INDUSTRIAL RELATION

INTRODUCTION INDUSTRIAL RELATION

One model of industrial relations

recommends that employers and
employees unions should work
towards developing an harmonious
relationship in which both parties
respect the rights and role of the other

THE ROLE OF THE MINISTRY OF

HUMAN RESOURCES IN INDUSTRIAL
RELATIONS
1) Ministry of Human Resources is responsible for setting
legislation that protects the rights of employers and employees.
2) It is also necessary to enforce the implementation after the
passing of a law.
3) Beside participation in the affairs of industrial relations, it is
also responsible for the enforcement of labor standards,
encourage of healthy work practices and training for the
workforce.
4) In the industrial relations through the Department of the
Ministry of Trade Unions also help employers and employees
who require advice and take steps to improve relations between
employers and employees.

IMPORTANCE OF INDUSTRIAL RELATION

1) On behalf of the employer or management,
understanding of industrial relations are considered
important because they have a direct relationship with
employees as they have to be responsible for the
quality and performance of the organization.
2) To ensure that all tasks can be run smoothly,
efficiently and effectively, management should
establish good relations with employees to pay
attention to employee welfare issues, including the
issue of salaries, side benefits and health and safety at
work.
3) Through industrial relations, workers can protect
their interests as well as labor organizations reduce

TRADE UNIONS
Trade Unions Act 1959 defines a trade union as
an association or a combination of employer or
employees are working in Malaysia.
Workers join unions because they realize that
collectively they will be in a position to push
for higher wages and better terms of
employment.
Unions take steps to protect their members
rights.

TRADE UNIONS
UNION

NATIONAL ISSUES
INDIVIDUAL EMPLOYER Recommending protective INDIVIDUAL MEMBERS
Representing members
Improving workers terms
legislation for workers
with grievances
and condition
Discussing with government
Providing benefits
Protecting members from
and employers
to members
unfair treatment
current issues

TRADE UNIONS
FORMING A UNION
Any group of seven or more workers can form a trade union,
providing they work in the same trade, occupation or industry and
the intended membership all work either in the private sector or all
in the public sector.
Once the decision is made to form the union, an application for
registration must be made within one month.
All unions are required to register with the Director-General of
Trade Union in order to operate legally.
Together with the completed application form, signed by the seven
members must be sent a printed copy of the unions constitution.
The Director General is vested with the authority to refuse to
register any union which , in his opinion is likely to be used for
illegal purposes.
The most important criterion for a union to be registered is that its
intended members must come from the same or a similar trade,
occupation or industry.

TRADE UNIONS
CENTRAL TRADE UNIONS
1)Indian National Trade Union Congress (INTUC)
2)All India Trade Union Congress (AITUC)
3)United Trade Union Congress (UTUC)
4)Bharatia Mazdoor Snagh (BMS)
5)National Front of Indian Trade Union (NFITU)
6)Centre for Indian Trade Union (CITU)

TRADE UNIONS
REASONS TO JOIN EMPLOYEE
UNIONS

Dissatisfaction with the management.

Field to socialize.
Provide the opportunity to be a leader.
To improve their economic position.
To ensure their rights upheld.
Because of social reasons.

TRADE UNIONS
REASONS NOT TO JOIN UNION EMPLOYEES

1.
2.
3.
4.
5.

COST
ANTI-UNION ATTITUDE
PRESSURE GROUP
FEAR LOSS OF EMPLOYMENT
LACK OF SUPPORT FROM UNIONS

TRADE UNIONS

TRADE UNIONS

TRADE UNIONS
CONDITIONS TO JOIN UNIONS
All workers in Malaysia can join trade unions, provided they are aged 16
years and above.
Union members aged between 16 years to 21 years have limited freedom
to participate in activities of trade unions.
Employees who work peninsula Malaysia can only join a union consisting of
members of the Malaysian peninsula to work.
At Sabah workers and Sarawak only allowed to join a trade union consisting
of members who work in the land of their own.
All the workers can join a union, from the lowest level to the highest level.
Trade unions can not apply the recognition and conduct collective
bargaining on behalf of the managers, executives and employees involved
in confidential work or those in charge of security for the purpose of
isolating aspects of the working group of other workers.
Group employees are prohibited from being members of any trade union is
the employees who serve in the armed forces and police and prison
personnel management level in the public service.
They can only join a trade union with the permission of the Chief Secretary
to the Government.

TRADE UNIONS
EMPLOYER'S RESPONSE TO THE
ESTABLISHMENT OF TRADE UNIONS

TYPE OF TRADE UNIONS

1.National and regional unions
Recruit members from workers in different companies in the same
industry or workers in the same trade or occupations
Example:
The National Union of the Teaching Profession (NUTP)
2.In-house Unions
are formed by workers in a company or organization whereby
membership is confined to employees in that particular company
Example:
National Union of Gold Storage Employees
3.Employers Association
In those industries where a well-organized employees union exist,
the employers are more likely to form an association of their own.
Example:
Malayan Commercial Banks Association (MCBA)

THE COLLECTIVE BARGAINING PROCESS

The process whereby employers and employees
negotiate over the terms and conditions of
employment.
Before a union can start to negotiate with an
employer on behalf of the workers in a company, the
union is required by law to gain formal recognition
from the employer.

THE COLLECTIVE BARGAINING PROCESS

RECOGNITION
an employer recognizes a trade union, the employer gives the
union certain rights, the most important of which is the right to
represent his workers
COLLECTIVE BARGAINING
As soon as a trade union gets recognition from an employer, it
can begin the process of bargaining with that employer to
improve the terms and conditions of service of the workers in the
company
COLLECTIVE AGREEMENTS
A written agreement between an employer and a trade union
relating to terms and conditions of employment
Most agreements include clauses on wages, working hours,
holidays, allowances and any other benefits to be given to the
workers

THE COLLECTIVE BARGAINING PROCESS

Ingat step ini

1. Prepared before collective bargaining

Formal preparation may start several months before the expiration
of the existing collective employment.
During the preparation stage, the two parties will select their
negotiating team to be representative at the negotiating table.
During preparation, the trade unions must determine the will of its
members and collect all the data about the organization's financial
position, the compensation offered by other organizations in the
same industry, economic conditions and other factors.
Party organization, the employer also must make appropriate
preparations.
To expedite the process of bargaining later, the management
should also conduct research.
Other actions to be taken by both parties at this point are as
follows:
Gather information related.
Setting goals consultation.
Develop strategies.

2. Setting bargaining issues to

be discussed
Trade unions should provide a list of
issues to be negotiated consisting of key
issues and side issues.
Bargaining issues to be negotiated is
divided into the following three
categories:
Mandatory bargaining issues that include wages,
hours, and other terms contained in the contract of
service of employees, such as compensation for
overtime.
Issue bargaining is allowed, for example the claim

3. Start collective bargaining

Collective bargaining involves one meetings

between employers and trade unions.
Each party will submit their respective claims .
Initiated consultations with the trade unions
provide a list of requests or issues to be
discussed to the employer.
Trade unions often will provide a long list of
demands , eg 10 requests .
Unionists will submit claims first, then the
management will give a counter proposal .
Negotiation outcome depends on each party's
power and skill of the consultant .
Labor laws in Malaysia do not prescribe

 However , Section 13 ( 3) of the Industrial

Relations Act provides a list of items that
contain items that can not be negotiated at
the option of the employer .
The rights or prerogatives of management
includes decisions about promotions,
employee turnover, recruitment,
retrenchment, dismissal , reinstatement and
commissioning work .
During negotiations, the impasse may
sometimes occur and it is resolved through
the intervention of a third party, trade union
strategy or management strategies.
Once agreement is reached, both parties will
provide a written agreement that includes all

4. Assess the status of

negotiations
At this level, consultative status will be
evaluated to determine whether collective
bargaining has been going well or not.
Sometimes the deadlocked negotiations for
negotiating parties could not reach an
agreement either before or after the expiration
of the previous collective agreement.
Section 2 of the Industrial Relations Act
defines trade disputes as disputes between
employers and employees in relation to
aspects of the employment or nonemployment or the terms of employment.

4. Assess the status of

negotiations

4. Assess the status of

negotiations

4. Assess the status of

negotiations
a) THIRD PARTY INTERVENTION
Conciliation or intermediation
During the process of conciliation or
intermediation, a neutral third party would
seek to persuade warring parties to resume
negotiations and reach a mutual agreement.
Conciliator or mediator people who would
seek to restore middle between the two
parties are disputing.
Third party involved in a conciliation process
may consist of officers Industrial Relations
Department.

4. Assess the status of

negotiations
a) THIRD PARTY INTERVENTION
The fact finding
Fact-finders are asked to review the issues in
dispute and announce its findings and
recommendations.
In Malaysia, the Industrial Relations Act
provides 2 types of search engine fact, the
Investigation Committee and the Board of
Inquiry.
Both of these investigative body appointed
by the Minister of Human Resources and duty
to investigate the reasons and causes of the

4. Assess the status of

negotiations
a) THIRD PARTY INTERVENTION
Arbitration

Arbitration is a process that allows a neutral

third party decide which solution can bind
both parties to the dispute. Arbitration to
settle trade disputes by peaceful means and
not biased.
In Malaysia, only the authority of the
Industrial Court arbitrate a dispute involving
employers and labor unions.
Decisions made by the Industrial Court on
the dispute known as the award. Award is

4. Assess the status of negotiations

4. Assess the status of negotiations

b) DIRECT ACTION OF TRADE UNIONS
THE PICKET
Workers who belong to a trade union and
who have a trade dispute with their
employer have the right to picket at or near
their place of work, providing:

They do not obstruct the exits and

entrances
They do not intimidate anyone
Their activities are peaceful

4. Direct action of trade unions

THE STRIKE
Only members of a registered trade union may strike
They must have an unsettled trade dispute with their
employer
Political and sympathy strikes are illegal
Types of strikes are generally illegal:
General strike
A strike involving wide variety of workers from different
industries, as many as possible, initiated for political reasons,
aimed at harming the government in power
Wildcard strike
A strike which does not follow the prescribed procedures.
Sympathy strike
A strike by a group of workers who do not have any dispute
with their employer but who wish to show their support for
another group of workers who are embroiled in a dispute
Sit-down or sit-in strike

4. Direct action of trade unions

THE LOCKOUT
Initiation of refusal to join the members of
trade unions and other interested parties (such
as family members or friends union members)
to purchase or use the goods and services the
employer organization.
Purpose to urge the employers to accept union
demands.
Trade unions will try to influence the public to
boycott the goods and services were the
organization.

5. Resolve the deadlock and reach agreement

Collective bargaining is considered

complete when the employers and the
trade unions managed to reach provisional
agreement.
Before a final agreement with signed,
formal agreement of the top management
must be obtained in advance.
The proposed agreement must be
confirmed by the members of the union.
If union members reject the agreement,
must be re-opened negotiations to reach a
new agreement.

 Section 14 of the Industrial Relations Act

provides for a collective agreement must
be in writing and signed by the
stakeholders.
Collective agreement must also: Name the parties involved in the agreement.
Expressing the force of the agreement (not less
than three years from the effective date of the
agreement).
Setting the modification and termination
procedures.
Establish procedures that will be used to settle
any question that may arise regarding the
interpretation and execution of the agreement.

6.Signed an joint agreement

For consultation not get stuck, the two
sides can continue to sign the collective
agreement after assessing the status of
the negotiations without having to go
through steps to resolve the impasse and
reach an agreement.

7. Administer or execute the

agreement

Actions to be taken in the administration of

a collective agreement: Inform the content, including any amendments
to the agreement to join trade unions and the
employers.
Implement the agreement.
Translate the contents of the agreement and
resolve grievances (complaints).
Monitor any activities related to contract
enforcement over.

SETTLEMENT OF INDUSTRIAL
DISPUTES
1. Conciliation
A process whereby the Department of
Industrial
Relations helps to settle disputes between
employers
and employees.
The majority of disputes are settled by
using the
conciliation machinery.

2. Arbitration
The settlement of a dispute between an
employer and his employees by a neutral

PROCEDURE GRIEVANCE
DEFINITION

Grievance Procedure is the proper

method of determining whether the
provisions of a treaty have been
violated or not.
Grievance procedures allow
employees to submit complaints
without prejudice to their position in
the organization.
Most collective agreements contain
provisions grievance procedure that

PROCEDURE GRIEVANCE
STAGE PROCEDURE
GRIEVANCE

PROCEDURE GRIEVANCE

PROCEDURE GRIEVANCE

DISCIPLINE OF EMPLOYEE
DEFINITION

Compliance with regulations for personal

benefit or enjoyment together.

Positive discipline involves the formation

of
appropriate attitude and the right
conditions in the
organization so that employees can
comply with
regulations.

DISCIPLINE OF EMPLOYEE
DISCIPLINARY ACTIONS

Various principles and guidelines on

discipline procedures also included in
procedures for Industrial Harmony.
According to Article 42 of this Code
disciplinary procedures must be in writing
and communicated to all employees.
In addition, disciplinary action should also
be carried out in accordance with the
rules of natural justice and comply with
the following conditions:
a) Ensure employee is notified in writing of the

b) Stating the authorities to take disciplinary action

and the type of disciplinary action will be taken.
c) Ensure that employers provide a prompt and full
consideration of all relevant facts.
d) Give employees an opportunity to explain his case
and the right to be represented by an employee
representative or trade union official.
e) Provide for warning of immediate supervisor in
advance in case of less serious misconduct.
f) Provide for a formal warning in writing that explains
the circumstances and the type of disciplinary action
that can be given to employees in the case of serious
misconduct. A copy of this record should be given to
trade union representative or officer at the request of
the affected employee.
g) Entitle the employee to submit an appeal to protest
disciplinary action against the management of higher

DISCIPLINE OF EMPLOYEE
TYPES OF DISCIPLINARY ACTIONS

Section 14 (1) of the Employment Act

1955:
Verbal warning and a written warning
(mild action)
Suspension and freezing of salary
increases (medium action)
Demotion and dismissal (heavy
action)

DISCIPLINE OF EMPLOYEE
DISCIPLINARY GUIDE

Disciplinary action is meant to correct

behavior that is not working properly
and not just punish alone.

The employer must ensure that the

procedures followed in disciplinary
action at its best.

Here are some guidelines that can be followed by the

employer in the employee discipline process:
Employers should establish regulations related to the
organization and the running of each rule must be stated
clearly. These regulations must be notified and further
explained to all employees.
Employees should be informed early about the types of
behavior that allowed work and the kind of behavior that is
not allowed and result violation of the rules that have been
set.
The employer should thoroughly investigate every case of
misconduct before taking any disciplinary action against the
employee concerned. Investigation should be carried out
according to proper procedures.
If the disciplinary action to be taken against an employee,
this action must be taken immediately so that employees
understand why it is subject to disciplinary action.
The employer should not be biased while deciding a

DISCIPLINE OF EMPLOYEE
GUIDELINES FOR CONDUCTING
INVESTIGATION
MISCONDUCT

According to the principles of natural

justice, no person should be punished
without being given a chance to defend
themselves. The employer must carry out
in-depth investigation before taking any
disciplinary action against employees
accused of misconduct.
During the investigation, the accused
employee will be notified of the charges.

 For the purpose of launching the

investigation process, the employer may
suspend an accused person for a period
exceeding two weeks and pay wages not
less than half of the total actual wages for
the period of dependence. If the
investigation finds that the employee is not
guilty, the employer must refund the
amount withheld wages to the employee.
Because the law does not set specific rules
on how an investigation should be carried
out, the employer can use that is considered
the best way to conduct the investigation.

Some guidance may be followed by the employer as

follows:
a) Investigating a case of misconduct should be conducted
as soon as possible. However, an employee who is
accused should be given sufficient time to prepare before
the trial.
b) Employee accused of the right to know all the details
related to accusations , including the alleged misconduct
occurred , preferably in writing. If necessary , employees
must be accompanied by trade union representatives at
the hearing. Employees must be given the opportunity to
testify and defend himself in front of a panel of
independent judges.
c) Investigations should be conducted by an independent
party, the organization's officials who are not directly
involved in the misconduct.
d) Employees should be allowed to ask questions and
interrogate witnesses , subject to the discretion of the

DISCIPLINE OF EMPLOYEE
DEALING WITH EMPLOYEE PROBLEMS
a)
b)
c)
d)

Transfer
Promotion of employees
Grievance Handling
Absenteeism

THANK
YOU