The Malaysian Airline System Berhad (MAS) Act passed by Parliament that paved the way for the ongoing restructuring of the national carrier adequately protects the rights of employees and allows the setting up of unions, a law lecturer said today.

But Dr Ruzita Azmi of Universiti Utara Malaysia's Kuala Lumpur campus told the airline's employees to understand that Malaysia Airline Bhd (MAB), the New Company (New Co) that took over from old MAS effective today was under the law, is not the successor employer to the Old MAS.

Responding to claims by the employees' union that the rights of the airline's staff were getting reduced salaries and lesser benefits and the rights of former workers who were not rehired following the restructuring were being ignored, she said: "When talk about benefits and rights of employees actually, we have to go to the basic. We have to go to the foundation of Employment Law, whereby Employment Law is the employer who offers the job and the employee who accepts the job.

"If they accept the new term and conditions set by the new management, this means they are happy with the term and conditions and also benefits. This employment contract falls under Law of Contract; there must be offer and accept term. The contract is enforceable by law', she said.

Dr Ruzita explained that whatever employees enjoyed under their previous management was now history and the new management could not be expected to implement the same benefits or the same terms and conditions.

To put it simply, she said: "When you are employees, you are governed by contract of service. So what governed the relationship between employer and employee is the contract that they signed. So if you don’t agree, you don’t accept the offer."

By the same token, all the benefits are spelt out clearly in their contract of employment and once they agree to sign, it means that they agree with all the benefits in the contract.

In a bid to turn around the beleaguered national carrier, Malaysia Airlines had on June 1, sent out termination letters to its 20,000 employees. Of that number, 6,000 employees had their contracts terminated while 14,000 were offered employment with the New Co.

By the end of June, it received a 98 percent response rate on offer letters sent to 14,000 employees, inviting them to join the new entity from Sept 1. Only one percent of the offers have been rejected.

She agreed that with the 98 percent acceptance rate, the issue of unfair packages should not arise.

"Yes, it shouldn’t be an issue. When you accepted the Letter of Appointment, you agreed with the term and conditions. And in that terms and conditions are also about the benefits you enjoyed being the employee of that organisation.

Since 98 percent have agreed, this suggest that the terms and conditions under the new entity are acceptable to them."

Dr Ruzita was also asked to comment on claims by the Malaysia Airlines System Employees Union (MASEU) that the previous collective agreement (CA) was still in place as no new agreement had been signed and whether the old CA can be transferred to the New Co.

"The MAS Act allows the formation of the trade unions. As in the setting up of a trade union, it is subject to procedures that they have to comply with. The old CA cannot be carried forward into the new company and if the employees want to form a union, the spirit of the Collective Agreement is that the representative of the employer and representative of the employees, sit down and agree on issues that can bring good industrial relations," she said.

Dr Ruzita advised employees to let the new Malaysia Airline Bhd which officially began operations today to get off the ground first, business wise, and later when the airline has achieved a steady course both financially and operationally, they could then think of forming a new union.

On the collective agreement, she said that as in any such agreement, it was a compromise or give and take between employer and employee, adding that it was not a one-sided matter where the union or employees could get what they wanted based on the old CA while the employer did not get their side of the bargain.

"We also cannot avoid retrenchment in the process of corporate reorganisation, it is something the company got to do to survive. At the end of the day they have to close down, so you cannot win all. You win some, you lose some."

Asked to justify the need for the new MAS Act, the law lecturer said it was necessary in this case to rescue an entity with a lot of financial problems, lots of legacy issues from lop-sided agreements, too much suppliers with contractual agreements and restrictive work to rule processes. "While there are many ways to do it, one crucial way is with the help of the new Act that gives immunity from legal actions and proceedings. That is important".

The MAS Act had given the New MAS a kind of immunity from legal actions being taken against the Administrator and other relevant parties thus allowing the New Co to focus with the business of making profit, she added.