ELABORATE ON ARGUMENTS FOR AND AGAINST NON HARMONIOUS INDUSTRIAL RELATIONS IN A 2010

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ACKNOWLEDGEMENTS

First of all we would like to thank God the Almighty for his blessed and kindness for

giving us strength and energy to complete this assignment and finish it on time.

We also would like to express our thanks to our lovely lecturer, Professor Madya

Norhayati Bt Mohd Salleh @ Salih for her knowledges and guidances for us to complete this

report without her support and references, nothing much that we can do fill anything in this

report.

Lastly but not least, our thanks also goes for those who had contributes directly and

indirectly in completing this report. Thank you so much for the co-operation.

Steve Morgan Anak Lisin

Email : steve_morgan87@yahoo.com.my

Aedil Izhar Bin Abd Aziz

Email : eddie_aziz22@yahoo.com
ELABORATE ON ARGUMENTS FOR AND AGAINST NON HARMONIOUS INDUSTRIAL RELATIONS IN A 2010
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CONTENTS PAGE

1.0 INTRODUCTION ............................... 1

2.0 TRADE DISPUTES ............................... 2

3.0 INDUSTRIAL ACTION BY EMPLOYEES ............................... 3

3.1 PICKETING ............................... 3

3.2 STRIKES .............................. 4

3.2.1 INCIDENCE OF STRIKES .............................. 5

4.0 INDUSTRIAL ACTION BY EMPLOYER ............................... 7

5.0 CONCLUSION ............................... 9

APPENDIX A : INDUSTRIAL DISPUTES ............................... 11

APPENDIX B : INCIDENCE OF STRIKES ................................ 13

BIBLIOGRAPHY ............................... 14
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1.0 INTRODUCTION

Industrial Relations (IR) is about the management of an equitable employment

relationship between the employer, the employee and the government within the

complex framework of law, culture, convention and rules. According to Salamon

2000, it is also about the confrontation of group interests tinged with ideologies and

how the different parties sometimes submerge self interest through the lack of

collective will, and co-operation with each other, in the pursuit of broader goals for the

common benefits. According to Dunlop 1993, Industrial Relations is the dimensions

that impact upon this relationship may be ideological, technological, societal,

economic and legal in nature. IR is not only about industrial disputes and work

problems that crop up every now and then when the employment system has broken

down. It is about how production can be upgraded through mutual understanding and

compliance of certain acceptable rules that govern the two direct parties in the

employment relationship (Salamon 2000, Jackson 1991). It is associated and their

trade unions and also the government witth its arbitation system (Aminuddin 1999,
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Balakrishnan 2002). Industrial Relations focuses on areas such as laws and rules which

impact on the work environment. It also focus on the terms and conditions of work and

the rights of employers and employees. Then, it focus on the processes by which the

rules and terms are made, i.e. the decision – making process.

2.0 TRADE DISPUTES

According to the Industrial Relations Act 1967, trade dispute can be defined as “ 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 ”. It also are known as industrial disputes. A dispute could be

caused by an individual who has grievance, and is representd by his union and who

has exhausted the grievance procedure without getting a satisfactory result. It also

caused by a difference of opinion between a union and an employer as to the

appropriate terms and conditions of service for the workers. Beside, it’s also caused by

a difference of opinion as to the interpretation of a collective agreement or Industrial

Court award or the non-implementation of an agreement or award.

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Conflict between an employer and his employees is an inherent possibility

given that they have clashing interests; especially in terms of wages. Employers wish

to maximise profits, which means controlling and limiting costs as far as possible. On

the other hand, employees want higher wages, more fringe benefits and more

conducive working conditions; all of which increase the employer’s costs.

Non-economic factors may also lead to dispute. Disciplinary action taken by

the employer may be considered unfair or unwarranted. Alternatively, there may be

interference with the right of the employee to participate in trade union activities, i.e.

victimisation.

Table 1 shows the causes of industrial disputes in 1991 and 1992. The most

common cause of disputes is a failure to reach agreement over terms and conditions of

employment, that is, a breakdown in collective bargaining.

3.0 INDUSTRIAL ACTION BY EMPLOYEES

When peaceful methods fail to settle a dispute, the trade union may attempt to force a

settlement by using or threatening to use more aggressive methods. The two types of

industrial action permitted by the law are pickets and strikes. Another possible weapon

used by unions is the boycott. Usually the union will try to encourage other workers

and supporters to follow suit, thus exerting economic pressure on the employer to give

in to their demands. Generally, the boycott is rarely used in Malaysia. To be truly

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successful a union-organised boycott would need to be supported by members of other

unions as well as the general public.

3.1 PICKETING

Picketing is the most common form of industrial action taken by workers. In

Section 40, The Industrial Relations Act 1967 said that the workers are allowed

to attend at or near their workplace when they have a trade dispute for the

purpose of peacefully giving information to the public and other workers and to

persuade other workers not to works if a strike has already been declared.

Picketing is commonly the first attempt at industrial action taken by workers.

This picketing is often held at luch-time and before or after working hours. If,

however, a strike has been declared, picketing will be held throughout the day

by the striking workers.

On April 26, 1988, it was reported by The Star that some 2,000 workers

of Syarikat Telekom Malaysia picketed in front of their headquarters during the

lunch-break and after office hours to support their demand for payment of

bonus. In September 2004, 100 journalists, all working for a major newspaper,

held an hour-long picket outside the newspaper’s corporate headquarters in

Kuala Lumpur. Their negotiations for a new collective agreement had ended in

a deadlock after two years of negotiations. They held placards which read

“Management cheats” and “Don’t Snatch Away Workers’ Rights”.

On Tuesday 18 March 2008, Telekom Malaysia will be facing a

nationwide picket by the National Union of Telecommunication Employees

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(NUTE). The picket is as a mean to protest against TM’s implementation of

the Employee’s Share Option Scheme (ESOS). Together with NUTE, the

picket will be also joined by Sabah Union of Telecommunication Employees

(SUTE) and the Union of Telecommunication Employees Sarawak (UTES)

who will be staging the protest in their respective states.

According to NUTE president, Mohamed Shafie BP Mammal said the

picket was due to the unfair allocation of shares where TM’s management had

no clear formula for allocation. TM was also said to have failed in disclosing

the information about the whole process, and did not discuss the terms and

conditions of allocation with the unions. The unions are also not satisfied with

the overall ‘outsourcing’ handling by the company.

“The decision made by TM shareholders during the extraordinary

general meeting was well-received by the three unions. However, the three

unions unequivocally and wholly reject the manner and procedure of the ESOS

exercise,” said Shafie to NST.

25 pickets will be held in the Peninsular Malaysia and three in Sabah

and Sarawak.

In October 2006, more than 500 members of NUTE organized a picket

in front of Telekom Malaysia HQ in Kuala Lumpur in protest of their

‘insourcing’ activity of the call centers to VADS Berhad, a company majority-

owned by TM. The employees were the staff of TM Call Center at the Retail

Customer Contact Center (TMRCC). During the same time, about 800

employees in Sabah and Sarawak picketed in the respective states.

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According to the cases, generally we can formulate that there have

advantages and disadvantages base on the non harmonious industrial relations

in this country. The advantages are to make sure the employees get the

information or give information to the others. In other words, the important

information will be given to them without any biased. So they know what the

latest info such as bonus, leaves and etc. It is important to make sure the

employees alert with the current issues that relate with their employer. Then, if

there have any trade dispute, the employees will influence their colleague

either continue their job or stop it. It shows that the employees have a tough

union that can make complication into their work’s environment.

For the disadvantages for the pickets are that can make a negative

perception to the employer and their reputation also will be affected. This are

because the picket will be done in the lunch hour, before working time or after

working time which are easy seen by the publics. Other than that, the work’s

environment also will be uncomfortable between the employees and their

employer. The employee’s affordability according to their works also will be

down until their employer accepts their demands.

3.2 STRIKES

A strike occurs when a group of workers refuses to work until their employer

accepts their demands. In Section 2, The Industrial Relations Act 1967 said

that a strike is the cessation of work by a body of workmen acting in

combination, or a concerted refusal or a refusal under a common understanding

of a number of workmen to continue work or to accept employment, and

includes any act or mission by a body of workmen acting in combination or

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under a common understanding, which is intended to or does result in any

limitation, restriction, reduction or cessation of or dilatoriness in the

performance or execution of the whole or any part of the duties connected with

their employment.

In brief, a strike is any stopping of work by a group of workers,

including any attempt to limit or slow down production on purpose. The illegal

strikers run the risk of being penalised under the Internal Security Act (ISA)

which allows imprisonment for an indefinite period without benefit of trial if a

person is believed to be a security risk. During the 1979 strike of the Airlines

Employees Union, the ISA was used against a number of the union leaders.

Indeed, it is an offence under Section 46, in the Industrial Relations Act which

is for a workman to take part in an illegal strike; the penalthy being a jail term

for up to one year, or a fine not exceeding RM 1,000.00 or both. Employers

would like to see this part of the Act being enforced more strictly.

Employers have the right to dismiss workers who participate in an

illegal strike, and they commonly make use of the right. In 1991, some 369

workers of Tan Chong Motors were dismissed for taking part in an illegal

wildcat strike. Although, subsequently, most of the workers were offered re-

employment; none of the workers re-applied for jobs with the company.

3.2.1 INCIDENCE OF STRIKES

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At the national level, the strike tendency of workers is a vital factor

influencing the investment decision by multinational companies.

Malaysia’s strategy to attract industry to this country, which will in turn

mean the provision of jobs, relies on having a responsible and co-

operative workforce. Ministers of the government have frequently

reminded Malaysians that strikes can only harm the interests of

workers.

The number of strikes held between 1994 and 2004, the number

of workers involved and the man days lost are shown in Table 2. Since

the year 2000, the number of strikes has dropped even more

significantly. The average number of strikes between the years 2000

and 2005 was only six. The cost of strikes should be kept in proper

perspective. While all industrial relations procedures are designed to

keep the number of strikes to a minimum, it must be remembered that

losses from industrial accidents, absenteeism, turnover and employee

illness are far greater than those resulting from strikes.

According to the cases and the chart, it can be clearly stated that

there have advantages and disadvantages according to the strikes. For

the advantages are the employees can express their unsatisfied

according to their works. It is because if they don’t use this way, their

employer will not takes any action to their demands. In fact, the strikes

also be done to make sure their employer alerts and be responsibles

about the employee’s needs.

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Otherwise, the workers use this strikes because want to release

their tension and protest towards their job. It is important because

emotional disturbance is one of the critical environment that can affect

the productions. Another advantage of the strike is can increase the

company’s performances because when this strike happen, the top

management surely get hands on together to get the best solutions

according to the employee’s demands.

In some cases, there also have disadvantages towards the strikes.

The production of the company will decrease. It is because the workers

will leave their work just want to involve the strike. So, the

effectiveness to the production is very high. The top management

should think quickly to solve the problems before it affect their profit.

As the results, the economic also will be affected. It is because they are

related to each other such as one of the country’s profitable. It also will

be complicated if the government know and involve to the cases.

It will show that the organisational in the critical stage such as

an useless of the top management which are they can’t deal to the union

about their demands until the strikes happen. Otherwise, when there

have a strike, it will affected to the public because they will destroyed

the public properties and make polution such as throw rubbish

everywhere to show their protest. Futhermore, it will make a bad

perception to the foreigner about this country.

4.0 INDUSTRIAL ACTION BY EMPLOYER

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In normal circumstances, employees’ unions are the ones who take industrial

action against employers to pressure them to give in to the worker’s demands.

However, on rare occasions, the employer will take action against the workers.

The most common industrial action taken by an employer is the lock-out, i.e.

the employer refuses to allow the workers to work until the dispute between

them is settled.

4.1 LOCK-OUT

Sometimes a lock-out is declared in response to an illegal strike by the

workers. According to Section 2, the Industrial Relations Act 1967, a

lcok-out can be define as the closing of a place of employment, the

suspension of work, or the refusal by an employer to continue to

employ any number of workers employed by him, in futherance of a

trade dispute, done with a view to compel those workers to accept terms

or conditions of work or affecting employment. The procedure for a

lock-out are the same as those for a strike.

During the 1979 strike in Malaysian Airline System (MAS), the

management brought in trainees from the Dusun Tua Youth Training

Centre to take over from the cabin staff. The trainees were given

special, intensive training and were put to work to replace the striking

staff.

According to the case, it can be clarified as the advantage to the

employer because they can use their power such as keeping the firm

operating; either by placing managerial or non-union employees in the

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strikers’ jobs, or by hiring replacement workers. So as the result, the

workers realise that their action is not having any negative economic

consequences on the employer, they may decide to go back to work.

The ultimate weapon of the employer against the union is the

total closure of a factory or plant, leading to loss of employment for all

workers involved. This response to aggressive union activity is not

uncommon, especially among multinational employers who choose to

place their factories in an environment most condusive to making

profits.
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5.0 CONCLUSION

Trade disputes cannot be denied that occasionally the path of industrial relations does

not run as smoothly as it should. Disputes between an employer and his employees are

unavoidable. In order to preserve industrial harmony in a unionsed environment an

employer has to be proactive and take positive steps to avoid industrial disputes.

Picketing is the most common form of industrial action taken by workers.

However, such picketing must not intimidate anyone, must not obstruct the entrance or

exit to organisation, and must be peaceful. In some instances, the mere threat of a

picket publicised in the mass media is sufficient pressure to force the employer to

respond positively to union demands.

A strike occurs when workers refuses to work until their employer accepts their

demands. A mass refusal of the workers to work overtime would, therefore, be a form

of strike. Strikes are only legal if they comply with the regulations in the Industrial

Relations Act and Trade Unions Act. Sympathy and political strikes or general strikes

are illegal in Malaysia.

The Industrial Relations Act allows the Minister of Human Resources to

appoint a committee of investigation or a board of inquiry where a trade dispute exists.

Such a committee or board is an investigative body and does not, in fact, take steps to

settle any dispute. The government prefers to deal with trade disputes through the

machinery of the Industrial Court.

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Lastly but not least, for Malaysia to realise its aspirations to become an

industrialised and developed nation by the year 2020 would require radical changes in

IR policies with several other macro policies such as education, training and

immigration.

Appendix A

TABLE 1

INDUSTRIAL DISPUTES ACCORDING TO CAUSES, 1994-1995

Total Disputes No. of workers Involved

Reason for disputes

1994 1995 1994 1995

1. Refusal to enter into collective 25 25 3,924 2,106

bargaining

2. Deadlock in collective bargaining

119 131 53,716 25,437

3. Disputes over terms and conditions of

236 254 22,638 12,660
contractual terms in collective

agreements & other service contracts

4. Dismissal of workers - - - -

5. Retrenchment and lay-off 7 10 833 634

6. Promotion, allocation of duties,

28 8 359 55
transfer and other management

prerogatives
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7. Demotion, suspension, warning letter

and other disciplinary action against 23 16 93 60

workers

8. Non-implementation of labour
15 10 929 2,418
standard and statutory provisions

relating to amenities and facilities and

other non-monetary benefits

9. Infringement of worker’s right/unfair

14 9 1,751 1,225
labour practices

36 48 3,332 4,062
10. Others

Total 503 511 87,575 48,657

Source : Department of Industrial Relations

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Appendix B
TABLE 2

INCIDENCE OF STRIKES, 1994-2004

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

No. of strikes 15 13 9 5 12 11 11 13 4 2 3

Workers 2,289 1,748 995 812 1,778 3,452 2,969 2,209 506 57 279
involved

Man-days 5,675 4,884 2,553 2,396 2,685 10,55 6,068 5,999 1,638 114 3,262
lost 4

Source : Department of Industrial Relations

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BIBLIOGRAPHY

Employment Act 1959

Indutrial Relations Act 1967 and Industrial Relations Rules 1980

Balakrishnan Parasuraman. (2004) Malaysian Industrial Relations A Critical Analysis.

Selangor: Pearson Malaysia Sdn. Bhd

Dunston Ayadurai (1998) Industrial Relations In Malaysia

Maimunah Aminuddin. (1996) Malaysian Employment Law and Industrial Relations. 2nd ed.

Selangor: McGraw-Hill (M) Sdn. Bhd

Maimunah Aminuddin. (2007) Malaysian Employment Law and Industrial Relations. 6th ed.

Selangor: McGraw-Hill (M) Sdn. Bhd

http://jpp.mohr.gov.my/images/stories/jppm/Tindakan_Perusahaan_(Piket,Mogok_&_Tutup_

Pintu).pdf
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