Today’s Lesson Industrial Relations Law
Lesson learning outcome At the end of this lesson students should be able to: Describe the industrial relation issues and responses in Malaysia. Discuss the salient features of the the Employment Act 1955 and the Industrial Relations Act 1967.
Industrial Relations : Definition  industrial relations refers to relations between employers, employees and their trade unions.
LABOUR LEGISLATION AND INDUSTRIAL RELATIONS Labour legislation was first enacted about 120 years ago, in certain parts of what is now Peninsular Malaysia to regulate the employment of immigrant Chinese and Indian labour in the mines and the plantations, and sought to legislate the conditions under which such labour could be employed culminated in the Employment Act 1955
LABOUR LEGISLATION AND INDUSTRIAL RELATIONS Laws governing trade unions and trade disputes were enacted only in 1940, and it applied only in certain parts of what is now Peninsular Malaysia. Today, their modern equivalent, the Trade Unions Act 1959 and the Industrial Relations Act 1967, apply throughout the country.
The principal laws affecting industrial relations in Malaysia The Employment Act 1955, The Trade Unions Act 1959, and The Industrial Relations Act 1967.
Other laws affecting industrial relations in Malaysia safety and the health of workers (primarily, the Factories and Machinery Act 1967,OSHA 1994) Social security (such as the Employees Social Security Act 1969, the Workmen's Compensation Act 1952, the Employees Provident Fund Act 1951, various Pensions Acts) and wages in "depressed" industries (namely, the Wages Councils Act 1947)
The 3 principal laws affecting industrial relations in Malaysia  Under the Malaysian Constitution, labour matters, including industrial relations, fall within the preserve of the Federal Government, rather than within that of the State Governments.  Consequently, all three laws are federal laws, and are administered by various departments in the same federal agency-the Ministry of Labour (now the Ministry of Human Resources).
The 3 principal laws affecting industrial relations in Malaysia  However, the Employment Act 1955 presently applies only in Peninsular Malaysia (private sector only).  The Trade Unions Act 1959 (public and private sector) and the Industrial Relations Act 1967 (primarily to the Private Sector ) apply throughout the country.
The Employment Act 1955 Regulates the employment relationship as well as the terms and conditions under which employers may employ employees. The employment relationship foreseen by the Act is the old "master and servant" (now replaced by the more egalitarian "employer and employee") relationship, i.e. the well-known "contract of service“ relationship. And among the terms and conditions regulated by the Act are the hours of work and wages, as well as other terms and conditions of employment and work.
The Trade Unions Act 1959  Regulates trade unions and union federations per se.  This Act defines trade unions, delineates their membership prescribes their registration, and describes their rights and responsibilities.
The Industrial Relations Act 1967  Regulates the relations between employers and workmen and their trade unions, and provides for the prevention or the settlement of differences or disputes arising between them.
The Industrial Relations Act 1967 This Act enshrines the principles underlying Malaysian industrial relations, namely: (i) Trade Unionism the principle that workmen (and employers too) are entitled to basic trade union rights such as the right to form unions, the right to join unions, and the right to participate in the activities of unions. (ii) Union Recognition - the principle that employee unions must be recognised by employers before they may represent workmen, whether individually or collectively.
The Industrial Relations Act 1967  This Act enshrines the principles underlying Malaysian industrial relations, namely:  (iii) Collective Bargaining - the principle that employee unions may negotiate with employers the terms and conditions of employment and work of workmen, and may conclude with employers binding and enforceable written agreements incorporating the terms and conditions agreed upon.  (iv) Dispute Resolution - the principle that disputes between employers, workmen and their unions should, if possible, be prevented through a grievance machinery or collective bargaining, and if not, be settled through conciliation or arbitration, rather than industrial action (i.e. strikes, lockouts etc.). However, the Act makes it clear that these principles apply primarily to the Private Sector.
INDUSTRIAL RELATIONS: ISSUES AND RESPONSES The need for government Involvement in Industrial relations in the Private Sector. in any society, there is necessarily conflict in industry between employers and workers, between the owners of goods and services and those who work to produce these goods and services. The objective of an industrial relations system should be to direct the forces producing conflict towards constructive ends. In a parliamentary democracy like Malaysia, it is the accepted view that these conflicts should be resolved by the parties concerned with as little government intervention as possible.
INDUSTRIAL RELATIONS: ISSUES AND RESPONSES The need for government Involvement in Industrial relations in the Private Sector. In accordance with this philosophy, employers and workers have grouped together to advance and protect their separate interests. Trade Unions have long been accepted as lawful, and the right to strike and bargain collectively have been similarly recognised. Likewise, employers have been allowed to organise themselves into groups and to take legitimate action to protect their interests
INDUSTRIAL RELATIONS: ISSUES AND RESPONSES The need for government Involvement in Industrial relations in the Private Sector. As part of this philosophy, it has also been accepted that the government should provide the facilities to help the parties agree, but not actively interfere to impose a settlement on them. In most cases, government intervention has taken the form of laws which regulate the structure and operation of organised workers and employers. A legal framework now exists within which the government has sought to define the public interest, and the boundaries of conflict resolution between workers and employers.
The Employment Act 1955 The Contract Content: Part I – Preliminary: interpretation of terms e.g. “Director General” means the Director General of Labour appointed under section 3(1); “employer” means any person who has entered into a contract of service to employ any other person as an employee and includes the agent, manager or factor of such first mention person Part II – Contract of service e.g. terminations, validity, conditions Part III – Payment of wages e.g. wages period, time of payment, advances Part IV – Deduction of wages e.g. lawful deductions
The Employment Act 1955 Part V – Relating to the truck system e.g. payment of wages through bank, wages to be paid in legal tender, remuneration Part VI – Priority of wages e.g. priority of wages over other debts Part VII – Contractors and principals e.g. liability of principles and contractors for wages Part VIII – Employment for Women e.g. prohibition of night work, prohibition of underground work Part IX - Maternity protection e.g. length of eligible period and entitlement to maternity allowance, payment of allowance to nominee
The Employment Act 1955 The Employment Act 1955 applies to all employees in Peninsular Malaysia and Federal Territory of Labuan whose monthly wages do not exceed RM1,500 and all manual labourers irrespective of their wages. Employers may draw up the contract of service but it should not contravene the minimum benefits stipulated under the law. Employees who earn between RM1,500 and RM5,000 a month can seek redress at the Labour Court on terms and conditions in their individual contracts of service.
The Employment Act 1955 Regulates the hours of work, including over timework. It also regulates wages - the payment of wages, advances on wages, deductions from wages, etc. and provides for the priority of wages over other debts, and the liability of principals and contractors, as well as employers, to pay wages. however, it does not specify a minimum wage, nor fix wage rates.
The Employment Act 1955 Provides for a Rest Day, Public Holidays, Annual Leave, Sick Leave, Maternity Leave, Maternity Allowance, and Termination and Layoff Benefits. Every employee, whether unionised or not, is entitled to all the benefits provided by the Employment Act 1955, and Every employer, whether local or foreign, is obliged to provide these benefits.
Obligations of an employer under the Employment Act 1955; Every employee must be given a written contract of service containing the term and conditions of the employment, including provisions relating to the termination of contract Maintaining of labour register pertaining to personal particulars of employees, payment of wages and deduction of wages Special provisions for the protection of female employees pertaining to night work and maternity benefits
Obligations of an employer under the Employment Act 1955; Normal hours of work and other provisions relating to numbers of working hours Entitlement of paid annual leave, sick leave and public holidays Rate of payment for overtime and extra work
The Employment Act 1955  These benefits have effectively become the "minimum" below which no employer may go, and to which every employee is entitled.  However, in order to promote foreign investment while maintaining a measure of protection for employees, the Industrial Relations Act 1967provides that any collective agreement affecting a "pioneer company", i.e. one granted pioneer status under the Promotion of Investments Act 1986, cannot contain terms and conditions of employment and work more favourable to employees than the terms and conditions contained in the Employment Act 1955, for at least 5 years from the time such a company commences operations in Malaysia
The Employment Act 1955  This restriction has effectively made the benefits provided by the Employment Act 1955 the "maximum" beyond which affected employers need not go, and affected employees cannot demand; it has also impeded the development of employee unions in "pioneer companies".  In the Public Sector, the terms and conditions of employment and work are determined primarily by salaries commissions or Committees and are administered mainly by the Public Services Department.
Industrial Relations Act 1967
The Content: Part I – Preliminary: interpretation of terms e.g. “Board” means the Board of Inquiry appointed under Part VIII; “collective agreement”, “collective bargaining”, “contract of employment”, “strike”, “trade dispute”, “trade union”, “workman”. Part II – Protection of Rights of Workmen and Employers and Their Trade Unions e.g. expression “trade union”, rights of workmen and employers, Prohibition on employers and their trade unions in respect of certain acts, leave on trade union business etc. Part III – Recognition and Scope of Representation of Trade Unions e.g. claim for recognition, prohibition of strike, lockout, picketing and termination of service pending recognition of a trade union, etc. Part IV – Collective Bargaining and Collective Agreements
Industrial Relations Act 1967 Part V – Conciliation e.g. reference of disputes for conciliation, Information, documents and compulsory conference for conciliation etc. Part VI –Representations on Dismissals e.g. Representations on dismissals. Part VII – Industrial Court e.g. Industrial court, Constitution of the Court, Divisions of the Court, Protection and immunity to members of the Court, Power of the Court, Awards, Agreement during proceeding, Effect of an award, Interpretation and variation of awards and agreements and etc. Part VIII – Investigation and Inquiry e.g. Investigation and Inquiry into trade disputes, Committee, Board and Reports.
Industrial Relations Act 1967 Part IX – Trade Disputes, Strikes and Lock-outs and Matters arising Therefrom e.g. pupil not to take part in trade disputes, intimidation, picketing, breach of contract liable to injure person or property, conspiracy in trade disputes, Restrictions on strikes and lock-outs in essential services and etc. Part X – Miscellaneous e.g. Application, Appointment of public officer, exclusion of evidence as to certain matters, Secrecy, Non-compliance with award or collective agreement and etc.
Industrial Relations Act 1967 Accords workmen as well as employers the right to form trade unions the right to join trade unions, and the right to participate in the activities of trade unions
In order to buttress these rights, it also imposes various duties on employers, workmen, and their unions, some of which are fairly general in nature, while others are quite specific. This Act applies primarily to the Private Sector. None of the aforementioned rights is absolute: all are qualified by the Industrial Relations Act 1967itself or by the Trade Unions Act 1959
Industrial Relations Act 1967 The Industrial Relations Act 1967 regulates relations between employers and workmen and their trade unions, including the prevention and settlement of trade disputes. The act outlines the following:  Protection of the legitimate rights of employers and workmen and their trade unions  Procedure for submission of claims for recognition and the scope of representation of trade unions and collective bargaining
Industrial Relations Act 1967  Matters not allowed to be included in the proposals for collective bargaining are those relating to promotion, transfer, recruitment, retrenchment, dismissal, reinstatement, allocation of duties and prohibition of strikes and lockouts over any of these issues  The Act emphasises on self-government within industries as the key to industrial harmony whereby employers and trade unions negotiate and settle their differences without intervention. In the event that the negotiation fails, the parties may refer to the Industrial Relation Department for conciliation. Where the matters fails to be resolved, it may be referred to the Industrial Court of Arbitration
Industrial Relations Act 1967  The Ministry of Human resource may intervene and refer at any stage of any trade dispute to the Industrial Court for Arbitration  A prohibition of strikes and lockouts once a trade dispute has been referred to the Industrial Court on any matters covered by a collective agreement or by an award of the Industrial Court.
Trade Unions Act 1959 Under the Trade Unions Act 1959, the following classes of persons can neither join nor be accepted as members by any trade union: (i) any person below the age of 16 years; (ii) any student of an educational institution established by or under a Written law, unless he is employed as an employee and is over the age of 18years; (iii) any person employed or engaged in a trade or occupation or industry other than the one in respect of which the trade union is registered; and
Trade Unions Act 1959 (iv) any "public officer" i.e. any person in the permanent or temporary employment of the Federal or a State Government. However, the King may exempt from this prohibition either wholly or conditionally any category or class of public officers, other than: members of the Armed Forces, the Police Force, and any prison service; public officers prohibited under any written law from being members of a trade union; public officers engaged in a confidential or security capacity; and public officers holding any post in the managerial and professional group, except such public officers in this group as are excluded from this prohibition by a written direction issued by the Chief Secretary to the Federal Government