INDUSTRIAL RELATIONS

PN. NIK SARINA NIK MD SALLEH

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 Industrial Relations
It is the relationship between workers and their
employers in the work environment.
Also known as employee relations or labor
relations.
IR focuses on:
– laws & rules which impact on the work
environment.
– terms & conditions of work.
– rights & obligations of employers & employees.
– processes by which the rules & terms are made.

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• Organizations must cope with lots of
changes: from trade unions; Government;
owner; customers; public; suppliers;
competitors.

• Those who need to study IR are: workers;

trade union leaders; managers; lawyers;
officers & executives in HR & IR depts.

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• Worker – to know their rights under labor laws, benefit joining TU,
understand certain risks associated with his membership in TU, to whom
should complain if employer fail to provide benefit as required by law.
• Trade union leaders – to protect employee from exploitation by employer,
represent employees at Collective Bargaining or C.Negotiation
• Manager – to upgrade understanding of IR so that can build trust,
communication and avoid conflict, good IR will contribute profit to
company.
• Lawyers – to represent employee or employer at Industrial Court or Labor
Dpt. Hearings and occasionally in the High Court and when a decision is
appealed, represent them at the Court of Appeals or Federal Court..
• Executive and Officer on HR and IR Dept. – a strong working knowledge of
the principle, concepts and laws in IR to carry out responsibilities, need to
have human skills to administer the system wisely, good communication
skills especially listening and negotiating skills, and have personal qualities
of patience, firmness and fairness.

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IR System in Malaysia is Tripartite
• The IR in Malaysia is a tripartite system. Three parties
are involved: Employers, Employees, & Government.

• Unipartite – decisions are made by management on

behalf of employer without interference by
workers/unions or any other party.

• Bipartite – decisions are made by both management &

workers/unions.

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 National Labor Advisory Council (NLAC)

• Consists of representatives from 3 sectors: 14 representatives from

workers; 14 from employers, & 12 from Government.

• The Minister of Human Resources chairs the discussion & appoints

the Government representatives.

• Other members are appointed after discussion with MTUC,

CUEPACS, & MEF.

• The council meets at least twice a year when there are urgent
matters to discuss.

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 International Labor Organization (ILO)

• Based in Geneva. It plays a role in the Malaysian IR system.

Malaysia joined as a member in 1957.

• It provides an international forum for discussion on all matters

relating to labor by holding an annual meeting every year in
Geneva and set labor standard which it expect member countries
to ratify and implement the standard.

• The ILO is run by a governing body or executive council of 14 full

members, 14 deputy members, and 14 reserve members. They
are made up of government, employers, & trade union officials.

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• ILO is financed by members but mostly from 7
countries: USA, Japan, Germany, France,
Britain, Italy, & Canada.

• Money is used for administrative purposes,

research, publications, & projects.

• ILO does not use force on members – it uses

moral persuasion – use psychology to persuade
the member countries to ratify and implement
the standard.
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 Employment Legislation
• The major employment related legislations are:
a. Employment Act, 1955
b. Trade Unions Act, 1959
c. Industrial Relations Act, 1967
d. Factories & Machinery Act, 1967
e. Occupational Safety & Health Act, 1994

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 The Employment Act, 1955
• Lays down the provisions to protect workers from
exploitation & to provide minimum benefits for all
workers covered by the Act, especially those earning
not more than RM 1,500 per month, those doing
manual labor, & those who supervise such workers
or are employed to drive or maintain vehicles.

• Benefits include termination and maternity benefits,

the right to a weekly rest day, annual leave, & sick
leave.

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 OSHA
• Establishes guidelines and lay down the
responsibilities of the various parties in industry in
relation to safety & health.

The Trade Unions Act

• Seeks to control the activities of trade unions so that
they can develop in an orderly and peaceful manner.
• It lays down rules & regulations which unions are
required to follow.

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 The Industrial Relations Act

• Regulates the relations between employers &

workmen & their unions as well as laying down rules
to help prevent & settle disputes between the 2
parties, thus ensuring peaceful IR as far as possible.

• The goal is to encourage harmonious relationship

between employers and employees in the interest of
nation’s productivity.

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 Role of Government in Industrial Relations
• It acts as Legislator through Parliament, Administrator through
the Ministry of Human Resources, & Participant as the largest
employer in the country.

Ministry of Human Resources

• Responsible for administering & overseeing the IR system
• Objectives are:
1. To protect welfare of employees.
2. To promote good employer–employee relationships.
3. To equip the unemployed with basic industrial skills & improve
skill level of work force.
4. To assist in maximizing country’s manpower resources through
manpower planning.

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 Ministry of Human Resources
• There are 7 departments in the ministry:

1. Dept. of Labor, Peninsular Malaysia

2. Dept. of Labor, Sabah
3. Dept. of Labor, Sarawak
4. Dept. of Industrial Relations
5. Dept. of Trade Unions
6. Dept. of Occupational Safety & Health
7. Manpower Dept.

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• 7 Departments in The Ministry of Human Resources

• Dept. of Labor, Peninsular Malaysia

– DG (head), Deputy of DG, 4 Directors of Labors – supervise the state level labor
offices and sub-offices.
– Enforces the Employment Act, the Workmen’s Compensation Act 1952, the
Children & Young Persons (Employment) Act 1966.
– Settle trade dispute between employer and employees relating payment or non-
payment of wages, allowances, retrenchment and retirement benefits.
• Dept. of Labor, Sabah
• Dept. of Labor, Sarawak
• Dept. of Industrial Relations
– administers the IR Acts, 1967
– to help settle dispute through conciliation.
• Dept. of Trade Unions
- acts as a central role in the growth of the TU movement :
– register newly formed unions
– deregister unions found breaking the law.
– Check a union’s account
– Investigate complaints made by union.
• Dept. of Occupational Safety & Health
• Previously known as the Dpt. Of Factories and Machinery
• Responsible to implement OSHA
• Manpower Dept.
-To help utilize to the maximize the nation’s manpower opportunities for its citizen.
- To provide data on manpower needed by the nation

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Related Organisations to the Ministry of Human Resources.

1. Social Security Organisation (SOCSO) – implements the

Employee’s Social Security Act 1967, provides benefits to
workers and their dependents in the event of work-related
accident.

2. Employees Provident Fund – requires the employees and

employers to make monthly contribution that is useful for their
retirement age.

3. Human Resource Development Fund – employers in certain

sectors of the economy are required to contribute 1% of their
payroll to the fund every month in order to conduct the trainings.
They can claim the reimbursement cost once after the training
been conducted.

4. Industrial Court – a specialized tribunal to arbitrate dispute

between employers and employees and an independent body
governed by the rules of the judiciary for the Malaysian
industrial relations system. 16