KMS 3014 Industrial Relations

Learning Unit 1
Introduction of Industrial Relations
What is industrial relations?
Industrial relations, employee
relations, employment relations
and labour relations.
Why study industrial relations?
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What is Industrial Relations?

Industrial relations (IR) is about the management of an
equitable employment relationship between the employer,
the employee and the government within the framework of
law, culture, convention and rules.
It is 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 cooperate with each others in order to achieve
broader goals for common objectives (Salamon, 2000).
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 At the other extreme, industrial relations has been

defined by Thomas A. Kochan, in his book Collective
Bargaining and Industrial Relations, as "all aspects of
people at work," but there are clearly some aspects of
people at work that entail highly technical subjects which
are not normally regarded as falling within the
mainstream of industrial relations study.
As an academic subject area, industrial relations is often
defined as an interdisciplinary field of applied study. This
conception recognizes that employment relationships
entail practical problems and other phenomena that
transcend any one traditional discipline.
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 To fully appreciate the multifaceted nature of many

industrial relations issues, one must draw from a variety of
perspectives.
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 two different parties in the employment
relationship (Salamon, 2000 & Jackson, 1991).

 There are different perspective were used to study

industrial relations (Salamon, 2000; Hollinshead et.al
2003 & Farnham, 2000).
There are 4 main perspectives on industrial relations.

Features at
Workplace
Omnipotent
management
exercising
unilateral
control

Perspectives

Genealogy

Status

Unitarist

Now
postindustrial
associated with
ascendancy of
management
power

Stereotypical
integration of
unilateral
management
control of
employment
relations

Pluralist

Reflects ideas of Stereotypical

Limited power Negotiated with
modern
view of
sharing
interest groups
democracy
managerial
between major
lately
legitimating
acceptance of
interested
stakeholder
trade union
limited powerparties
perspective
recognition
sharing in certain
areas of
decision-making
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Manifestation
Unilateral
Performance
Related Pay,
emphasis on
communication
& performance
evaluation

Perspectives
Marxist

System

Features at
Manifestation
Workplace
Mid-nineteeths Theory of society
Focus on
Conflict
century analysis
emphasizing
exploitation
absenteeism,
of gross
opposing
and structured sabotage, false
inequalities
interests within
inequalities consciousness
creating
workplace and
and
capitalism
beyond
consumerism
Genealogy

Interwar,
importance of
pseudoscientific
conceptual
analysis
underpinning
discipline

Status

A
Institutions in Refinement of
conceptualization equilibrium
descriptive
in order to
governed by tools. Scope for
classify the
rules. Open
international
discipline
system, inputs comparisons
and outputs
affected by
environment

Source: Adapted and modified from Hollinshead et.al (2003), Employee

Relations, 2nd Edition, Prenctice Hall, UK, p.7.
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The concept of unitarist

In unitarism, the organization is perceived as an integrated and
harmonious whole with the ideal of one happy family, where
management and employee all share a common purpose,
emphasizing mutual cooperation.
Positions are organised into a hierarchy of authority resulting
in a chain of command. The management, who are the
authority, should win the respect and loyalty of all the
members. Members should know their place within the
hierarchy and not step out of place.
The unitary perspective in the workplace discourages any form
of conflict. The management feel that this sort of development
would lead to destruction and weakness within the company,
which would be disruptive and unnecessary.
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The concept of unitarist

The management would possibly see this as a threat to their
power within the company, as once a trade union was
developed management positions would not have complete
control.
This is why members have no decision making role within the
business. Management should be trusted to make acceptable
decisions and the members should agree and stand by
resolution.

The concept of pluralist

In pluralism the organization is perceived as being made up of
powerful and divergent sub-groups, each with its own legitimate
loyalties and with their own set of objectives and leaders.
The two predominant sub-groups in the pluralistic perspective
are the management and trade unions.
The management have relevant procedures in place to enable
them to deal with any conflict, this perception encourages the
formations of trade unions as they believe that in a normal,
healthy environment, disputes will be inevitable.
The balance of power in this perspective is not consistent. It can
vary in each situation depending on various circumstances.
However the more a company accepts and supports the trade
union, the more power the trade union will gain due to increased
membership.
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The concept of pluralist

As the pluralist perspective acknowledges rival leadership (trade

unions) the members have some bargaining powers. They also
have a degree of input into decisions made by management, as all
decisions will be justified through the trade union. If the decision is
not acceptable negotiations will take place until it is suitable to be
applied in the workplace.

The role of management would lean less towards enforcing and

controlling and more towards persuasion and co-ordination.
There are also certain disadvantages in being a union member.
Fees are required and loss of earnings can occur if conflict results
in a strike. There can be certain stigmas attached to being a union
member, which can lead to victimization and hinder chances of
promotion.
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Industrial Relations in Malaysia

The Industrial Relations system in the country operates within
the legal framework of the Industrial Relations Act 1967 & the
Industrial Relations Regulations 1980, which is applicable
throughout Malaysia.
The Industrial Relations Act 1967 governs the relationship
between employers and workmen or employees and their trade
unions and generally due with trade disputes.
It emphasizes on direct negotiation between employers and
workmen or employees and their trade unions to settle their
differences, to regulate their collective relationship and to settle
any dispute arising therefrom through their own effort and
through mutually agreed procedures with minimal government
intervention.
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 In Hong Leong Equipment Sdn Bhd v. Liew Fook Chuan [1996] 1

MLJ 481, the Court of Appeal described the Industrial Dispute
Resolution System under the Act as follows:First, there is the conciliatory power vested in the Director
General whose sole function is to mediate and attempt to settle
disputes as early as possible. It is not part of his functions to
ascertain the law or the facts or to make any determination upon
either.
Second, there is the power vested in the Ministry to refer
representations made under section 20(1) of the Act. It is a power
he must, by reason of the combined operation of the provision of
Article 5(1) & 8(1) of the Federal Constitution, exercise fairly.
Third, there is the power to adjudicate the same representations
vested in the Industrial Court which, by the terms of the Act,
enjoined to act, inter alia, according to equity and good
conscious when marking its award.
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Industrial Relations, Employee Relations

and Labour Relations
Labour relations or industrial relations are a similar term.
The term industrial relations explain the relationship between
employees and management which stem directly or indirectly from
union-employer relationship. Industrial relations are the relationships
between employees and employers within the organizational settings.
The field of industrial relations looks at the relationship between
management and workers, particularly groups of workers
represented by a union.
Industrial relations are basically the interactions between employers,
employees and the government, and the institutions and associations
through which such interactions are mediated.
Its core subject-matter has always been collective bargaining and
trade union matters.
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 The concept of employee relations includes the relationship

between employer and employee or between employee and
employee.
If the concept of employee relations is taken care well, it will
support and guide myriad decisions that human resources
management will make in the course of recruiting, screening,
hiring, training, compensating, assessing, coaching,
counseling, disciplining and terminating employees
Basic employee relations concepts include equal treatment,
fairness and consistency among employees, effective
communications between management and employees,
documentation of employment actions, recordkeeping as
required by law and practice, grievance handling, training &
development and best employment practices.
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 Employee relations also encompasses the organizations

overall approach to maintaining a positive, productive and
cohesive work environment within the organizations
particular business model and corporate culture.
Source: http://www.shrm.org/hrdisciplines/employeerelations/

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Why Study Industrial Relations?

Understand the concept of industrial relations and its practicality
at the workplace.
Understand the industrial relations system, practices and
challenges in Malaysia.
Provide a comprehensive and general understanding of the
practice of Industrial Relations & Labour Laws, focusing on
critical areas which equip participants with the skills to handle
industrial relations matters.
To expose the students on the role of the legislation in industrial
relations, the development of trade unions, collective bargaining
issues, industrialization strategies and its impact
towards stakeholders.
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