TOPIC 6
COLLECTIVE BARGAINING AND COLLECTIVE
AGREEMENT
•
•
•
UPON COMPLETING THIS TOPIC, STUDENT
SHOULD BE ABLE TO:
Distinguish collective bargaining from collective agreement.
Identify common problem faced in conducting collective bargaining.
Discuss the relationship between collective agreement and Industrial Court.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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6.1 COLLECTIVE BARGAINING
6.1.1 DEFINITION
Collective bargaining is defined as
“ negotiation with a view to the conclusion of a collective agreement.”
(IRA 1967)
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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COLLECTIVE BARGAINING … cont’d
Important points about the definition i.
As the principal means of improving the terms and conditions of employees’ employment and promoting their socio-economic interests.
ii.
As the means of regulating the relations between employers and union within the framework governing these relations constituted by the State.
iii.
As the most important means of fixing wages and conditions of employment in the private sector.
iv.
For workers : a negotiation can only be carried out by workmen’s union.
v.
For employers : a negotiation can only be carried out either by an individual employer or an employer union.
vi.
The provision of Part IV, IRA does not apply to government service of any statutory authority, or to any worker employed by the government or by any statutory authority.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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8.1.2 OBJECTIVES
Among important objectives: i.
To improve wages and conditions of works and employment among employees.
ii.
To protect employees welfare iii.
To avoid arbitrary action by employers.
iv.
To involve employees in decisions making.
v.
Can avoid unilateral decisions.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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6.1.3 PROCESS
• Once a workmen’s union has been recognized by an employer/ employer union or
• A workmen’s union has been accorded general recognition by its employer, either party can:
At any time, invite the other party to commence collective bargaining.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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Steps i.
The invitor must send a written invitation together with the proposals for a collective agreement to commence collective bargaining ii.
The invitee must, within 14 days of its receipt, reply (in writing) to the invitor…either accepting it or refusing it. iii.
If an invitation has been made and accepted, collective bargaining must commence within 30 days of the receipt of the acceptance. iv.
But, if an invitation has been made and; a. it has not been accepted within 14 days of the receipt, or it has been refused, or b. it has been accepted but bargaining has not commenced within 30 days of the receipt of the acceptance…
The invitor must file a complaint in the form of written report to the DGIR. v.
The DGIR is authorized… to take such steps that necessary… to get the parties to commence bargaining.
(Sec. 13, IRA)
Norhayati Mohd Salleh
PAD 365 TOPIC 6
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PROCESS … cont’d
Important points i.
If, despite the DGIR efforts, there is still a refusal to commence bargaining it is said that a trade dispute exists .
ii. If an invitation has been made and accepted, and collective bargaining has commenced and successfully concluded the end result is a collective agreement.
iii. If the bargaining has not been successfully concluded… the law is silent on this point.
iv.
If the bargaining failed to result in an agreement… a trade dispute is presumably- as exists .
Norhayati Mohd Salleh
PAD 365 TOPIC 6
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6.1.4 CONTENT
•
•
The content of collective bargaining is the proposal for collective agreement.
In the IRA 1967, there is no provision that states
“bargainable subjects”. But, there is a list of “nonbargainable” subjects as follows:
The promotion of a workman (from lower to higher grade).
i.
ii.
iii.
The termination of service of a worker by reason of redundancy or reorganization.
iv.
The dismissal or reinstatement of a worker.
v.
The transfer of a workman within the organization
(whereby is does not harm an employee in regard of his term of service)
The assignment or allocation of duties or tasks to a worker that is compatible with the term of service.
(Sec. 13(3), IRA)
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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CONTENT … Important points
The above items are outside the scope of collective bargaining.
i.
These matters are referred to as
“managerial prerogatives” or
“managerial rights”.
ii.
But, this Act does not prohibit trade unions from raising/ discussing general matters related to procedures for promotions.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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THE EFFECTS i.
There is no guarantee that recognition will result in collective bargaining. ii. There is no guarantee that collective bargaining will result in a collective agreement.
iii. If the collective bargaining is successfully concluded the end result is a collective agreement.
iv. The failure of collective bargaining will result in a trade dispute.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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6.1.6 COMMON PROBLEMS
Many problems may exist that hinder both parties from concluding collective bargaining successfully, as follows: i.
Delay reply by any party to the collective bargaining
(within 14 days should be replied) e.g. the Non-Metallic Mineral Products
Manufacturing Employees Union vs the South East
Asia Fire Bricks Sdn. Bhd.
ii.
The refusal of any party to attend collective bargaining conference or to commence the collective bargaining.
e.g. the above cases iii.
When the workmen’s union bargains for matters that are listed under “managerial prerogatives” (as main proposal).
e.g. the Sime Darby Malaysia Sdn. Bhd. Vs the
National Union of Commercial Workers.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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6.2 COLLECTIVE AGREEMENT
6.2.1 DEFINITION
Collective agreement is defined as “ an agreement in writing concluded between an employer or employer union on the one hand, and an employee union on the other, relating to the terms and conditions of employment and work of workmen or concerning the relations between such parties ”.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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COLLECTIVE AGREEMENT … definition
Important points i.
It is recognized as a symbol or proof of the harmonious relations between an employer
(or employer union) and a workmen’s union.
ii. It is considered as a contract regulating the relationship between the employer and his employees for a certain period of time.
iii. It is resulted from a successfully concluded collective bargaining.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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6.2.2 CONTENT
Sec. 14, IRA declares that:
1. A collective agreement must set out the terms and conditions of employment/ service agreed upon by the parties thereto and must also, where appropriate:
• Specify the name of the parties to the agreement.
• Specify the duration for which the agreement is to be effective
(not less than 3 years)
• Prescribed the procedure for settling any question over the interpretation or implementation of the agreement, by the reference of any such question to the Industrial Court for arbitration (unless there already exists appropriate machinery for settling any dispute between them).
2. A collective agreement shall not contain any term or condition of employment less favourable than or in contravention of the provisions of any law applicable to the workmen covered by the agreement: any such term or condition shall be void an of no effect to that extent
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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6.2.3 COGNISANCE
Sec. 16, IRA states that:
1. A collective agreement must be in writing and signed by the parties to the agreement, or by persons authorized on their behalf.
2. A signed copy of the collective agreement must be jointly sent to the Registrar (of the Industrial Court) within one month from the date on which the agreement has been entered into.
3. The Court may, (before taking cognisance of the collective agreement), ‘required any part of the agreement as does not comply with Sec. 14, IRA to be amended (by the parties to the agreement) as may direct, and if the parties to the agreement fail to carry out its direction, … the Court may amend the agreement in the manner directed and the amended agreement shall be deemed to be the collective agreement between the parties.
4. The Court may also refuse to take cognisance of the collective agreement “ if it is of the opinion that the agreement does not comply with Sec. 14, IRA”.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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6.2.4 THE EFFECTS
Sec. 17, IRA declares that:
1. A collective agreement which has been taken cognizance of the Industrial Court shall be deemed as the award of the Court and shall be binding on: a. the parties to the agreement, their successors, assignees and transferees; and b. all the workmen who are employed to which the agreement relates.
2. As from the specified date period in the collective agreement, it shall be an implied terms of employment contracts between the workmen and the employer(s) …
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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6.2.5 PROHIBITION
• A collective agreement cannot include managerial prerogatives without consent from the employer (as in the Sec. 13(3),
IRA).
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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6.2.6 PROBLEMS
• After a collective agreement has been approved by the Industrial Court and becomes effective, several problems may occur due to: i.
Misinterpretation of the content of the collective agreement by any party.
ii.
Improper implementation of the collective agreement by the parties to the agreement.
iii.
Violation of any terms and conditions of the agreement.
iv.
Non-compliance of the agreement.
v.
Non-implementation of the award.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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6.2.7 THE INDUSTRIAL COURT AND THE COLLECTIVE
AGREEMENT a) Every collective agreement must be accorded by the
Industrial Court.
b) The Industrial Court has a discretionary power to: i.
accord it or, ii.
refuse to accord it if in its opinion the agreement does not comply with Sec. 14, IRA or, iii.
ask the parties to the agreement to amend any part of the agreement (before it accord the agreement).
iv.
amend a collective agreement if it thinks necessary and the amended agreement is considered as the agreement that concluded by the parties to it.
(Sec. 16, IRA)
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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Discussion questions:
1. Outline and explain four (4) factors that can hinder the conclusion of a collective bargaining.
2. Outline and explain four (4) factors that contribute to the success of a collective bargaining.
3. Identify and explain any five (5) items unions should not include in the collective agreement proposal.
4. Identify four (4) requisites that determine the union bargaining strength.
5. Identify four characteristics of effective negotiators in a bargaining session.
Norhayati Mohd Salleh
ADM 465 TOPIC 6
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