks are operating without problems.

3. Further, Magrib prayers starts at about 6.20 PM. Bank employees need to reach home in time to perform their religious obligations


E.  CHILDCARE

1. Our proposal to extend CHILDCARE allowance to all employees is motivated by the fundamental principle that there must be no discrimination on account of gender as well as race, religions guaranteed by our Federal Constitutions. The recent amendments to the Federal Constitution further fortified this principle.

2. In is grossly unfair as the CHILDCARE allowance was introduced in place of the need for banks to provide crèche for employees. If Banks provided crèche, male employees will be able to send their children as well.

3. Banks' reason that the allowance is to retain female staff is discrimination against male employees and will run foul of the Article 8 of the Federal Constitution.

4. There must be equal work for equal pay and this CHILDCARE allowance is part of the benefits package of employees covered under the scope of this Award.

5. We would like to add that the family structure in the modern times have changed. There are more and more fathers with children to take care off.

We pray that this Honourable Court so award.

CONCLUSION

SBEU tried very hard to conclude a Collective Agreement with SCBA. It was only after much soul searching that SBEU feels obligated to take a stand against the Banks attempt to take away safeguards that are fundamental to the very survival of the union and its ability to performs its duty to protect the interest of bank employees in Sarawak.

We are entirely mindful of the challenges facing the Banking Industry and we have shown that SBEU is always at the forefront in efforts to raise the productivity, efficiency and customers service levels of the Banks in Sarawak. This can be reflected in several proactive proposals on PRRS, sick leave, compassionate leave, and trade union training courses.

We come before this court because of our confidence that the Court can fairly decide on the areas of dispute.


Very much obliged.


Dated this 30th September 2001






ANDREW LO
GENERAL SECRETARY

FOR SARAWAK BANK EMPLOYEES UNION

This submission is filed on behalf of SBEU by Andrew Lo Kian Nyan, General Secretary of the Union and whose address for service is 2nd Floor, Lot 79, Block B, Queen's Court, King Centre, Jalan Wan Alwi, 93350 Kuching

APPENDIX 1

Agreed articles prior to or during the Industrial Court hearing (except where consequential effect from disputed articles marked by *)