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OVERVIEW ON MALAYSIAN IR SYSTEM
MALAYSIAN IR SYSTEM
Its sometime known as Labor Relations/Employee Relations
relationship between employer and employees, particularly in unionized
environment
IR concerns on these particular areas:
Legislation affecting working environment
Terms and condition of work
Employer/employee right
Process by which the rules and terms are made in the organization
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MALAYSIAN IR SYSTEM
Generally IR systems are Tri parti te ie. They are made up of three
parties:
The employer representative;
The employees representative (unions); and
The government representative.
The most important machinery is the National Labor Advisory Council
(NLAC 14 workers rep, 14 employers rep and 12 govt. rep. Also
involve are MTUC, CUEPACS and MEF. Meet twice a year)
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THE ROLES OF HR MINISTRY
Responsible for administering and overseeing IR system in
Malaysia.
The Obj ectives of the Mini stry are:
To protect the welfare of the workers
To promote harmonious employer employees relationship
T equip work force with basic industrial skill and further
improve their level of skills
To assist in maximizing and fully utilizing the countrys
manpower resources
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Department of Labor (Peninsular Malaysia)
Department of Labor (Sabah)
Department of Labor (Sarawak)
Department of Industrial Relations
Department of Trade Union
Department of Occupational Safety and Health
Manpower Department
DEPARTMENT UNDER HR MINISTRY
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Headed by DG and assisted by DDG
Enforces EA, WCA, CYP Employment Act,
Settle dispute of non-payment of wages, allowances,
retrenchment and retirement benefits through Labor Court
Department of Labor
Department of Industri al Rel ations
Headed by DG and assisted by DDG. Enforces IR Act
Settle employers and employees dispute i.e. conciliation
Department of Trade Uni on
Headed by DG and assisted by DDG. Enforces TU Act
To register & de-register TU, checks union account, investigate
complaint with regards to the management of TU
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Department of OSH
Headed by DG. Previously known as Dept. of F&M
Enforces OSHA, F&M Act, and Part of Petroleum Act (Safety Measure)
OSHA Act, 1994 empowers the DOSH:
- To carry out safety inspection at workplace,
- To organize promotional activities on safety working culture.
- To carry out activities at improving safety and health at workplace
- To provide effective safety management
Manpower Department
Headed by DG and assisted by 2 directors
To develop competitive workforce, to develop national trainers skill and
improve workforce skill
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VARIOUS LABOR LEGISLATIONS AFFECTING IR SYSTEM
There are various Legislation affecting the Labor Law in Malaysia.
The major employment-related legislation are:
Employment Act, 1955
Trade Union Act, 1959
Industrial Relati ons Act, 1967
Occupational Safety and Health Act, 1994
Factories and Machinery Act, 1967
Employees Provident Fund Act, 1991
Employees Social security Act, 1969
Workmens Compensation Act, 1952
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VARIOUS LABOR LAWS AFFECTING IR SYSTEM
This Act generally only applies to Western Malaysia,
Provides conditions relating to employment, contracts of service
and termination.
Sets minimum conditions of employment which include provision
of public holidays, paid annual and sick leave, normal working
hours, overtime rates and maternity allowances.
Coverage of the Act, Sec. 2, EA (1955) First Schedule:
- Wages do not exceed RM1,500 pm (regardless of position)
- Regardless of wages if:
- Engaged as a manual laborer
- Supervises employees engaged in manual labor
- Engaged in the operation or maintenance of any vehicle
for the transport of passengers or goods
- Engaged as a domestic servant
EMPLOYMENT ACT, 1955
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TRADE UNION ACT, 1959
Seeks to control the activities of TU in Malaysia
Lay down rules and regulation of establishing TU, who can
become member of TU, rights of TU and any other rules in which
unions are required to follows
INDUSTRIAL RELATION ACTS, 1967
Regulate the relations between employers and workmen and TU.
Laying down rule to prevent and settle dispute between them.
The overall goal is to promote harmonious industrial relations
system in Malaysia
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To provide protection to workers who may involve in accident or
contract occupational disease
To ensure workers receive financial compensation for injuries if
they are unable to work
These are some of the benefits
Free medical care
Disablement benefit
Dependants benefit
Invalidity/survivors pension
Funeral benefit
SOCIAL SECURITY ORGANIZATION ACT (SOCSO)
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To ensure workers have fund available on their retirement.
All employers must register with the Fund and they are
responsible for contributing to the fund. Current % to be
contributed are 12% from employers and 11% from employees.
For the purpose of contribution wagesinclude fixed allowance,
commissions and bonus payments but not including overtime,
traveling allowance, gratuity, retirement benefits and retrenchment
benefits
Withdrawals only allowed for buying or building house, medical
expenses, serious illness, tertiary education for children, invest in
unit trust and computer (suspended)
THE EMPLOYEES PROVIDENT FUND ACT (EPF)
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OTHER RELATED ORGANIZATIONS
HUMAN RESOURCES DEVELOPMENT FUND (HRDF)
HRDF Act was introduced in 1993.
Employers within the scope of this act are required to contribute
1% of the total company payroll on a monthly basis
The company can claim reimbursement for fund spent on staff
training once the amount contributed by the company has
accumulated to the minimum level required
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Established by IRA (1967) with the purposes of providing a
peaceful and unbiased means of settling trade disputes between
employer and employees
To grant cognizance to the Collective Agreement which have been
jointly deposited by the employers/Unions
Headed by the Court President. There are 21 Chairmen ie. 15 in
KL, 2 in Penang, 1 in Ipoh, 1 in J B and 2 in Sarawak and Sabah.
INDUSTRIAL COURT
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Legi sl ative Power of IC
Summon parties
Call in witness and documents
Hear and determine disputes in
the absence of any party
summoned to the proceedings
Conduct proceeding in private
Call in the aid of experts
To regulate the procedure and
proceedings of the court
Make an award
Juri sdi cti on of IC
Unfair dismissal claim
Trade disputes
Interpretation of CA or
awards
Contravention of union
rights or complaint of non
compliance
Amendments of CA
INDUSTRIAL COURT
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Nati onal Vocati onal Trai ning Council
Established in May 1989 to coordinate on vocational training
system through the restructuring of Lembaga Latihan
Perindustrian dan Persijilan Ketukangan Kebangsaan (LLPPKK).
Represented by 10 private sectors 10 public sectors
representative with 2 additional members. Chaired by General
Secretary of MOHR.
Main objectives to formulate, promote and coordinate vocational
training strategy
OTHER RELATED ORGANIZATION
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(1) an employee shall be allowed in each week a rest day
of one whole day.
(1A) in the case an employee engaged in shift work any
continuos period of not less than 30 hours shall
constitute a rest day
(2) the employer shall prepare a roster informing an
employee of the days appointed to be his rest days
therein.
LAWS ON WORKING HOURS
REST DAY Sec 59
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(1) Every employee shall be entitled to a paid holiday at his
ordinary rate of pay on the following days in any one
calendar year;
(a) Entitle for at least 10 public holiday, 4 of which shall be:
(i) the National Day
(ii) the Birthday of the Yang DiPertuan Agong
(iii) the Birthday of the Ruler, or Yang DiPertuan
Negeri of the state where the employee is
employed
(iv) the Workers Day
(b) On any day declared as a public holiday under section 8
of Holidays Act 1951
PUBLIC HOLIDAY Sec 60D
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(1)(a) 8 days for every 12 months of continuos service with the
same employer for a period of less than 2 years
(b) 12 days for every 12 months of continuos service with the
same employer for a period of 2 years or more but less
than 5 years
(c) 16 days for every 12 months of continuos service with the
same employer for a period of more than 5 years
ANNUAL LEAVES Sec 60E
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LAWS ON WORKING HOUR
NORMAL WORKING HOUR
Hours of Work Sec. 60A(1) an employee shall not be required
under his contract of service to work:
a) More than 5 consecutive hours without a period of leisure of
not less than 30 minutes duration
b) More than 8 hours per day
c) In excess of a spread over period of ten hours in one day
d) More than 48 hours in one week
{Subject to provisions under Sec. 60A(2)}
Cont.
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Sec. 60A(2) employee may be asked to work more than what is
prescribe in subsection (1) or to work on rest day in the case of:
a) Accident, actual or threatened with respect to his place of work;
b) Work is essential to the life of the community;
c) Work essential for the defense or security of Malaysia;
d) Urgent work to be done to machinery or plant;
e) An interruption of work which is impossible to foresee;
f) Work essential to the economy of Malaysia
(refer to Sec. 2 IRA Schedule)
NORMAL WORKING HOUR (Cont.)
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SHIFT WORK
Working Hour System: Shift Work Sec.60C
(1)(a) an employee may be required to work >8 hours / day or >
48 hours / week but the average number of hours worked
over any period of 3 weeks shall not exceed 48 per week
(2) no employer shall require an employee in shift work to
work for more than 12 hours in any one day
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SHIFT WORK
Shift work involves:
Hours of work include hours outside the normal or
traditional working hours such as 8 4 or 9 5,
Two or more groups of workers who take turns to man the
work station
The most common patterns of shift work
Double day shifts
Three shift works
Split shift (working early, break and continue spread
over cannot be more than 10 hours)
Rotating and permanent shifts
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PROBLEMS OF SHIFT WORK
Legal constraint on women working at night Sec 34 EA
Increase in cost
Workers health
Stress and psychological problems
Reasons for Shift Work:
Work nature of continuous basis
Meeting the targets or quota
Production technologies need to run continuously
To meet demands of the products
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FLEXI TIME
Flexi time is a system of working hours where the starting and
stopping times are decided by the individual worker within the
number of limitations set by employer (Maimunah)
Key term in a flexi time system:
Bandwidth the daily opening hours
Core hours time where workers must present
Flexi band hours before and after core hours
Settlement period total hours required for certain period
Eg:
7 am 9 am Noon
Core Time
3 pm
5 pm
Core Time
Flexi time Flexi time
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ADVANTAGES OF FLEXI TIME
Some of the benefits of implementing flexi time:
Higher productivity
Reduction in overtime
Better customer service
Fewer transport problems
Raised employee morale
Reduced absenteeism
Problems of Flexi time
Feasibility
Supervision and communication
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COMPRESSED WORK WEEK
Any arrangement of work hours that allows workers to fulfill their
work obligation in fewer days than the normal working of 5 or 6
day week. This will result in the numbers of hours per day will be
more than 8 hours.
Types of Compressed Week Schedules:-
a) 4/40 ; 10 hours per day for 4 days in a week & 3days off
b) Floating 4/40 ; 10 hours per day for 4 days with 4 days off, in a
cycle
c) 4 /40 ; 9 hours per day & 1four hour days with 2 days off
d) 5/45 4/36 ; 9 hours per day, alternating between five day &
four day weeks
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PART TIME WORK
A part time worker can be temporary or permanent worker BUT must
be working less than the normal working hours.
EA defines part time workers as those whose average hours of work
do not exceed 70% of normal working hours of full time workers doing
the same job in the same organization.
Who wants to work part time?
a) Students
b) Housewives
c) Pensioners
d) Moon lighters (those full timers who wants extra income)
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(3)(a) any overtime work carried out in excess of the normal
hours of work, the employee shall be paid at a rate not
less than one and a half times his hourly rate of pay
irrespective of the basis on which his rate of pay is fixed
(3)(b) .... overtime means the number of hours of
work carried out in excess of the normal hours of work
per day
OVERTIME Sec 60A
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(3)(a) in the case of an employee employed on a daily, hourly or
other similar rate who works on a rest day, he shall be
paid for any period of work -
(i) which does not exceed half his normal hours of
work, one days wages at the ordinary rate of pay
(ii) which is more than half but does not exceed his
normal hours of work, two days wages at the
ordinary rate of pay
OVERTIME Sec 60
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(3)(b) in the case of an employee employed on a monthly rate of
pay who works on a rest day, he shall be paid for any
period of work -
(i) which does not exceed half his normal hours of
work, wages equivalent to half the ordinary rate of
pay for work done on that day
(ii) which is more than half but does not exceed his
normal hours of work, one days wages at the
ordinary rate of pay for work done on that day
OVERTIME Sec 60
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(3)(c) for any work carried out in excess of the normal hours of
work on a rest day by an employee mentioned in paragraph
(a) or (b), he shall be paid at a rate which is not less than
two times his hourly rate of pay
(d) in the case of an employee employed on a piece rates who
works on a rest day, he shall be paid twice his ordinary rate
per piece
OVERTIME Sec 60
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(3) (a) Employee required to work on any paid holiday is entitled to
for that day-
(i) in the case of an employee employed on a monthly,
weekly, daily, hourly, .. be paid two days wages
(ii) in the case of an employee employed on a piece
rates, be paid twice the ordinary rate per piece
(aa) for any overtime work carried out by an employee referred to
in paragraph (a)(i) in excess of the normal hours of work o
a paid public holiday, he shall be paid at a rate which is not
less than three times his hourly rate of pay
(aaa) for any overtime work carried out by an employee referred to
in paragraph (a)(ii) in excess of the normal hours of work on
any paid holiday, he shall be paid not less than three times
the ordinary rate per piece
OVERTIME Sec 60D
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TheOrganization
(throughthemanager)
EstablishesRules
AndStandards
Communicatethose
rulesandstandards
AssessesBehavior
andPerformance
Attempts toChange
Inappropriate
Behaviors
EMPLOYEE
INDUSTRIAL DISCIPLINE AND TERMINTATION
THE DISCIPLINARY SYSTEM
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Organi zational Culture Regardi ng Di sci pli ne
If the norms is to avoid penalizing problem employees,
then managers more likely not to use discipline
Lack of Support
Managers fear that their decisions will not be supported by
higher management.
Feel Guilty
Prior to become a manager, they themselves commit the
same violations as their employees.
WHY DISCIPLINE MIGHT NOT BE USED
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Loss of Fri endshi p
managers who are too friendly with their employees may
fear losing those friendship if discipline is used.
Time Loss
Discipline when properly applied, requires considerable
time and effort. Managers tries to avoid the process
Fear of Lawsuits
Managers are increasingly concerned about being sued for
disciplining someone particularly in dismissal.
WHY DISCIPLINE MIGHT NOT BE USED
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Red Hot Stove
Introduced by Douglas Mc Gregor. Disciplinary action should have
the following criteria:
1. Immediate to take as soon as possible
2. Give Warning to remind workers.
3. Consistent to have standard operating procedure
4. No Personal Agenda avoid bias
APPROACHES TO DISCIPLINE
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Positi ve Di sci pline:
Focus on fact-finding and guidance to encourage desirable
behaviors instead of using penalties to discourage undesirable
behaviors.
Steps in Positive Discipline:
1. Counseling opportunity to identify employee work behavior
problems and discuss solutions.
2. Written Documentation If the counseling fails to change, a
second meeting is conducted and solution is documented.
3. Final Warning If no improvement, a final meeting is held
and emphasizes on correcting inappropriate actions.
4. Dismissal If problems still persists after final warning, then
dismissal actions is taken.
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Progressive Di sci pli ne
Incorporates a sequence of steps into the shaping of employee
behavior
Fi rst Offence Verbal Warni ng
Second Offence Wri tten Warni ng
Thi rd Offence Final Written Warning
Fourth Offence Demotion/Suspensi on/Di smi ssal
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Steps in Progressive Discipline:
Employee is notified of the problem and given a verbal
warning
If matters still not resolved, the employee receives a written
warning
If problems persists, the employee is suspended without pay
for certain period of time
Finally, should all attempt to rectify problem fails, the
employee services is terminated.
Note: Immediate termination in case of Intoxication at work,
fighting, theft, drug abuse at work, possession of weapons and
falsifying employment application.
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Resi gnati on
EA Sec 12 a contract to employ and to serve may be terminated
by either party by giving the other party a 4 weeks notice if work for
less than 2 years
6 weeks notice if work for more than 2 years but less than 5 years
8 weeks notice if work for more than 5 years
Termination of contract may be done without notice and indemnity
if due to breach of terms of contract.
Reti rement
Leaving an organization voluntarily upon reaching certain age.
Some organizations provides for retirement benefits, such as
pensions. Others may just have to depends on EPF.
TERMINATION OF SERVICE
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Di smi ssal
Unsatisfactory Performance
- negative attitudes, absenteeism, wastage, etc
Misconduct
- theft, insubordination, fighting, etc
Lack of Qualifications
- unable to complete tasks assigned even after training
Changes in the Requirements of the J ob
- changes in technology, work process, redundant, restructuring
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Maj or Mi sconduct
Insubordination, sleeping while at work
Fighting, intoxication, theft, punch, absent without prior permission
Punching card for others
Falsifying documents, malingering
Minor Mi sconduct
Incompetent, come late for work
Abuse of office equipment, personal work during office hour
Negligence (depend on case, could also be major misconduct)
MISCONDUCT
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Retrenchment
a non-disciplinary terminations and can only be done due to
business or economic reasons.
Sec 60M No local employee can be terminated for the
purpose of employing foreign employee
Sec 60N the employer shall not terminate the services of
a local employee unless he has first terminated the
services of all foreign employees employed by him in a
capacity similar to that of a local employee
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Refers to a properly conducted pre-dismissal inquiry by the
employer.
Sec.14(1) EA 1955 employer may terminate contract of
service on the ground of misconduct after conducting due
inquiry.
Sec. 20(1) Industrial Relations Act 1967 workmen may
make representation for reinstatement, to the DGIR if they
consider themselves have been dismissed without just
cause
Defective inquiry may be one in which basic principles of
Natural J ustice are not observed.
DUE INQUIRY
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The rule of PNJ ensure fairness & impartiality through governing
the manner of arriving at decisions by judicial process.
2 essential elements in PNJ are:
The rule against bias
Hearing of both sides
Any person or body exercising judicial or quasi-judicial functions
fails to observe the rules of PNJ , its orders or decisions would be
liable to be quashed on certiorari by the superior court.
PRINCIPLE OF NATURAL JUSTICE (PNJ)
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It requires the adjudicator not only to be impartial & neutral, but
also to appear to be above board.
Bias Due to Pecuniary Interest interest relating to money
Bias Due to Personal Interest family relationship, grudges
Bias Due to Official Interest
This principle is based on twin requirements:
No man should be a judge in his own cause
J ustice must not only be done, but be seen to be done
THE RULE AGAINST BIAS
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The Rul e of Heari ng Both Sides
This rule is expressed through Latin maxims:
Audi alteram partem - hear the other side
Audiatur el altera pars - no man should be condemned unheard.
Any party involves in the proceeding should be given prior notice
and opportunity to be heard
The adjudicator should receive all relevant material which a
party wishes to produce in support of its case
All evident should be taken in his presence
Each party be given opportunity to rebut and cross examine
THE RULE OF HEARING BOTH SIDE
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TU as any association or combination of workmen or employers
whose place of work is in West Malaysia, Sabah or Sarawak..
Implication of the definition:
A TU need not be called a union eg: MITASA
Employers union is separated from employees union
Membership confined either in Peninsular Malaysia or
Sabah or Sarawak only
Trade union must be within specific trade, occupation or
industry only.
No general nature is allowed. Members of the union must
be homogenous i.e. possess common interest
Any organization form to achieve objectives stated in the
act is considered having form a union and must follow all
rules related to TU
TRADE UNIONS
DEFINITION OF TU Sec 2 TUA (1959)
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TRADE UNION
WHY WORKERS JOINT TU
1. To improve terms and conditions of employment
2. Collective Bargaining (Collective Agreement) - CB / CA can only
be negotiated through unions
3. Financial Benefits
4. Protection of Rights
5. Security & Social Needs
WHY EMPLOYERS REFUSE
1. Union members tends to have higher salaries than non-union
workers due to demands
2. Agreements in CB/CA restrains employers from flexibility in work
assignments
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MEMBERSHIP OF TU
TRADE UNION
Workers in this country have the right to form and joint TU:
1. Any workmen over 16
2. Any person who is employed under contract of employment
3. Under 18 are restricted in their union activities not entitle to vote
on matters involving strike, imposition of a levy, dissolution of
union, amendment of the rules of TU
4. Under 21 cannot be elected as officer of TU
5. Students cannot joint TU unless they are bona fide workers and
over 18 (those on study leave or still eligible for TU membership)
6. In Public Sector
Can only joint union by workers in the same occupation/
ministry/department
Police, Prison service, Armed Force and those in confidential
service cannot joint TU
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TRADE UNION
REGISTRATION OF TU
Registration of a Trade Union:
1. Must apply for registration to the Registrar of TU within 1 month of
establishment.
2. Application must fulfill following requirements:
made in the prescribe form and signed by at least 7 members
of the union
accompanied by the prescribed fee
attached with the rules and constitution of the union
specify the name and headquarters address of the union
titles, names, address, ages and occupation of the officers of
the TU
names, address, ages and occupation of the members making
the application
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PROCESS FLOW FOR CLAIMING RECOGNITION
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TRADE UNION
RECOGNITION OF TU
The procedures as prescribe by IRA (1967) are as follows:
1. TU must apply in writing in the prescribe form a claim for
recognition in respect of the workmen or any class of workmen
employed by such employer
2. Employer must response within 21 days and give an answer of any
of these:
Agree to give recognition
To refuse recognition, with reasons given
The employer can request the DGIR to verify on certain
particulars of the TU.
3. If employer refuse to accord recognition, the TU can report the
matters to the DGIR.
Cont.
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TRADE UNION
4. Even after instruction from DGIR, the employer still refuse to
recognize the TU, the matter would be referred to Human Resource
Minister for a binding decisions. This decision is final and cannot be
questioned by any court.
5. During this recognition process, employees cannot go on strike and
employers also cannot declare lock-out or terminate the services of
an employee.
6. If TU has been given recognition, nor other TU can claim in respect
of same class of workmen for a period of 3 years.
7. Where recognition has been rejected by DGIR or Minister such TU
cannot make a claim for a period of 6 months from the date of
rejection.
RECOGNITION OF TU (Cont.)
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TRADE UNION
TYPES OF TU IN MALAYSIA
1. Public Sector Employees Union. Eg. MITASA, NUTP, Kesatuan
Sekerja Kakitangan MIDA, ANULAE etc.
2. Private Sector Employees Union
National Union attempts to cover all workers in the same
industry/trade/occupation, thus members may come from
various organizations. Eg. NUBE, NUPW etc
In-house Union members are all employed by the same
employer. Eg. Malaysian Airline Employees Union, Telekom
Bhd Employees Union and TN Employees Union
3. Employers Union any groups of employers within the same
trade/industry/occupation joint together to form a union of
employers. Eg. Association of Insurance Employers (AIE),
Malayan Agricultural Producer Association (MAPA) and Malayan
Commercial Banks Association (MCBA
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TRADE UNION
MTUC
MTUC is not a TU but it is a society registered with the
Registrar of Society. Members are individuals TU which
choose to joint as an affiliate.
One of the functions is to act as a spokes person for TU both
at national and international levels. Represented the
workers in the NLAC and EPF Board
Objectives:
Provide advisory services to it affiliate
Present the labor viewpoint to the government
Present workers view on national issues
Help to organize workers who do not belong to a TU
Represent the Malaysian labor movement abroad etc
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TRADE UNION
CEUPACS
CEUPACS is a federation of TU of civil servants and as such
recognized as spokesperson for the public sector.
Membership is open to all registered TU in the public
sector in West Malaysia. Any TU wants to joint must
conduct secret ballot to decide in joining.
Objectives:
to promote the interests working of it affiliate TU
to protect the interest of its members
to promote legislation affecting the interest of the members
to improve the conditions of employment of the members
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TRADE UNION
MALAYSIAN EMPLOYERS FEDERATION (MEF)
It is the employers equivalent to the MTUC and represented
the employers at the NLAC, EPF Board, SOCSO Board and
also the NPC and also National Council for OSH.
Registered under the Registrar of Society
Objectives:
to secure the organization of all employers
to present the opinions of employers on labor matters
to promote and protect the interest of employers
to advise members on implementation of labor laws
to advise members on settlement of disputes
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MALAYSIAN LABOR ORGANIZATION (MLO)
TRADE UNION
Established in 1989 and registered in 1989 as an
alternative to the MTUC
MLO was formed as a result of certain union such as
NUBE were unhappy with the political and aggressive
stance of MTUC at that time.
The objectives are somewhat similar to the objective of
MTUC
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COLLECTIVE BARGAINING AND COLLECTIVE AGREEMENT
DEFINITION AND PURPOSE OF CB
Coll ective Bargai ning
Sec. 2, IRA (1967) defines collective bargaining as negotiating with a
view to the conclusion of a collective agreement.
The process involve the employer and the employees represented by
their respective TU sit together to discuss the term and condition of
employment.
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Promotion from a lower grade to a higher grade
Transfer of an employee by an employer within the organization.
The employment of any person by an employer that he may
appoint in the event of a vacancy
Termination of an employee by an employer due to reasons of
redundancy or re-organization of an employers profession,
business, trade or work.
Dismissal and reinstatement of an employee by an employer
The assignment or allocation of duties and tasks by an employer to
an employee
MANAGEMENT PREROGATIVES
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PROCEDURE FOR CB
The procedures as prescribe by IRA (1967) are as follows:
After recognition, either party at any time may invite in writing the
other party to commence CB and set forth the proposal for
Collective Agreement. (CA)
The invited party must response in writing within 14 days whether
to accept or reject the invitation.If accepted CB must start within 30
days from the date of acceptance.
If no response within 14 days, or refuse to to accept, or CB does
not start after 30 days of acceptance, the party making the
invitation may report to DGIR for necessary instruction.
If after the instruction from DGIR, CB still does not start a trade
dispute is deemed to exist.
The TU cannot include management prerogative in its proposal
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COLLECTIVE AGREEMENT
Collective Agreement is defined as a conclusion of a collective
bargaining process.
Shall be in writing and signed by employer an employees TU
relating to the terms and conditions of employment. It must
prescribe:
The parties to the agreement
The period the agreement shall continue to be in force which
should not be less than 3 years
The procedure for modification
The procedure for termination
The machinery for the settlement of any disputes regarding
interpretation, implementation including reference of such
disputes to the Industrial Court
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COLLECTIVE AGREEMENT
Once CB is successful, both parties will deposit a copy of
CA to Registrar of Industrial Court within 30 days.
Industrial Court is authorized to approve or reject the
agreement
Industrial Court may also requires either party to amend
the agreement in the manner directed by it.
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TRADE DISPUTES
TRADE DISPUTE
Sec 2 - IRA: any dispute between an employer and his employee
which is connected with the employment or the non-employment
or the terms of employment, or the conditions of work of any such
employee.
There are few types of Industrial Actions:
Strike
Lock out
Picketing
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TRADE DISPUTES
CAUSES OF TRADE DISPUTE
These are some of the causes of Trade Dispute:
Unfair labor practices by the employer such as wrongful
dismissal, discrimination, and so on which give rise to
grievance
Breach of , or non-implementation of a CA or Court Award
Deadlock in CB
Difference of opinion on the terms and conditions of
employment or interpretation of the Collective Agreement
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67
TRADE DISPUTES
STRIKE
... the cessation of work by a body of workmen acting
in combination or concerted refusal or a refusal under common
understanding of a number of workmen to continue work or to
accept employment..
It includes stoppages of work, go slow, restriction, reduction,
limitation in the performance or execution of the whole or any part
of the duties connected with their employment
(In simple word, strike is any stopping of work by a group of
workers, including any attempt to limit or slow down production on
purpose)
Cont.
68
TRADE DISPUTES
The procedures as prescribe by the law are as follows:
1. The workers to go on strike must belong to a registered TU. Non
unionized workers are not allowed to go on strike.
2. There must exist a trade dispute between employees and
employer. Strike is for the purpose of the furtherance of trade
dispute. Strike for any other reasons is illegal i.e. sympathy
strike or political strike.
3. Secret ballot must be conducted setting out clearly the issues
leading to the proposed strike. To go on strike, TU must obtain
2/3 majority voting in favor of the strike.
4. The result of this secret ballot must be sent to the DGTU within
14 days of the secret ballot.
Cont.
PROCEDURE FOR A LEGAL STRIKE
69
TRADE DISPUTES
5. No strike can be organized under these following circumstances:
Before the expiry of the 7 days of cooling period after submitting the
secret ballot result to DGTU (Sec. 26A TUA)
If the secret ballot becoming invalid because not following procedures,
upon expiring of 90 days after the date of the ballot, if the DGTU thinks
it contravenes any law (Sec. 40A TUA)
During and 7 days after the proceeding of a Board of Inquiry which is
appointed by Minister (Sec. 44 IRA)
Matters pertaining to management prerogatives (Sec. 41 IRA)
In respect of any matters covered under a valid CA taken cognizance
by the Industrial Court (Sec. 44 IRA)
In the public sector where the King has withheld consent to the
reference of a dispute to the industrial court (Sec. 44 IRA)
Workers under essential services cannot strike without giving 42 days
notice, or within 21 days of giving such notice or before the expiry of
the date of strike specified in such notice.
PROCEDURE FOR A LEGAL STRIKE (Cont.)
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70
TRADE DISPUTES
LOCK OUT
1. Almost similar to strike only this time action is by the
employer. IRA defines as:
the closing of a place of employment
the suspension of work
the refusal by any employer to continue to employ any
number of employee employed by him
2. Purpose of a lockout is to force employee to accept the
terms and conditions or as a tool to counter the industrial
action taken by the trade union of the employees.
3. Procedures for lockout is almost similar to strike.
71
PICKETING
TRADE DISPUTES
1. Can be conducted by one or more employees at or near
place of work and where trade dispute involving such
employee exists.
2. Reasons for picketing:
to obtain or communicate information
to persuade or induce other employees to stop work
3. Picketing is lawful as long as:
it does not intimidate anybody
it does not obstruct the exit or entrance of the workplace
or traffic
conducted peacefully
72
TRADE DISPUTE SETTLEMENT
SETTLEMENT OF TRADE DISPUTE
25
73
DIRECT NEGOTIATION
1. This is the ideal method of settling dispute where both
parties come to the negotiation table to solve the dispute
amicably.
2. This negotiation process is seen as a matured and
harmonious way of settling dispute. This method is highly
encouraged in the Industrial Relation Act.
3. If both party fail to settle the dispute, the solution may have
to go to the third party
74
CONCILIATION
1. After negotiation fails to provide settlement next best
method is conciliation where 3
rd
and neutral party is called
to help. It may be:
Voluntary conciliation both parties agreed to call for
conciliation
Compulsory conciliation the intervention from the DIR
office because of public interest
2. The 3
rd
party is normally officers from the Dept of Industrial
Relation. The officers may meet and discuss with the
disputing parties either separately or jointly.
3. The conciliator identifies issues and promote settlement and
not merely listening to the parties.
75
TRADE DISPUTE SETTLEMENT`
ARBITRATION
1. If even after the intervention of officers from the DIR, the
dispute cannot be settled, arbitration may be the only way to
settle the issues.
2. This method, and impartial 3
rd
party is given the authority to
settle the dispute examining information and evidence given
by both party before making judgment.
3. In Malaysia only Industrial Court has the power to arbitrate.
26
76
MEDIATION
1. Rare methods of settling dispute between employers and
employees. Not mentioned in the Act
2. Similar to conciliation. The neutral 3
rd
party is called to
mediate the settlement is not from the government. This
mediator is considered unbiased and impartial and is
respected by both disputing parties.
Politician
Local leader

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