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TOPIC 3 TRADE UNIONS. UPON COMPLETING THIS TOPIC, STUDENTS SHOULD BE ABLE TO: Define trade unions and explain the objectives of trade unions Explain the types and categories of trade unions Discuss the composition of trade unions Explain the registration and management of trade unions
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TOPIC 3TRADE UNIONS UPON COMPLETING THIS TOPIC, STUDENTS SHOULD BE ABLE TO: Define trade unions and explain the objectives of trade unions Explain the types and categories of trade unions Discuss the composition of trade unions Explain the registration and management of trade unions Explain the immunity, powers, liability and rights of trade unions Norhayati Mohd Salleh ADS 465
3.1 DEFINITION • The term trade or labour unions can be understood as organized workers with common goals particularly to gain higher salaries, better working conditions, more benefits etc. Part I of the Trade Unions Act (TUA), 1959 defines; • “… a trade union as any association or combination of employers (being employers employing employees in West Malaysia, Sabah or Sarawak) or of employees (whose place of work is in West Malaysia, Sabah or Sarawak), as the case may be: • whether temporary or permanent; and • within any particular trade, occupation or industry or within any similar, and Norhayati Mohd Salleh ADS 465
DEFINITION …. CONT’D….. • having one or more of the following objectives: • the regulation of relations between employers and employers or between workmen and workmen; or • the representation of either employers or workmen in trade disputes; or • conducting of or dealing with trade disputes and matters related thereto; or • the promotion or organization or financing of strikes or lockouts in any trade or industry, or the provision of pay or other benefits for its members during a strike or a lockout. (SEC. 2, TUA 1959) Norhayati Mohd Salleh ADS 465
DEFINITION …. Cont’d iv. having one or more of the following objectives: • the regulation of relations between employers and employers or between workmen and workmen; or • the representation of either employers or workmen in trade disputes; or • conducting of or dealing with trade disputes and matters related thereto; or • the promotion or organization or financing of strikes or lockouts in any trade or industry, or the provision of pay or other benefits for its members during a strike or a lockout. (SEC. 2, TUA 1959) Norhayati Mohd Salleh ADS 465
3.1.1 IMPLICATION OF DEFINITION Several interpretations can be made as the following: • a union can be a temporary or permanent association or combination of employers or of employees; • a union must be an association or combination of employers or of employees, and cannot be an association or combination of both employers and employees; • a union (whether of employers or of employees) must be confined to Malaya or Sabah or Sarawak, and cannot embrace Malaysia as a whole; • an employer union must be confined to a particular industry or trade or to similar industries or trades (‘similar’ in the opinion of the Director General of Trade Unions); Norhayati Mohd Salleh ADS 465
IMPLICATION OF DEFINITION … cont’d • an employee union must be confined to a particular establishment or industry or trade or occupation or to similar industries or trade or occupations (again ‘similar’ in the opinion of the Director General); and • any association or combination of employers or of employees which fits the definition would be a union whether or not it has been registered as one. • Furthermore, the union must be confined to the private sector or to the public sector and, cannot embrace both sectors at once. Therefore: • an employer union must be confined to either one of the two sectors; and • an employee union must also be confined to one of the two sectors. (Ayadurai: 1998: pg 30-32) Norhayati Mohd Salleh ADS 465
3.1.2 OBJECTIVES AND FUNCTIONS The general objectives and functions of trade unions are the following: • to promote the industrial, social and intellectual interests of their members; • to obtain and maintain for its members just and proper rates of remuneration, security of employment and reasonable hours and conditions of work; • to promote the material, social and educational welfare of the members; and • to promote legislation affecting the interests of the members in particular or trade unionist in general. (Maimunah Aminuddin: 2007: p.110) Norhayati Mohd Salleh ADS 465
3.2 TYPES / CATEGORIES OF UNIONS There are basically three (3) categories of unions in Malaysia: (i) Public sector employees’ unions • Consists of the civil service, the statutory bodies and the local authorities. (ii) Private sector employees’ unions – are either national or in-house unions. – National union – covers all workers in the same industry, trade or occupation. – In-house union – is one where members are all employed by the same employer. (iii) Private sector employers’ unions – consists of employers that employ employees in the private sector. – in response to the large and powerful national trade unions of employees. (Maimunah Aminuddin: 2003: pg 136-140) Norhayati Mohd Salleh ADS 465
TYPES OF UNIONS … cont’d Other classifications: • Membership – employer or employees • Location – Sabah / Sarawak / Peninsular • Job nature – trades / occupations / industries / establishments • Sector – public / private Norhayati Mohd Salleh ADS 465
3.3 Composition of trade unions • Composition of trade unions is based on membership. It is the impact of the definition in TUA that requires a union may only be composed of: i. either employers or employees, ii. employers/employees in Sabah, Sarawak or Peninsular Malaysia; iii. employers/employees in the private sector or employees in public sector; iv. employers within a particular industry or trade or within similar industry or trade; v. employees within a particular establishment/industries/trades/occupations or within similar establishment/industries/trades/occupations Norhayati Mohd Salleh ADS 465
3.4 REGISTRATION AND MANAGEMENT OF TRADE UNIONS 3.4.1 Registration • This is a process where a trade union applies for registration and a certificate of registration will be issued by the authority. • The definition is silent on this matter (issue of registration). • But, registration is necessary for a union under the TUA 1959 (TUA does insist on the registration of every union). Norhayati Mohd Salleh ADS 465
3.4.2 APPLICATION FOR REGISTRATION An established trade union must fulfill several requirements to be registered as the following: i. It must make application to the DGTU, ii. It must be signed at least by 7 members of the union, iii. It must be made in the prescribed form, iv. It must be accompanied by the prescribed fee, v. It must make application to the DGTU, vi. It must be accompanied by a printed copy of the rules of the union signed by the members making the application, and vi. It must specify: The name of the union and the address of its head office; i. The titles, names, ages, addresses and occupations of the officers of the union…and such other information regarding such officers as the DGTU may in any particular case require to be furnished… and ii. The names, addresses and occupations of the members making the application. (Sec. 10, TUA 1959) Norhayati Mohd Salleh ADS 465
3.4.3 THE MANAGEMENT OF TRADE UNIONS The DGTU has enormous powers regarding management of trade unions i.e. registration, de registration of and any other matters related to trade unions. They are the following: 3.4.3.1 REGISTRATION TUA 1959 gives powers to the DGTU regarding registration of trade union as follows; • To register a trade union in the prescribed manner. (Sec. 12(1), TUA) • To issue a certificate of registration in the prescribed form. (Sec. 13, TUA) • To call for further information for the purpose of satisfying himself. (Sec.14, TUA) • To extend the period of registration from one month as to exceed a period of six month. (Sec. 8, TUA) Norhayati Mohd Salleh ADS 465
REGISTRATION … cont’d v. To reject any application by a trade union if: • He is satisfied that there is a trade union (exists) in respect of the particular trade, occupation or industry and in the interest of the workmen in that particular trade, occupation or industry. (Sec. 12(2), TUA) vi. Shall refuse to register a trade union if: (a) In his opinion the trade union is likely to be used for unlawful purposes or for purposes contrary to or inconsistent with its objectives and rules; or (b) He is not satisfied that the trade union has complied with the provisions of this Act and of any regulations made thereunder; or Norhayati Mohd Salleh PAD 365
3.4.3.2 DE REGISTRATION • Removal of right to practice by local registering body, usually as a disciplinary measure because of professional misconduct, possibly because of inability to perform because of psychiatric problem. – DGTU has the right to cancel or withdraw a certificate of registration of a trade union (to revoke the registration) under the following circumstances: i. At the request of a trade union; or ii. If he is satisfied that: • the certificate was issued by fraud or mistakes; • any one of the objectives or rules of the trade union is unlawful; Norhayati Mohd Salleh ADS 465
DE REGISTRATION … cont’d ….. – the constitution of the trade union or its executive is unlawful; – the trade union has been contravened any provision of this Act or of any regulations made thereunder; • the funds of the trade union has been expended in unlawful manner or unlawful objectives or on an objective not authorized by the rules of the union; or • the union has ceased to exist. (Sec. 15(1), TUA) iii. upon amalgamation of trade union or dissolution of trade union. (Sec.15(1), TUA) Norhayati Mohd Salleh ADS 465
DE REGISTRATION …. Cont’d …. (4) In addition, the DGTU has a power to order a suspension of a branch of a trade union if he is satisfied that the branch of a union has contravened the provision of this Act or the rules of the union concerned. – The suspension of an entire union or the entire class of union is in the hand of the Minister of Human Resources. (Sec.17, TUA) Norhayati Mohd Salleh ADS 465
3.4.3.3 Effects of de registration • A legally registered union will enjoy all rights, power and privileges that enable it to function effectively. • However, the registration certificate can be withdrawn or cancelled by the authority and it is called de registration of trade unions. De registration puts a union at disadvantages as follows: i. It is regarded as unlawful entity and stop from enjoying all rights, immunities and privileges of registered unions. However the union is responsible for all liabilities incurred or to be incurred by it. ii. The union or members cannot take part in any trade dispute, promote, organize or finance any strike or lockout. iii. The union is to be dissolved and the funds disposed according to its rules. iv. No one can participate in the management or organization of the union except those who are assigned to deal with dissolution of union, disposal of funds or appeal against de registration. Norhayati Mohd Salleh ADS 465
3.4.4 OTHER POWERS OF THE DGTU Furthermore TUA also provides the DGTU with powers which are related to trade unions as follows: • Funds and accounts • Memberships • Executives or officers or employees of a union Norhayati Mohd Salleh ADS 465
3.4.4.1 FUNDS AND ACCOUNTS • Unions are responsible to manage their funds and accounts according to Part VIII, TUA. The compliance to this Part is important to avoid mismanagement of funds and accounts. • Section 50, TUA outlines the use of union funds for specific purposes as follows: i. paying salary to the union’s employees ii. maintenance or up-keeping of the union office iii. settlement of trade dispute iv. payment of compensation such as strike allowance to the members for the losses arising out of trade disputes v. paying allowances to members and their family on account of death, old age, sickness, accident or unemployment. vi. printing, publishing and circulation of any printed literature such as newsletters, brochures, flyers and banners vii. financing union activities such as picket, strike, social events, sports activities, educational trips, dinner, family day and charitable activities Norhayati Mohd Salleh ADS 465
FUNDS AND ACCOUNTS …… cont’d… Furthermore, • Section 50A, TUA allows unions to undertake fund-raising and collection of money with prior approval from DGTU. • Section 51, TUA prohibits unions from using their funds to pay any fine or penalty imposed to any person by sentence or court order. • In addition, Section 52 prohibits unions from using their funds for any political purposes or supports. Norhayati Mohd Salleh ADS 465
OTHER POWERS OF THE DGTU ….. Cont’d Unions are responsible for proper financial accounts management as outlined in Sections 55, 56 and 57, TUA. • Section 55, TUA requires union treasurers (or officer-in-charged) to submit annual audited accounts for checking. • Section 56, TUA states the requirement for a trade union submits to the DGTU an audited general statements of the receipts, funds, effects and expenditure of the union in the 12 months (ending on the 31st March in each year); before 1st October of each year. • Section 57, TUA requires a trade union to make account books or other records of a trade union to be available for inspection or for audit by a fit and proper person approved by him. Norhayati Mohd Salleh ADS 465
OTHER POWERS OF THE DGTU ….. Cont’d 3.4.4.2 The DGTU also has certain extent of power in terms of membership i.e. membership of minors and membership of public officers and employees of statutory authorities. a) Membership of minors Minors refer to persons that are under the age of 21 but above the age of 16. Therefore the DGTU is responsible to prohibit the following persons from joining a trade union; i. Any person below the age of 16 years; ii. Any student of an educational institution (school, polytechnic, college, university, etc.) established under any written law, unless he is also employed as an employee and is over the age of 18 years; iii. Any person not engaged or employed in the establishment or industry or trade or occupation in respect of which the union is registered. (Sec. 26(1A), TUA) Norhayati Mohd Salleh ADS 465
MEMBERSHIPS … cont’d b) Membership of public officers and employees of statutory authorities • In these categories of membership, the Yang Di-Pertuan Agong has certain extent of power i.e. in terms of exemption from prohibition. However there are several groups of who are prohibited from establishing and joining trade unions i. members of the armed forces, the police force, any prison service; ii. public officers prohibited under any law from forming or joining a union; iii. public officers employed in a confidential or security capacity; and iv. public officers holding any post in the Managerial and Professional Group, unless they have been permitted to be members of a union by the Chief Secretary to the Government. (Sec. 27(2), TUA) Norhayati Mohd Salleh ADS 465
MEMBERSHIPS … cont’d Concept of ‘closed shop’ - Closed shop/ union shop means, some unions make agreement with employer that only union members shall be employed in particular organizations. - the concept of “closed shop” is not applied in Malaysia but practised in certain countries such as United States and United Kingdom. (Maimunah Aminuddin: 2006: pg 114 – 115) Norhayati Mohd Salleh ADS 465
MEMBERSHIPS … cont’d • The Trade Unions Act, 1959 regulates the right of employees to membership in trade unions. • In some cases the Act merely restricts this right, but in other cases it completely negates it. • This regulations affects public sector employees more than private sector, and • among public sector employees, it more affects government employees more than statutory and local authority employees. (Dunston Ayadurai: 1998: pg 34) Norhayati Mohd Salleh ADS 465
MEMBERSHIPS … cont’d Classes of persons prohibited from joining a trade union • any person below the age of 18 years; • Any student of an educational institution (school, polytechnic, college, university, etc.) established under any written law, unless he is also employed as an employee and is over the age of 18 years; • Any person not engaged or employed in the establishment or industry or trade or occupation in respect of which the union is registered; and Norhayati Mohd Salleh ADS 465
MEMBERSHIPS … cont’d iv. Any “public officer” (‘ a person in the permanent or temporary employment of any government (federal or state) in Malaysia). But, TUA adds that the Yang Di-PertuanAgong may, by notification in the Government Gazette, exempt any public officer or any group of them (i.e. any government employee or any group of them) from this prohibition, except: (a) members of the armed forces, the police force, any prison service; (b) public officers prohibited under any law from forming or joining a union; (c) public officers employed in a confidential or security capacity; and (d) public officers holding any post in the Managerial and Professional Group, unless they have been permitted to be members of a union by the Chief Secretary to the Federal General Government. Norhayati Mohd Salleh ADS 465
MEMBERSHIPS … cont’d • An employee of a statutory authority can be a member only of a union whose membership is confined exclusively to employees of that particular statutory authority; even then, an employee of a statutory authority: (a) who is employed in a confidential or security capacity cannot be a member of a union; or (b) who holds any post in the Managerial and Professional Group cannot be a member of a union, unless he has been permitted to be a member of one by the Chief Secretary to the Federal Government. Norhayati Mohd Salleh ADS 465
MEMBERSHIPS … cont’d • An employee of a financially autonomous local authority can be a member only of a union whose membership is confined exclusively to employees of one or more financially autonomous local authorities; even then, an employee of a financially autonomous local authority: (a) who is employed in a confidential or security capacity cannot be a member of a union; or (b) who holds any post in the Managerial and Professional Group cannot be a member of a union, unless he has been permitted to be a member of one by the Chief Secretary to the Federal Government. (Sec. 26 (1A) & Sec. 27 TUA 1959) Norhayati Mohd Salleh ADS 465
OTHER POWERS OF THE DGTU ….. Cont’d 3.4.4.3 OFFICERS OF THE UNION • After the rules of the union have been accepted by the members, officers may be elected in accordance with the rules. • This must be done through secret ballots. The rules of the union must ensure that every member has an equal right and a reasonable opportunity to record his vote freely, and that the secrecy of the ballot is properly secured. Norhayati Mohd Salleh ADS 465
OFFICERS OF THE UNION … cont’d • According to Section 28 TUA, the following persons are disqualified for election to be the executive of the union or federation of trade unions: • He is not a citizen of the federation; • A person who has been a member of the executive of any trade union the registration of which has been cancelled or withdrawn under certain circumstances. iii. An office-bearer or employee of a political party; “ iv. He has been convicted by any court of law of criminal breach of trust, extortion, or intimidation, or of any offence which in the opinion of the Director General renders him unfit to be an officer of a trade union; or v. He is a bankrupt. Norhayati Mohd Salleh ADS 465
3.5 Rights, Powers, Liabilities, Immunities and privileges of registered trade unions The Trade Union Act 1959 has stipulated several matters related to a legally registered trade union. They are the following: 3.5.1 Rights of Trade Union There are several rights enjoyed by trade union as conferred by the law. These rights are also enjoyed by non-registered trade union. At this point, you may need to refer to Part IV of the Trade Union Act, 1959. The rights outlined by Part IV of the Act are: 3.5.1.1 Legal action • Section 25 (1) of TUA, provides a union to institute legal action and similarly the union too can be charged. Section 25 (2) of the same Act specified that an unregistered union can be charged under the name it used or the name it is referred to. While Section 25 (3) of the TUA states Norhayati Mohd Salleh ADS 465
Rights of Trade Union …. Continued… 3.5.1.2 Financial support • The financing of trade union is very much supported by its members through entrance fee payment and monthly membership subscription made by members once they join in as a member of a union. • Section 25(5) of the Trade Unions Act provides that any fines imposed and be born by the union, can be derived from the sales of its movable properties or any monetary held under its trust fund in accordance with the related criminal procedure. 3.5.1.3 Representation in court proceeding • Section 25(6) of the Trade Unions Act, clarifies a trade union must appear in any civil or criminal proceeding. The Act grants the rights to the union to be represented by its executive, solicitor or advocate. Norhayati Mohd Salleh ADM 465
Rights of Trade Union …. Continued… 3.5.1.4 Industrial action • As stipulated in the Trade Unions Act, 1959 (Section 25A), both trade union of employee and employer alike can take actions to stop a trade by launching legal strike and lock out. • However, the provision also states that penalties are enforceable if a trade union does not comply with the requirements or the regulations. Norhayati Mohd Salleh PAD 365
3.5.2 POWERS Powers mean the ability to do or act. • We learn earlier that a union may institute legal action and can be charged, which means an unregistered trade union can also be charged. • However only a registered trade union will have the power to: 3.5.2 .1 run activities/perform roles • regulate relations between employers and employees (Sec. 2, TUA) • represent employers/employees in trade disputes • conduct/deal with trade disputes and related matters • promote, organize or finance strikes/lockouts and provide pay/other benefits during industrial actions Norhayati Mohd Salleh ADS 465
POWERS … cont’d 3.5.2.3collect money or other property for its purpose of the union (Sec. 11, TUA) i.e. collect entrance fee and monthly subscription from the members. 3.5.2.4 organize its funds and expenditure to • purchase or take upon lease for the purposes of the union any land or building and, subject to any written law or other law which may be applicable, to sell, exchange, charge or lease any such land or building which may be so purchased • invest in any securities or in any loans to any company in accordance with any law relating to trustees • deposit its funds in any bank incorporated in Malaysia or any finance company which is a subsidiary company of such bank invest its funds in any registered cooperative society or in any commercial, industrial or agricultural undertaking or banking enterprise, which is incorporated and operating in Malaysia (Sec. 49, TUA) with the prior written approval of the Minister Norhayati Mohd Salleh ADS 465
POWERS … cont’d However the fund of a trade union is designated only to be spent for the following purposes: a. paying salary to the union’s employees b. maintenance or up-keeping of the union office c. settlement of trade dispute d. payment of compensation such as strike allowance to the members for the losses arising out of trade disputes e. allowances to members and their family on account of death, old age, sickness, accident or unemployment. f. printing, publishing and circulation of any printed literature such as newsletters, brochures, flyers and banners g. financing union activities such as picket, strike, social events, sports activities, educational trips, dinner, family day and charitable activities The law also mentioned that it prohibits trade unions from spending or utilizing their funds for any political purpose including financially supporting a political party. Norhayati Mohd Salleh ADS 465
3.5.3.2 IMMUNITIES Immunities can be understood as exemption or exception conferred to a person, a group of people etc 3.5.3.1 Civil suit • According to Trade Unions Act, 1959 section 21, no suit or legal proceeding shall be maintainable at any civil court against registered trade union except in certain cases such as breaching a contract of an employment, interference with the trade, business or employment of others, and interference with the rights of others to dispose of his capital or his labor as he wills. Norhayati Mohd Salleh ADS 465
IMMUNITIES …. Cont’d … • Under normal circumstances, an employer can take civil action against his employees when they are found to join a strike. They do not go to work. By involving themselves in the strike, the employees had breached their contract of service. • However, if the strike is legal and done in contemplation or furtherance of a trade dispute, then no action shall be taken against the employee as the law provides them immunity in civil suit. Norhayati Mohd Salleh ADS 465
2. IMMUNITIES …. Cont’d … 3.5.3.2 Tortuous act • According to section 22 of the Trade Unions Act, a registered trade union is immune from any tortuous act allegation. Its trustees and officials are protected too. • Tortuous act is referring to any act which can make a person liable to pay compensation on damages other than breaching the contract of service. • Such allegation will not be heard or entertained by any court, unless in the case for breach of contract such as compensation payment prior to retrenchment practices. • No consideration will be acknowledged for any undertakings of the union concerning its specific property or rights, unless in respect of contemplation or furtherance of a trade dispute. Norhayati Mohd Salleh ADS 465
3.5.4 Privileges A privilege means special honour or restricted rights/benefits. • A registered trade union has the right to make decision together with the employer either by invitation from the employer or by inducing the employer to arrive at a decision. • An employee can interfere in decision making by organizing and launching strike against an employer. A union can stop or cease a trade through the act of strike in the case of employee union or lock-out for the case of employer union. • Such privilege is provided in Section 24 of the Trade Unions Act. The consent awards a registered union’s officers and members with immunity of not liable to criminal prosecution for conspiracy and inducement. Norhayati Mohd Salleh ADS 465
Liabilities can be interpreted as a state of being responsible according to law. 3.5.3.1 LIABILITY IN TORT • A registered trade union is liable for ‘… any tortuous act alleged to have been committed by or on behalf of a trade union’. (Sec. 22 (1) & (2), TUA) 3.5.3.2 LIABILITY TO CONTRACT • Every registered trade union is liable on … any contract entered into by it or by agent acting on behalf. But, they are not so liable on any contract which is void or unenforceable at law…”(Sec. 28, TUA) Norhayati Mohd Salleh ADS 465
3.5.5 LIABILITIES Liabilities can be interpreted as a state of being responsible according to law. 3.5.5.1 Tortuous act • Although earlier it was mentioned that a trade union will not be charged for any act committed in contemplation or furtherance of a trade dispute, however the law did states that a union, its trustees and officials is responsible for torts done involving specific property or rights of a trade union or its usage. • As such, a trade union can be charged for the tort of nuisance if its premise is being used in a way that can cause nuisance to its neighbors. (Sec. 22 (1) & (2), TUA) 3.5.5.2 Contract • Section 23 of the Trade Unions Act states that every registered Trade Union shall be liable on any contract entered into by it or by an agent acting on its behalf, except a contract which is void and unenforceable at laws. Norhayati Mohd Salleh PAD 365
3.5.4 PRIVILEGE TUA Sec. 24 provides the privilege of having objects in restraint of trade, • “…shall not be deemed to be unlawful, so as to render any member of such trade union liable to criminal or conspiracy or otherwise, or to render void or voidable any agreement or trust…” Norhayati Mohd Salleh ADS 465
3.5.6 DUTIES Duties mean what one is obliged to do by law or morality etc (responsibilities). • The basic duty of a trade union is to comply with the law, particularly the TUA itself i.e. the provisions that governing/ regulating the registration, formation, composition and memberships. Norhayati Mohd Salleh ADS 465
DUTIES … cont’d (Sec 63, TUA) provides that all unions must comply to these provisions: i) To have a registered office. (Sec. 37, TUA). ii) To take a secret ballot (to make any decisions as listed by this Act) (Sec. 40, TUA). iii) To ensure that all the property to be vested in its trustees. (Sec. 47, TUA) iv) To ensure the registered trade union: a) to keep a record (Sec. 57 (1) & (2), TUA) b) to submit a general statement to DGTU (Sec. 57 (3), TUA) • Therefore, any trade union which contravene those provisions shall be guilty of an offence” – consequences : fine not exceeding RM1,000/ or imprisonment not exceeding 6 months or both. (Sec 57 (4), TUA) Norhayati Mohd Salleh ADS 465
Discussion Questions: • Describe any FOUR (4) factors why workers join trade unions • Elaborate on the causes and effects of small size of unions in Malaysia. • Evaluate the necessity of registration for a trade union. • Explain any four (4) problems might occur in a registration process. 6. Evaluate the establishment of in–house unions in a country 7. Describe four (4) groups of Malaysian public sector employees who are excluded from establishing and joining trade unions . 8. Elaborate on the causes and effects of a de-registered trade union. Norhayati Mohd Salleh ADS 465