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Chapter 10 1

CHAPTER

INDUSTRIAL RELATIONS

HRM Principles & Practices (Second Edition)

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Chapter 10 2

PREVIEW

The importance of industrial relations.

The role played by the Ministry of Human Resources in

industrial relations.

The functions of trade unions, including the legal

requirements to form and join a union.

The process of collective bargaining.

The legal forms of industrial action that may be taken by

employers and trade union members.

The processes by which industrial disputes are settled

conciliation and arbitration.

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Chapter 10 3

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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Chapter 10 4

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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Chapter 10 5

CREATING AN ENVIRONMENT
OF INDUSTRIAL HARMONY
CREATING
CREATINGAN
AN
ENVIRONMENT
ENVIRONMENT
OF
OF
INDUSTRIAL
INDUSTRIAL
HARMONY
HARMONY

The
TheMinister
Ministerof
of
Human
Human
Resources
Resources

The
TheDepartment
Department
of
of
Trade
TradeUnion
UnionAffairs
Affairs

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The
TheDepartment
Department
of
of
Industrial
IndustrialRelations
Relations

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Chapter 10 6

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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Chapter 10 7

TRADE UNIONS
Why do workers join trade unions?

To have a voice.

To gain bargaining power and fight for more wages,

more benefits and less work.

To ensure their employment rights are protected.

To show their solidarity with other workers.

To have an opportunity to socialise with other workers.

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Chapter 10 8

THE RIGHT TO ESTABLISH A

TRADE UNION
All trade unions must be registered with the
Department of Trade Unions BEFORE they can
begin any activities.
Applications to register must be made within
one month of the first meeting held at which it
was agreed to start a trade union. A temporary
committee may be appointed to carry out the
necessary paperwork.
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Chapter 10 9

THE RIGHT TO JOIN

A TRADE UNION
Any employee above the age of 16 has the
right to join a trade union, except employees
in:

The Royal Malaysian Police

The Prison Service

The Armed Forces

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Chapter 10 10

THE RIGHT TO JOIN

A TRADE UNION (cont.)
Restrictions

Employees in public and private sectors cannot

join the same union.

Employees in statutory bodies can only join inhouse unions.

Employees may only join a union covering

workers in either Peninsular Malaysia, Sabah or
Sarawak (depending on where the employee is
working). Combinations are not permitted.

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Chapter 10 11

THE RIGHT TO JOIN

A TRADE UNION (cont.)

Employees can only join a union

representing the trade, occupation or
industry in which they are working, unless
the union is in-house.

Managers, executives, confidential and

security staff can only join a union whose
members are in the same category as
themselves.

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Chapter 10 12

CONTROL OF TRADE UNIONS

The Trade Unions Act has provisions on who

is eligible to be elected as an officer of a
trade union (as President, Vice-President,
Honorary Secretary, Treasurer and Council
Members).

Trade union funds may only be used for

purposes stipulated in the Trade Unions Act.

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Chapter 10 13

TYPES OF TRADE UNIONS

TYPES
TYPES
OF
OF
TRADE
TRADEUNIONS
UNIONS

National
National
Unions
Unions
of
of
Employees
Employees
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In-house
In-house
Unions
Unions
of
of
Employees
Employees

Employers
Employers
Associations
Associations

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Chapter 10 14

EMPLOYEE UNIONS
19962009
1996
Sector

1999

2009

2005

No.

Members

No.

Members

No.

Members

No.

Members

Private

292

407,303

328

406,773

390

379,493

436

n/a

Government

136

241,411

125

244,388

127

311,618

137

n/a

Statutory
Bodies and
Local
Authorities

88

79,532

84

74,161

91

69,396

93

n/a

516

728,246

537

725,822

608

760,507

666

806,860

Total

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Chapter 10 15

MALAYSIAS LARGEST
EMPLOYEE UNIONS
2009
UNION

MEMBERSHIP

NU Teaching Profession

NU Bank Employees

30,000

NU Plantation Workers

28,000

Kesatuan Guru-guru Melayu

22,000

Sarawak Teachers Union

15,000

Electrical Industry Workers Union

14,000

Telekom Bhd. Employees Union

13,000

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130,000

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Chapter 10 16

MALAYSIAS LARGEST
EMPLOYEE UNIONS (cont.)
UNION

MEMBERSHIP

Non-metallic Mineral Products

Mnfrg. Employees Union

13,000

Malayan Nurses Union

13,000

Metal Industry Employees Union

12,000

Kes. Guru-guru Lepasan Maktab

11,000

NU Commercial Workers

NU Petroleum & Chem. Workers

Tenaga Nasional Employees Union

Transport Workers Union

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11,000
10,000
10,000

10,000
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Chapter 10 17

COLLECTIVE BARGAINING
Collective bargaining is a process whereby a
trade union negotiates with an employer or
association of employers over the terms and
conditions of service of employees.
A trade union can only invite an employer to
commence collective bargaining once it has
been recognized by the employer as the
legitimate representative of the employers
workers.
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Chapter 10 18

THE COLLECTIVE
BARGAINING PROCESS
Once a trade union has been recognized by an
employer, either party may initiate the collective
bargaining process.
Bargaining sessions will be held between
teams of negotiators appointed by the employer
and the union respectively.

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Chapter 10 19

COLLECTIVE AGREEMENTS
A collective agreement is a written agreement
between a trade union and an employer, or
association of employers, concerning the terms
and conditions of employment of the
employers workers.
A collective agreement is the outcome of
collective bargaining.

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Chapter 10 20

COLLECTIVE AGREEMENTS
(cont.)
Scope: Collective agreements cover ALL
employees in the company concerned who are
eligible to join the union.
Duration: A minimum of 3 years.
Contents:

Terms and conditions of employment of the

workers concerned

Special provisions/facilities for the trade union

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Chapter 10 21

COLLECTIVE AGREEMENTS
(cont.)
Procedures, for example:

Procedure for settling grievances

Procedures for settling disputes

Procedures for transfer of workers

Procedures for retrenchment of workers

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Chapter 10 22

THE RIGHT TO TAKE

INDUSTRIAL ACTION
Employees who belong to a trade union
have the right to:

Picket and strike, when a trade dispute occurs.

Employers have the right to lockout the

workers when a trade dispute occurs.

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Chapter 10 23

PICKET
A picket is legal providing:
The workers involved are members of a trade
union.
A trade dispute between the employees and
their employer exists.
It is held at or near the employees workplace.
It does not obstruct the entrances or exits to
the workplace.
It is peaceful and does not intimidate anyone.
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Chapter 10 24

STRIKES
A strike is legal providing:
The strikers are members of a trade union.
The strikers have a trade dispute with their
employer.
A secret ballot is held prior to starting the strike.
Two-thirds of the workers agree to strike.
The ballot papers must be sent to the Department of
Trade Unions for verification.
The workers must wait for at least 7 days before
commencing the strike.
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Chapter 10 25

STRIKES (cont.)
A strike will be illegal in the following
situations:

Over an issue relating to the question of

recognition of a union

Relating to matters in a collective agreement

which has been taken cognizance of by the
Industrial Court

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Chapter 10 26

STRIKES (cont.)

Relating to the managerial prerogatives of

recruitment, transfer, promotion,
termination of a worker and the allocation
of duties to a worker.

After a trade dispute has been referred to

the Industrial Court for arbitration.

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Chapter 10 27

THE COOLING OFF PERIOD

Conciliation meeting(s) will be held at the

Department of Industrial Relations.

If conciliation unsuccessful, the Minister of

Human Resources will refer the dispute to
the Industrial Court for arbitration.

Once a dispute has been referred to the

Industrial Court, it is illegal for the workers to
strike on the issues under dispute.

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Chapter 10 28

REVIEW

The importance of industrial relations.

The role played by the Ministry of Human Resources in

industrial relations.

The functions of trade unions, including the legal

requirements to form and join a union.

The process of collective bargaining.

The legal forms of industrial action that may be taken by

employers and trade union members.

The processes by which industrial disputes are settled

conciliation and arbitration.

HRM Principles & Practices (Second Edition)

Oxford Fajar Sdn. Bhd. (008974-T), 2011

All Rights Reserved

Chapter 10 29