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INDUSTRIAL RELATION

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Industrial Relations• It is the relationship between workers and their employers in the work environment.• Also known as employee relations or labor relations.

IR focuses on:– laws & rules which impact on the work environment.– terms & conditions of work.– rights & obligations of employers & employees.– processes by which the rules & terms are made.

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Organizations must cope with lots of changes: from trade unions; Government; owner; customers; public; suppliers; competitors.

Those who need to study IR are: workers; trade union leaders; managers; lawyers; officers & executives in HR & IR depts.

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The IR in Malaysia is a tripartite system. Three parties are involved: Employers, Employees, & Government.

Uni-partite – decisions are made by management on behalf of employer without interference by workers/unions or any other party.

Bipartite – decisions are made by both management & workers/unions.

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National Labor Advisory Council (NLAC)Consists of representatives from 3 sectors: 14 representatives from workers; 14 from employers, & 12 from Government.

The Minister of Human Resources chairs the discussion & appoints the Government representatives.

Other members are appointed after discussion with MTUC, CUEPACS, & MEF.

The council meets at least twice a year when there are urgent matters to discuss.

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International Labor Organization (ILO)Based in Geneva. It plays a role in the Malaysian IR system. Malaysia joined as a member in 1957. It provides an international forum for discussion on all matters relating to labor by holding an annual meeting every year in Geneva.The ILO is run by a governing body or executive council of 14 full members, 14 deputy members, and 14 reserve members. They are made up of government, employers, & trade union officials.ILO is financed by members but mostly from 7 countries: USA, Japan, Germany, France, Britain, Italy, & Canada.Money is used for administrative purposes, research, publications, & projects.ILO does not use force on members – it uses moral persuasion.

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Employment Legislation

The major employment related legislations are:

a. Employment Act, 1955b. Trade Unions Act, 1959c. Industrial Relations Act, 1967d. Factories & Machinery Act, 1967e. Occupational Safety & Health Act, 1994f. Etc.

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The Employment Act, 1955

Lays down the provisions to protect workers from exploitation & to provide minimum benefits for all workers covered by the Act, especially those earning not more than RM 1,500 per month, those doing manual labor, & those who supervise such workers or are employed to drive or maintain vehicles.

Benefits include termination and maternity benefits, the right to a weekly rest day, annual leave, & sick leave.

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OSHAEstablishes guidelines and lay down the responsibilities of the various parties in industry in relation to safety & health.

The Trade Unions ActSeeks to control the activities of trade unions so that they can develop in an orderly and peaceful manner.It lays down rules & regulations which unions are required to follow.

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The Industrial Relations ActRegulates the relations between employers & workmen & their unions as well as laying down rules to help prevent & settle disputes between the 2 parties, thus ensuring peaceful IR as far as possible.The goal is to encourage harmonious relationship between employers and employees in the interest of nation’s productivity.

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Role of Government in Industrial Relations It acts as Legislator through Parliament, Administrator through the Ministry of Human Resources, & Participant as the largest employer in the country.

Ministry of Human ResourcesResponsible for administering & overseeing the IR systemObjectives are:

1. To protect welfare of employees.2. To promote good employer–employee relationships.3. To equip the unemployed with basic industrial skills & improve

skill level of work force.4. To assist in maximizing country’s manpower resources through

manpower planning.

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Ministry of Human Resources

There are 7 departments in the ministry:

1. Dept. of Labor, Peninsular Malaysia2. Dept. of Labor, Sabah3. Dept. of Labor, Sarawak4. Dept. of Industrial Relations5. Dept. of Trade Unions6. Dept. of Occupational Safety & Health7. Manpower Dept.

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7 Departments in The Ministry of Human Resources

Dept. of Labor, Peninsular MalaysiaDG (head), Deputy of DG, 4 Directors of Labors – supervise the state level labor offices and sub-offices.Enforces the Employment Act, the Workmen’s Compensation Act 1952, the Children & Young Persons (Employment) Act 1966.Settle trade dispute between employer and employees relating payment or non-payment of wages, allowances, retrenchment and retirement benefits.

Dept. of Labor, SabahDept. of Labor, SarawakDept. of Industrial Relations

administers the IR Acts, 1967to help settle dispute through conciliation.

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Dept. of Trade Unions- acts as a central role in the growth of the TU movement :

register newly formed unionsderegister unions found breaking the law.Check a union’s accountInvestigate complaints made by union.

Dept. of Occupational Safety & HealthPreviously known as the Dpt. Of Factories and MachineryResponsible to implement OSHA

Manpower Dept.-To help utilize to the maximize the nation’s manpower opportunities for its citizen.- To provide data on manpower needed by the nation

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Related Organisations to the Ministry of Human Resources.

1. Social Security Organisation (SOCSO) – implements the Employee’s Social Security Act 1967, provides benefits to workers and their dependents in the event of work-related accident.

2. Employees Provident Fund – requires the employees and employers to make monthly contribution that is useful for their retirement age.

3. Human Resource Development Fund – employers in certain sectors of the economy are required to contribute 1% of their payroll to the fund every month in order to conduct the trainings. They can claim the reimbursement cost once after the training been conducted.

4. Industrial Court – a specialized tribunal to arbitrate dispute between employers and employees and an independent body governed by the rules of the judiciary for the Malaysian industrial relations system.