Judgment

Steve L.K. Shim, CJ (Sabah & Sarawak)

(delivering the judgment of the court)

1. This appeal concerns the interpretation or construction of s 17(1)(a) of the Industrial Relations Act 1967 (IRA) and in particular the meaning of the words "their successors, assignees or transferees" appearing therein.

   THE BACKGROUND FACTS

2. In this case Sin Poh (Star News) Amalgamated Malaysia Sdn Bhd ("Sin Poh") had a permit to publish the newspaper called "Sin Chew Jit Poh Malaysia". On April 27, 1987 Sin Poh and the National Union of Journalists Malaysia (NUJ) (the first appellant) entered into a collective agreement which was duly given cognizance by the Industrial Court on May 2, 1987 vide cognizance No 71/87.

3. Sin Poh suffered losses amounting to over RM12 million. On September 3, 1987 Sin Poh was placed under receivership and receivers and managers from Price Waterhouse were appointed. On October 28, 1987 Sin Poh's publishing permit for "Sin Chew Jit Poh Malaysia" was cancelled by the Minister of Home Affairs. However, on March 23, 1988, the said Minister issued the permit for publishing the same newspaper to Syarikat Pemandangan Sinar Sdn Bhd (the first respondent), a company with a paid up capital of only RM2 which then re-employed 85% of Sin Poh's employees. On April 6, 1988, the receivers and managers of Sin Poh entered into a sale and purchase agreement with Syarikat Rimbunan Hijau Estate Sdn Bhd (the second respondent) whereby all the physical assets of Sin Poh including land, buildings, plants, machineries, vehicles and stock-in-trade as well as the product name of "Sin Chew Jit Poh" were sold by the receivers and managers to Syarikat Rimbunan Hijau (the second respondent). It is to be noted that the first respondent was, at all material times, the subsidiary of the second respondent.

4. In the meantime, on April 5, 1988, the first appellant (NUJ) had referred a complaint of non-compliance of the collective agreement to the Industrial Court. Pursuant to this complaint, the Industrial Court handed down Award No 126/88. On May 9, 1988, the first appellant (NUJ) also applied for interpretation of Clause 1 of the collective agreement under s 33(1) of the IRA in an attempt to include the first and second respondents as Sin Poh's successors, assignees or transferees. The Industrial Court handed down its Award No 244/88. The first and second respondents thereafter moved a motion in the High Court to have the award quashed. The motion was granted. In quashing the award, the High Court ordered the question whether the first respondent or the second respondent or both was/were the successors, assignees or transferees of Sin Poh be reheard by the Industrial Court but in doing so, it upheld the interpretation of s 17(1)(a) of the IRA adopted by the Industrial Court. Against that decision, the respondents appealed to the Supreme Court. The appeal was allowed and the Industrial Court was directed to rehear all the issues afresh.

5. Pursuant to the said order of the Supreme Court, the Industrial Court reheard the matter and handed down Award No 190/93. In the said award, it was held inter alia that upon an interpretation of s 17(1)(a) of the IRA, the respondents being successors, assignees or transferees of a party to the collective agreement, were bound by it. Unhappy with that decision, the respondents thereafter filed a notice of motion dated October 19, 1993 to the High Court to quash the said award. On April 21, 1995, the High Court dismissed the respondents application with costs. The respondents then lodged an appeal to the Court of Appeal. On September 4, 1997, the Court of Appeal allowed the appeal and quashed the said award. NUJ and the Industrial Court (the appellants) being dissatisfied with the decision then applied for and were granted leave by the Federal Court on May 10, 2000 to appeal on the following question of law:-

   Whether the words 'their successors, assignees or transferees' appearing in s 17(1)(a) of the Act mean the successors, assignees or transferees of:- (i) parties to the agreement; of (ii) members of the trade union of employers to whom the collective agreement relates; or (iii) to both (i) and (ii) above.

   THE ISSUES

6. It seems clear that the preliminary issue if not the sole issue which leave to appeal has been granted relates essentially to the construction of s 17(1)(a) of the IRA which deals with the effect or effects of a collective agreement which has been taken cognizance of by the Industrial Court. Now, the Court of Appeal, in reversing the decision of the High Court dated April 21, 1995 and quashing the Industrial Court Award No 190/93 has construed s 17(1)(a) quite narrowly. This is reflected in that part of the judgment of the Court of Appeal, which reads (see [1997] 4 AMR 4266 at pp 4278-4279):-

   Going back to s 17(1) of the Act, what it really says is that a collective agreement which has been taken cognizance of by the court, as in this case, shall be deemed to be an award and shall be binding on 'the parties to the agreement'. It is in paragraph (a) specifically that the interpretation thereof appears to have raised a problem. In our considered View, the words 'successors, assignees or transferees' therein cannot relate to the words 'the parties to the agreement' but only to 'party' and 'members' which appear after the word 'including'. Otherwise, there ought to be commas after the word 'agreement' in the first line and 'relates' in the fourth line. Consequently, only where 'the parties to the agreement' include a party which 'is a trade union of employers' then, and only then, it will be binding on 'all members of the trade union to whom the agreement relates and their successors, assignees or transferees', the word 'their' there referring specifically to the members of the trade union of employers which the appellants are not as they are individual employers. Further, if the first respondent is correct and the liberal rule is to apply, the words 'and their successors, assignees or transferees' should actually appear after the word 'agreement' in the first line and not at the end. As such, it is our finding that the collective agreement in this case cannot apply to the appellants as it can apply to the parties to the agreement which they are not, but where it involves a trade union of employers, and it is not disputed that the appellants and Sin Poh are not, it will also apply to its members and their successors, assignees or transferees.

7. It is contended by counsel for the appellants that the Court of Appeal had construed s 17(1)(a) of the IRA erroneously in that it was overly preoccupied with punctuation marks in the construction of the said section and had completely overlooked the purposive approach and the general legislative purpose in construction. However, counsel for the respondents takes the view that the construction adopted by the Court of Appeal is correct.

   THE LAW

8. In construing a statute, the intention of Parliament must not only be deduced from the language used but also from the social and economic conditions which gave rise to it and the mischief it was meant to remedy (see Re Application by Dunlop Estates Bhd [1980] 1 MLJ 243; Seafood Court Estates v Asher [1949] 2 All ER 155, 164). It is well settled in the area of law governing statutory interpretation and construction that each legislation must be construed in its own light. In enacting legislation, Parliament is invariably prompted by considerations and demands peculiar to the circumstances for which the enactment is made. To determine the legislative intent, each statute must be examined on its own against the background in which it was passed. We would adopt the observations of Mohd Azmi J (as he then was) in Dunlop Estate Bhd v All Malayan Estates Staff Union [1980] 1 MLJ 243 who said inter alia:-

   In my view, having regard to the principles enunciated in the cases cited the Industrial Relations Act, being a social legislation enacted with the prime object of attaining social justice and industrial peace, demand practical and realistic interpretation whenever, necessary for the purpose of maintaining good relationship and fair dealings between employers and workers and their trade union and the settlement of any differences or disputes arising from their relationship.

9. Quite clearly, the Industrial Relations Act is piece of social legislation whose primary aim is to promote social justice, industrial peace and harmony in the country. As such, the approach to interpretation must be liberal in order to achieve the object aimed at by Parliament. This had been described by Lord Diplock as the "purposive approach", an approach followed by Lord Denning in Nathan v Barnet London Borough Council [1978] 1 WLR 220 who reiterated that in all cases involving the interpretation of statutes, we should adopt a construction that would promote the general legislative purpose underlying the provision. We accept that to be the correct approach.

   CONSTRUCTION OF S 17(1)(a) OF THE INDUSTRIAL RELATIONS ACT

10. Now, s 17(1) of the IRA reads as follows:-

    (1)	A collective agreement which has been taken cognizance of by the court shall be deemed to be an award and shall be binding on -
    	(a)	the parties to the agreement including any case where a party is a trade union of employers, all members of the trade union to whom the agreement relates and their successors, assignees or transferees; and
    	(b)	all workmen who are employed or subsequently employed in the undertaking or part of the undertaking to which the agreement relates.

11. It is accepted that a collective agreement is one entered into between the employer and its employees or union of workmen normally for a period of three years. Under s 17(1)(b), all employees are bound whether or not they are members of the union which negotiated the collective agreement or whether they join as employees subsequent to the date of the collective agreement. This provision in the Act cuts across the law of contract and is meant for the general application of the collective agreement on all the employees of a company. In our view, the same approach must apply to s 17(1)(a) involving employers. The rationale is one of continuity of the collective agreement from the original parties and members of the union to their successors, assignees or transferees. It is meant to ensure that the rights and obligations of the parties to the collective agreement be preserved by those taking over from the original parties so as to maintain what Mohd Azmi J in Dunlop Estate Bhd (supra) has aptly described as "good relationship and fair dealings between the employers and workers and their trade union and the settlement of any differences or disputes arising from their relationship". And we may add that this is essential in promoting social justice, industrial peace and harmony in Malaysia.

12. Clearly therefore, given the intention of the legislature, s 17(1)(a) must be construed to embrace the successors assignees or transferees of both parties to the collective agreement and the members of the trade union of employers to whom the collective agreement relates. Such a construction has the effect of promoting the general legislative purpose underlying the provision stated above.

    CONCLUSION

13. In the circumstances, we are, with respect, unable to agree with the view expressed by the Court of Appeal that the words "successors, assignees or transferees" in s 17(1)(a) of the IRA cannot relate to the words "the parties to the agreement" but only to "party" and "members" which appear after the word "including". We are of the unanimous view that the words "their successors, assignees or transferees" therein must mean the successors, assignees or transferees of the parties to the collective agreement as well as the members of the trade union of employers to whom the collective agreement relates. For the reasons given, we hold that the Court of Appeal has misconstrued s 17(1)(a) accordingly.

14. Given the conclusions aforesaid, counsel for the appellants has urged us to affirm Industrial Court Award No 196/93 and the judgment of the High Court dated April 21, 1995 which have held, on the established facts before them, that the respondents are the successors, assignees or transferees of Sin Poh and therefore bound by the collective agreement dated April 27, 1987 (Cognizance No 71/87). In rebuttal, counsel for the respondents has contended that the appellants must confine themselves to the issue or question for which leave to appeal was granted by the Federal Court under Rule 108(1)(c) of the Rules of the Federal Court and drawing particular attention to the fact that the Court of Appeal had made a finding of fact that the respondents were not the successors, assignees or transferees of Sin Poh. According to counsel, any challenge to that finding of fact would clearly militate against the scope of the issue which has been referred to the Federal Court for determination.

15. Although leave was granted on a question of law relating to the proper construction of s 17(1)(a) of the IRA, it is, in effect, a determination as to whether or not the Court of Appeal had construed the section correctly. We have held, for the reasons given, that the Court of Appeal had not done so. And having construed the said section in the manner it did, the Court of Appeal came to the following conclusion:-

    Having interpreted s 17(1) of the Act in this manner and after deliberating dutifully on the arguments and authorities, we came to the unanimous conclusion that the appellants are not the successors, assignees or transferees of Sin Poh and are not bound by the collective agreement of which Sin Poh was a party.

16. It seems clear that the above conclusion was arrived at principally upon the construction which the Court of Appeal had placed on s 17(1)(a) of the IRA. It is our view that the Court of Appeal would not have come to such a conclusion if it had not misconstrued the said section.

17. In the circumstances and for the reasons stated, we will allow the appeal with costs here and below.

Nathan v Barnet London Borough Council [1978] 1 WLR 220; Application by Dunlop Estates Bhd, Re [1980] 1 MLJ 243; Dunlop Estate Bhd v All Malayan Estates Staff Union [1980] 1 MLJ 243; Seafood Court Estates v Asher [1949] 2 All ER 155

Industrial Relations Act 1967: s.17, s.33(1)

Rules of the Federal Court 1995: Rule 108

Ramdas Tikamdas (Siva, Ram & Associates) for Appellants

Ambiga Sreenevasan & Siva Kumar Kanagasabai (Skrine & Co) for Respondents

This decision is also reported at [2001] 4 AMR 3813