CHAPTER ONE

INTRODUCTION
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What is industrial relations?
Industrial relations is the relationship between an
employer and the trade union which represents his
workers, pertaining to employment, non-
employment, terms and conditions of work, etc.

Also refers to the management of employees’

welfare and internal communications.

Industrial relations is also known as:

 Employment relations
 Labor relations
 Introduction (con’t)
• The relationships which arise at and out of the
workplace:
Relationship between individual workers
Relationships between workers and their employers
Relationships between employers
Relationships between employers and workers have
with the organizations formed to promote their interests
(trade unions and employer associations)
Relationships between those organizations at all
levels
 Introduction (con’t)
• Industrial relations operate at different levels:
▪ the national level
to formulate labor relation policy through a tripartite process
▪ the industry level
in the form of collective bargaining between employer’s
association and trade union
▪ the organizational level
direct relationship between employers and employees, but the
interests of workers are represented by unions
 Industrial Relations Legislations
• The principles governing industrial relations are
derived from:
▪ labor legislations
▪ common law; and
▪ case law (awards of the Industrial Court)
 Industrial Relations Legislations

• There are 3 pieces of legislations that are related to

industrial relations:
▪ Industrial Relations Act 1967
▪ Employment Act 1955
▪ Trade Unions Act 1959
• In addition, the Code of Conduct for Industrial Harmony has
been introduced by the MOHR in 1975 to provide the
principles and guidelines to promote industrial harmony.
The focus of industrial relations

Industrial
Relations

Relationship Disciplinary
between Laws relating to procedures &
employers & employment termination of
trade unions employment
Importance of IR
 Who needs to study industrial relations?

• Workers
• Trade union leaders
• Managers
• Lawyers
• Human resource practitioners and specialists
Tripartite industrial relations systems: 3
parties, all inter-related

Employees &
Employers their
trade unions

The
Government
 Tripartism in Industrial Relations
• Tripartism provides the government with the institution to
play its rightful role to reconcile and safeguard the respective
interests of workers and employers and the community as a
whole.

• Also enables the government to benefit from the specialized

knowledge and experience of workers and employers in
formulating realistic and meaningful labor policies as well as
legislations.
 Tripartism in Industrial Relations
• Tripartism denotes the involvement of workers and
employers, through their organizations, and the government
in the formulation of policies and laws pertaining to labor,
social and economic matters.

• Through this consultative mechanism, the Government seek

to reconcile and harmonize the conflicting interests of
workers and employers and hence that of the national goals
and objectives.
 Parties in Industrial Relations
• Employees and their unions
• Employees may join or form union so that they can bargain effectively
for better terms and conditions of employment
• Employers and their organizations
• Employers traditionally work to retain broad control over the
operations of their business
• Employers are given managerial prerogatives provided by legislations
• Further management rights may be negotiated and spelt out in the
employment contract
• The Government
• Government plays a vital role in industrial relations through the
institution of laws, rules, guidelines and court awards
 Key players in Malaysian industrial
relations system

• 1. National Labor Advisory Council (NLAC)

• A tripartite forum to discuss matters pertaining to labor and
manpower issues and to make recommendations to the Minister
with a view to foster harmonious IR so as to increase productivity.
• Functions:
• To mobilise the ideas and experience of employers, employees and
Government on employment practices, policies and legislations
• To render views and advice on the improvement of employment
conditions and practices and on the enhancement of labor
productivity
 Key players in Malaysian industrial
relations system

• 1. National Labour Advisory Council (NLAC)

• made up of 14 representatives from employees, 14 from employers
and 12 from government.
• Other representatives:
• Malaysian Employer’s Federation (MEF)
• Malaysian Trade Union Congress (MTUC)
• Congress of Unions of Employees in Public and Civil Service
(CUEPACS).
 Key players in Malaysian industrial
relations system

• 2. International Labour Organisation (ILO)

• Agency of the United Nations based in Geneva, is a
tripartite body which provides an international forum for
discussion on all matters relating to labor.
 Key players in Malaysian industrial
relations system

• 3. Ministry of Human Resources

• chair the NLAC meetings and appoints the government
representatives.
• Its secretary is the Secretary General of the Ministry
 Ministry of Human Resources
Objectives:
• To protect the welfare of workers – their safety, health and
rights
• To promote good employer-employee relationships through a
stable and peaceful industrial relations system
• To equip the unemployed with the basic industrial skills and
to improve the skill level of the work force
• To assist in maximizing the country’s manpower resources
through manpower planning.
 Ministry of Human Resources
Departments which play key roles in IR:
• Department of Labor
• Department of Industrial Relations
• Department of Trade Union Affairs
• Department of Occupational Safety and Health
• The Industrial Court
 Industrial Relations in the Public
Sector
● As the right for CB is not applicable to the public
sector, the Government has provided the following
machineries for negotiations and settlement of
disputes:
 Industrial Relations in the Public
Sector
● 1. Public Services Department (JPA)
• Acts as the personnel department of the Federal
government
• Responsible for all planning and implementation of
personnel related functions in the public service. Its
activities include supervising the National Joint Council
 Industrial Relations in the Public
Sector
● 2. National Joint Council
▪ Its function is only to discuss in general the
principles relating to remunerations, allowances and facilities
in the public sector and is left to the Government to make
decisions
● 3. Public Services Tribunal
▪ Its function is to determine any dispute in regard to
anomalies in the Cabinet Committee Report on salaries and
terms and conditions of employment
 Industrial Relations in the Public
Sector
● 4. Cabinet Committee on Salaries
• The Committee is headed by the PM and is responsible
to formulate the salaries, benefits and terms and
conditions of employment of employees in the public
sector.
• The recommendations of the Committee are
implemented by the Public Services Department
 The Malaysian Trades Union Congress (MTUC)

 The MTUC is NOT a trade union. It is registered under the

Societies Act.
 The MTUC’s members are individual trade unions which
choose to affiliate to it.
 The MTUC speaks on behalf of unions and workers on issues
related to the welfare of workers at national and
international levels.
 Representing workers’ viewpoints on tripartite bodies such as
NLAC and EPF Board.

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The Malaysian Trades Union Congress (MTUC)

 Objectives of MTUC:
 Providing an advisory service to its members
 Presenting the labour viewpoint to the government
 Presenting workers’ views on national issues
 Helping to organize workers who do not belong to a union
 Representing the Malaysian labour movement at forums
abroad
 Providing trade union education
 Carrying out research on matters of trade union interest
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 The Malaysian Employers Federation
(MEF)
 The MEF is the employers’ equivalent of the MTUC. It is a
registered society.
 The MEF carries out wage and benefits surveys, conduct
research esp on CB and monitors the Consumer Price Index
 The MEF provides IR services to its members by representing
them at the IC, advising them during CB and giving any
assistance requested by its members.

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 The Malaysian Employers Federation
(MEF)
 At the regional level, the MEF is a member of the ASEAN
Confederation of Employers (ACE) and the Confederation of
Asia Pacific Employers (CAPE)
 At the international level, it holds membership in the
International Organization of Employers (IOE)

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 The Malaysian Employers Federation
(MEF)
 Objectives of MEF:
 Secure the organization of all employees
 Co-ordinate and present the opinions of the employees on
labour matters
 Promote, protect and defend the interests of employers in
general
 Inform and advise members on the implementation of the
labour laws
 Advise members on the settlement of trade disputes.

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 Congress of Unions of Employees in the Public
and Civil Services (CUEPACS)
 CUEPACS is a federation of trade unions of government
workers.
 It serves as the spokesman for the public service workers
 First registered in 1959 under S72 TUA,
– Two or more registered trade unions in Malaysia whose members are
employed in a similar trade, occupation or industry may form or
create a federation of trade unions if the consent of the members of
each of the registered trade unions wishing to form or create a
federation has been obtained by a majority of votes taken at a general
meeting or a meeting of delegates, as the case may be, after service
on the Director General and all members of the union, not less than
fourteen days prior to such meeting, of notice of the proposed
resolution to participate in the federation.

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 Congress of Unions of Employees in the Public
and Civil Services (CUEPACS)

 Objectives of CUEPACS:
 To promote the interests and improve the working of its
affiliate trade union
 To protect the interests of the affiliate trade unions and
their members
 To endeavor to improve the conditions of employment of
the members of the affiliate trade unions
 To promote legislation affecting the interest of the
member unions

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 Congress of Unions of Employees in the Public
and Civil Services (CUEPACS)

 Membership is open to all registered trade unions in the

public and civil services in West.
 The administration of CUEPACS is carried out by a council
elected at a convention held once in three years

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