KESATUAN PEKERJA-PEKERJA EXXONMOBIL EXPLORATION AND PRODUCTION MALAYSIA INCORPORATED v EXXONMOBIL EXPLORATION AND PRODUCTION MALAYSIA INC.
(Award No.: 116 of 2026)
A collective agreement which has been taken cognizance of by the Industrial Court is deemed to be an award and shall be binding on the parties to the agreement[1]. This means that all the terms set out in the collective agreement, including any grievance or dispute resolution procedures, must be complied with as agreed between the parties to the collective agreement. In the instant case, the Industrial Court via Award No. 116 of 2026 handed down on 14 January 2026 unanimously dismissed the Union’s complaint of the Company’s alleged non-compliance with a provision of the Collective Agreements pursuant to section 56 of the Industrial Relations Act 1967[2] (“IRA 1967”).
According to the Union, the Company had failed to pay satellite allowances to its offshore assigned employees (“OAEs”) who were assigned to work on the Company’s offshore platforms, namely Tapis A from 2014 to 2023 and Tapis C from 2014 to 2025. The Company, however, argued that the OAEs were not entitled to satellite allowances as Tapis A & Tapis C were in fact, not satellite platforms. Further, the OAEs were well aware that Tapis A & Tapis C were not satellite platforms as the issue of their entitlement to satellite allowances purportedly owed to them for a period of 10 years was only suddenly raised via the Union President’s email in February 2024. The Union’s awareness that Tapis A & Tapis C were not satellite platforms is also demonstrated by the fact that this issue was never raised as a grievance in line with the Grievance Procedure under the Collective Agreement.
[1] Section 17 (1) (a) & (b) of the Industrial Relations Act 1967
[2] Collective Agreement (2016 – 2019) Cognizance No.: 260/2016; Collective Agreement (2019 – 2022) Cognizance No.: 170/2019; and Collective Agreement (2022 – 2025) Cognizance No.: 288/2022
In dismissing the Union’s complaint, the Industrial Court found that the Collective Agreements set out an internal grievance procedure mutually agreed upon by parties under Article 66 to Article 71 and held among others, as follows:
(a) Article 66 clearly required employees to first exhaust the step-by-step internal grievance procedure before initiating court proceedings. As the Union had failed to comply with the mutually agreed grievance procedures, their complaint was premature.
(b) In light of the serious disputes of facts as to whether Tapis A and Tapis C are satellite platforms, a complaint of non-compliance under section 56 of the IRA 1967 is not the appropriate course of action.
This decision affirms that the Industrial Court will not entertain premature complaints that bypass internal grievance mechanisms, particularly where serious factual disputes exist. The inclusion of grievance procedures in collective agreements reflects parties’ mutual understanding regarding the value and importance of a full and open discussion in resolving misunderstandings and maintaining industrial harmony. Thus, having developed a mutually agreed process in a collective agreement, it is not up to either party to bypass the same at any stage. It is therefore of utmost importance that collective agreements contain robust detailed grievance procedures in anticipation of any disputes.
The Company was represented in the Industrial Court by partners Shariffullah Majeed, and Arissa Ahrom, of Lee Hishammuddin Allen & Gledhill.
The Industrial Court Award may be found here.
If you have any queries, please contact Shariffullah Majeed (sha@lh-ag.com) or Arissa Ahrom (aa@lh-ag.com).
Learn more about our partners who specialize in this area
