Question 1 (b)

George was recently employed by Toxen Instrument Bhd (the Company) as a supervisor in
one of the Company’s factories. George signed an agreement with the Company, and soon
the manager of the factory gave him a list of the dos and the don’ts. George worked in the
factory for a month. He visited his doctor, who told him that his illness was due to job stress.
George was asked to work from 8 am to 12 am every day without a proper break and proper
meals. Though he approached his manager to allow him to work for 8 hours only, his request
was turned down because large orders were made that needed to be finished on time.
George, being a member of the workers union (Union), asked the Union for help. The Union
started to discuss the problem with the Company, but the manager refused.
Now, George intends to sue the Company for breach of terms of the collective agreement
signed between the Union and the Company. One of the clauses in the agreement contained
procedures for amicable settlement of disputes between the Company and the Union or its
members.
Advice George, according to the provisions of relevant written law and decided cases.
(4 marks)

The issue is whether Toxen Instrument Bhd intended collective agreements between
the company and George to form a legally binding contract.
According to Industrial Act 1967 section 2, “collective agreement” means an
agreement in writing concluded between an employer or a trade union of employers on the
one hand and a trade union of workmen on the other relating to the terms and conditions of
employment and work of workmen or concerning relations between such parties;
It is a known fact that George signed an agreement with Toxen Instrument Bhd when
he was employed as a supervisor in one of the company’s factories.
Moreover, based on Industrial Act 1967 section 14 (1) – a collective agreement shall
be in writing and signed by the parties to the agreement or by persons authorized in that
behalf and (2) – a collective agreement shall set out the terms of the agreement and shall,
where appropriate (d) unless there exists appropriate machinery established by virtue of an
agreement between the parties for the settlement of disputes, prescribe the procedure for
the adjustment of any question that may arise as to the implementation or interpretation of the
agreement and reference of any such question to the Court for a decision.
George intends to sue the company because one of the clauses in the agreement
contained procedures for amicable settlement of disputes between the company and the union
or its members.
For example, in the case of Ford Motor Co v Amalgamated Union of Engineering and
Foundry Workers [1969], where Ford Motors and trade unions reached collective agreements
concerning employment conditions, signed by their representatives. When an union strike
took place concerning the conditions, the company brought an action for an injunction
pursuant to the agreements, attesting the collective agreements to be legally binding. The
unions argued that no legally enforceable contract resulted from the collective agreements.
The Court held that it is necessary to examine the context and surrounding
circumstances, in order to ascertain the intention of the parties to be legally bound. The
relevant circumstances include the wording of the agreements, their nature, the background in
which they were reached, the knowledge and opinions of parties’ representatives, and other
facts that show the parties’ intentions that the agreements are binding in law. Court held that
the agreements did not contain express provisions concerning their binding effect and
affirmed that the parties did not have the intention to make the collective agreements binding
at law.
However, in George’s case, the agreement signed by him with Toxen Instrument Bhd
expressed a proviso – friendly settlement of disputes between the company and union or its
members, which the company breached when the manager turned down George’s request to
allow him work for 8 hours and refused when the Union started to discuss the matter with the
company.
In conclusion, Toxen Instrument Bhd had intention to make collective agreements
binding at law with George and had breached the one of the clauses in the agreement.