INDUSTRIAL RELATIONS

IN MALAYSIA

A REVIEW
 Malaysian Industrial
Relations
Industrial relations is the
relationship between an employer
and the trade union which
represents his workers.
An industrial relations systems
consists of:
Employers and their associations
Employees and their trade unions
The government
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 Malaysian Industrial
Relations
Malaysian industrial relations system is - Tripartite
i.e. made up of 3 parties
The actors in a Malaysian industrial relations are:-
Employers and their associations
Employees and their trade unions
Government
The main actor in Malaysian IR is the government.
The rules and regulations on compensation, worker
rights, discipline and the duties and performance of
employees can be made in any of these three ways
Unilaterally managerial prerogatives
Bilaterally or in a trade union and management
Tripartite manner TU, management and government

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 Malaysian Industrial
Relations
From time to time the government of a country plays a role in in
drafting and presenting to Parliament, labour laws which affect
work life.
In Malaysia before such laws are presented to Parliament, there
are tripartite discussions, i.e all 3 parties- employers, unions
representing the employees and the government will sit together
to agree on what laws or amendments to the laws are necessary
National Labour Advisory council (NLAC) is the machinery for this
tripartite discussion.
14 representatives for the workers, 14 for the employers and 12
for the government
Minister of HR chairs the sessions and appoint 12 government
representatives.
Others are appointed after consultation with relevant bodies
MTUC, CUEPACS and MEF.
Another international body that plays a role in Malaysian IR is the
ILO

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PARTIES IN THE INDUSTRIAL
RELATIONS SYSTEM
International Labour Organization
International trade union bodies
The Malaysian Trade Union Congress
The Malaysian Employers Federation
The Ministry of Human Resources
Individual trade unions
Individual employers
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 Malaysian Industrial
Relations
The government plays 3 major roles in the
Malaysian IR. It acts as
A legislator through Parliament
An Administrator through the Ministry of HR
A Participant (Employer) by way of being the
largest employer in the country .
The Ministry of HR is responsible for
administering and overseeing the IR system
The mission statement of the Ministry is to
develop a competitive workforce in an
environment of industrial harmony and social
justice.
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 Malaysian Industrial
Relations
Its basic objectives are
To protect the welfare of workers- their safety,
health and rights
To promote good employer and employee
relationships through a stable and peaceful IR
system
To equip the unemployed with basic industrial
skills and to improve the skill level of the work
force
To assist in maximising the countrys
manpower resources to manpower planning

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INDUSTRIAL HARMONY AND
CONFLICT
Industrial harmony is necessary for the
success of the individual enterprise
and the success of the national
economy.
Conflict is the antithesis of industrial
harmony.
An industrial relations system must
find ways to manage conflict
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 Malaysian Industrial

Relations
The Ministry of HR has 8 departments :-
Department of Labour, Peninsular Malaysia
Department of Labour, Sabah
Department of labour, Sarawak
Department of Industrial Relations
Department of Trade Unions Affairs
Department of Occupational Safety and Health
Manpower Department
Department of Skills Development
There are other organizations which either report to the
Ministry of HR or in the case of Employee Provident Fund Board
to the Ministry of Finance are independent but also deal with
labour matters:-
Social Security Organization
Employee Provident Fund Board
Pembangunan Sumber Manusia Berhad
Industrial Court
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 Labour laws in Malaysia
(Undang-undang buruh di
Malaysia)
Laws providing for basic benefits:
Employment Act 1955 (Akta Kerja)
Wages Councils Act 1947 (Akta Majlis Penetapan Gaji)
Children and Young Persons (Employment) Act 1966 (Akta
(Penggajian) Kanak-kanak dan Orang Muda)
Workers Minimum Standards of Housing and Amenities Act
1990 (Akta Standard Minimum Perumahan dan Kemudahan
Pekerja)
Social security laws:
Workmens Compensation Act 1952 (Akta Pampasan
Pekerja)
Employees Provident Fund Act 1991 (Akta Kumpulan Wang
Simpanan Pekerja)
Employees Social Security Act 1969 (Akta Keselamatan
10
Sosial Pekerja)
 Labour laws in Malaysia
( contd)
Safety laws
Factories and Machinery Act 1967 (Akta Kilang
dan Jentera)
Occupational Safety and Health Act 1994 (Akta
Keselamatan dan Kesihatan Pekerja)
Laws establishing the industrial relations
framework
Trade Unions Act 1959 (Akta Kesatuan Sekerja)
Industrial Relations Act1967 (Akta Perhubungan
Industri)
Law relating to training of employees
Pembangunan Sumber Manusia Bhd Act 200111
 Recognition of Trade Union
An important prerequisite for trade unions
in order to commence collective bargaining
with its employer
Is a starting point for collective bargaining
The IRA 1967 requires union to attain
recognition before they can proceed to
invite the employer to commence CB
Recognition means the employer concedes
that the union is the legitimate
representative of his workers and has the
right to speak on their behalf.
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 Recognition of Trade Union
Once a union has been given recognition by the
employer it gains the following advantage
The union can represent employees who have a
grievance or complaint
It can negotiate for better terms and conditions on
behalf of all workers in the workplace who are
eligible to be members of the union. A collective
agreement by law covers all bargainable
employees in a particular workplace
Registration of TU gives it legal right to exist but
recognition means an individual employer is willing to
accept the union as the rightful representative of his
workers.

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 Recognition Procedure
Fills out Claim for recognition form (Form A) and presents it to
employer. a copy will be submitted to the DGIR name,
address, specify the workers for whom the union is requesting
recognition, include a copy of the unions constitution.
Upon receiving such claim, employer must reply within 21 days
with 3 possible responses
Voluntarily give recognition
Refuse to grant recognition must inform the union of this
decision and give reason for it. The union has 14 days to
report to DGIR in the IR Department. If not, deemed that the
application is withdrawn.
Reject application because they question whether the union is
the correct one to represent its employees an investigation
will be carried out by the Trade Unions Department which will
examine job duties and the nature of the business of the
company and use its discretion in determining this.

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 Recognition Procedure
The IR Department will also determine whether a majority of the
workers in the company are union members membership check, If
more than 50% are members recognition can be granted
An officer from the IR Department will visit the workplace that has
made recognition claims
A secret ballot will be held to determine voluntary members.
If after advising employer of the outcome of the membership check
recognition is still not granted
The DGIR will report the matter to the Minister of HR who has the
power to (under section 9 of IRA) decide whether the union should
be recognized.
Usually if more then 50% are members the minister will order
recognition.
If unions claim fore recognition is rejected after intervention by the
Minister, it must wait 6 months before submitting another claim- has
to gather more members to reach 50% membership .

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 Conditions for Recognition
The union must be registered
It must be registered as a trade union under the Trade Unions
Act 1959 which provide the guidelines for registration of
trade unions.
The union must be competent to represent the workers
involved
i.e. it must be confined to the same establishment, industry,
trade or occupation as those employees (or to an industry,
trade or occupation similar to theirs).
The union must be suitable to represent the workers
involved
White-collared workers can only join white-collared unions
The union must be sufficiently representative of the
workers
At least 50.1% of the workers are members or are willing to be
represented by the union for the purpose of collective bargaining.

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 Trade union submits proposals for a collective agreement
to management to commence negotiations
Management
has 14 days to If offer is rejected or if
accept / reject bargaining does not
the invitation to commence within 30 days of If one party to the dispute
commence acceptance letter, refer to does not want to refer it to
negotiations. Director General of IR the Minister, he/she can
on his/her own motion
IR Department refer the dispute to the
Both parties If deadlock in conciliates but Industrial Court.
meet to negotiations, either there is still a
negotiate the party can request deadlock.
union claims the IR Department CB to exclude
to conciliate. 1. Promotion
2. Transfer
Both parties jointly 3. Employment
Both parties agree to write to the Minister
the items negotiated. 4. Termination
of HR to refer the 5. Dismissal/
A collective The IR Department dispute to the
agreement is drawn reinstatement
conciliates and Industrial Court
up between the 6. Assignment/allocation
agreement is
parties and signed of tasks.
reached on items
negotiated. A Minister refers
collective agreement dispute to the
The collective is drawn up and Industrial Court,
agreement (10 signed which hears it and
copies)is to be
makes an award.
deposited with
Both parties must
Industrial Court
abide by the award 17
within 1 month
 Collective Bargaining Process
Employer and Employer Association or Workers and Trade Union invite the
other for collective bargaining [Section 13 (1) (a) & (b) IRA 1967]

The management must reply in writing

whether to accept or reject within 14 days The invitation must be done in
from the date of invitation [Section13 (4) writing [Section13 (2) IRA 1967]
IRA 1967]

If management
If management accept, negotiation will begin at fe
any time within 30 days from the date the union refuse
received the letter of acceptance from the
management [Section13 (2) IRA 1967].
Reached Fail to
agreement Negotiation begins
agree

Signing of collective Dispute

Dispute resolution
agreement .
process

Breached of agreement

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 COLLECTIVE BARGAINING
PART IV - COLLECTIVE BARGAINING AND COLLECTIVE
AGREEMENTS
13. Collective bargaining.
(1) Where a trade union of workmen has been
accorded recognition by an employer or a trade union
of employers -
(a) the trade union of workmen may invite the
employer or trade union of employers to commence
collective bargaining; or
(b) the employer or the trade union of employers may
invite the trade union of workmen to commence
collective bargaining.

(2) The invitation under subsection (1) shall be in

writing and shall set out the proposals for a collective
agreement.

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 Collective Bargaining
(3) Notwithstanding subsection (1), no trade union of
workmen may include in its proposals for a collective
agreement a proposal in relation to any of the following
matters, that is to say -
(a) the promotion by an employer of any workman from a
lower grade or category to a higher grade or category;
(b) the transfer by an employer of a workman within the
organisation of an employer's profession, business, trade
or work, provided that such transfer does not entail a
change to the detriment of a workman in regard to his
terms of employment;
(c) the employment by an employer of any person that he
may appoint in the event of a vacancy arising in his
establishment;

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 Collective Bargaining
(d) the termination by an employer of the
services of a workman by reason of
redundancy or by reason of the reorganisation
of an employer's profession, business, trade or
work or the criteria for such termination;
(e) the dismissal and reinstatement of a
workman by an employer;
(f) the assignment or allocation by an
employer of dudes or specific tasks to a
workman that are consistent or compatible
with the terms of his employment:

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 ILO Convention
The International Labor Organization (ILO) is an agency of the
United Nations that plays a role I Malaysia's industrial relations
Malaysia joined the ILO in 1957. it has 175v members
It provides a forum for discussion on labor matters
The ILO will set labor standards and expect the member countries
to ratify and implement
Malaysia has ratified the following
Abolition of forced labor
Guarding of machinery
Minimum age (underground work)
Recruiting of indigenous workers
Contracts of employment (indigenous workers)
Penal sanctions
Labor inspection
Employment service
Protection of wages
Right to organize
Right to bargain collectively
 The ILO is run by 14 full members, 14 deputy
members (with no voting rights) and 14
reserve members
Representatives are made up of government ,
employer and trade union officials
ILO not only formulates international labor but
also provides technical assistance, training
and advisory, researched and publishes them
Their main publication is the International
Labor Review
 ILO most important convention is on
Freedom of Association
The ILO uses moral persuasion in
order to ensure adherence to its
convention