TOPIC 1
OVERVIEW OF INDUSTRIAL RELATIONS
Learning Objectives
Upon completing this topic, students should be able to:
• Define industrial relations
• Explain the principles of industrial relations
• Discuss harmonious industrial relations and its effects
• Describe types of decision making in the industrial
relations system
• Discuss the roles and functions of government in the
industrial relations
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1.0 definition and concept
1.1 definition
• Several definitions can be given:
Ayadurai (1998 : pg.3) defines industrial relations,
“… the relations between employees, employers and
their trade union.”
In addition, Ayadurai (1998 : pg.4) said,
“… is a discipline that concentrates on the management
of unionised employees.”
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Definition… cont’d
Maimunah Aminuddin (2006 : pg. 2) defines industrial relations,
“… as the relationship between workers and their employers
within the work environment.”
Industrial relations is also known as employee, labour or
employment relations.
(Maimunah Aminuddin : 2007 : pg. 2)
• Focused areas in industrial relations:
i. The relationships between employers and trade unions
ii. The framework provided by the employment law
iii. Disciplinary procedures and termination of the
employment contract.
(Maimunah Aminuddin : 2007 : pp. 2)
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1.2 elements
Industrial relations comprise several elements as follows:
i.
employers – the party (person / body – corporate /
unincorporated who employs workmen under a
contract of employment (includes the governments
and statutory bodies).
ii. employees – the party (including apprentices),
employed by an employer under a contract of
employment to work for hire or reward.
iii. contract of employment – any agreement whether
oral or writing (and whether express or implied),
whereby one person agrees to employ another as
employees, and other agrees to serve his employer as
a workman.
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Elements …. Cont’d
iv. trade unions – organisations for protecting workmen
from exploitation by employers and for promoting the
economic interests of workmen.
v. labour legislations – labour laws that govern industrial
relations such as the Employment Act 1955, the
Industrial Relations Act 1967 and the Trade Union Act
1959.
(Ayadurai : 1985 : pp 13 – 14)
vi. unionism – spirits among workmen to unionise and carry
out activities for protecting their interests at work.
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1.3 the importance of industrial relations
Several groups of people need to understand the theory
and practice of industrial relations as follows:
i. Workers – to make them know their rights and
obligations under the employment laws, aware of the
benefits can be gained or risks might be faced by
joining trade union and develop healthy attitude
towards workplace.
ii. Trade union leaders – to enable them perform their roles
effectively in protecting workers from greedy
employers.
iii. Managers – to ensure their effectiveness in dealing with
workforce, in improving productivity and increasing
profitability of the organisation.
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the importance of industrial relations … cont’d
iv. Lawyers – to ensure their competence in giving advise
to their clients, in representing employers/unions and in
drafting legally enforceable employment contracts.
v. Officers and executives in human resource and industrial
relations departments – to carry out their job
responsibilities particularly in improving their human
skills in order to administer the system wisely .
(Maimunah Aminuddin : 2007 : pp 4 - 6)
vi. Students – they are future workers, trade unionists,
managers, lawyers, officers/executives and employers.
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1.4 the systems of industrial relations
• Almost all industrial relations systems are tripartite, i.e. they
are made up of three parties/participants/groups – as the
following:
i. the employer
ii. the employee
iii. the government
• These groups may interact differently (in different countries)
in making decisions related to work life. The decisions can be
made in any three of three ways i.e. :
i. unilaterally
ii. bilaterally or
iii. tripartite manner
(Maimunah Aminuddin : 2007 : pp. 6 – 7)
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1.5 roles of the government in industrial relations
• Under the Malaysian Constitution, industrial relations is
the preserve of the federal government, as opposed to
the state governments.
• Four roles are played by the federal government as
follows:
i. legislator – through the Parliament (legislating laws)
ii. administrator – through the Ministry of Human
Resources (enforcing labour legislations)
iii. participant – through Minister of Human Resources (in
the NLAC and CCIH)
iv. employer – the largest in the country (public sector).
(Ayadurai : 1998 : pp. 223 – 240)
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1.6 impacts of harmonious industrial relations
• The impacts of harmonious industrial relations can be
seen from several aspects as the following:
1.6.1 impacts upon a country
i. politics
ii. economics
iii. social
1.6.2 impacts upon an organisation
i. employers
ii. employees
iii. profitability
iv. productivity
v. compensation etc.
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1.7 the Ministry of Human Resources
1.7.1 introduction
This Ministry is responsible for administering and
overseeing the industrial relations system.
1.7.2 objectives
i.
To protect the welfare of workers i.e. safety, health
and rights.
ii. To promote good employer–employee relationships
through a stable and peaceful industrial relations
system.
iii. To equip the unemployed with basic industrial skills
and to improve the skill-level of the workforce; and
iv. To assist in maximising the country’s manpower
resources through manpower planning.
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the Ministry of Human Resources … cont’d
1.7.3 Structure
This Ministry comprises seven departments namely:
i.
Department of Labour, Peninsular Malaysia.
ii. Department of Labour, Sabah.
iii. Department of Labour, Sarawak.
iv. Department of Industrial Relations.
v. Department of Trade Union Affairs.
vi. Manpower Department.
vii. Department of Occupational Safety and Health.
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the Ministry of Human Resources … cont’d
1.7.4 Related organisations
Several categories of organisations namely:
(a) Independent organisations
These refer to independent organizations that
deal with labour matters such as:
i. The Social Security Organisation.
ii.
The Employee Provident Fund.
iii.
The Human Resource Development
Corporation/Berhad.
iv.
The Industrial Court.
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the Ministry of Human Resources … cont’d
(b) Companies
•
The National Institute of Occupational Safety
and Health
(c) Advisory Councils
i. The National Labour Advisory Council
ii. The National Council for Occupational Safety
and Health
iii. The National Vocational Training
(www.mohr.gov.my)
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Discussion Questions:
1. Explain any four (4) characteristics of
harmonious industrial relations.
2. Distinguish harmonious industrial relations
from non-harmonious industrial relations.
3. Elaborate on the consequences of nonharmonious industrial relations to a country.
4. Evaluate on the practice of industrial relations
system in Malaysia.
5. Elaborate on the principles established by the
Industrial Relations Act 1967 in the Malaysian
industrial relations.
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