UNIVERSITI TEKNOLOGI MARA

COURSE : INDUSTRIAL RELATIONS

COURSE CODE : HRM 659
CASE STUDY : PAST YEAR 2 (JUNE 2016 & JUNE 2019)

IFFAH IMANINA BINTI EMRAN (2018328965)

PAST YEAR 2016

PART A

QUESTION 1

Chocolate Lazaria (M) Bhd Employee Union (CLBEU) is a union of workmen, registered
under ‘similar establishment’ with DGTU on February 2, 1999. In October 1999, CLBEU
easily got its recognition the company and has since acted as a collective bargaining body
for employees of the Chocolate Lazaria (M) Bhd who come within the scope of the union’s
representation.

Due to business expansion, on October 1, 2009 ChocolateLazaria (M) Bhd, corporatized its
procurement and marketing division as its subsidiaries under the names: Lazaria Importers
Sdn. Bhd and Lazaria Marketing & Distributors Sdn Bhd respectively. Chocolate Lazaria (M)
Bhd and continues to act as an investment holding company providing day to day
administrative and management service to the two subsidiaries.

Kareem, the president of Chocolate Lazaria (M) Bhd Employees Union then made an
application to the Director of Trade Union (DGTU) to change the union’s name to Lazaria (M)
Bhd. Employee Union (LBEU). Upon receiving the approval from the DGTU, LBEU then
extends the union’s membership to employees in the two subsidiaries. However the outcome
was very upsetting. Moreover, application for recognition from two subsidiaries was rejected
by the subsidiaries management.

Kareem was very furious when he knew that there are movements in both subsidiaries to set
up their own employees’ union. Hence, using his position and popularity, Kareem induced
and threatened individuals who initated movement to set up another employees’ union.

Based on the above case:

a) Explain the term ‘similar establishment’.

Similar establishment is an establishment is a shop, business or organisation occupying

a specific building or location. A similar establishment can be referred to an entity with
similar reach, principles or characteristics of key activities. They can be premises with
features similar to hotels, motels, inns or boarding houses. It includes premises which
provide furnished sleeping accommodation, with or without a board or food preparation
facility, and which are used or maintained as suitable for use by visitors or travellers.
 Similar facilities also include hostels, guest-houses, bed and breakfast, rest-houses,
resorts, chalets and lodging-houses, private residence clubs, service apartments and
home-stays. It does not, however include premises that are used to house students in
connection with an educational institution, such as residential colleges on university
campuses.

(4 marks)

b) Describe four (4) reasons for Chocolate Lazaria (M) Bhd to easily recognize
CLBEU.

i) Have collective bargaining

According to the case study, CLBEU acted as a collective bargaining body for all
workers of Chocolate Lazaria (M) Bhd and was recognized as a legal representative of
its staff. It thus indicates that CLBEU had already obtained recognition from Chocolate
Lazaria because if there is no recognition, the union cannot enter into collective
bargaining. Therefore, CLBUE is easily recognized because the employer has already
provided recognition to the trade union.

ii) Have sufficient members

The union needs to have enough members. This is to ensure that the President of the
Union will serve as a representative of his employees and has the right to speak on
their behalf. The percentage of employees involved must be 50 per cent greater than
the total number of workers in the company, in order to be easily recognized in this
situation. CBLEU has enough members to include more than 50% of eligible
employees in the company. Not only did the representatives already have a legitimate
delegate to represent a member of the Union.

iii) Solidarity of union members

The solidarity of the members of the union is very necessary to prevent the employer
from opposing the union by refusing to give all their demands. If the employer is aware
that the employees are divided among themselves and are unable to agree on the
demands to be made of the employer, it will help the employer to refuse to comply with
the demands of the employee. The employer of Chocolate Lazaria is also aware that
the employee is not split among them and is in a position to consent on the proposal to
be made to the employer.

iv) Adequate financial strength

A union must have a strong financial position, because the larger the number of union
members, the higher the amount of money used to pay their income. If the union has a
low budget to hold a strike fund and this problem is known to the employer, the union
 will face difficulties in persuading the employer at the bargaining table. In this case
study, CBLEU has a good financial position that can persuade the employer to do CB.

(8 marks)

c) Discuss the procedure(s) for changing the union’s name to Lazaria (M) Bhd
Employees Union

The procedure(s) for changing the union’s name to Lazaria (M) Bhd Employees Union is
firstly, a notice of change of name must be issued in writing to the Director General and
signed by the Secretary and seven members of the registered trade union. If the
proposed name is the same as any other current trade union, or is almost the same as
the name of another trade union, the Director General will refuse to register a change of
name. Then, if the Director General is satisfied that this Act is complied with by changing
the name, the trade union will register the name in a specified manner which will have
effect from the date of registration.

(5 marks)

d) List two (2) reasons for the subsidiary companies to reject LBEU’s application
for recognition.

 The similarity in the trade union’s name. The name of LBEU union is similar to
CBLEU as the Director General may refuse to register a trade union if the name
is similar to the existed trade union.
 Both subsidiaries do not have the same scope of employment as CLBEU,
therefore, the claim for recognition are being rejected.

(2 marks)

e) Comment on Kareem’s action

According to Section 7 of the IRA 1976, it is prohibited for a worker or trade union of
workers and its agent to carry out activities which persuade an employer to join or refrain
from joining a trade union during working hours, except with the consent of the employer
and threatening any person to refrain from being a member or officer of trade union by
offering some advantage to any person.

Therefore, Mr. Kareem has no right to be angry when he realizes that there is
another attempt in the company to set up another employee union, because every
worker in Malaysia has the right to form and join a trade union that is protected by
Section 5 of the IRA 1967, where is state that no individual shall interfere with, restrict a
worker or employer assist in the formulation of and join a trade union and to participate in
its lawful activities.
 Hence, no employee of a trade union or employer shall be in dispute with each other
in the establishment, functioning or administration of that trade union. Mr Kareem has
induced and threatened individuals who have initiated a movement to set up another
union of employees because he knew that if more than one union is registered under the
union, the DGTU may cancel the registration certificate of the union, as specified in
Section 15 TUA 1959.

(6 marks)

PART B

QUESTION 1

a) Describe four (4) roles of a trade union as stipulated in the TUA 1959

Four roles of trade union is firstly, to promote the interest of their members and
working people in general. It is to promote industrial, social and intellectual of its members.
For example, trade union helps to voice out for powerless employee if the term is not
satisfied between employee and employers.

Secondly, the role is to promote employee-friendly legislation. This is mean, promote

legislation that is affecting the interest of its members in particular or trade unionist in
general. For example, trade union attempt to improve the term and conditions of employment
of workers through the process of bargaining with the employer.

Thirdly, the trade union role is to promote material, economic, social and educational welfare
of their members. This is mean, trade union plays an important roles in workers welfare in
term of working condition, learning opportunity for members, promotes equal opportunity at
works and also helps to ensure healthy and safe working environment.

Lastly, to protect the right of their members at the workplace by obtain and maintain just and
proper rates of remuneration, security of employment and reasonable hours and condition of
works. This will help to improve in staff retention as the trade union negotiates on behalf of
the members’ to find solution that meet business needs while ensuring the workers are
treated fairly.
(10 marks)

b) Distinguish between In-house, National, and Federation of Trade Unions

Private sector unions are both national and in-house unions.

National unions attempt to cover all workers in the same industry, trade or
occupation. The larger unions have sophisticated structure with regional branches and local
committees. A Union is purporting to be national in coverage which is not necessarily a large
union in term of membership. The size of membership is depending on the number of the
potential members and the degree of success of the union officers in persuading the
potential members to join trade union. It is geographically limited. Which is mean, national
unions do not covers workers throughout Malaysia but only Peninsular Malaysia or Sabah,
or Sarawak as the case may be, as required by law.
 In house unions are formed in an organization for the benefit of worker who works in
that particular organization where the members are employed by the same employer.
Workers from other organization are not allowed to become members. This immediately
suggest that members of such unions can and will be involved in different occupations. The
government’s policy is to encourage the formation and growth such unions. In house union’s
development also has been affected by the employers’ attitudes and the government.
Examples of in house union are Malaysian Airlines Employees Union, UMW Employees
Union and Proton Employees Union.

Lastly, federation of trade union is also known as Malaysian Employers Federation

(MEF). MEF has representatives on number of councils and bodies such as National Labour
Advisory Council (NLAC), Employee Provident Fund Board and others. It is registered as a
society and its members are individual companies and also employers association. Function
of MEF is to carry out research needed by its members, especially for collective bargaining
purpose such as carry out wage and benefits surveys. This organisation also conduct
training on topic related to labour legislation and other industrial relations matters.

(10 marks)

c) Identify the legal immunities of a registered trade union

According to Trade Union Act 1962 (Section 21), it explain that no suit or other legal
proceeding shall be maintainable in any civil court against any registered trade union or any
officer or member thereof in respect of any act done in contemplation or in furtherance of a
trade dispute to which a member of the trade union is a party on the ground only that such
act induces some other person to break a contract of employment, or that it is an
interference with the trade, business or employment of some other person or with the right of
some other person to dispose of his capital or of his labour as he wills. This is covered under
Immunity from civil suit in certain cases.

(5 marks)

QUESTION 2

a) Explain the prohibitions imposed by the Industrial Relations Act 1967 on

employers in order to allow employees to form trade unions within any particular
establishment, trade, occupation or industry or within any similar trades,
occupations or industries.

Workers in Malaysia have the right to form and join trade unions. This is known as freedom
of association and this right is protected under Industrial Relation Act1967 (Section 5). In this
act it explains that no employers shall:

i. Prevent a worker from joining trade union by putting a condition in his contract of
employment.
ii. Refuse to employ a worker on the grounds he is a trade union members or officers of
a trade union
iii. Discriminate against any person in regard to employment, promotion, any condition
of employment or working conditions on the ground that he is or is not a member or
officer of a trade union
 iv. Dismiss or threaten to dismiss a workman, injure or threaten to injure him in his
employment or alter or threaten to alter his position to his prejudice by reason that
the workman proposes to become participates in

Any complaint by a worker that his right under this section of the act has been violated it can
be reported to Department of Industrial Relation (DIR) which has the authority to investigate
the matter and give advice in settling this matter.

(10 marks)

b) Based on the following scenario, advised Ali, a secretary of Kesatuan Sekerja

Syarikat Pekerja Aqeel on whether he has committed any offense under any
relevant laws:

i) Taking leave of absence with pay to carry his duties as an officer of trade
union.

Ali does not commit any offense as he can take leave of absence with pay to carry
his duties as an officer of trade union. According to the Industrial Relation Act 1967,
during working working hours, a union can take a day off to join union activity. In
addition, Ali should apply leave and stated the duration and purpose in order to carry
out his duties. Thus, Ali will not get leave with paid because he is not representing his
union. Hence, he deserve to get paid if he representing for his union for his company
matters.

(5 marks)

ii) Inducing his office colleague from becoming an officer of the trade union by
offering any advantage.

Ali does commit offense where according to Industrial Relation Act 1967, A worker or
trade union of workmen or its agent is prohibited from carrying out the following
activities:

 Persuading at the employer’s place of business, during working hours,

another worker to join or to refrain from joining a trade union except with the
consent of the employer

 Intimidating any person to refrain from becoming or to continue to be or to

cease to be a member or officer of a trade union

 Inducing any person to refrain from becoming or to cease to be a member or

officer of a trade union by conferring or offering to confer on any person any
advantage

(5 marks)
iii) Using the trade union funds to sponsor the activities of Parti Bersatu Maju, a
newly formed political party.

In this case, Ali has commit offense whereby the use of this money is confined to
purposes set out in Industrial Relation Act 1967 (Section 50) and the rules of trade
union. The act state that union funds can only be used for the purposes which related
to trade union only. The law prohibits union from using their funds for any political
purpose including providing funds to a political party. To ensure that unions funds are
only used for its purposes allowed by the law, unions are required to send annual
audited accounts to the Department of Trade Union.

(5 marks)
 PAST YEAR JUNE 2019
PART A
QUESTION 1

Zabel Technologies Employees Union (ZTEU) was formed and registered to protect and
increase the standard of living of its members. Since it was then new, ZTEU needed insights
to operationalize its union effectively. Lately, number of complaints piled up and the union felt
it was about time to negotiate with the employer about the rising cost of living, uncertain
medical coverage, extra workloads, insufficient overtime payment, sexual harassment
issues, equality in promotions, transfer opportunity and others. Moreover, there was no
proper channel to voice up employee’s dissatisfactions. Due to these rising issues, the union
decided to invite the employer to participate in a collective bargaining (CB) session. After a
few attempts, the employer still rejected the CB invitations as according to them, the content
of the proposal should not touch on any of the managerial prerogative items.

Therefore, the union hired a legal advisor to assist them with documentations and
procedures for CB. Finally, the collective bargaining process commenced and ran smoothly
between ZTEU and its employer. Later, a collective agreement (CA) was concluded and
deposited for cognizance at the Industrial (IC). However, the IC refused to accords
cognizance as according to the IC, the collective agreement did not fulfill certain conditions.

a) Explain the preparations prior to the commencement of the collective bargaining (CB)
process between ZTEU and its employer.

The preparation prior to commencement of the collective bargaining (CB) process between
ZTEU and its employer are the union decided to hire a legal advisor to represent them with
documentation and procedures for Collective Bargaining.
 The ZTEU must collect economic data as the union collects data to query workers for
higher living expenses, inadequate overtime payment, if it is acceptable in the
economic situation.
 Next the Union has settled on plans and methods for the collective bargaining
process. They know the technique and strategies of the negotiation session. ZTEU
and its affiliates have a mandate from their principals or union members.
 As decided by the ZTEU, the standard of living of its members is to be protected and
increased. Collect data about the strength and weaknesses of the other party. The
employer needs to investigate which leaders of the ZTEU unions are their
representatives. Collect information about other party's strength and weaknesses.

(5 marks)

b) Examine the items that can discussed and cannot be discussed during the
negotiation process between ZTEU and its employer.
An employee performs duties and responsibilities assigned to him by his employer according
to "Terms and Condition of Service". Employees shall, in return, be entitled to wages,
benefits such as payment of medical expenses, paid holidays, working conditions, layoffs,
termination procedures and retrenchment procedures, LIFO (last in, first out). Based on this
 case study, topics that can be addressed during the ZTEU and its employer negotiation
process are about increasing living expenses, unclear medical benefits, additional
workloads, inadequate payment of overtime and issues of sexual assault. Since the workers
will discuss their frustration in the workplace.

Therefore, according to Section 13(3) of Industrial Relations Act 1967, it is important

to note that there is a list of non-bargain able subjects on which collective bargaining is not
possible if employer refuse to bargain on these subjects. These matters are referred to as
“managerial prerogatives”. In this situation, during the negotiating process between ZTEU
and its employer, things that cannot be addressed are equality in promotions and transition
opportunities. The advancement of any worker from a lower grade or category to a higher
grade by an employer and the transfer of a worker within the company by an employer
cannot be addressed.

In addition, things that may not be addressed are the employment of any person by
an employer that he can appoint in the event of a vacancy, the termination by an employer of
a worker's services by reason of redundancy, and the employer's dismissal and
reinstatement of a worker. These items should not be addressed because the employers'
sole right to their workers is this.

(6 marks)

c) Point out the tactics that might be used by the employer to delay the CB process

Tactic need to be thought about in advance of the first bargaining session. Tactics are the
detailed methods and steps used to implement their strategy. Tactics that used by the
employer to delay the CB process is to threaten to withdraw their agreement to the check-off
procedure unless the union reduces its demands. This can very effective in persuading the
union to moderate its demand, but it is also likely to lead deterioration in the relationship
between the two parties. Thus, the union will perceive the threat as a union-busting tactic
designed to reduce the influence of the union and its ability to serve its members efficiently.
Other than that, purposely delaying the negotiations and spreading the meetings over a
length time period. As it is possible for an agreement to be concluded in meeting, especially
when the original demands are reasonable and realistic. Next, employers could decide room
arrangement where the union side’s chairs had been specially placed by the management
so that the union members had to look up at the management team, thus making the union
representatives uncomfortable and at its disadvantage.

(6 marks)

d) Explain on the items in CA that meet the conditions for cognizance as specified by the
Industrial Relations Act 1967.

Collective Agreement is an agreement in writing between an employer, or a trade union of

employers, and trade union of workers relating to the term and condition of employment. If
the employer fails to comply with the terms contained in the collective agreement, any trade
union or individual can lodge a complaint with the industrial Court. According to Industrial
Relations Act 1967, Cognizance is the process where Industrial Court recognize a Collective
Agreement as a binding and valid document and to get cognizance for the industrial Court,
the CA must fulfil certain conditions. First, items in CA that meet condition for cognizance are
must specify the parties to the agreement as they should have both parties name, for this
case has stated that Zabel Technologies Employees Union (ZTEU) and its employer. Next, it
must specify duration of the agreement which mean CA duration cannot be less than 3
years. It must include a procedure for modification and termination of the agreement. This is
compulsory as to ensure that nobody either both parties can easily terminate or modify the
agreement. If both parties need to modified certain contain agreement, they must follow the
procedure that been given. It must specify the procedure to be used to settle any dispute
over the interpretation and implementation of the agreement. It is because sometimes can
have potential dispute happens during implement the CA. Most probably there would have
dispute. However, to avoid dispute or conflict, they need to prepared procedure to settle the
dispute. It must not include items of managerial prerogatives. The Industrial Relations Act
does not give a list of bargainable items, but it does state that certain issues cannot be
included in a union proposal for an agreement in section 13 (3). These prerogatives include
promotion, transfer, recruitment, dismissal, termination for redundancy and assignment of
work. However, general issues relating to procedures on these matters can be, and
frequently are, found in collective agreements. In this case study, the employer still rejected
the CB invitations as according to them, the content of the proposal has touch some of the
managerial prerogative items. The managerial prerogatives items are the sole right of the
employer.

(8 marks)