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The Covid-19 Factor on Collective Bargaining

Kesatuan Sekerja Industri Elektronik Wilayah Utara Semenanjung Malaysia v Panasonic Automotive Systems Malaysia Sdn. Bhd. (Industrial Court Award No. 1711 of 2020)


Pursuant to section 30(4) of the Industrial Relations Act 1967 Act (the Act), the Industrial Court has wide discretionary powers in the determination of the final award in trade disputes which include having regard to public interest, the financial implications and the effect of the award on the economy of the country and/or the industry concerned.

In this case, the Industrial Court took into account the fragile economic climate caused primarily by the Covid-19 pandemic in arriving at its decision to, amongst others, reduce the annual increment percentage proposed by the Union from 10% to 5%.

The takeaway from this Award is that the Industrial Court is committed in striking a balance between weighing the interests of both the Company and Union together with the existing economic climate.

Moving forward

Although Covid-19 is now a factor to be considered by the Courts, employers must be mindful that the burden is still upon them to establish the financial position of the Company through cogent documentary evidence. A mere reliance on the pandemic or economic downturn would be insufficient.

The Industrial Court award may be viewed here.


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