Chapter 10

Industrial
Relations

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Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.

❑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.
Preview
❑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.
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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 Parties in the Industrial Relations Systems

❑International Labour Organization

❑International trade union bodies
❑The Malaysian Trades Union
Congress
❑The Malaysian Employers
Federation
❑The Ministry of Human Resources
❑Individual trade unions
❑Individual employers
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 Creating an
Environment
of Industrial
Harmony

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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.

An industrial relations Conflict is the

system must find ways antithesis of industrial
to manage conflict. harmony.

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 Trade Unions
Why do workers join trade unions?

To have a voice.
To gain
bargaining
To have an
power and
opportunity to
fight for more
socialise with
wages, more
other workers.
benefits and
less work.
To ensure
To show their their
solidarity with employment
other workers. rights are
protected.
The Right to
Establish a All trade unions must be registered with the
Trade Union 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.
The Right to Join a Trade Union

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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
 Restrictions Employees in public and private sectors cannot join
the same union.

Employees in statutory bodies can only join in-

house unions.
The Right
Employees may only join a union covering workers
to Join a in either Peninsular Malaysia, Sabah or Sarawak
(depending on where the employee is working).
Trade Combinations are not permitted.

Union Employees can only join a union representing the

trade, occupation or industry in which they are
(cont.) 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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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.
 Types of
Trade Unions

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Copyright © 2023 by McGraw Hill Malaysia. All rights reserved.
 Malaysia’s Largest Employee Unions (2022)

UNION MEMBERSHIP
NU Teaching Profession 189,000
NU Bank Employees 14,000
NU Plantation Workers 35,000
Electrical Industry Workers Union 14,000
NU of Telekoms Employees 9,000

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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 the employer has recognized it as the
legitimate representative of the employer’s workers.

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

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Collective
Agreements
A collective agreement is a written
agreement between a trade union and an
employer, or an association of employers,
concerning the employer's workers'
terms and conditions of employment.

A collective
agreement is the
outcome of
collective
bargaining.
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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 Collective Agreements (cont.)
Procedures, for example:
Procedure for settling grievances

Procedures for settling disputes

Procedures for transfer of workers

Procedures for retrenchment of workers

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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Pickets
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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 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.
Strikes (cont.)

Relating to matters in
Over an issue relating a collective agreement
to the question of which has been taken
recognition of a union cognizance of by the
Industrial Court

Relating to the
managerial prerogatives
After a trade dispute
of recruitment, transfer,
has been referred to
promotion, termination
the Industrial Court for
of a worker and the
arbitration.
allocation of duties to a
worker.
 Conciliation meeting(s) will be held at the Department
of Industrial Relations.

The Cooling If conciliation unsuccessful, the Minister of Human

Resources will refer the dispute to the Industrial Court
Off Period 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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