MALAYSIAN INDUSTRIAL
RELATIONS AND EMPLOYMENT
LAW
Author: Maimunah Aminuddin
Chapter Six
Collective Bargaining
Malaysian Industrial Relations &
Employment Law
1
Preview

Deciding on terms & conditions of service

Collective bargaining

Collective bargaining procedure

Collective agreements

Terms & conditions of service in the public
sector
Malaysian Industrial Relations &
Employment Law
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Deciding terms & conditions of
service
Wages and other terms & conditions of
service can be decided upon:

Unilaterally, by the employer

Bilaterally or jointly by the employer and the
representatives of employees

Bilaterally, but with controls
established by the state
Malaysian Industrial Relations &
Employment Law
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Deciding terms & conditions of
service, cont.

When workers belong to a trade union, they
gain the right to decide upon terms &
conditions of service jointly with the
employer through the process of collective
bargaining.

The outcome of collective bargaining is a
collective agreement.
Malaysian Industrial Relations &
Employment Law
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Collective bargaining

The Industrial Relations Act requires trade
unions to gain recognition from each
employer with whom they wish to conduct
collective bargaining.

The procedure by which a union may claim
recognition is laid down in the Act.
Malaysian Industrial Relations &
Employment Law
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Recognition process
Recognition may be granted voluntarily by the
employer at the request of the union.


If an employer refuses to grant recognition, or does
not reply to an application for recognition by a
union, the union may report to the DGIR.
The DGIR will verify:
whether the union is competent to represent the
workers concerned and what % of workers are
represented by the union.
Malaysian Industrial Relations &
Employment Law
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Collective bargaining process
Collective bargaining may be conducted:

At industry level whereby employer’s union
and national employees’ union negotiate

At company level whereby employer
negotiates with national employees’ union

At company level whereby employer
negotiates with in-house employees’ union
Malaysian Industrial Relations &
Employment Law
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Collective bargaining procedure

Either union or employer invites the other to
commence bargaining. Invitation is
accompanied by draft collective agreement.

Once employer agrees to bargain,
representatives of both parties meet,
bargain and if agreement is reached, put
agreement in writing.
Malaysian Industrial Relations &
Employment Law
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Collective bargaining procedure,
cont.
Prior to commencement of negotiations, both
parties will:


decide who shall represent them
collect information about the other party’s
strengths and weaknesses

collect economic data

get a mandate from their principals

decide on strategies and tactics
Malaysian Industrial Relations &
Employment Law
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Collective bargaining procedure,
cont.
If employer refuses to negotiate, or if
employer and trade union can not agree on
the terms and conditions of employment to
be included in the collective agreement, a
trade dispute exists.
Malaysian Industrial Relations &
Employment Law
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Collective bargaining procedure,
cont.

Either party can report a trade dispute to the
Department of Industrial Relations for the purpose
of conciliation.

Conciliation meetings will be held. If agreement
reached between employer & union, matter is
resolved.

If conciliation not successful, dispute will be
referred to the Industrial Court for arbitration.
Malaysian Industrial Relations &
Employment Law
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Collective bargaining procedure,
cont.

When a collective bargaining dispute is
referred to the Industrial Court, a hearing
will be held.

The Court has the power to decide upon the
terms and conditions to be included in the
collective agreement where the parties are
unable to reach an agreement.
Malaysian Industrial Relations &
Employment Law
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Collective agreements (CA)

Collective agreements must be deposited
with the Industrial Court in order to be
binding on the parties.
Malaysian Industrial Relations &
Employment Law
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Collective agreements (CA), cont.
The Industrial Relations Act specifies that:

A CA must be valid for a minimum of 3 years

A CA must specify the parties to the
agreement

A CA must include procedures for
modification and termination
Malaysian Industrial Relations &
Employment Law
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Collective agreements (CA), cont.
Items commonly found in CAs
 Recognition of the rights of each party
 Scope of the agreement
 Union rights
 Wages, allowances, bonus and other
financial payments
 Benefits
 Procedures relating to retrenchment,
promotion, and grievances
Malaysian Industrial Relations &
Employment Law
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Public sector terms & conditions of
employment

Unions in the public sector do not have the
right to conduct collective bargaining with
the employer.

Wages and other terms and conditions are
set unilaterally by the government (the
employer).
Malaysian Industrial Relations &
Employment Law
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Review

Deciding on terms & conditions of service

Collective bargaining

Collective bargaining procedure

Collective agreements

Terms & conditions of service
in the public sector
Malaysian Industrial Relations &
Employment Law
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