TOPIC 7
INDUSTRIAL DISPUTES AND
INDUSTRIAL ACTIONS
UPON COMPLETING THIS TOPIC, STUDENT SHOULD BE ABLE
TO:
• Distinguish industrial disputes from industrial actions.
• Outline the causes of industrial disputes.
• Identify suitable methods to resolve industrial disputes.
• Distinguish industrial actions by employer from industrial actions by
employees.
• Outline the causes of industrial actions.
• Elaborate the procedures or requirements to carry out industrial
actions legally.
• Identify and discuss penalties for conducting illegal industrial
actions.
• Evaluate on the advantages and disadvantages of industrial actions
(strikes).
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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7.1 INDUSTRIAL DISPUTES
7.1.1 DEFINITION
“ Trade disputes…as any disputes between an
employer and his workmen which is connected with
the employment or the non-employment or the terms
of the employment or the conditions of work of such
workmen.” (Sec.2, IRA)
“ Industrial disputes refers to any type of labourmanagement conflicts / disputes, including trade
disputes.”
* the term ‘non-employment’ is not defined in the IRA
but it is the negative form of employment. It can occur
in the various forms such as dismissal, termination,
lay-off, and suspension of an employee by his/her
employer.
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7.1.2 Causes
Several factors have been associated with the occurrence
of industrial disputes as follows:
i.
The failure of the grievance procedures to conclude
satisfactory results.
ii. A difference of opinion as to the appropriate terms and
conditions of service for workers.
iii. A difference of opinion as to the interpretation of a
collective agreement or Industrial Court Award.
iv. The non-implementation of an agreement or award.
v. The refusal of any party to commence collective
bargaining.
vi. The refusal of any employer to accord recognition.
vii. Disciplinary actions taken by an employer which are
considered as unfair or unwarranted.
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7.1.3 Dispute Resolution
It refers to the methods to settle trade disputes.
• The IRA, 1967 recognises either implicitly or explicitly a
number of ways for that purposes.
• It specifically makes available three methods viz:
– Conciliation
– Factfinding
– Arbitration
• Other methods recognized by IRA are the following:
– Direct negotiation
– Direct action
– Executive action
– Executive or administrative action
– Mediation
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ADM 465 TOPIC 7
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Dispute Resolution … cont’d
1. CONCILIATION
• “Conciliation is the process of arriving at a
settlement of a trade dispute with the help of a
third, neutral party.”
(Marilyn A.: 1999: pg. 184)
• “Conciliation also means bringing together the
two parties involved to resolve their problems.”
• Agency – Department of Industrial Relations
• Machinery – Conciliation conference (but, IRA is
silent on the composition, jurisdiction, powers or
limitations of the conciliation conference)
• Provision – Part V, IRA
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Dispute Resolution … cont’d - Conciliation
PROCESS
i. It can be voluntary or compulsory.
ii. The parties are encouraged to resolve their
problems.
iii. It is up to the parties concerned to reach the
agreement.
iv. The conciliator merely arranges the meeting or
advice the parties because he has no authority
to insist that the parties accept any particular
recommendation.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Dispute Resolution … cont’d - Conciliation
Situations that require conciliation:
i. If a trade dispute has not been resolved, it
must be referred to the DGIR by any party
to it for conciliation.
ii. The DGIR may also refer a trade dispute
for conciliation if in his opinion the dispute
is not likely to be resolved and public
interests demand. (Sec. 8 IRA)
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Dispute Resolution … cont’d - Conciliation
In practice,
i. Conciliation is carried out by Industrial Relations Officer(s) who will
meet the parties, either separately or jointly.
ii. The conciliator will:
• give explanation on the problem
• help the parties arrive at a compromise which is acceptable to
both parties.
• give advice
• He has no authority to insist any party or the parties to accept any
recommendation.
iii. His roles are to:
• identify the issues
• brief the problem
• give advice
•
* This method is important because 70-80 per cent of trade disputes
are settled in this way annually.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Dispute Resolution … cont’d - Factfinding
2. FACTFINDING
• It refers to investigation and inquiry carried
out by specific agencies on any matter that
are related or relevant to the dispute.
• Agencies/ machineries – Board of Inquiry
and Committee of Investigation (both are
appointed by the Minister of Human
Resources).
• Provision- Part VIII, IRA 1967.
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Dispute Resolution … cont’d - Factfinding
2.a Committee of Investigation
i. It consists of one or more persons
appointed by the Minister.
ii. It has jurisdiction over any trade dispute
referred to it by him.
iii. It has the power to investigate the
causes of and the circumstances
surrounding the dispute.
iv. It is required to make a report to the
Minister ‘as soon as possible’.
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Dispute Resolution … cont’d - Factfinding
2.b Board of Inquiry
i.
It consists of one or more persons appointed by the
Minister.
ii. It has jurisdiction over any trade dispute referred to it
by him for fact finding.
iii. It has more power than the committee, as follows;
iv. The power to inquire into the dispute referred to it.
v. The power to summon witnesses to give evidence on
oath or affirmation.
vi. The discretion to sit in private or public.
vii. The discretion to make Interim Report that must be
laid down before the Dewan Rakyat ‘as soon as may
be’.
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ADM 465 TOPIC 7
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Dispute Resolution … cont’d - Factfinding
Limitation of the agencies
1.
2.
i.
ii.
iii.
A board cannot include in its Report(s) any information, which are
confidential in nature, obtained by it in its inquiry about trade
union, business or organization without consent.
Both agencies are not the bodies that settle the disputes referred
to them.
The Act requires them to investigate or inquire causes and
circumstances surroundings the dispute.
But, in their proceedings before a Board or a Committee- they
can permit or not permit a person to be represented by someone
else.
So far, no cases of appointment of a Committee or a Board (since
the introduction of IRA)
Reason?… the Government prefers to refer/ use other methods
to settle the disputes.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Dispute Resolution … cont’d - Factfinding
3. ARBITRATION
• “ Arbitration is a method of settling a dispute whereby the two
parties involved request the third party, or are compelled by
law to use a third party to make decision for them”.
• “…is where an impartial third party is given the authority to
settle the dispute by examining the information given by both
parties and making a judgement.”
i. Agency – Industrial Court.
ii. Provision – Part VII, IRA.
iii. Types – compulsory or voluntary.
• IRA 1967 identify only one agency for arbitration of trade
disputes i.e. Industrial Court
• Industrial Court – composition, jurisdiction, powers, awards &
appeal. (Please discuss in the tutorial class)
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4. OTHER METHODS RECOGNISED BY THE
IRA, 1967
a. DIRECT NEGOTIATION
• “ … is a method of settling the dispute whereby the
two parties involved are willing to come together for
discussion until a satisfactory compromise is
reached or concluded.”
• Agency – parties to the disputes.
• Provision – none
• It is seen as a mature and harmonious way of settling
the dispute.
• It is quick, cheap, save ‘faces’, and very effective way
(for settlement/ arriving resolution without involvement
the third person).
• It is more likely to result in the permanent resolution of
the dispute than resolution arrived through the
intervention of a third person.
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ADM 465 TOPIC 7
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Dispute Resolution … cont’d – Other Methods
b. MEDIATION
• Mediation is similar to conciliation whereby the
third neutral party is called in by the parties to
the dispute to help them find a settlement.
• It is relatively rare method of settling a trade
dispute.
• It is not mentioned in the labour laws, but is,
occasionally used.
• But, the mediator is not usually from the
government (a person who is considered
unbiased, impartial and is sufficiently respected
and trusted by both parties).
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ADM 465 TOPIC 7
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Dispute Resolution … cont’d – Other Methods
c. EXECUTIVE AND ADMINISTRATIVE ACTION
The IRA, 1967 makes available two agencies for:
i. Executive action i.e. the Minister of Human Resources
• Sec. 19A, IRA authorises the Minister to resolve trade
dispute i.e. to conciliate a trade dispute.
• Sec.9, IRA authorises him to resolve recognition
dispute (by giving decision).
ii. Administrative action i.e. the DGIR
• Sec.19, IRA authorises the DGIR to resolve the trade
dispute.
• Sec.9, IRA authorises him to resolve recognition
dispute (i.e. to take any step or make inquiry)
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Dispute Resolution … cont’d – Other Methods
d.DIRECT ACTIONS
These methods refer to industrial actions by
employers or employees viz:
i. Lockouts
ii. Picketing
•
Strikes
• These actions are taken to ensure that the
disputes are settled quickly (which are to
be discussed in 7.2)
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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7.2 INDUSTRIAL ACTION
• It refers to a direct action carried out by either
employers or employees resulted from trade
disputes. It is considered as an aggressive and
threatening method to settle trade disputes.
7.2.1 CAUSES
• The failure of peaceful dispute resolution
methods for resolving any trade/ industrial
disputes.
• The attempts of a party to force the other party
to give in.
• Employers and employees attitudes such as
intolerable etc.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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7.2.2 TYPES
• The types or industrial action can be divided
into main categories namely:
• Industrial action by employees such as
picketing, strikes, boycott and sabotage but,
the only forms of employees’ industrial
action permitted by the labour laws are
picketing and strikes.
• Industrial action by employers i.e. lockouts
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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7.2.3 INDUSTRIAL ACTION BY EMPLOYEES
a. Picketing
•
It refers to a situation whereby “ one or more
persons may attend at or near the place where
the workman works and where a trade
disputes involving such worker exists only for
the purpose of peacefully: i. Obtaining or communicating information, or
ii. Persuading or inducing any workman to
work or abstain from working (if a strike has
taken place) (Sec. 40 (1), IRA)
•
* Picketing is the most common form of
industrial action in Malaysia.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Picketing … cont’d
Conditions
Picketing must not: i. in the workplace
ii. intimidate any person
iii. lead to breach of the peace
iv. obstruct the entrance or exit
v. allow workers who are not directly
involved in the trade dispute to take
part.(Sec. 40 (1)(2)
NORHAYATI MOHD SALLEH
PAD 365
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Picketing … cont’d
Objectives
The main objectives are the following:
i. To pressurize the employers to settle the
dispute or to fulfill their claims quickly.
ii. To inform/ communicate certain issue to
public.
iii. To give the employer a lesson.
* Picketing is an early stage towards more serious
action.
* Usually picketing is carried out during lunch hour,
before or after working.
NORHAYATI MOHD SALLEH
ADM 465
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Picketing … cont’d
Unlawful picketing
• The employees’ action of picketing become
unlawful if they do not conduct it according to the
requirements of the said provision i.e. Sec. 40.
IRA.
Punishment:
Any contravention can be convicted the following: a. An imprisonment for a term not exceeding one
year, or
b. A fine not exceeding
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b. Strikes
Many definitions can be given.
i.
A strike can be defined as “ an action carried out by
the employees collectively whereby they withdraw
themselves from work or, refuse to continue
performing their present works/ jobs or, refuse to
perform the jobs assigned by the employers or, stop/
delay their work which result in lower performance
which affect the organisation’s production”. (Sec.2,
IRA)
ii. In brief, “ a strike is any stopping of work by a group of
workers, including any attempt to limit or slow down
production on purpose.” (Maimunah Aminuddin, 2006)
iii. Strikes are only legal if they comply with the
regulations in the Industrial Relations Act and Trade
Unions Act. As such, the right to strike is only
extended to members of a registered trade union.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Strikes … cont’d
Forms of strike
i. Legal strike
ii. Illegal strikes which refer to actions such
as lightning/ wildcat strike, sympathy
strike, political/ general strikes.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Illegal strikes
Sympathy strike
• Occurs when a group of workers who are not involved in a trade
dispute decide to go on strike to show support and solidarity with
another group of workers who are legitimately on strike.
Political/ General strike
• This type of strike aimed not at employer but at the government. The
striking workers hope to force the government into giving in to
certain demands. They assume that their strike may disrupt the
economy and, therefore, pressure the government into giving in to
them.
Wildcat strike/ Lightning strikes
• This strike refers to a type of strike which is called without taking any
ballot or following the procedures. The workers make a decision to
strike and do so immediately. They can be said to “down tools”, i.e.
refuse to go on with their work. Such strike occasionally occurs,
especially in the agricultural estates, but the strikes are not
supported by their union and such action is strongly discouraged.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Strikes … cont’d
Strikes procedure
• Unlike registration and recognition of trade
unions and collective bargaining, the
industrial relations laws do not clearly lay
out the procedures to be followed to
ensure the legality of a strike.
• But, various requirements and restrictions
are found in both the Trade Union Act and
Industrial Relations Act. The requirements
and restrictions are the following:
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Strikes procedure … cont’d
(a) Industrial Relations Act, 1967
(i) Sec. 45, IRA
• This section deems a strike or lockout illegal if: a. it is declared or commenced or continued in
contravention of Sec. 43 or Sec. 44, or of any provision
of any other law; or
b. it has any other object than the furtherance of a
trade dispute:
• between the workmen on strike and their employer or
• between the employer who declared the lockout and his
workmen.
However, the Act declared the consequence of an illegal
lockout, which is deemed illegal by the Act.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Strikes procedure … cont’d
(ii) Sec. 44, IRA
• This section prohibits a strike or a lockout
in specified circumstances such as after a
trade dispute has been referred by the
Minister to the Industrial Court for
arbitration and the parties thereto have
been notified of the reference.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Strikes procedure … cont’d
iii)
Sec. 43, IRA
• It restricts a strike or a lockout in the “Essential
Services”. It does not prohibit a strike or a lockout in
these services but requires only appropriate notice
of them.
iv) Section 44(b), IRA
• “ No workman shall go on strike and no employer of any
such workman shall declare a lock-out after a trade
dispute or matter involving such workman and such
employer has been referred to the Court and the parties
concerned have been notified of such reference.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Strikes procedure … cont’d
(iv) Sec. 46 to 48, IRA
• These sections make an offence, punishable on
conviction by fine and/ or imprisonment, for an
employee or an employer to participate in, or to
instigate others to participate in, or even to
support (by financial means) a strike or a lockout
deemed illegal by it.
(v) Section. 49, IRA
• This Act protects union members who refuse to
participate in any illegal strikes or lockout.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Strikes procedure … cont’d
(b) Trade Union Act, 1959
(i) Section 25(A)1, TUA
•
This Section prohibits an employee union from calling a
strike or an employer union from declaring a lockout under
the following circumstances:
–
without first obtaining the consent from majority of
members (at least two thirds)
–
before the expiry of 7 days after submitting to the DGIR
(Sec. 40(5) TUA)
–
if the secret ballot become invalid (by virtue of Section
40 (2), (3), (6) or (9) TUA
–
in contravention or without complying with the rules of
the union
–
in respect of matter covered by a direction or a decision
of the Minister
–
in contravention or without complying with the TUA or
any other law.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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Strikes procedure … cont’d
(ii) Section 40, TUA
• This section requires a trade union to take a secret ballot to
make a decision on inter alia any matter relating to a strike or a
lockout. (a secret ballot must held by those eligible to strike).
• The results of this ballot must be sent to the Director- General of
Trade Unions by the union secretary within 14 days of taking the
ballot. The strike can only take place if two-thirds of those entitled
to vote agree to the action, and after waiting 7 days after the
ballot results have been sent to the Director General.
• This compulsory “ cooling –off period is intended not only to allow
the Director General time to check the validity of the ballot, but it
also gives the union members time to change their mind.
• With this threat of an impending strike, the employer may give in
to the employees’ demands or they themselves may have
second thoughts, given the seriousness of their impending
action.
• This 7-day period allows the Minister of Human Resources to
intervene and refer the dispute to the Industrial Court for
arbitration, thus making a strike illegal.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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7.3 INDUSTRIAL ACTION BY EMPLOYERS
Lock-outs
Sec. 2 IRA defines a lockout as,
•
“ the closing of a place of employment, the suspension
of work, or the refusal by an employer to continue to
employ any number of workers employed by him, in
furtherance of a trade dispute, done with a view to
compel those workers to accept terms or conditions of
work or affecting employment.”
*
The procedure for lock-out are the same as those for a
strike:
i.
IRA Sec. 43, 44, 45, 46, 47, 48 & 49
ii. TUA, Section 25(A)1 & 40
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ADM 465 TOPIC 7
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Discussion questions
1. Distinguish trade disputes from industrial
disputes.
2. Differentiate between conciliation and
mediation.
3. Explain the circumstances where a strike
is not allowed by the Malaysian labour
laws.
4. Elaborate on the process of arbitration to
resolve trade disputes.
5. Contrast between legal and illegal strikes.
6. Explain the pros and cons of lockouts.
Norhayati Mohd Salleh
ADM 465 TOPIC 7
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