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At the end of this chapter, you will be able to: Explain why employee join unions Describe the historical development of trade unionism in Malaysia Describe the significant characteristics of Malaysia's trade unions Understand the Trade Union Act (1959) and Industrial Relations Act (1967) and how both regulate labor-management relations Describe the roles of managers in unionized organizations Understand the managerial skills required in managing labor relations process.
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Year 1984 1985 1986 1987 1988 1989 1990 1991 1992
Peninsular Malaysia Sabah and Sarawak Malaysia Unions Members Unions Members Unions Members 291 547,936 95 46,050 386 593,938 296 560,952 96 47,454 392 608,406 305 561,099 96 45,395 401 606,494 311 561,248 98 45,284 409 606,532 322 568,893 92 48,623 414 617,516 344 589,031 95 43,721 439 632,752 364 613,221 104 46,059 468 659,280 380 609,552 104 51,599 484 661,151 397 638,711 104 53,718 501 692,429
Figure 1: Increase in the Number of Trade Unions and Total Memberships [Source: Ministry of Human Resources]
The table below shows the Trade Unions Membership by Size of Union, 1990 1992.
Number of Members Under 100 100 - 200 200 - 500 501 - 1000 1001 - 2000 2001 - 5000 5001 - 10000 Above 10000 Employer's Union Federation of Trade Unions Total
Number of Unions Total Membership Percentage of Total 1990 1991 1992 1990 1991 1992 1990 1991 1992 99 102 104 4,601 4,998 5,177 0.7 0.77 0.75 72 73 79 10,237 10,521 11,258 1.6 1.59 1.63 85 92 92 27,715 31,155 29,698 4.2 4.71 4.29 76 77 82 52,325 54,238 58,006 7.9 8.20 8.38 50 56 58 72,622 82,824 84,560 11.0 12.53 12.21 35 33 34 109,045 105,984 109,507 16.5 16.03 15.81 19 18 16 130,437 122,601 108,205 19.8 18.54 15.63 10 11 14 251,517 248,226 285,278 38.2 37.54 41.20 17 18 18 621 513 639 0.1 0.08 0.09 4 4 4 91 101 0.01 0.01 467 484 501 659,120 661,151 692,429 100.00 100.00 100.00
Figure 2: Trade Unions Membership by Size of Union, 1990 - 1992 [Source: Ministry of Human Resources]
Services sector has the most members as well the highest number of trade unions followed by manufacturing and agriculture sectors. These three sectors account for almost 80% of number of unions and memberships. Currently, only 10 % to 11 % of the Malaysian workforce is organized. This shows that trade unionism is not very strong in Malaysia. The rate of growth of trade unions is
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also rather small. Furthermore, the growth is more in the form of in-house unions rather than national or federations of trade unions.
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iii.
a. The trade union makes a claim to the employer by filling in the prescribed
form. b. The employer must reply within 21 days upon receiving the claim. According to Section 9(3) of IRA, the employer has three possible responses: Accord recognition If recognition has been accorded, the trade union is deemed to be the formal representative of the workers or a class of workmen.
Refuse recognition
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If the employer refuses recognition, he has to notify in writing the workmen's trade union giving the grounds for not according recognition. Delaying recognition to check the status of members The employer may apply to the Director General of Industrial Relations to ascertain the competency and membership of the union. This may delay the recognition of the trade union. The employer is required to give written notice to the union of his application to check the status and membership of the union.
c.
If recognition is refused or the employer has not responded within 21 days in writing, the union may file a complaint in the form of a written report to the Director General of Industrial Relations. The Director General will then investigate or make inquiry to resolve the matter. If the Director General cannot resolve the matter, he is required to notify the Minister of Human Resources. The Minister will decide whether recognition is to be accorded. The decision of the Minister is final and cannot be questioned in any court.
d. After recognition has been granted, no other union can make a claim in respect of the same workmen or class of workmen for a period of three years. If a union's claim for recognition has been rejected, either by the Director General or by the Minister, the union cannot make another claim for a period of six months from the date when the claim was rejected. iv. Ways Employers Make Seeing Recognition Difficult Not all employers favor the idea of unionism. Some even discourage the notion. Ways that employer can discourage the activities of a trade union can include: a. Employer may challenge the representativeness of the trade union concerned. Employers will ask the Director General of Industrial Relations to do a membership check or by taking a secret ballot to determine the position of the union. Thus, making the process of seeking recognition more difficult. b. Employer may resort to victimization and unfair labor practices that are difficult to prove. For example, the employer may resort to transferring union leaders, harassing workers through personal interviews on union activities and so on. c. Employer may try to sabotage the union's activities by sponsoring another rival trade union and by giving recognition to this trade union. 3. Collective Bargaining Collective bargaining is the process where representatives from employee and employer trade unions meet and negotiate regarding certain arising matters. IRA defines the procedure for collective bargaining and Collective agreement (CA). Below are the procedures for collective bargaining: i. ii. When the employer has accorded recognition of the workmen's union, either party may invite the other party to commence collective bargaining. The invitation must be made in writing and set forth the proposal for a collective agreement. The party to whom the invitation is made must reply in writing within 14 days of its receipt. The reply must indicate whether to accept or reject the invitation. If an invitation has been made and accepted, collective bargaining must commence within thirty days of the receipt of the acceptance.
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iii.
iv.
v.
If the invitation has been made and it has not been accepted within 14 days, or refused or it has been accepted, but bargaining has not commenced within 30 days of receipt of acceptance, the party that initiate the invitation may file a complaint in the form of a written report to the Director General of Industrial Relations (DGIR). The Director General is then authorized to take such steps as may be necessary to get the parties involved to commence bargaining. If, despite his efforts to conciliate, there is still a refusal to commence bargaining, a trade dispute is deemed to exist. If an invitation has been made and accepted, and collective bargaining has been successfully concluded, the end result would be a collective agreement. The agreement must be made in writing. But if the bargaining has not been successfully concluded, a trade dispute is deemed to exist. If the collective bargaining has not been successful and the DGIR has failed in his conciliation the DGIR and the parties to the collective bargaining can refer the trade dispute to the Minister of Human Resources. The Minister will refer the matter to the Industrial Court for arbitration.
A Collective Agreement is defined as an agreement in writing between an employer trade union and a workmen's union. Every CA must be in writing and signed by both parties to the agreement or by persons authorized to sign on their behalf. 10 copies of the CA must be deposited with the Registrar of the Industrial Court within 30 days of the signing of the agreement. The CA must also specify the terms and conditions of employment such as salary scales, bonus payment, overtime rates, retrenchment benefits, retirement benefits, holidays, leave benefits, medical benefits, mileage allowance, and many others. However, it must not include items, which are considered to be managerial prerogatives. These prerogatives are sets of list of non-bargainable subjects at the option of the employer. They include the promotion, transfer, employment, termination, dismissal and reinstatement of employees and the assignment or allocation of duties by the employer. A CA usually specifies the names of the parties to the agreement, the period for which the agreement is to be effective (which cannot be less than 3 years). It should also prescribe the procedure for modification or termination of the agreement, and the procedure for settling any question over the interpretation or the implementation of the agreement. A collective agreement relating to a pioneer status enterprise or any industry specified by the Ministry, cannot, without the approval of the Ministry, contains better terms and conditions than those legislated in Part XII of the Employment Act. 4. Trade Disputes IRA defines trade disputes as any disputes between an employer and the employees regarding employment and non-employment issues and can be caused by reasons such as wrongful dismissal, discrimination and so forth. In trade disputes, trade unions will only acts as an agent for its members. Employees and employer may express their dissatisfaction by taking industrial actions. There are many types of industrial actions that can be taken by employees or employers in order to force the other party to give in to their demands. This is done if other peaceful methods fail to bring any settlement. Among a few that are recognized by law are: Strike A strike is a stopping of work by a group of workers including any attempt to limit or to slow down work on purpose. The strike must be connected with the employment or non-employment of workmen and for the purpose of furtherance of a trade dispute. A strike for other purposes will be considered illegal.
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Lockout IRA defines lockout as the closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of workmen employed by him. Picket A picket is where the workers gather outside the workplace for the purpose of putting pressure on the management to accept their demands. 5. Dispute Resolution Some of the dispute resolution tools are i. Direct negotiation Direct negotiation is a method of settling disputes where the two parties involved, directly come together for discussion until a satisfactory compromise is reached. Conciliation Conciliation is a process of bringing together the parties involved in a dispute to resolve the dispute between them. Under the IRA, DGIR has the power to act as conciliator. If conciliation by the DGIR has failed, the DGIR will bring the dispute to the Minister. The Minister can also refer the dispute to the Industrial Court for compulsory arbitration. Arbitration Arbitration is a method of dispute resolution through the use of a third party. Arbitration is where the third party is given the authority to settle the trade dispute. This is only taken when other methods of dispute settlement have been exhausted and have failed to settle the matter. In Malaysia, only the Industrial Court has the authority to arbitrate trade disputes.
ii.
iii.
6. The Industrial Court The industrial court is established by IRA to provide a peaceful and unbiased means of settling trade disputes through arbitration. Two main functions of the Industrial Court (IC) are: i. ii. To hear and decide disputes or cases of non-compliance of awards and collective agreements. To scrutinize, vet and take cognizance of collective agreements.
The IC consists of a President and four Chairmen and two Panels; a panel of persons representing employers and a panel of persons representing employees. The Agong appoints the President and Chairmen of the IC, while the panel members are appointed by the Court President from a list of names submitted by the MTUC and the MEF. The Act requires the Court President to have at least seven years of experience as a lawyer before his appointment. In presiding over cases that involve trade unions, the IC consists of a President or Chairman and two panel members, one from each of the two Panels. But for cases that only involve individual grievances, e.g. unfair dismissal, the President or chairman may sit alone without a Panel.
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In terms of jurisdiction, the IC can hear cases of trade disputes referred to it for arbitration by the Minister or at the request of both parties to a dispute after other means of dispute resolution have failed. However, the Minister cannot refer disputes concerning the public sector to the IC without the consent of the Agong. Other areas of IC's jurisdiction includes the following: Arbitration of grievances concerning unfair dismissal of non-unionized workmen when referred to by the Minister of Human Resources Interpreting the approved Collective Agreement or awards by any party or the Minister Hearing complaints over alleged contravention of trade union rights or non- compliance of awards or collective agreements Requiring the parties involved amending a collective agreement; and, if they refuse to do so, the IC has the authority to amend the agreement itself. The industrial court has the power to summon parties in disputes, call witnesses, hear and determine disputes in the absence of any party summoned to the proceedings, conduct its proceedings in private, call in the aid of experts, regulate the procedures and proceedings of the court and make an award. The decision or award of the IC is final and conclusive and shall not be challenged, appealed against, or quashed in any court of law.
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It is important for Malaysia to have a harmonious employer -employee relation to ensure that economic development continues. Besides that harmonious industrial relations can lead to higher productivity, which in turn benefits employees. However, employers should not take advantage of the employees by exploiting and manipulating the workers in denying their rights to a fair share of the economic cake.
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SUMMARY
1. Employees join unions for several purposes; economic needs, social and leadership needs, unfair managerial practices and to channel to voice concerns. 2. There are different classifications of trade unions in Malaysia; national trade unions vs. inhouse unions, public and private sector union, employees and employers unions and federation of trade unions. There are also several other labor-related organizations such as MEF and MTUC. 3. In Malaysia, two major laws were established to govern industrial relations. They are Trade Union Act (1959) and Industrial Relations Act (1967). 4. There are basically 2 strategic choices that management has towards unions; acceptance or avoidance.
PRACTICE QUESTIONS
1. Explain the reasons for employees to join trade unions. 2. Describe the provisions in the two major laws that govern industrial relations in Malaysia. 3. In case of deadlocks during collective bargaining, what are the potential actions committed by both employers and employees? 4. Given a trade dispute, what are the methods used to resolve the disagreement?
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