Chapter 8 IR MALAYSIA

Chapter 8 INDUSTRIAL
RELATIONS
INDUSTRIAL RELATIONS
(Tripartite system)
Industrial relations is the relationship between

an employer and the trade union which
represents his workers.
An industrial relations systems consists of:
q Employers and their associations
q Employees and their trade unions
q The government
HRM Principles and Practices Third Edition All Rights Reserved

© Oxford Fajar Sdn. Bhd. (008974-T), 2014 1– 2
ORGANIZATION CHART
MINISTRY OF HUMAN RESOURCES
Ministry of
Human
Resources
Department Department Department

Department
of Trade of Industrial of Occupational
of Labour
Union Affairs Relations Safety and Health
Department
of Manpower
Department
of Skills
Development

ROLE OF THE MINISTRY OF
HUMAN RESOURCES
The Ministry:
q sets policies,
q prepares draft employment legislation, and
q enforces the employment legislation.

TRADE UNIONS
Why do workers join trade unions?

q To have a voice.
q To gain bargaining power and fight for more
wages, more benefits and less work.
q To ensure their employment rights are protected.
q To show their solidarity with other workers.
q To have an opportunity to socialise with other
workers.
THE RIGHT TO ESTABLISH A
TRADE UNION
All trade unions must be registered with the

Department of Trade Unions BEFORE they can
begin any activities.
Applications to register must be made within one
(1) month of the first meeting held at which it was
agreed to start a trade union. A temporary
committee may be appointed to carry out the
necessary paperwork.

THE RIGHT TO JOIN A TRADE
UNION
Any employee above the age of 16 has the

right to join a trade union, except employees
in:
q The Royal Malaysian Police
q The Prison Service
q The Armed Forces

UNION (cont.)
Restrictions
q Employees in public and private sectors
cannot join the same union.
q Employees in statutory bodies can only join in-
house unions.
q Employees may only join a union covering
workers in either Peninsular Malaysia, Sabah
or Sarawak (depending on where the
employee is working). Combinations are not
permitted.
UNION (cont.)
q Employees can only join a union representing

the trade, occupation or industry in which they
are working, unless the union is in-house.
q Managers, executives, confidential and

security staff can only join a union whose
members are in the same category as
themselves.

TYPES OF TRADE UNIONS
TYPES
In-house Unions
OF
of TRADE UNIONS
Employees
members are all employ by the same employer
-eg: proton employees union
National Unions
of Employers’
Employees Associations
- MEF (Malaysian Employer Federation
-Attempt to cover all workers in the different company but in the same
industry, trade and occupation
-Eg: NUTP

COLLECTIVE BARGAINING
Collective bargaining is a process whereby a

trade union negotiates with an employer or
association of employers over the terms and
conditions of service of employees.
A trade union can only invite an employer to

commence collective bargaining once it has
been recognized by the employer as the
legitimate representative of the employer’s
workers.
THE COLLECTIVE
BARGAINING PROCESS
Once a trade union has been recognized by an

employer, either party may initiate the collective
bargaining process.
Bargaining sessions will be held between teams
of negotiators appointed by the employer and the
union respectively.

COLLECTIVE AGREEMENTS
A collective agreement is a written agreement

between a trade union and an employer, or
association of employers, concerning the terms
and conditions of employment of the employer’s
workers.
A collective agreement is the outcome of
collective bargaining.

THE RIGHT TO TAKE
INDUSTRIAL ACTION
Employees who belong to a trade union have

the right to:
q Picket and strike, when a trade dispute
occurs.
Employers have the right to lockout the
workers when a trade dispute occurs.

DEFINITION
Picket
q “A gathering of workers outside their workplace with
placards and banners expressing workers’ grievances
and demands for people to see, thus generating public
sympathy and support”
Lockout
q “A refusal by an employer to permit workers to work
when a trade dispute exists between 2 parties”
HRMPrinciples
HRM Principles
and & Practices
Practices Third Edition All Rights Reserved
©(Second
Oxford Fajar Sdn. Bhd. (008974-T), 2014
Edition) Chapter 13 – 15
1– 15
Cont’d...
Strike
q “Any stopping of work by a group of workers
including any attempt to limit or slow down
production on purpose”
§ Go-slow, work-to-rule, ban on overtime
(Reduction of output)
HRMPrinciples
HRM Principles
and & Practices
©(Second
1– 16
PICKETS
A picket is legal providing:

q The workers involved are members of a trade
union.
q A trade dispute between the employees and
their employer exists.
q It is held at or near the employees’ workplace.
q It does not obstruct the entrances or exits to
the workplace.
q It is peaceful and does not intimidate anyone.

STRIKES
A strike is legal providing:

q The strikers are members of a trade union.
q The strikers have a trade dispute with their
employer.
q A secret ballot is held prior to starting the strike.
q Two-thirds of the workers agree to strike.
q The ballot papers must be sent to the Department
of Trade Unions for verification.
q The workers must wait for at least 7 days before
commencing the strike.
STRIKES (cont.)
A strike will be illegal in the following

situations:
q Over an issue relating to the question of
recognition of a union
q Relating to matters in a collective agreement
which has been taken cognizance of by the
Industrial Court

STRIKES (cont.)
q Relating to the managerial prerogatives of

recruitment, transfer, promotion, termination
of a worker and the allocation of duties to a
worker.
q After a trade dispute has been referred to the
Industrial Court for arbitration.

DEFINITION
TRADE DISPUTES
“Any dispute between an employer and his
workers which is connected with the employment
or non-employment or the terms of employment or
the condition of work of any such worker”
HRMPrinciples
HRM Principles
and & Practices
©(Second
Edition) Chapter 13– 211– 21
DEFINITION
TRADE DISPUTES
“Any dispute between an employer and his
workers which is connected with the employment
or non-employment or the terms of employment or
the condition of work of any such worker”
HRMPrinciples
HRM Principles
and & Practices
©(Second
Edition) Chapter 13– 221– 22
SETTLEMENT OF TRADE
DISPUTE
q Conciliation
- Is the process of arriving at a settlement of a
trade dispute with the help of a third neutral
party
- - carried out by officers of the Department of
Industrial Relation either separately or jointly
- IR officers help both party to arrive at a
compromised which is acceptable to both sides

THE COOLING OFF PERIOD
q Conciliation meeting(s) will be held at the

Department of Industrial Relations.
q If conciliation unsuccessful, the Minister of
Human Resource will refer the dispute to the
Industrial Court for arbitration.
q Once a dispute has been referred to the
Industrial Court, it is illegal for the workers to
strike on the issues under dispute.
HRMPrinciples
HRM Principles
and & Practices
©(Second
1– 24
q Arbitration
- An impartial third party is given the authority to
settle the dispute if the stage of conciliation is
fail.
- The judge of Industrial Relation Court will
examine the information given by both sides
and making judgment.


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Chapter 8 INDUSTRIAL

Industrial relations is the relationship between

HRM Principles and Practices Third Edition All Rights Reserved

Department Department Department

HRM Principles and Practices Third Edition All Rights Reserved

HRM Principles and Practices Third Edition All Rights Reserved

Why do workers join trade unions?

All trade unions must be registered with the

HRM Principles and Practices Third Edition All Rights Reserved

Any employee above the age of 16 has the

HRM Principles and Practices Third Edition All Rights Reserved

q Employees can only join a union representing

q Managers, executives, confidential and

HRM Principles and Practices Third Edition All Rights Reserved

HRM Principles and Practices Third Edition All Rights Reserved

Collective bargaining is a process whereby a

A trade union can only invite an employer to

Once a trade union has been recognized by an

HRM Principles and Practices Third Edition All Rights Reserved

A collective agreement is a written agreement

HRM Principles and Practices Third Edition All Rights Reserved

Employees who belong to a trade union have

HRM Principles and Practices Third Edition All Rights Reserved

A picket is legal providing:

HRM Principles and Practices Third Edition All Rights Reserved

A strike is legal providing:

A strike will be illegal in the following

HRM Principles and Practices Third Edition All Rights Reserved

q Relating to the managerial prerogatives of

HRM Principles and Practices Third Edition All Rights Reserved

HRM Principles and Practices Third Edition All Rights Reserved

q Conciliation meeting(s) will be held at the

HRM Principles and Practices Third Edition All Rights Reserved

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