MALAYSIAN INDUSTRIAL

RELATIONS & EMPLOYMENT LAW

Eighth Edition
Author: Maimunah Aminuddin

Chapter One
An Overview Part 1

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Preview
Defining industrial relations

The focus of industrial relations

Tripartite systems and the key players

Employment legislation

Role of the Ministry of Human Resources

and other key agencies

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What is industrial relations?
Industrial relations is the relationship
between an employer and his employees,
especially where the employees are members
of a trade union.

Industrial relations is also known as:

Employment relations
Labour relations
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 industry - any economic activity
concerned with the processing of raw
materials and manufacture of goods in
factories.

relations - the way in which two or more

people or things are connected.
 CONCEPT AND MEANING OF
INDUSTRIAL RELATIONS

Definition is not exhaustive

Some of the definitions e.g;
Industrial relations encompasses a set of
phenomena, both inside and outside the
workplace, concern with determining and
regulating employment relationship
Some philosophical definitions
Dunlop (1958) defines industrial relations
as the complex interrelations among
managers, workers and agencies of the
governments

Dale Yoder (1944) industrial relations is

the process of management dealing with
one or more unions with a view to
negotiate and subsequently administer
collective bargaining agreement or labour
contract
Brief Intro of IR

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The focus of industrial relations

Industrial
Relations

Relationship Disciplinary
between Laws relating to procedures &
employers & employment termination of
trade unions employment

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Who needs to study industrial
relations?
Workers

Trade union leaders

Managers

Lawyers

Human resource management specialists

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Tripartite industrial relations
systems: 3 parties, all inter-related

Employees &
Employers their
trade unions

The
Government

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Main Parties in Industrial Relations
Employees and their Organisations i.e. Trade Union : The
personal characteristics of workers, their culture, educational
attainments, qualifications, skills, attitude towards work, etc.
play an important role in industrial relations.

Employers and their Organisation: The employers are a very

important variable in industrial relations. They provide
employment to workers and try to regulate their behaviour for
getting high productivity from them. In order to increase their
bargaining power, employers in several industries have
organised employers' associations. These associations put
pressure on the trade unions and the Government.

Government: The Government or State exerts an important

influence on industrial relations through such measures as
providing employment, intervening in working relationships. and
regulating wages, bonus and working conditions through various
laws relating to labour. The Government keeps an eye on. Both
the trade unions and employers' organisations to regulate their
behaviours in the interest of the nation.
Features of Industrial Relations
Industrial relations are born out of employment
relationship in an industrial setting. Without the
existence of two parties i.e. labour and
management, this relationship cannot exist. It is
the industry, which provides the environment for
industrial relations.

Industrial relations are characterized by both

conflict and co-operation. So the focus of
industrial relations is on the study of the attitudes,
relationships, practices and procedures developed
by the contending parties to resolve or at least
minimize conflicts.
Features of Industrial Relations
As the labour and management do not operate in
isolation but are a part of the large system, so the
study of industrial relations also includes vital
environmental issues like technology of the
workplace, country's socio-economic and political
environment, nation's labour policy, attitude of
trade unions, workers and employers.

Industrial relations also involve the study of

conditions conducive to the labour,
management co-operation as well as the
practices and procedures required to elicit the
desired co-operation from both the parties.
Features of Industrial Relations

Industrial relations also study the laws,

rules, regulations, agreements, awards of
court, customs and traditions, as well as
policy framework laid down by the
government for eliciting co-operation
between labour and management. Besides
this, it makes an in-depth analysis of the
intervening patterns of the executive and
judiciary in the regulation of labour-
management relations.
Key players in Malaysian industrial
relations
National Labour Advisory Council (NLAC)

Ministry of Human Resources

Malaysian Trades Union Congress (MTUC)

Malaysian Employers Federation (MEF)

International Labour Organisation (ILO)

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The International Labour
Organisation
The ILO is an agency of the United Nations.

It has no powers to enforce any directives or

rules.

It formulates key labour standards which

members, including Malaysia, are expected
to implement.

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Employment laws
Laws providing basic benefits and rights for
employees and employers
Laws establishing a framework for the
industrial relations system
Social security laws
Safety laws
Laws restricting employment of non-
Malaysians

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Role of the government in IR
To protect welfare of workers

To promote good employer-employee

relationships through a peaceful IR system

To assist the unemployed find employment

To conduct national level human resource

planning

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Ministry of Human Resources
Departments which play a key role in IR:

Department of Labour

Department of Industrial Relations

Department of Trade Union Affairs

Department of Occupational Safety and

Health

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Other key agencies
The Employees Social Security Organisation
The Employees Provident Fund

The Industrial Court

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Review
Defining industrial relations
The focus of industrial relations
Tripartite systems and the key players
Employment legislation
Role of the Ministry of Human Resources
and other key agencies

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 MALAYSIAN INDUSTRIAL
RELATIONS & EMPLOYMENT LAW
Eighth Edition
Author: Maimunah Aminuddin

Chapter One
Part 2

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 THEORISTS OF INDUSTRIAL
RELATIONS

Theorists
of IR

Dunlop Unitarists Pluralists Marxists

1) Dunlop
Also known as system theory
IRs are best regarded as a sub-system of
the wider social system.
3 main actors are:
Management organisation & representatives
Workers (individual or trade union)
Govt Agencies, e.g. Labor Department
This theory says that the actors hold the
same ideology in the workplace
environment that cause to its stability.
Dunlop System Theory

ACTORS

INDUSTRIAL ENVIRON
RULES RELATIONS MENT
SYSTEM

IDEOL
OGY
I) The Actors

ACTORS

1) 3)
2) Workers
Management Government
II) The Environment
The environment is where actors interact
to each other.
The actors employ any mechanisms (e.g.
political and economic power) to
determine the rules that constitutes the
outcome of the industrial relations system.
Roles are so intimate and almost
inseparable as if that none of them can
act in an autonomous and independent
manner.
III) The Ideology
Binding ideology is a set of common
belief and understanding that serve to
encourage compromises among actors to
ensure the system is operable.
Each actor has its own ideology towards
relationship.
Each actor might have different opinions,
beliefs and etc
This framework conceives IR system which
is self adjusting towards equilibrium
IV) The Rules
The relationship is regulated by certain
rules, regulations or laws
The actors are bound to each other by the
law that has been enacted by the
government.
 2) UNITARISTS THEORY

Paternalistic = a system in which someone in

authority advises and helps people but also
controls them by not letting them make their
own decisions and choices
the organization is perceived to be
harmonious employer and employees work
hand in hand
the conflict is temporary and due to the
internal drawbacks of the individual worker
and organization
reluctant to recognize the role of trade union
2) UNITARISTS
The unitarists approach can be further
grasped through 3 school and practical
thoughts:
Scientific management theory
Human relations
Human resources management

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 i. Scientific management theory
This particular theory holds that the employment
relations choices of management must start from the
assumption that employees are immature in the ways of
work, are prone to avoid it whenever possible, and have
limited, self-centred aspirations and time-horizons.

ii. Human Relations

In this theory the reduction of organisational
tension is held to rest on the ability of individuals to
achieve self-fulfillment in the workplace. Workers are
regarded as qualitatively different to other resources used
in production.
 iii. Human Resource Management
(HRM)
HRM assumes that organizational tensions can be
completely resolved by nurturing a psychological contract
based on cooperation. The employee relations choices in
this instance are predicated on the belief that the forces
uniting managers and employees are far stronger than the
forces dividing them.
3) PLURALISTS

opposite to unitarists
different interest and values
conflict is inevitable
recognise the legitimacy of trade union to
voice out the employees interests;
through
Negotiation
Collective Bargaining
the relationship between conflicting
parties is governed by a set of rules of the
country.
3) PLURALISTS
The strengths of the theory:
no one to overpower to the other
government to arbitrate the conflict

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4) Marxists
It is referred as radical view
It sees that IR system is made up in the
capitalist society and social change
inequalities in society (wealth and power)
concerned with the structure of the society
capitalist and labour- conflict is inevitable
resolution of conflict by the change of
society
THE DEVELOPMENT OF INDUSTRIAL RELATIONS IN
MALAYSIA
The development of industrial relations in Malaysia can
be traced back from its history. The major components that
shape the industrial relation in Malaysia nowadays are
influenced by the impact of colonial invasion especially by the
British. Briefly, the development of industrial relation may
therefore be understood from the following phases;

Pre-Independence
i. Socio-economic
ii. Legislations
Post- Independence
The Main Legal Frameworks of IR

3 main Acts;

The Employment Act 1955 (EA)

The Industrial Relations Act 1967 (IRA)
The Trade Union Act 1959 (TUA)
THE EMPLOYMENT ACT 1955
Application;
Applicable to Peninsular Malaysia and
Federal Territory
Sabah and Sarawak Respective Labour
Ordinances
Only for those workers whose salary do
not exceed RM2000 a month (Peninsular)
and RM2500 a month (Sabah and
Sarawak)
THE EMPLOYMENT ACT 1955

Significance of the Act

Prescribes minimum standards of the terms in
the employment such as overtime pay,
maternity leave, annual leave, sick leave
public holiday, termination and so on.
Will be covered in detail in Chapter 2/Topic 2
TRADE UNION ACT 1959
It seeks to control the activities of trade
unions so that they can develop in an
orderly and peaceful manner.
Chapter 5 will deal with the rights of trade
unions and their members

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 THE INDUSTRIAL
RELATIONS ACT 1967

It regulates the relations between

employers and employees and the unions.
It lay down rules to help prevent and
settle disputes between the two parties.
Detailed discussion in Chapter 6, 7 and 8

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Other Important Acts
The Employees Provident Fund Act a
system of compulsory savings for their
retirement (Chapter 3).
The Employees Social Security Act
to ensure employees receive
compensation in case of work-related
accidents or illness (Chapter 3).
The Occupational Safety and Health
Act lays down responsibilities of various
parties in industry related to safety and
health (Chapter 4). Malaysian Industrial Relations &
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 Q&A??

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