Chapter 10 INDUSTRIAL RELATIONS

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.

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

PARTIES IN THE INDUSTRIAL RELATIONS SYSTEM 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

CREATING AN ENVIRONMENT OF INDUSTRIAL HARMONY The Minister of Human Resources The Department Trade Union Affairs Industrial Relations

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.

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.

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.

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

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 in-house 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.

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.

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 TYPES OF TRADE UNIONS National Unions of Employees In-house Unions Employers’ Associations

EMPLOYEE UNIONS 1996–2013 Sector 1996 1999 2005 2013 No. Members Private 292 407,303 328 406,773 390 379,493 462 381,839 Government 136 241,411 125 244,388 127 311,618 244 516,982 Statutory Bodies and Local Authorities 88 79,532 84 74,161 91 69,396 14 673 Total 516 728,246 537 725,822 608 760,507 720 899,494

MALAYSIA’S LARGEST EMPLOYEE UNIONS 2009 UNION MEMBERSHIP NU Teaching Profession 175,000 NU Bank Employees 31,000 NU Plantation Workers 33,000 Kesatuan Guru-guru Melayu 30,000 Sarawak Teachers Union 17,000 Electrical Industry Workers Union 14,000 Telekom Bhd. Employees Union 10,000

MALAYSIA’S 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 11,000 NU Petroleum & Chem. Workers 10,000 Tenaga Nasional Employees Union 10,000 Transport Workers Union 10,000

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 employer’s workers.

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.

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 employer’s workers. 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

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.

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.

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.) 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

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.

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.

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.