TOPIC 2 EVOLVEMENT OF INDUSTRIAL RELATIONS UPON COMPLETING THIS TOPIC, STUDENTS SHOULD BE ABLE TO: Discuss the origins of industrial relations Elaborate on Malaysian industrial relations Describe international evolvement of industrial relations Explain industrial relations in the Malaysian public sector Norhayati Mohd Salleh ADS 465

Norhayati Mohd Salleh @ Salih ADS 465 2.1 Origins In Malaysia, industrial relations emerged as in other countries i.e. began within traditional organisations (between the owner and the employees). Features: More to person-to-person relationship (personal) Employers conduct affairs personally or trough a managerial structure Peasant society – informal relationship In agricultural sector – typical negotiation on the terms and conditions of employment Employers were unhappy as employees bargained for better compensation Norhayati Mohd Salleh @ Salih ADS 465

Norhayati Mohd Salleh ADM 465 ORIGINS ……. continued In modern industrial relations, the traditional features were disappearing. Employees began organising themselves into groups They worked through groups (in the form of trade unions) rather than as individuals The establishment of trade unions for both parties and the legislation of legal regulations change the relationship into formal and impersonal Norhayati Mohd Salleh ADM 465

2.2 Malaysian industrial relations The emergence of Malaysian industrial relations is associated with immigrant labourers and British colonialism. The Chinese and Indian workers involved in the commercial industries i.e. mines, plantations, business, trades, services etc The Chinese workers organised themselves into triad societies, secret societies etc Norhayati Mohd Salleh ADM 465

Malaysian industrial relations … cont’d Chinese and Indian workers (indentured) were influenced by political development in their home country E.g. clashes between Kuomintang and Chinese Communist Party also affected local situations This can be seen from a series of demonstrations, strikes and riots from pre war until post war e.g. Batu Arang Coal Strike 1935. Norhayati Mohd Salleh ADM 465

Malaysian industrial relations … cont’d Labour movement was related to communist influence e.g. General Labour Union (head office in Singapore) after war strikes and demonstrations increased and led to political unrest in the country. 1947 – registration of trade unions became compulsory 1948 – amendment on Trade Unions Enactment (tighter control on trade unions) Please read Wu Min Aun (2006) : Industrial Relations Law of Malaysia (3rd Edition), Pearson Malaysia, Petaling Jaya - introduction Norhayati Mohd Salleh ADM 465

2.3 International evolvement of industrial relations The evolvement of Malaysian industrial relations can be seen from external influences. The influence of Chinese Communist Party (CCP) and General Union before 1957 proved the development of trade unions and industrial relations (although led to negative impacts) The International Labour Organisation (ILO) – located in Geneva, under the United Nations plays important roles in the Malaysian industrial relations (member since 1957) Norhayati Mohd Salleh ADM 465

International evolvement … cont’d Some international bodies (esp. affiliation bodies) also play a role in the Malaysian industrial relations e.g. the Airlines Employee Union and the Malaysian airlines System (MAS) and the International Transport Workers Federation intervened the dispute in 1979. Please read … Maimunah Aminuddin (2007), Malaysian Industrial Relations Law and Employment Act (6th Ed), McGraw Hill, Kuala Lumpur Norhayati Mohd Salleh ADM 465

2.4 Industrial relations in the Malaysian public sector Industrial relations in the public sector refer to the relationship between the government and the public sector’s employees. It is related to the role of the government as an employer in this sector. Employers refer to the federal government, the state governments, the federal statutory authorities, the state statutory authorities and the local authorities. The federal government is necessarily involved in industrial relations in this sector. Norhayati Mohd Salleh @ Salih ADS 465

Norhayati Mohd Salleh @ Salih ADM 465 2.4.1 DIFFERENCES The differences between the industrial relations system in the public sector and in the private sector can be seen from the following: - Principles underlying the systems Parties involved The way employees’ unions are organized The ways employees are grouped Machineries cater for industrial relations in the public sector. (Dunston Ayadurai : 1985) Norhayati Mohd Salleh @ Salih ADM 465

Norhayati Mohd Salleh @ Salih ADS 465 DIFFERENCES … CONT’D 2.4.1.1 Principles underlying the systems The principles underlying industrial relations in both sectors are different. In the private sector; these principles are embedded in the statue i.e. IRA 1967. Sec 52, IRA declares that Parts II, III, IV and VI shall not apply to any public sector services (GO and JPA). The principles are trade unionism, union recognition, collective bargaining and dispute resolutions. Norhayati Mohd Salleh @ Salih ADS 465

Norhayati Mohd Salleh @ Salih ADS 465 DIFFERENCES … CONT’D 2.4.1.2 Parties Involved The parties involved in industrial relations in the both sectors are not constituted in the same way. Only a few employers in the private sector – some are unionised. No employer union in the public sector. Norhayati Mohd Salleh @ Salih ADS 465

Norhayati Mohd Salleh @ Salih ADS 465 DIFFERENCES … CONT’D 2.4.1.3 The way employees are grouped The employees in the public sector may group themselves in unions or in associations and still enjoy any of the benefits of union representation (unlike in the private sector, where they must group themselves in trade unions to enjoy any of the benefits of union representation). Norhayati Mohd Salleh @ Salih ADS 465

Norhayati Mohd Salleh @ Salih ADS 465 DIFFERENCES … CONT’D 2.4.1.4 The way employees’ unions are organised Employees unions in the public sector are organized along ministry/ department/ occupation/ statutory authority/ local authority lines. Employees’ unions in the private sector are organized along establishment/ industry/ trade/ occupation lines. Norhayati Mohd Salleh @ Salih ADS 465

Norhayati Mohd Salleh @ Salih ADS 465 DIFFERENCES … CONT’D 2.4.1.5 The machineries catering for industrial relations in the public sector The machineries in the public sector is unique and has no equivalent in the private sector as follows: i. Salaries Commissions and Salaries Committees. ii. The Public Service Department. iii. The Public Service Tribunal; and iv. The Joint Councils Norhayati Mohd Salleh @ Salih ADS 465

The machineries catering for industrial relations in the public sector Salaries Commissions and Salaries Committees Are appointed periodically by federal government To review salaries and other terms and conditions of service in public sector To make recommendations on those matters E.g. 1991 the Special Committee of the Cabinet on Salaries for the Public Sector (Report/recommendation was the New Remuneration System) Followed by the Malaysian Remuneration System (2001) Norhayati Mohd Salleh @ Salih ADS 465

Norhayati Mohd Salleh @ Salih ADS 465 The machineries catering for industrial relations in the public sector … cont’d ii) The Public Service Department (PSD) PSD is one of the important federal agencies Headed by the Director General of Public service It serves as human resource department of the federal government It looks after practically all public sector employees Norhayati Mohd Salleh @ Salih ADS 465

The Public Service Department (PSD) … cont’d Its main function is to implement the recommendations of Salaries Commissions and Salaries Committees once accepted by the Government Other functions: i. negotiates any anomaly arising from the implementation of these recommendations with any public sector employees who is affected by it, or with any organisation of public sector employees whose members are affected by it; and ii. Supervises the operation of the national joint councils and departmental joint councils Norhayati Mohd Salleh @ Salih ADS 465

Norhayati Mohd Salleh @ Salih ADS 465 The machineries catering for industrial relations in the public sector … cont’d iii) The Public Service Tribunal (PST) PST is an arbitration tribunal It is constituted by the Public Service Tribunal Act 1977 Its main function was to determine any dispute in regard to any anomaly arising from the implementation of the recommendations of salaries commissions and salaries committees referred to it under the Act. It has been abolished in the year 2000. Norhayati Mohd Salleh @ Salih ADS 465

Norhayati Mohd Salleh @ Salih ADS 465 The machineries catering for industrial relations in the public sector … cont’d iv) The Joint Councils (JCs) It is a machinery i.e. modification of the Whitley Council machinery of the United Kingdom The design is to be consultative and not negotiative in character Two levels of JCs i.e. the National Joint Councils and the Departmental Joint Councils Norhayati Mohd Salleh @ Salih ADS 465

The Joint Councils (JCs)… cont’d the National Joint Councils Constituted three councils i.e.: a. one council for those in the Managerial and Professional Group; and b. two councils for employees in the Support Group Not available for Police Forces and Armed Forces, Senior Managerial Group and public servants where SSB / SSM does not apply To serve as fora for consultation between representatives of the federal government and of public sector employees on matters related to remunerations, allowances, perquisites etc of public sector employees as a whole. Norhayati Mohd Salleh @ Salih ADS 465

The Joint Councils (JCs)… cont’d the Departmental Joint Councils The councils were constituted to serve as fora for consultation between representatives of the ministry/department/statutory authority/local authority concerned and representatives of that ministry Items involved : on all matters affecting work efficiency and staff welfare in the unit involved. Norhayati Mohd Salleh @ Salih ADS 465

Norhayati Mohd Salleh @ Salih ADS 465 Discussion questions Elaborate on the impacts of colonialism in the Malaysian industrial relations. Evaluate the roles of foreign workers in the development of Malaysian industrial relations. Critically evaluate the influence of international bodies upon Malaysian industrial relations. Discuss the uniqueness of Malaysian public sector industrial relations. Elaborate on the Salaries Commissions and Salaries Committees in Malaysia. Norhayati Mohd Salleh @ Salih ADS 465