MALAYSIAN INDUSTRIAL RELATIONS

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MALAYSIAN INDUSTRIAL RELATIONS

• INDUSTRIAL RELATIONS

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Definition

• Systems that encourage industrial harmony
• It is for the regulation of relations between
  employers and workmen or employees and their
  trade union and the prevention and settlement of
  trade disputes.
• Focus on 3 aspects
• Relation between employer and union
• Employment law
• Discipline procedures and terminating service
  contract

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Importance of IR

• One of the important aspects in human resource
  management
• To create a harmonious relation between employer
  and employee
• To ensure that employees receive fair and just
  treatment and avoid conflicts in organization

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Industrial relations system in Malaysia

• Made up of three parties/or the tripartite
  systems
• Employer
• Employees (represented by union)
• Government
• Industrial Relations Act 1967 use to regulate
  the relation between employer and employee

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Industrial relations system in Malaysia

• Code of Conduct for Industrial Harmony 1975 was
  introduced to maintain harmonious relation
  between employer and employee
• There are 47 issues covered regarding employer
  and union responsibilities, collective
  bargaining, etc
• Generally, IR in Malaysia is controlled by the
  government.

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Definition of Trade Union

• Section 2, under Trade Union Act- Trade Union is
  any association or combination of workmen or
  employers...whose place of work is in West
  Malaysia, Sabah or Sarawak...
• a. Within any particular establishment, trade,
  occupations or industries and
• b. Whether temporary or permanent and

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continued

• c. Having among its objects one or more of the
  following
• The regulation of relations between workmen and
  employers for the purposes of promoting good irs
  between workmen and employers, improving the
  working conditions or enhancing their economic
  and social status, or increasing productivity
• The regulation of relations between workmen and
  workmen, or between employers and employers
• The representation of either workmen or employers
  in trade dispute
• The conducting of....or dealing with trade union
  disputes and matters related thereto or
• The promotion, organization or financing of
  strikes or lockouts in any trade or industry or
  the provision of pay or other benefits for its
  members during a strike or lockout.

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Trade Union (TU)

• TU Functions
• Protecting TU members through collective
  strength
• Economic controller represent employees on
  issues such as salary and employment contract
• Support and help employees, such as advise and
  counselling,benefit
• Input provider to government on issues related to
  employees

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Membership of TU

• According to Industrial Relations Act (Section
  5) workkers in Malaysia have the right to form
  and join TU FREEDOM OF ASSOCIATION
• In addition, The Act states that
• No employer shall prevent a worker from joining a
  union by putting a condition in his contract of
  employment
• No employer shall refuse to employ a worker on
  the grounds he is a TU member or officer
• No employer shall discriminate against a worker
  (for example in terms of promotion) on the
  grounds he is a TU member or officer and
• No worker shall be threatened with dismissal or
  dismissed if he proposes to join a TU, OR if he
  participates in union activities.

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Joining a Union

• All workers over the age of 16 yrs have the right
  to join an appropriate union- one which
  represents workers in their trade, occupation or
  industry (Peninsular Malaysia, Sabah or Sarawak)
• Union members under 18 yrs of age are restricted
  in their union activities (not entitled to vote
  on matters involving strike, dissolution of the
  union or ammendment of the rules in TU)
• Union members under 21 years of age are not
  eligible to be elected as officers of the
  union.Pekerja berumur kurang 16 tahun
• Specified group of workers are restricted from
  joining TU.
• These are members of the police force, armed
  forces and prison service.

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Why joining TU?

• Dissatisfaction with management
• Underpaid salary
• Dangerous work environment
• No job security/warranty
• Less concerned about employee welfare
• Social Needs
• Platform to get to know other people
• To benefited from facilities provided by union
  (e.g onsite day care centre)

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Why joining TU?

• Leadership opportunity
• Opportunity to demonstrate leadership abilities
• There are organizations that incorporate union
  leaders position into their formal
  organizational structure (usually the lower level
  management)
• Peers Influence
• - Pressures from supervisor and co-workers to
  join TU

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Types of TU in Malaysia

• Three types
• Public Sector TU
• Eg National Union of the Teaching Profession
  the Malayan Nurses Union
• Private Sector TU
• Eg National Union of Bank Employees (NUBE)
• Employer Association
• Known as association not union
• Eg The Malayan Agriculture Producers
  Association (MAPA)

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Collective Bargaining(CB)

• Bargaining process between employer and their
  employees regarding terms and conditions of
  service/employment
• Union will represent employees in CB
• Union needs to be registered in order to get
  recognition from employer before representing
  employees in CB
• Four important issues usually bargained
• Wage/benefit
• Work hours
• Employment terms and conditions
• Grievances

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Collective Bargaining

• Prerequisites to effective CB are that the union
• Be recognised by the employer
• Has adequate financial strength and
• Members are united.
• The outcome of CB is known as collective
  agreement

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Collective Bargaining Process
Ready to bargain
Develop the bargaining strategy
Implement bargaining process
Signing of collective agreement
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Collective Bargaining Process

• First step Ready to bargain
• Union needs to collect informations and facts to
  support argument during CB process
• Example of information employee performance
  record, overtime record
• Union needs to clearly develop objective of the
  CB
• Union needs to have knowledgeable and skillful
  bargaining team

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Collective Bargaining Process

• Step 2 Develop Bargaining Strategy
• Union needs to understand its own power and the
  employer as well
• Union needs to identify the correct and proper
  strategies to be used during bargaining
• Strategy planning should be consistent with the
  information collected during the first step and
  also to take into consideration employers power
• The final outcome of collective bargaining should
  be the win-win strategy

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Collective Bargaining Process

• Step 3 Implement the Bargaining Process
• Both sided (union and employer) should be patient
  throughout the bargaining process
• Bargaining team needs to be knowledgeable about
  employment law and industrial relations system in
  Malaysia
• Union needs to present all the facts collected
  during the first step

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Collective Bargaining Process

• Step 4 Signing Collective Agreement
• Involves the process of collection of
  recommendations to be included during signing the
  colective agreement
• Collective agreement should be in written form
  (Industrial Relations Act, 1967)
• The content of colective bargaining agreement
  should be stated clearly using the language that
  both parties can understand well

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Grievance

• An individual workers complaints towards
  employer is termed as grievance
• Employee and its union have the right to make
  complaints if they are not satisfied with their
  employer
• Factors that lead to grievance
• Employer denied employees right to be promoted
• Employer does not appreciate outstanding
  achievement by employee
• Employer exaggerate small mistake done by
  employee
• Discriminate employee based on different
  religion, culture and race

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Steps in Grievance
Union receives complaints from individual employee
Union proposes complaints to employees
immediate supervisor to settle the complaints
If the immediate supervisor fails to settle the
complaints, union can propose the complaints to
the top management in the organization
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Grievance

• For a trade dispute to exist, the employee
  concerned must be represented by their union to
  settle the grievance
• Factors that enable union to represent employee
  in trade dispute
• Employee finds no other ways to settle grievance
  
• There exist conflicting opinion between employer
  and union regarding terms and conditions of
  employment
• The agreement results or the concerned laws are
  not implemented by employer
• There exist conflicting opinions regarding terms
  in collective agreement or legal decision from
  Industrial Court

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Grievance

• Factors that hinder union to represent employee
  in trade dispute
• Individual worker has a complaint concerning
  alleged interference by an employer with his
  right to join or not to join a trade union
• The worker may complain to the Director-General
  of Industrial Relations or refer to the
  industrial court
• Individuals who believe that they have been
  dismissed without just cause or excuse
• The worker may complain directly to Department of
  Industrial Relations

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Industrial Action by Employees

• The only forms of employee industrial action
  recognised by the labour laws are
• Picketing
• Strike

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Picketing

• The most common form of industrial action taken
  by employee
• Done to comunicate issues to the public and to
  embarrass the employer
• Prominent display of banners and placards with
  derogatory comments about their employer and
  management
• The Industrial Relations Act (Section 40) allows
  workers to attend at, or near, their workplace
  during trade dispute for the purpose of
  peacefully giving info to the public and other
  workers
• and to persuade other workers not to work if a
  strike has already been declared.
• Only workers directly involved in the dispute can
  participate in the picket (although an officer or
  employee of the union can be present to ensure
  that the picketing is carried out according to
  the law)
• Picketing must not intimidate anyone, and must be
  peaceful

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Strike

• Occurs when a group of workers refuse to work
  until their employer accepts their demands
• Involves stopping of work by a group of employees
  including any attempt to limit or slow down
  production on purpose
• 2 types of strike
• Strike relating to collective bargaining
• Strike that has no relation to collective
  bargaining

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Strike

• Strike relating to collective bargaining
• when employer is not willing to provide
  collective bargaining or no resolution during
  collective bargaining
• Strike that has no relation to collective
  bargaining
• Due to factors such as terms and conditions of
  employment, retrenchment, layoffs and promotion
  issues

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Strike

• Strike Procedures
• Secret ballot must be held by those eligible to
  strike, clearly stating the issues leading to the
  proposed strike
• The results of this ballot must be sent to the
  Director-General of Trade Union s by the union
  secretary within 14 days of taking the ballot
• Strike can only take place if two third of those
  entitled to vote agree to the action
• Strike can take place after waiting 7 days after
  the ballot results have been sent to the
  Director-General
• Secret ballot is only valid for 90 days, and if
  strike has not taken place within this period, a
  new ballot will be required if the union intends
  to continue with the strike action

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Employer Actions

• Employer also has the right to engage in
  industrial action
• The most common industrial action taken by
  employer is the lock-out
• Employer refuses to allow the workers to work
  until the dispute between them is settled
• Alternatively, the employer can take steps to
  fight a strike by keeping the firm operating
  either by placing managerial or non-union
  employees in the strikers job or by hiring
  replacement workers

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Settlement of Trade Disputes

• Direct Negotiation
• Conciliation
• Mediation
• Arbitration

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Settlement of Trade Disputes

• Direct Negotiation
• The ideal method for settling a dispute
• Discussion between employer and the union until a
  satisfactory compromise is reached
• Solutions arrived at by mutual decision between
  the two parties without the involvement of an
  outsider

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Settlement of Trade Dispute

• Conciliation
• Arriving at a settlement of a trade dispute with
  the help of a third, neutral party
• Is carried out by officers of the Department of
  Industrial Relations
• Industrial Relations officer will meet the
  parties, either separately or jointly
• Conciliation can be voluntarily requested by
  either of disputing parties or the
  Director-General of Industrial Relations may
  intervene in the public interest, requiring the
  parties to attend a conciliation meeting ( is
  known as compulsory conciliation)

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Settlement of Trade Dispute

• Mediation
• Rare method of settling a trade dispute
• Similar to conciliation in that a neutral third
  party is called in by the employer and the TU who
  are in the midst of a dispute to arrive to
  settlement
• The mediator is not from the government , but a
  person considered unbiased and impartial and is
  respected and trusted by both parties
• A politician or other local leader may intervene
  in a dispute

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Settlement of Trade Dispute

• Arbitration
• When disputing employer and union cannot find a
  solution by themselves or with the help of the
  Department of Industrial Relations, arbitration
  may be the only way to settle the dispute
• An impartial/neutral third party is given the
  authority to settle the dispute by examining
  information given by both sides and making a
  judgment
• Only the Industrial Court has the power to
  arbitrate labour disputes
• Industrial could award need to be followed by
  employer and union