INDUSTRIAL RELATIONS IN MALAYSIA

OVERVIEW
 INTRODUCTION
 INDUSTRIAL IN LOCAL
RELATIONS CONTENT
 INDUSTRIAL
 MINISTRY OF HUMAN RESOURCE
HARMONY
 3 MAJOR LAWS THAT MALAYSIAN
GOVERN THE
INDUSTRIAL RELATIONS
 WHO NEEDS TO
UNDERSTAND?
1.1 INTRODUCTIO TO SUBJEC
N T
Industrial relations/labour relations: study of
relationship
between employees and their employers
pertaining to the
employees employment or non-
employment, terms and conditions of
work, grounds of termination of
employment, etc.
 It also refers to the management of employees
welfare and
internal communications.
Industrial relations stresses the importance of 3
major areas:
1.2
DEFINITION
Interaction between the employer and the
employee or the trade union in the
work place.
 Its role is to strengthen the harmonious
relation
between the employer and to avoid any
form of
exploitation and discrimination in
the workplace
or outside of the workplace.
1.3 INGREDIENTS IN INDUSTRIA
AN The L
employee
RELATIONSHIP • People who accept
employment
an
by
offered

the employer on
terms
The employer An employment
and conditions of
• Party that offers an service • Employment can
employment. Employer agreed either be full-
can verbally time job or part-time
be individual, a or properly written job
company or in a
contract of service. that agreed by both
any type of employee and
organization or employer.
society which has paid
employees for the job INDUSTRIA
done RELATIONSHI
L
P
2. INDUSTRIAL RELATIONS IN
LOCAL
CONTENT
INDUSTRIAL RELATION IN LOCAL
CONTEXT
2.1 INDUSTRIAL RELATIONS
SYSTEMS
IN MALAYSIA
 Is recognised as a tripartite system and is made up of 3 groups and
Ministry of Human
Resources act as a president. His role is to oversee the overall development of
discussion.
 Includes
 Employers and their organizations.
 Employees and their unions.
 Government.

 Machinery for discussion in tripartite system.

 National Labor Advisory Council (NLAC) which is made up of
14 representatives from employees, 14 from employers and 12
from government.
 Minister of Human Resources will chair the NLAC meetings and
appoints the government
representatives.
 Other representatives are appointed after consultation from
Malaysian Employer’s Federation (MEF), Malaysian Trade Union
Congress (MTUC) and Congress of Unions of Employees in Public
and Civil Service (CUEPACS).
2.2 ROLE OF EMPLOYERS AND
THEIR
ORGANIZATIONS
Promote and protect the interest of member


their s
 To negotiate and deal with of
trade unions disput
employees
between an individual member and e
To represent their members in
 employee’s
any trade
union
2.3 ROLE OF EMPLOYEES AND
THEIR
An employee has a right under Section 4 of
UNIONS


the
Industrial Relations 1967 to join a
trade union
 Types of union
 Private sector
 Represented by Malaysian Trade Union
Congress(MTUC)
 Issues include minimum wages for workers,
cost of living,
foreign workers
 Public sector
2.4 ROLE OF GOVERNMENT IN
THE
INDUSTRIAL

RELATIONS
Legislator through parliament
SYSTEMS
Administrator- through the Ministry of
Human Resources
 To protect the welfare of employees-safety, health rights
and a
 Promote good employer-employee stable
relationship through to
and peaceful Industrial Relations system

 Toassist
To equipinthe unemployed
maximizing with
country’s basic resources
manpower
industrial
through skills and
improve
manpowertheplanning
skill level of the workforce

 Participant- by being the largest employer in

the country
 Employee in the public, private and government
3. INDUSTRIAL
HARMONY
3.1
DEFINITION
Existence of a
 relationship between
peaceful trade
unions
representing
 Workers
 Workers’
employees
3.2
IMPORTANCE
Increase productivity
 Attract more investment opportunities
 Workers are more motivated and
committed
 Prevent industrial actions from
employees it
 To promote
members andthe
the development
employer to be of trade s
democratic
union
and and
responsible
 To promote and help voluntarily collective
bargaining
between the employer and the employee
related to the

responsibility, working environment and
other related
condition to uphold self interest of parties

To promote the conducive working
environment for the

purposes of balancing dispute resolution
and to
increase high productivity between the
employer and
the employee
4. MINISTRY OF HUMAN
RESOURCE
4.1
SCOPE
Encompass employee and workers state of
safety,
health and welfare and human
resource matters
such as training, employment, labor
rights and
industrial relations.
 It includes the PERKESO (Pertubuhan
Keselamatan
Sosial), PSMB (Pembangunan Sumber
Manusia
Berhad), JTM (Jabatan Tenaga Malaysia),
4.2 & STRUCTUR
ROLE E
 Government’s overall goal in the area of
Industrial
Relations is to encourage harmonious
relationships between employers and
employees in the interest of the
nation’s productivity
4.3
OBJECTIVES
To protect the welfare of the employees-
safety,
and rights
 To promote good employer-employee
relationship
through a stable and peaceful Industrial
Relations
system
 To equip the unemployed with basic
industrial skills
and to improve the skill level of the
workforce
4.4 DEPARTMENTS IN THE
MINISTRY
 Department of Labor, Peninsular Malaysia, Sabah and
OF HR
Sarawak-enforces
Employment Act 1955, Workmen’s Compensation Act 1952,
Wages Council Act
1947, Young Persons Act 1966, Employment Restriction Act
1968 and Workers
 Minimum Standards of Housing & Amenities Act 1990. It also
settles disputes
between employers and employee over payment/non-
 payment of wages,
retrenchment and retirement benefits.
 Department of Industrial Relations – administers Industrial
Relations Act 1967 and attempts to help settle disputes
 between employers and employees through conciliation.
 Department of Trade Unions – enforces Trade Union Act
1959 and play central role in the growth of the trade union

movement.
Department of Occupational Safety and Health – enforces
Occupational Safety &
Health Act 1994 as well as Factories & Machinery Act 1967.
Manpower department.
4.5 3 MAJOR LAWS THAT
GOVERN
MALAYSIA INDUSTRIAL
 Employment Act 1955. This act stipulates regulations covering all aspects of

RELATIONS
employment of workers.
Among provisions covered are termination, working hours, maternity and sick
leave benefits and wage
payments. The provisions aim to safeguard against exploitation by employers.
The specific coverage
including:
 To provide minimum benefits for those workers covered by the act.
 To establish certain rights for employers.
 Industrial Relations Act 1967. This act regulates the relationships between
 To establish certain rights for employees.
employers and their workmen
through trade union including:
 To provide and encourages harmonious relation between employers and employees.
 To provide guidelines on collective bargaining between employers and employees.
 To establish procedures for settlement of trade disputes.

 Trade Unions Act 1959. This act establishes the responsibilities of trade unions
and their members including:
 To provide the rules on the right of employees to form, join and participate in any lawful trade
union activities.
 To provide the rules on the right of employers to form, join and participate in any lawful
employer’s association activities.
 To establish and promote legislation affecting the interest of the trade union member.
4.6 ESSENTIAL SECTIONS
OF
EMPLOYMENT
Notice of
ACT
-< 2 years -4 weeks
1955
termination -2-5 years
->5 years
-6 weeks
-8 weeks
Annual Leave -1-2 years -8 days
-2-5 years -12 days
-more than 5 years -16 days
Sick leave -< 2 years -14 days
-2-5 years -18 days
->5 years -22 days
Termination, Lay -< 2 years -10 days
Off & -2-5 years -15 days
Retrenchment ->5 years -20 days
Retirement Benefits Subject to a maximum of 5 years services
Overtime Work Subject to a maximum of 104 hours services
Working on Rest Days -Payable at twice the normal daily basic wage or
payment
-Payable at twice the normal hourly rate

Maximum Hours of Work -5 consecutive hours with rest of at least 30 minutes

-Not more than 8 hours in 1 day
Maternity Leave -Maternity leave of 60 days (42-60) commencing any time
within 30 days
from confinement, with the exception that she has been
duly advised by the
doctor that her leave is required to begin within 14 days
prior to her
confinement
-After 60 days, she may apply to a total of 90 days
confinement(additional 30 days) without pay(non-pay
leave) on condition
till to the 5th child
-Earnings do not exceed RM1500 per month and all
Public holiday manual workers
-An employee shall be paid 2 days wages on any one of
irrespective
the 10 gazetteof their earnings
public holidays
-Any overtime work on any one of the chosen public
holidays will be paid
at 3 times normal ordinary rate of pay
5. WHO NEEDS TO
UNDERSTAND?
 1.8 PEOPLE WHO NEEDS
UNDERSTAND TO
THE THEORY AND
PRACTICE OF INDUSTRIAL
RELATIONS
• To know their rights under the labor law, to be aware of benefits
Worke they can gain by
rs joining a trade union, to understand that there may be certain
risks associated with
being a member to a union and they should know to whom they
could complain if
their employer fail to provide them with benefits provided under
the law

• IR is important to managers because there is a direct link between

profitability and
Manager good industrial relations. Bad management will cause conflict,
s miscommunication,
negative attitudes, high turnover rates as workers leave to look for
more satisfying
workplaces else where. Productivity will be low amongst those who
stay and morale will
 • They are often called upon to represent
Lawyer workers or employees at the Industrial Court
s or at Labor Department hearings, High
Court, Court of Appeals or Federal Court

Trade • To know how to play their role effectively so

Union
s that workers
Lead will be protected from exploitation by greedy
ers employers

Officer & • They need to have strong working

Executiv
s
knowledge of principles, concepts and
es
in HR &
laws so that they can carry out their job
IR responsibilities well.
departm
ent