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Comparing the effectiveness of remedies available to Maltese Trade Union members to those of shareholders under Maltese Company Law


Maltese Trade Unions have a sui generis legal nature which imbues them with  unique characteristics, features and attributes. The external dealings of Trade  Unions with third parties are both legally regulated and squarely within reach of  the judiciary, but what about their inner dealings? National jurisprudence seems to  suggest that most of the latter are to be self-regulated by the trade union internal  mechanisms. This situation is quite debatable and begs the question as to whether  it is indeed an effective alternative to a form of fully-fledged special administrative  regulatory body as is the case in other foreign jurisdictions such as the UK, the US  and Canada.  

In furtherance of this objective can parallels be drawn in the field of trade unionism with the legal and juridical evolution in company law with regards to  minority rights of equity owners, and can any of the lessons learned in the long  and rich history of Maltese corporate law be applied to buttress the institution of  trade unions?  

Albeit there may be some fundamental differences between these two institutions,  a lot in common still exists to the extent that it may well be opportune to add  further to the already existing shared principles and practices used by one  institution to the other.  

Whilst there are a multitude of other institutions which like companies and trade  unions are regulated by special laws and which may also be of a national interest,  none of them can have a socio-economic impact of the same magnitude as these  two institutions. 

Both institutions are organised in a democratic manner in the sense that they both  adopt processes which allow their members to vote for the administrators or  directors of their choice according to the fundamental notion of majority rules.  However, notwithstanding this rule, it is also imperative to evaluate what happens  when the minority suffers abuses of power.  

A critical comparative analysis with some foreign jurisdictions will also be  undertaken in order to be in a position to first identify any potential shortcomings  in the Maltese Industrial Relations system and finally offer practical  recommendations as to how such shortcomings can be addressed. A qualitative  form of research will be adopted to tackle this paper.



The author aims to analyse a very important area in the overall Industrial Relationsnpicture namely the relationship between a trade union and its constituents. In comparison with other areas very little has been written about the internal dealings and affairs of a trade union, its organization and functioning, and its relations to its members, and the methods by which internal discipline and the rights of members are enforced.

But why is the author so especially concerned with the relationship between the trade union and its members? Isn`t a Trade Union like any other voluntary association such as social clubs, political parties, sports associations or religious groups? Why single out unions from the rest of the associations? The answer to these questions will no doubt determine the direction of our whole line of inquiry.

For the reader to get a better understanding of this subject matter, it is imperative to examine the trend of judicial and legislative interference with the internal functioning of trade unions whilst also understanding the underlying motivations and objectives of this interference. In the past, Courts have generally permitted union interpretation and enforcement of their own constitutional provisions even though the result may be to limit a trade union member’s freedom of action or his own union’s constitutional rights. Is this the case in relation to all aspects or are there areas such as dismissal of members which are so fundamental that they are treated differently than others?

The chances that a union’s conduct vis-a-vis its individual members will turn into  domination increases as various union practices are found to be wanting in the  over-all picture, and yet are not modified or discarded. Some of these will be  discussed; whilst others can be inferred; and still others are unknown possibilities.2 

The author also aims to draw parallels between the remedies available under  company law to those available under Industrial Law to company shareholders  and trade union members respectively. The reason for this is that these areas of  law, albeit having some fundamental differences, still have quite a lot in common,  starting from the fact that they are both special laws and regulate areas which can  be deemed as being in the national interest in view of their far-reaching socio– economic effects.  

Additionally, the very fact that industrial law, as is also the case in many other  areas of law involving other associations point out to principles drawn out from  company law (like for example the notion of majority rules, the registration  requirements, the distinct legal personality and more), makes the comparison of  the remedies available between the two institutions a very interesting one indeed.  Further principles, concepts or remedies which worked well in Company Law can  perhaps be introduced to Industrial law in situations where a grey area or a lacuna  may exist.  

Notwithstanding that these institutions have a number of common factors, Maltese  company law seems to have evolved and kept pace with what is happening in  other jurisdictions by also granting special remedies and providing added protections to company shareholders vis-a-vis the controllers of the company,  whilst in the case of Industrial law the situation has remained pretty much as it  was in 1976 in terms of legislation and this may be negatively impacting the  progress if any in respect of the remedies available to trade union members vis-a-vis those who administer a Trade Union.  

The overall objective of the Term Paper is to first raise awareness of the serious  consequences which may ensue as a result of the issues identified and to finally be  able to present practical solutions to address such issues effectively perhaps by  applying additional remedies which have been adopted by other foreign  jurisdictions and/or by other comparable institutes to Industrial Law in order to  buttress the institution of trade unions.  

Literature Review and Research Methodology  

The existing literature on Maltese Trade Unions does not comprehensively cover  the subject or covers only certain parts of the legal aspects pertaining to a Trade  union without delving in the remedies available to its members. On the other  hand, the subject matter of shareholder protection and minority rights has been  extensively covered by a number of works, albeit the comparative analysis of the  remedies available for trade union members versus the Trade Union and the  remedies of shareholders versus the Company was never covered before making  this term paper quite original under the leading premise of ‘work which has never  been ancovered by other researchers before’.

This study purports to present an awareness of the importance for remedies to be  made available for Trade Union members in view of the significant consequences  which may ensue from a lack thereof which could be very detrimental not only to  any individuals who may be involved in an issue with the Trade Union but also to  the Industry and the general public. This differs significantly from a comparison  between shareholders and trade union members themselves as the study is only  concerned with the remedies which are available to their constituents and not with  the fundamental differences which may exist between the two institutions  themselves other than describing their legal nature and some factual major  differences.  A qualitative approach was adopted during this work3 involving an in-depth  examination of a number of domestic and foreign jurisprudence and case studies  in order for the author to be able to compare and contrast the remedies of trade  union members and shareholders respectively, and to also be able to establish the  significantly different positions which exist between the UK , Malta and potentially  other jurisdictions, from a point of view that the position obtaining in Malta does  not seem to reflect the intentions of the Maltese legislator in 1976 who seems to  have wanted to achieve a very similar position to that obtaining in the UK. 


Based on all of the above, the author has no doubt that the remedies available for a  minority shareholder in a company are broader in their remit and are applied by  the courts more efficiently and consistently than those which are available for a  minority trade union member. A major advantage for shareholders is undoubtedly  the fact that the courts are readily prepared to issue interim orders when this is  needed to safeguard the interest of shareholders.  

On the other hand, we have seen the court interpret in different ways the legal  provisions relating to trade union which in turn impacts significantly the efficacy  levels of the remedies available to trade union members. Even worse, is the fact  that the latest position reflected in the MUBE decision seems to provide the most  inferior level of remedies in respect of the jurisdiction of the court in relation to the  inner dealings of a trade union. Nevertheless, on a positive note a consistent  approach seems to exist in relation to actions which may breach the principles of  natural justice. Whilst some progress is being registered in this area, no concrete  proof exists yet that the courts are willing to interpret the remedies which were  introduced to combat discrimination and inequality as providing for a sui generis wide ranging interim remedy which can be availed of also by trade union  members.

This is very unfortunate since in the opinion of the author, the legislator intended  to increase and improve on the previously existing remedies by introducing a new  one which empowered the courts to issue an order to an employer or a trade union  as the case maybe to desist from doing a discriminatory act as specified in the  Equality for Men and Women Act51 and in the Equal Treatment in Employment  Regulations52. Such an order goes very much further than the ordinary prohibitory  warrants which are normally available in other non-discrimination related  situations inter alias because such an order to desist is an order to do something (di  fare) as opposed to an order to stop someone from doing something (di non fare) as  is strictly contemplated in the case of ordinary precautionary warrants.  

Nevertheless, as we have seen in the 2007 judgement above, the novelty and any  intended improvement on the situation which existed prior to the introduction of  the above mentioned Act and Regulations would all be lost and become nearly  useless unless the time element is really and truly addressed to make the remedy  efficient. The powers of the Court to accept requests made by an application after a  due process already existed before the Act and Regulations mentioned above came  into force. Had the intention of the legislator not been to provide an efficient  remedy which is even more far reaching than that of a precautionary warrant as  explained above, there would have been no need to include such remedy as this  already existed in the first place. Unfortunately, as far as research has revealed so  far, no judgement seems to have been given by the court applying such an  interpretation.

When it comes to Constitutional remedies the situation is such that both EU and  Domestic law are well-geared to deliver an ideal and adequate remedy inter alias to  Trade Union members in respect of their constitutional rights. Nevertheless, it is  very unfortunate that the Court’s position so far is such that it chooses to grant an  interim measure only very restrictively, hence by doing so, in the opinion of the  author, defeating the intended scope of the legislation to truly offer an adequate  remedy in many of the cases. In a recent case,53the Court seemed to be moving in  the right direction by granting a temporary interim measure in respect of an  alleged breach of the right to privacy until all the parties had the opportunity to  present their submissions albeit no definite judgement was delivered in view of the  sudden passing of the plaintiff and the subsequent revocation of the application by  his heirs. A very similar application54 was once again filed by the CEO of HSBC  Bank Malta plc who also requested an interim measure due to an alleged breach of  the right to his privacy in an ongoing case, which however was promptly declined  by the Court on the basis that such a measure was not available in such situations.  

The situation is even worse in respect of the Industrial Tribunal in view that  everything seems to point towards what as a minimum may be described as a  perceived lack of powers to issue interim orders which are such a powerful tool  when dealing with many issues inter alias those relating to the inner dealings of a  Trade Union. Nevertheless, it is safe to say that third parties have the same  remedies available to them against a Trade Union as if they were dealing with any  other type of partnership or legal person. One can also argue that the same can be  said for members in relation to any contract they may have (such as an employment contract) with the union, other than the contract by which they  become members of the same union.

8.1. Micro and Macro Effects – Why Is It So Important to  Have Effective Remedies for Trade Union Members?  

The general lack of adequate remedies described in the previous chapter creates a  situation of uncertainty, or yet even worse, of certainty that one can very easily end  up with no remedies whatsoever when faced with a breach of a trade union’s  regulation by other officials or members. This is extremely worrying and should be  a serious cause of concern to many stakeholders in the industry. The negative  impact and consequences of such a situation can be very far-reaching mostly  because of the very unique legal nature of trade unions itself.  

Countries around the world ascribe varying degrees of Trade Union’s control and  rigidity levels with which they bind their members. Nevertheless, the decisions of  any Trade Union movement worthy of the name can have a conclusive and  immediate impact on its members in an equal manner as the government of its  respective country.

Whilst taxes levied by government may be a very important factor for an  individual, the remuneration package negotiated by a trade union through   collective bargaining at the individual’s workplace may be even more important

for such individual. Additionally, the non-financial conditions negotiated by a  trade union or the lack thereof may also create immense hardship to such  individual or on the contrary help him in no small way.  

The exercise of such powers over individuals in a democracy by any association of  persons naturally raises pressing questions about the rights and remedies available  for its members. The compelling question being researched by the author in relation to the effectiveness or otherwise of the remedies available to trade union  members vis a vis the internal dealing of their trade union is reinforced by the fact  that the trade union’s power over such individuals is a deliberate product of  government policy. Many governments in countries around the world chose to  regulate the labour market through collective bargaining as an alternative to the  government’s own control. One must also not forget that through Collective  bargaining a Trade union can also have the same impact on non-members at the  workplace. Hence this makes certain aspects such as membership, expulsion,  suspension, discipline and the adhesion to union regulations vital matters  requiring special attention.56 

In contrast with Trade Unions a Company has no such powers over individuals  but has equal powers over the financial interest of its shareholders which have  been vested by the latter in such company. The major fundamental difference  which exist between the two is that whilst a Trade Union’s assets are controlled by  the administration of the union for the benefit of its members which may include  the bettering of the financial remuneration of its members. However such members  are not the ultimate beneficiaries of those assets even in the case of dissolution of the trade union. On the contrary, the ultimate beneficiary of a company is indeed  the ultimate beneficiary of the assets of the company and will receive such assets in  the case of an eventual liquidation of the company. Hence whilst fundamentally  different from each other, the author opines that in both instances the financial  interests of an individual may be at stake. In respect of companies, legislators  around the world have developed special remedies similar to the ones described  earlier on in this paper purely because of the extent of the consequences which  may arise from an abuse of power by the company in relation to the financial  interest of the shareholder vested in such company.  

Indeed, many authors opine that it would be a wise policy for courts to legally  refrain from interfering in order for labour to actually be free to govern itself. Such  authors are of the belief that any governmental or judicial interference frustrates  the concept of collective bargaining and that only as a measure of last resort “must”  the freedom of unions, as with the freedom of individuals and all groups, be  circumscribed.  

But once we have established the extent of the powers exercised by a trade union  over an individual, what do we make of union statutes which deal with the serious  matters mentioned above? Many a times the wording used in trade union statutes  regulating such serious matters would be in the lines of “a member may be  expelled or suspended if he acts contrary to the best interests of the union “, or  where the member has committed acts which “discredit” the union or its officers, or  where a member acts against the union’s “policies”.  

Should these generic terms be allowed to prevail making them a tool in the hands  of abusers? Should the court be able to judicially review these generic terms in order not to allow them to be used as a tool in the hands of abusers or should the  court allow trade unions to regulate themselves without the possibility of judicial  review? Then again even when government regulates this area and union  provisions are required to be clear as opposed to vague expressions, should the  court be allowed to review the compliance or otherwise to trade union rules?  

The most recent judgement quoted in this paper namely the MUBE judgement  referred to above can help highlight the extent of the negative consequences which  may ensue in a scenario in which the courts and the legislator opt to allow self regulation without the possibility of judicial review. Without entering into the  merits of the case or to whether or not the allegations made by the applicant are  true or otherwise, if the judgement is analysed from the perspective of the  applicant, the outcome of the judgement would have meant that thousands of  union members were being literally held at ransom by a small group of members  consisting of the incumbent administration and the Executive Council of the union.  Notwithstanding that hundreds of members were unhappy with the disregard of  the union’s rules by its own administration and the passiveness of the council in  this regard, they could do literally nothing to rectify the matter.  

The union’s internal mechanisms and organs were failing to deliver the expected  results. Even if a majority (let alone a minority) of members wanted to do so, they  couldn`t rectify the situation in view that the administration controlled the voting  process (and hence the outcome of any vote) by practices which were in breach of  the union statute. Such a scenario not only undermines minority rights but goes as  far as defeating also the principle of majority rules.

Once such a situation develops within a Trade Union, the serious consequences  which have already been described in this chapter could ensue and these could  have a devastating effect on the lives of thousands of workers. Hence in the  opinion of the author, the consequences deriving from an uncontrollable abuse of  the powers belonging to a trade union can be immense and are comparable to, if  not even greater than the consequences arising from a similar abuse of company  powers.  



Once we have established that some sort of action is required to address this  lacuna, we now need to explore the best way how to address it, namely as to  whether it would be best by the creation of an administrative office such as the  Certification Officer in the UK or by empowering the Tribunals and the Courts to  review the inner dealings of a trade union, or perhaps both?  

The remedies available for a shareholder in a company have proved to be very  effective overall with the two key factors being their wide remit and the possibility  of an interim relief. Nevertheless, when there was lack of clarity in a certain area  such as the interim relief the remedies weren`t as effective and many shareholders  suffered unnecessary prejudice at the time. In fact, before the Maltese Companies  Act was enacted, there was no specific remedy for the abuse by the majority  regarding decisions affecting the company. However, in a previously mentioned  judgement,80 the Court noted that the matter had already been dealt with by other  countries, despite Maltese law’s shortcoming.81 

In line with the general principles of equity however, the Court should be allowed  to ‘subject the exercise of legal rights to equitable considerations’82.  

1)A legislative intervention to address the areas which were covered in the UK law  but aren`t covered under Maltese law is in the opinion of the author the best  solution in order to avoid any misinterpretations and/or misunderstandings. Such  amendments should cater for a sui generis remedy before the Court or the  Industrial Tribunal which would also be empowered to give an interim order of  both di fare and di non fare similar to what is provided for in anti-discrimination  scenarios as already outlined earlier and to the remedies available for a company  shareholder.  

Additionally, the powers conferred to the UK Certification Officer should be  conferred to the Registrar of Trade Unions with a facility to appeal before the  Industrial tribunal and subsequently to the Courts of Appeal inferior jurisdiction.  Whether an appeal from decisions of the Registrar should be restricted to points of  law only very much depends on whether interim relief is made readily available or  otherwise. Only if the law is clear about such availability and the Courts and  Tribunals are prepared to allow applicants to make use of such availability in a  manner which is at least at par with the situation which exists for other  precautionary warrants, appeals should be restricted to points of law only before  the Court of Appeal inferior jurisdiction.  

2)Another solution by means of a legislative intervention could be to transpose  article 402 of the Companies Act 1995 in the Industrial law in order for the lessons  learned in the long and rich history of Maltese corporate law to also be applied to  buttress the institution of trade unions.  

3)Alternatively, if the legislator doesn`t see fit to pass such legislation, or possibly  even until such time that the above-mentioned legislation is passed, one can hope for a more efficient and consistent judicial interpretation of our existing provisions  as follows:  

At worse, the position held by the Court in the 1953 GWU case should prevail over  the latest position held in the 2016 MUBE decision. For the sake of clarity, in the  1953 GWU judgement83, the court relying on both Italian and English teachings  and jurisprudence stated that in light of such teachings and judgements, it seemed  that it would have been possible for someone to appeal the decision of a national  executive like that of the GWU before a tribunal if it involved a cause which is  recognised at law in order to cancel a contract, or in the case of breach of  regulations, or even in the case of an application of the regulations in a manner  which breaches the principles of natural justice.  

Moreover, it then proceeded to further qualify the aforementioned hypothetical  instances, by stating that the courts can never judicially review the deliberation of  the national executive as to whether or not it was opportune or expedient and/or  the intrinsic motive which determined it. Additionally, neither can the court  judicially review whether the opinion expressed in such deliberation was correct or  otherwise, as long though, that it was made in good faith. However, and this is  being said especially in the light of EU law and the fundamental basic principles  that have been introduced in Maltese law as a result thereof, such qualifications  need to be assessed in all cases (and not just for prohibitory injunctions) in  accordance with the principle of proportionality as was in fact done in the  previously mentioned 2006 GWU decision (albeit solely because of the fact that it  was a decision related to the issuing of a warrant of prohibitory injunction), and in light of any element and extent thereof of any potential public interest, as opposed  to simply reviewing the good faith aspect only.  

This approach would bring under judicial review many of the matters which were  deemed by the Court in the MUBE decision as not being subject to review by the  Courts and which are matters which weigh on the public interest as already  explained earlier on in this term paper and/or subject a party to disproportionate  prejudice compared to the prejudice suffered by the other party. The prevailing  situation which exists in the UK also continues to support in no small way the need  for a more consistent and efficient judicial interpretation and approach as outlined  above and strongly suggests that a very dangerous situation with potential serious  repercussions to many stakeholders exists at present.


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