TRADE DISPUTES AND INDUSTRIAL ACTION LABOUR LAW TRADE DISPUTES AND INDUSTRIAL ACTION

LEARNING OUTCOME 1 Procedure for dispute settlement (C4, P2, LL)

INTRODUCTION Disputes between employer and employees are unavoidable. The threat of industrial action cannot be avoided, the law will need to interfere on how to respond to action taken by both the trade union and individual employees.

Trade dispute It is defined by the Industrial Relations Act as; “ any dispute between an employer and his workers which is connected with the employment or non- employment or the terms of employment or the condition of work of any such worker.”

A dispute can be caused by; An individual who has a grievance, and is represented by his union and who has exhausted the grievance procedure without getting a satisfactory result; A difference of opinion between a union and an employer as to the appropriate terms and conditions of service for the workers; A difference of opinion as to the interpretation of a collective agreement; The non-implementation of an agreement or reward.

The requirements that a dispute must meet; 1) Between workers and their employer The dispute must be between workers and their employer. Under this definition, 'workers' may be party to a lawful trade dispute and not merely 'employees'. In addition, in this context, the term 'worker' has an extended meaning to cover both current workers and any former workers whose employment was terminated in connection with the dispute or where the termination was one of the factors giving rise to the dispute.

2) Current employer The dispute must be with the current employer and does not extend to action taken against a potential future employer. 3) Must be represented by their union.

INDUSTRIAL ACTION BY EMPLOYEES When peaceful method fails to settle a dispute, the trade union may attempt to force a settlement by using or threatening to use more aggressive methods. The two types of industrial actions permitted by the law are pickets and strikes. Another methods are boycott and sabotage which are unlawful.

PICKETING Industrial action by unionized workers (called pickets) who either are on, or are trying to gather support for, a strike by assembling near the entrance to the employer's premises. Pickets try to persuade (1) co-workers to join them, (2) workers of other firms (such as delivery men) to refuse to enter the premises, and (3) customers to refrain from doing business with their employer.

The Industrial Relations Act (section 40) allows workers to attend at, or near their workplace when they have a trade dispute for the purpose of peacefully giving information to the public and other workers and to persuade other workers not to work.

The conditions while having a picket Only those workers directly involved in the dispute can participate in the picket. An officer or an employee of the trade union can be present to ensure that the picketing is carried out according to the law. Must not intimidate anyone, must not obstruct the entrance or exist to the organisation, and must be peaceful.

3. Do not require a police permit for the activities 3. Do not require a police permit for the activities. Neither can they be dispersed by the police, as picketing is a legal activity. 4. Picketing is used both to communicate issues to the public and to embarrass the employer. This is done by the display of banners with derogatory comments about the employers; by requesting passer-by to show their support by pressing their vehicle horns and by a willingness to give information to the mass- media. In some instances, the mere threat of a picket publicised in the mass media is sufficient pressure to force the employer to respond positively to union demands.

STRIKES Section 2 of the Industrial Relations Act define strike as; “strike” means the cessation of work by a body of workmen acting in combination, or a concerted refusal or a refusal under a common understanding of a number of workmen to continue to work or to accept employment, and includes any act or omission by a body of workmen acting in combination or under a common understanding, which is intended to or does result in any limitation, restriction, reduction or cessation of or dilatoriness in the performance or execution of the whole or any part of the duties connected with their employment”

A strike is any stopping of work by a group of workers including any attempt to limit or slow down production on purpose. A slow-down or go-slow by workers are forms of strike under the Industrial Relations Act. A mass refusal of the workers to work overtime would therefore, be a form of strike.

STRIKE PROCEDURES The relation laws do not clearly lay out the procedures to be followed to ensure the legality of a strike. The various requirements and restrictions are found in both the |Trade Unions Act and the Industrial Relations Act. Strikes are only legal if they comply with the regulations in the Industrial Relations Act and Trade Unions Act.

The requirements The right to strike is only extended to members of a registered trade union. Strikes must be in furtherance of a trade dispute. Only where a group of workers have a trade dispute with their employer can they take strike action. Sympathy and political strikes or general strikes are illegal in Malaysia.

A secret ballot must be held by those eligible to strike, clearly stating the issues leading to the proposed strike (Trade unions Act, section 40). The result of this ballot must be sent to the Director-General of Trade Union by the union secretary within 14 days of taking the ballot. The strike only can take place if two-thirds of those who entitled to vote agree to the action. The secret ballot is only valid for 90 days. The strike can be held only after “cooling- off period” of seven days after submitting the result of ballot to the Director general.

This cooling off period is to allow the Director general to check the reliability of ballot and allows the trade union to change their minds. More importantly, it will allow the Minister of human Resource to intervene and refer the matter to the Industrial court for arbitration, then making the strike illegal. If the decision is made to refer the case to the Court, the trade union must be notified of such reference.

Strikes in essential services Essential services include; Banking services, electricity services, Fire services, port, harbour and airport services, postal and telecommunication services, prison, public health, water, transport, broadcasting, petroleum and gas services Intending strikes must give 21 days notice to their employer. When an employer receives such notice, must inform the Director- general about it.

In the case of public sector, the approval from the YDPA Agong is essential. The YDPA can refer the case to the Industrial Court for arbitration.

When is a strike not permitted Over a collective agreement which has been accepted by the Industrial Court; Over managerial prerogatives; After a trade dispute has been referred to the Industrial Court for arbitration; Over a recognition dispute which is being resolved by the minister; When the YDPA Agong has refused permission for a trade dispute in the public sector to be referred to the Industrial Court for arbitration.

PENALTIES FOR ILLEGAL STRIKES The executives of the trade union can be fined, or imprisonment or both; The members of union who takes part in the strike are not eligible to join the trade union without express permission from the director-General of the Trade unions. The union can be de-register.

Industrial Action by eMPLOYERS Lock Out The employer refuses to allow the workers to work until the dispute between them is settled. Sometimes, a lock out is declared in response to illegal strike by the workers.

The definition of lock-out under section 2 of the Industrial relations Act; “lock-out” means— (a) the closing of a place of employment; or (b) the suspension of work; or (c) the refusal by an employer to continue to employ any number of workmen employed by him, in furtherance of a trade dispute, done with a view to compelling those workmen to accept terms or conditions of or affecting employment; The procedure for a lockout are the same as those for a strike.

If there are two or more trade unions registered, which represent the same group of workers in a trade, occupation, industry, the Director General has the power to de- register the union which covers a minority of the workers. The Director-general also has the powers to do de-register or cancel the registration of a union if it was obtained by fraud, if it is being used for unlawful purposes, or if it does anything to contravene the Trade Unions Act.

COLLECTIVE BARGAINING Collective bargaining is a type of negotiation used by the employees to work with the employer or a group of employers. During a bargaining period, a union of the employees will approach the employers to negotiate the contact which both parties can agree with. For effective bargaining take place, there are two necessary pre-conditions; i) workers must have the right to form and join trade unions. ii) unions must have bargaining strength.

Union bargaining strength Be recognized by the employer Has adequate financial strength, and members are united. The Industrial relation Act requires unions to attain recognition before they can proceed to invite an employer to commerce collective bargaining.

Recognition Procedure 1.The union must fill out a Claim for Recognition Form and presents it to the employer. A copy of this form must also forwarded to the Director-General of Industrial relations. An employer must reply within 21 days. The responses; i) voluntarily recognize ii) Not recognize.

3. If the employers refuse to recognise, the Union can report to the Director-General who will investigate and take whatever means to settle the dispute. If the employer still refuse to give recognition, the Director-general will report this case to the Minister of human Resources. If more than 50 % of the workers belong to the union, the Minister will normally order recognition. The decision is final and binding on both parties.

Bargaining procedure Refuse to negotiate Agreement is reached Union presents written demand At the first bargaining, union explains and company makes counter offer Agreement over non-controversial items Bargaining over controversial issues Refuse to negotiate Agreement is reached Conciliation meeting If no resolution, refer to Industrial court for arbitration

Legally binding agreement Must fulfill certain criteria; a) Must specify the parties to the agreements b) Must specify the duration of the agreement – which cannot be less than 3 years, c) Must include the procedure for modification of the agreement. d) must not include the managerial prerogatives issues such as the promotion, transfer, recruitment, transfer, termination, assignment etc. The agreement is binding on all workers even if they are not the members of the UNION.